Business View Caribbean | December 2020

7 BUSINESS VIEW CARIBBEAN DECEMBER 2020 The structural problems of Latin American and Caribbean economies and new international scenarios make it essential for FDI to contribute to driving development with equality and environmental sustainability in the region, ECLAC says in its annual report on this topic. L atin America and the Caribbean received $160.721 billion dollars in Foreign Direct Investment in 2019, 7.8% less than in 2018, a decline that is seen intensifying sharply in 2020 when inflows are forecast to drop by between 45% and 55% as a result of the crisis stemming from the COVID-19 pandemic, the Economic Commission for Latin America and the Caribbean (ECLAC) advised upon presenting its annual study Foreign Direct Investment in Latin America and the Caribbean 2020 (the document will be soon available on ECLAC’s website). Worldwide, the amount of Foreign Direct Investment (FDI) is seen shrinking by 40% in 2020 and by between 5% and 10% in 2021. Thus, FDI would mark in 2021 its lowest value since 2005. FOREIGN DIRECT INVESTMENT IN LATIN AMERICA AND THE CARIBBEAN FELL BY 7.8% IN 2019 AND A ROUGHLY 50% PLUNGE IS FORECAST FOR 2020 Latin America and the Caribbean is the region forecast to have the steepest decline, according to the document by ECLAC launched at a virtual press conference by the United Nations regional organization’s Executive Secretary, Alicia Bárcena. Since 2012, when a historic high was reached, foreign investment flows have experienced a nearly uninterrupted decline in Latin America and the Caribbean, which has demonstrated – primarily in South American countries – the relationship existing in the region between FDI flows, the macroeconomic cycle and commodity price cycles, the report sustains. As in prior years, the study points to great heterogeneity in national results and no subregional pattern emerges: in 17 countries, inflows declined in 2019 versus 2018 while in 9 others, they increased. In 2019, the five countries that received the most investment were Brazil (43% of the total), Mexico (18%), Colombia (9%), Chile (7%) and Peru (6%). OPENING L INES Alicia Bárcena, ECLAC Executive Secretary, during the presentation of the report on Foreign Direct Investment in Latin America and the Caribbean 2020.