Caribbean And Latin America Face FDI Decline, Report Reveals

by Philip Morton, Investors Offshore.com

02 April 2003

In its World Investment Report 2003, the UK's Economist Intelligence Unit (EIU) warned that countries in the Caribbean and Latin America should brace for a continued decline in foreign direct investment this year.

Observing that in 2002 'there was hardly a country in the region that did not experience a decline in FDI inflows', the EIU announced that growth in foreign direct investment over the medium term is likely to be slower for Latin America and the Caribbean than in other emerging markets.

The report on international investment trends cited structural weaknesses and high levels of external debt as factors likely to hinder growth, and warned that: 'FDI inflows will also be hindered by costs to business deriving from bureaucracy, deficiencies in infrastructure and underinvestment in human capital'.

The EIU review suggested, however, that of all of the countries surveyed for the purposes of the report, Mexico is likely to benefit most from FDI inflows this year.

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