In DR, FDI increased by 21%, reaching US$3,102 million; 80% of all that the subregion received and Pro Dominicana forecasts more to come
Foreign direct investment (FDI) in Latin America and the Caribbean has recovered from the pandemic-induced decline, growing 56%, from US$86 billion in 2020 to US$134 billion in 2021, and that improvement included the Dominican Republic.
According to statistics in the World Investment Report 2022, released by the United Nations Conference on Trade and Development (UNCTAD) in June this year, the rebound in FDI in Caribbean economies (which grew 39% and stood at US$3.8 billion) was mainly due to the growth in investment flows to the Dominican Republic, the largest recipient of foreign investment in the subregion,
Dominican Republic received 80% of foreign investment received in the Caribbean. It increased its FDI by 21%, to US$3,102 million. Investments increased in mining, financial services and special economic zones, among others.
FDI flows to the Latin American and Caribbean region plummeted 45% in 2020. It was the steepest drop on record in developing regions that year. It was just when the covid-19 pandemic began to wreak havoc across the universe.
Amelia Santos, Director of the Investment Research Section, UNCTAD’s Investment and Business Division, argues that when looking at investment throughout the world, it is remarkable that, despite the pandemic, the Dominican Republic achieved a positive performance.
In a conversation with the newspaper elCaribe, together with Biviana Riveiro, director of Pro Dominicana, believe DR made the most of the significant investments registered in a set of sectors. “It is movement in the real part and direct investment of companies, but also in the capital market. Yes, it suffered in the pandemic, there was a fall in investment, but it recovered and recovered thanks to investments in productive transformation in renewable energy and sectors related to climate change,” she said.
The performance of other countries has been as follows: South America’s FDI grew by 74% (reaching US $ 88,000 million). South America’s largest economy, Brazil, grew in FDI by 78% to $50 billion (figures taken from UNCTAC). Meanwhile, FDI inflows into Central America rebounded 30%, reaching US$42 billion. Central America’s largest economy, Mexico, rose in FDI by 13%, totaling $32 billion. That makes it the second largest recipient in the subregion after Brazil. In the case of Chile, FDI flows increased 32% (it received US$13 billion), supported by several major acquisitions and renewed interest in mining projects. In Colombia, foreign investment grew 26% in 2021, reaching US$9 billion, driven by inflows into the manufacturing sector and transport, logistics and communications services. Meanwhile, flows to Argentina and Peru recovered to pre-pandemic levels. FDI flows to Costa Rica returned to pre-pandemic levels, nearly doubling to $3.2 billion, with new investments in special economic zones. In the case of Guatemala, FDI reached a record level of US$3.5 billion. Based on data from the UNCTAC report, the Latin American and Caribbean region experienced an overall increase in cross-border mergers and acquisitions. “While the number increased by 49% to 244 businesses, the total value of net sales (US$8 billion) was almost unchanged from the previous year,” the agency’s June 2022 data say.
New and forecast
The completely new investments announced in the LAC region increased by 16% and most of the capital went to the mining, information and communications, and automobile industries. “The value of international project financing agreements announced in the region doubled, surpassing pre-pandemic levels. These were driven by large projects in transport infrastructure, especially in Brazil, and in mining and renewable energy activities throughout the region,” the detailed UNCTAC report said.
Dominican Republic is one of the leading countries in the region and an example of transformation and approaching regional markets. Through Pro Dominicana, the government has taken some steps, such as involving Dominican consulates and representations abroad and creating the National Investment Registry, which has resulted in an improvement in the attraction of foreign capital.
A signal of confidence
Biviana Riveiro from Pro Dominicana believes there are two elements that have contributed enormously to a greater takeoff of the Dominican Republic. One of them is the signal of confidence that has been sent to international markets, which has allowed to maintain investment flows, which in turn average out the investment of the last ten years.”
This is important, because at a time when forecasts predicted the fall in regional investment was going to be 40%, we dropped in the first eight months of the year, but we also managed to recover that process of growth of foreign direct investment,” she said. She recalled that previously this country accounted for 40 and 45% of FDI in the Caribbean.
Source:
El Caribe
