Published On: Thu, May 28th, 2015

ECLAC study on foreign direct investment puts focus on Caribbean

alicia_barcenaSANTIAGO, Chile -- The Caribbean receives higher amounts of foreign direct investment (FDI) when compared to other developing economies, according to a newly published report from the Economic Commission for Latin America and the Caribbean (ECLAC).

Entitled “Foreign Direct Investment in Latin America and the Caribbean”, the flagship report was launched by ECLAC executive secretary, Alicia Bárcena, on 27 May at the organization’s headquarters in Santiago, Chile.

For the first time, the flagship report dedicates an entire chapter to FDI in the Caribbean, thus placing increased emphasis on the importance of FDI for the region. FDI inflows into the Caribbean amounted to approximately five percent of GDP in 2014, compared to three percent for Latin America, and less in other developing regions.

In the Caribbean, FDI is important both as a source of funds for development and as a source of foreign exchange. Nevertheless, questions remain about the extent to which these flows contribute to growth and development in the Caribbean.

Given the increasing propensity of many large Caribbean transnationals to make significant cross-border investments, the report looks at outward FDI from Caribbean countries to regional and extra-regional economies.

The publication discusses recent developments in key sectors, which either attract the most FDI inflows or possess potential for increased FDI. Examples include tourism, natural resources, manufacturing, business process outsourcing, financial services, and offshore education. Potential benefits and drawbacks of FDI are examined.

The report provides an analysis of the modalities commonly utilized by Latin American and Caribbean countries to attract and leverage FDI. It also looks at the extent to which these methods attract FDI, which contributes to economic growth and sustainable development.

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