FDI in Latin America Rises by 6%, Brazil Still Top Dog

The Economic Commission for Latin America and the Caribbean (ECLAC) has urged governments in the region to continue devising newer strategies to attract foreign investment, noting that foreign direct investment (FDI) in Latin America rose 6 percent in the first six months of this year.

Thirteen countries received a total of $ 102 billion, with Brazil turning out to be the largest recipient, according to the report. The region’s biggest economy received more than $39 billion in the first six months of this year, which is, however, 10% lower than the sum received during the same period last year.

Foreign direct investment flows were also up in Venezuela (44%), Peru (27%), El Salvador (27%), Panama (19%), Costa Rica (15%), Uruguay (8%) and Colombia (5%).

Thanks to the purchase of the brewery Modelo by the Belgian firm Anheuser-Busch InBev, the first half of 2013 saw Mexico exceed all FDI received during 2012. Even without that deal (valued at 13.249 billion dollars), FDI in Mexico would have been 15% higher than the year-earlier period.

In the first seven months of the year, inflows to Chile were 26% lower than the same period in  2012, although the decrease is due to extraordinary operations recorded in April. Inflows were also down in Guatemala, Argentina and the Dominican Republic, where a major acquisition had significantly bolstered the figures for 2012.

Surprisingly, the outward foreign direct investment has decreased significantly. “The 10 countries of the region that presented data accounted for $5.2 billion of investment abroad in the first six months of the year, compared to 24.4 billion for the same period of 2012,” stated ECLAC in a press release.

Mexico, which had invested record amounts abroad last year, reduced outflows by 71% in the first half of 2013, while Brazil’s figure was down 77%. Outward FDI flows, which reached historic highs in the three previous years, remained highly volatile despite the continued effort to internationalize local firms.

There have been several cross-border acquisitions in the recent past: the Chilean company Corpbanca bought Helm Bank Colombia, Chilean Entel bought Nextel Peru and the Colombian firm Nutresa bought the Chilean food company Tresmontes Lucchetti.

The Commission says America Movil’s plan to acquire Netherlands KPN would increase Mexico’s investment abroad.