World Investment Report 1998

Trends and Determinants

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Prepared by the United Nations Conference on Trade and Development (UNCTAD), the World Investment Report 1998 (WIR98) provides an analysis of current trends at the global and regional levels in Foreign Direct Investment (FDI) and international production by transnational corporations (TNCs). It discusses specific issues related to the role and impact of FDI in various parts of the world, including, among others, the implications of the recent financial crisis in Asia for FDI, in and by, the affected countries and other economies. The Report also reviews the locational determinants of flows of FDI to host countries and examines the evolving nature of those determinants as TNCs adjust their strategies to the changing global economic environment and increased competitive pressures.



Latin America and the Caribbean

Inward foreign direct investment (FDI) in Latin America and the Caribbean was comparatively low between the early 1970s and the early 1990s, and even declined during a part of the “lost decade” of the 1980s. This was largely a consequence of poor economic performance, mainly resulting from the debt crisis in the region. From 1991 onwards, however, this trend was reversed, as Latin America began to receive substantial and growing FDI inflows. Even Mexico’s 1994-1995 peso crisis did not discourage foreign direct investors. Indeed, during 1995-1997, FDI flows into the region grew more than twice as fast as flows to all other developing countries as a whole.


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