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Foreign Direct Investment in Latin America and the Caribbean 2003

image of Foreign Direct Investment in Latin America and the Caribbean 2003

This publication sets out and analyses the main foreign direct investment (FDI) trends in the countries of Latin America and the Caribbean. In 2003, flows of foreign direct investment (FDI) to Latin America and the Caribbean continued to shrink for the fourth year running. With this latest decline, Latin America and the Caribbean turned in the worst performance of any world region. This situation was exacerbated by the steady increase in profit remittances and in outflows of other FDI-related resources, which has diminished its impact on the balance of payments.

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Summary and conclusions

Foreign direct investment (FDI) has transformed Latin America, modernizing branches of industry and improving many of its services and some of its infrastructure. The evidence is everywhere, from the export platforms in Mexico and Costa Rica that assemble competitive motor vehicles and microprocessors, respectively, to the upgraded telecommunications network in Brazil, financial services in Argentina and road infrastructure and airport services in Chile. Although transnational corporations (TNCs) have been very active in recent years, some questions are now being raised as to the net benefits of their operations in the region. These doubts revolve around the existence, in some cases, of a disparity between host countries’ expectations at the time such investments are made and the difficulties that have arisen along the way.

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