Page 23 - Preview (GT)

Winners and Losers:
Who Is Ahead in FDI?
Through August 2015, FDI
has dropped sharply in Latin America and the Caribbean as a region. Which countries are suffering? Which are muddling along? And which are the big winners? Central America is the only sub-region to demonstrate a net gain in FDI year over year.
Politically and economically, the past several years have been difficult for Latin America and the Caribbean (LAC). Constant political change in the form of leadership turnover—both scheduled and unscheduled—and economic upheaval including plummeting oil prices and a crisis in China have spelled turmoil in the region. Venezuela has refused to release any official economic data since the third quarter of 2014, Argentina is in the middle of a protracted fight with the United States over debt payments; and Brazil has raised taxes and frozen US
$22.6 billion in 2015 budget spending. In short, conditions in Latin America have been volatile.
International investors have responded to the volatility with a marked decline
in foreign direct investment. The United Nations Economic Commission for Latin America and the Caribbean (ECLAC) noted that globally, foreign direct invest- ment (FDI) dropped by 7 percent in 2014 and that Latin America and the Carib- bean experienced a decrease in FDI of 16 percent. In the first half of 2015, FDI in Latin America fell a further 21 percent,
fueled by a slowdown in China and a Brazilian economy in freefall.
THE BIGGEST LOSER
In 2014, Mexico experienced the greatest loss of inflow, dropping 49 percent from 2013 to 2014. Through August of 2015— latest period for which statistics are available— that fall has largely halted, with the nation losing only an additional 8 percent in FDI over the same period
in 2014. For 2015, Brazil has fallen the farthest, dropping 36 percent over its 2014 investment. In its August 2015
strategybg.com 21