- The international organization presented its annual analysis on Latin America, noting that the Caribbean country grew by 7% in 2023.
Despite a 9.9% decline in foreign direct investment (FDI) in Latin America in 2023, reaching $184.304 billion, the Dominican Republic recorded a 7% improvement, driven by the services, manufacturing, and medical devices sectors.
“For the second consecutive year, the Dominican Republic registered record volumes of foreign investment exceeding $4 billion. The services sector was one of the main recipients, accounting for 78% of the total investment in 2023,” said José Manuel Salazar-Xirinachs, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC).
ECLAC presented its annual report yesterday, titled “Foreign Direct Investment in Latin America and the Caribbean 2024,” highlighting the strong performance of the Dominican Republic in attracting investment while making recommendations to strengthen attractive areas.
Salazar-Xirinachs noted that growth in services and manufacturing helped offset the decline in natural resource inflows. Among the factors influencing this success, he cited “very attractive location,” “a good investment climate,” infrastructure improvements, and the availability of human resources. “When there are virtuous processes in attracting foreign direct investment, success leads to greater successes, and this is something observed in different countries,” he stated.
He specified that the country’s total investment last year was 10% higher than in 2022, with modern services as the main growth area. He also highlighted the manufacturing industry, which saw a 13% increase compared to the previous year.
The ECLAC Secretary referred to tax incentives as a mechanism to attract capital but recommended applying them cautiously and periodically reviewing their effectiveness.
In this regard, he explained the need for joint actions with private sectors and other entities to create a transparent framework that strengthens the investment intentions of future investors who want to direct their resources to the region’s countries.
Energy and tourism led last year
Speaking about the projections for the remainder of 2024, Salazar-Xirinachs referred to the most attractive sectors from the previous year: tourism and energy, which together attracted $1.22 billion.
“When we look at the announced investment projects indicating future prospects, renewable energy continued to lead announcements in 2023 with six projects valued at over $700 million in total, representing 43% of the total announcements. Additionally, two tourism projects were recorded with an estimated value of $420 million,” detailed the executive.
Regarding natural resource exploration, the ECLAC Secretary emphasized the importance of considering various factors within the national and territorial dialogue exercises that the Dominican Republic is conducting—referring to rare earth investigations in Pedernales.
“From ECLAC, we highly value these processes that the Dominican Republic is undertaking to define regulations and investment conditions in these sectors,” he added.
The international organization reiterated the importance of continuing to train more and better human resources, with agreements that allow multinational companies to set up in the country to invest in continuous and specialized training programs, as an option to transfer well-being and wealth to the population.
Foreign investment fell by 9.9% in 2023 in Latin American countries, down to $184.304 billion, although it remains above the average of the last decade with prospects for improvement.
The decrease in flows received by Brazil (-14%) and Mexico (-23%), the two countries with the highest share in total inflows, explains the regional result, according to the study presented by the United Nations agency based in Santiago.
Peru also experienced a significant decrease (-65%), while Argentina and Chile showed increases (57% and 19%, respectively).
Investment in Central America
In Central America, almost all countries received more FDI, with notable growth in Costa Rica (28%) and Honduras (33%). In the Caribbean, the increase is mainly due to the rise in inflows in Guyana (64%) and the Dominican Republic (7%), highlights the ECLAC annual report presented yesterday.
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