South America, a magnet for foreign investment

According to the report “Investing in the world,” Agency for Trade and Development United Nations, UNCTAD (for its acronym in English), released this week, foreign direct investment (FDI) increased 56% and rose to U.S. $ 86,000 million. According to the report, Brazil generated 56% of that volume.
In total, foreign direct investment to Latin America and the Caribbean rose to U.S. $ 159,000 million in 2010, representing a 13% increase over the previous year.

Foreign direct investment in resources dedicated to building economic as well as the formation of factories and several international business operations, such as mergers and acquisitions, purchase of equities, loans to affiliates and reinvested earnings.
“Latin America and the Caribbean experienced a sudden acceleration of mergers and acquisitions, which increased from negative values, considering the investments in 2009 to U.S. $ 29,000 million in 2010, which is a record in the region since 2000,” says the report.
“This evolution bears witness to an upsurge in the interest of foreign companies in acquiring companies in Latin America after a decade of slow,” says UNCTAD.
Foreign direct investment in Latin America and the Caribbean in 2010, focused on Asian multinational operations by the oil & gas, mainly Chinese and Indian.
Multinationals in Latin America
The study says, fueled by strong economic growth in their countries, multinationals in Latin America also increased their investments abroad, particularly in developing countries.

“Capital flows to Latin American left and the Caribbean increased 67% to about U.S. $ 76,000 million in 2010, the largest regional progress in the world,” the report says.
The significance of the increase is due to increased investments by multinationals in Brazil and Mexico, the main investors in the region.
In the case of Brazil, the export of these resources amounted to U.S. $ 12,000 million last year, thanks to investments in foreign companies like Vale, Braskem, Petrobras, Camargo Correa, Gerdau and Votorantim.
Preliminary data for 2011 indicate that foreign direct investment inflows in Latin America continue to rise.
Regarding the outputs, ie, investments made by companies outside the region, they continue to decline, the study said.

The case of Brazil

UNCTAD’s report appears at a time when the Brazilian currency, the real, is revalued against the dollar.
Brazil jumped from the number 15 in 2009 to number 5 in the ranking of the countries that received foreign direct investment.
They totaled $ 48,400 million in 2010, which means an increase of 84.6% in 2010 compared to the previous year.
In 2009, he says, from Paris, BBC reporter Daniela Fernandes Brazil, the South American giant had suffered a 42% decrease in the volume of foreign direct investment due to the economic crisis, a drop greater than the world average, that year.
The quantum leap of such investments in Brazil, in 2010, due to the entry of more than U.S. $ 15,000 million in December, of which U.S. $ 7,100 million is due to the sale of 40% of the Brazilian unit of the company Spanish oil group Repsol to Chinese Sinopec.
UNCTAD’s report is disclosed in this framework, when the real is valued against the dollar, a situation favored by the entry of foreign resources.
The ranking
In 2010, the United States again tops the list of countries with higher foreign direct investment in the UNCTAD study, with an income of U.S. $ 228,000 million, an increase of 49%.
China and Hong Kong are classified differently and occupy respectively the second and third places, with FDI of U.S. $ 106,000 million and U.S. $ 69,000 million.
Fourth, the report puts to Belgium, with U.S. $ 62,000 million in foreign direct investment.
The UNCTAD predicts global growth for new foreign direct investment, which should reach between U.S. $ 1,400 billion and U.S. $ 1,600 billion this year.

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