March 1, 2006
Foreign direct investment is surging around the world, but flows into Latin America fail to impress. Regional leaders need to spur economic growth to bridge the gap.
Latin America is losing FDI to other markets.To achieve long-term sustained growth, Latin America needs to attract investments of a permanent nature – foreign direct investment (FDI). On this measure, the region doesn't stack up very well against its developing market peers.
The Institute of International Finance (IIF), a Washington-based lobbying group for the world's largest banks, estimates that net FDI last year into Latin America's nine largest economies was $40.9 billion, down 8.5% from the 2004 level. With tepid projected economic expansion of 4% this year, the IIF forecasts that FDI to Latin America will come in almost flat at $41 billion, bringing its three-year exp