Summary and conclusions

In 2004 flows of foreign direct investment (FDI) to Latin America and the Caribbean rose substantially for the first time since 1999. From a level of US$ 39.1 billion in 2003, these inflows jumped to US$ 56.4 billion in 2004, an increase of 44%. While this is a very positive sign, it does not mean that the region has overcome its problems in attracting FDI. In 2002-2003 FDI flows to Latin America and the Caribbean had declined significantly in comparison to the volume that had entered these countries during the FDI boom of 1996-2001. The region has seen a steady decline in its traditional share of global FDI and demonstrates evident weaknesses in competing for newer, higher-quality investments (in higher-technology manufactures, research and development centres and new services such as those related to shared back-office activities, software and regional headquarters). Given this situation, the Latin American and Caribbean countries would do well to shift their focus towards attracting better-quality FDI. To do so, they will have to take a more astute approach to the design of national policies

Sustainable Development Goals:

Decent Work and Economic Growth