SANTIAGO: Foreign direct investment (FDI) in Latin America and the Caribbean fell 16 per cent in 2014, reversing a decade-long growth trend as the region’s economies slowed, a UN panel said on Wednesday.

Foreign investment in the region fell to $158.8 billion last year from a record $190bn in 2013, said the Economic Commission for Latin America and the Caribbean.

It was the first drop since 2009 and a sharp reversal in a trend that saw foreign investment expand rapidly over the course of a decade, from $46.9bn in 2003.

“Inflows were affected by the region’s economic deceleration and lower prices for its raw mat­e­rial exports,” the commission said in a report.

It predicted another decline in foreign investment in 2015.

Latin America’s economies, which boomed in the 2000s, are feeling the pinch of falling commodities prices.

ECLAC’s executive secretary Alicia Barcena urged Latin American policymakers to use the slowdown as an opportunity to diversify away from the raw materials the region’s economies rely heavily on.

Brazil attracted the most foreign investment, $62.5bn — 2pc less than 2013. Mexico was next with $22.8bn, but that was a 49-per cent drop from 2013. The biggest decline in foreign investment was in Venezuela, where it fell 88pc, to $320 million.

Published in Dawn, May 28th, 2015

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