Brazil Gets Lion Share of Foreign Investment in Latin America

US dollar Foreign direct investment (FDI) in Latin America and the Caribbean was record last year, reaching almost US$ 106 billion, according to figures disclosed by the Economic Commission for Latin America and the Caribbean (Eclac), an organization connected to the United Nations (UN).

According to the organization, the previous record had been in 1999, when the investment flow reached US$ 89 billion, boosted by privatization processes of state-owned companies in the region. Last year, however, the factors that attracted foreign funds were the growth of the local economies and the strong global demand for natural resources produced here.

The entry of FDI into Latin America and the Caribbean in 2007 was 46% over the volume that came to the region in 2006, the largest increase among developing nations, according to the Eclac. The main receiver of funds last year, however, was Asia, which received 55% of the total turned to developing economies. Latin America came in second place, with 21%.

Brazil was the country in the region that received the largest volume of funds in 2007, a total of US$ 34.6 billion, 84% more than in the previous year. According to the Eclac, the sector that received the largest volume of investment was the service sector, followed by the transformation industry and exploration of natural resources.

Mergers and acquisitions of companies also played an important part in the entry of funds. Among the main operations in the region in 2007, the Eclac mentions the purchase of shares of ArcelorMittal Brazil by the ArcelorMittal head office, in India, for the value of US$ 1.18 billion, the purchase of financial information company Serasa by the Irish Experian Group, for US$ 1.2 billion, the acquisition of mining company MMX Minas-Rio by Anglo American, from the United Kingdom, for US$ 1.15 billion, and the purchase of retail chain Atacadão by French retail chain Carrefour for US$ 1.1 billion.

Brazil, Chile, Colombia and Mexico were responsible for 90% of the growth in FDI flow to the region, according to the Eclac. Mexico was in second place among the receivers, with inflow of US$ 23.23 billion, followed by Chile, with US$ 14.46 billion and Colombia, with US$ 9.03 billion.

If in the case of Brazil, the service sector was the one that received the largest volume of foreign funds, in Chile and Colombia the largest inflow was into the oil and gas area. In Mexico, the main destination for investment was the transformation industry.

The main origins of funds invested in the region were the United States, the Netherlands and Spain.

On the other lane, foreign direct investment by nations in Latin America totaled US$ 20.62 billion last year, less than half of the US$ 42 billion in 2006. Brazil once again led as the origin of funds, with US$ 7.07 billion in investment in 2007, but much less than the US$ 28.2 billion in the previous year. The figures for 2006, however, were greatly influenced by the purchase of Canadian mining company Inco by the Brazilian Vale do Rio Doce.

Last year, the main acquisitions made by Brazilian companies abroad were the purchase of the North American Chaparral Steel and Quanex Corporation by ironworks Gerdau, for the value of US$ 5.4 billion, the acquisition of US slaughterhouse Swift & Co. by JBS-Friboi group for US$ 1.4 billion and acquisitions in the area of services for the petrochemical industry by GP Investments for US$ 1 billion in Argentina and in other nations.

Anba – www.anba.com.br

Tags:

Ads

You May Also Like

Pakistan Wants Fuel Partnership with Brazil

According to the Minister of Foreign Trade and to the president of the Export ...

Brazil’s Lula Urges New Pope to Promote Social Justice

Brazilian President Luiz Inácio Lula da Silva sent a message to His Holiness, Pope ...

Accused of Corruption, Brazil’s Senate President Might Resign Any Minute

Brazilian senator José Sarney, the president of the Senate and a key ally of ...

Brazilian Air Force Officer Ending Training for Space Travel

A Brazilian air force officer will become his nation’s first person in space when ...

Winner at Sundance, Brazilian Documentary Starts Promising US Career

Manda Bala (Send a Bullet), the Brazilian movie that won at this year's Sundance ...

Brazil Market Ends 2004 in Record Breaking Pace

Brazilian shares continued upward to set a record closing high in the final day ...

Corruption Scandal in Brazil Also Brings Down Federal Savings Bank’s Chief

The downfall of Brazil’s Minister of Finance, Antonio Palocci, was sealed when it was ...

Dr. Menges, I Apologize for My Fellow Brazilians

The "new axis of evil," which late American scholar Constantine Menges predicted and all ...

A People Dumping Place in Brazil Teaches Princeton Anthropologist to Get Involved

While doing fieldwork for his Ph.D. in his native Brazil in 1995, anthropologist João ...

Brazil Auctions Dozens of Exploration Blocks in New Oil Frontiers

The National Petroleum, Natural Gas and Biofuel Agency (ANP) has scheduled for December 18th, ...