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Country Report Jamaica
The Economist Intelligence Unit, May 2013, Pages: 24
According to data released by the UN Economic Commission for Latin America (ECLAC) on May 14th, foreign direct investment (FDI) to Latin America continued an upward trend in 2012 for the third consecutive year, despite a challenging global economic outlook and falling global FDI flows. This confirms the region's continued attractiveness for foreign investors and supports our forecast that FDI will reach a record US$218bn by 2017.
Continuing the solid upward trend observed since 2010, FDI to Latin America reached a record high of US$173.4bn in 2012 (up by 6.7% from 2011), lifting the region's share of global FDI flows to 12% (from 10% in 2011). FDI to the region represented around 3% of its total GDP (a maximum of 11.3% in Chile), up from 2% in 2011-this is still below the 4% achieved in 1996-2011. The region's success in attracting FDI was even more remarkable when contrasted with the trend followed by global FDI flows amid a still-weak recovery in the developed world. Global FDI flows fell by 13% in 2012, brought down by a 22.5% dip in FDI to developed countries (with those to the US and the EU being the main culprits, down by 25.3% and 24.8% respectively). FDI to developing countries also posted a minor 3% decline, with 13.1%, 10.2% and 3.3% falls in flows to the transition economies, Asia and the Pacific, and the Middle East respectively. Latin America was the only region in the world other than Africa (where FDI inflows increased by 5.5% after three consecutive years of decline), to post a positive result in 2012.
Latin America's good performance is explained by a combination of factors. Although some of these are related to a more general trend of FDI being displaced from developed countries still mired in recession or in an uncertain recovery, to developing ones where returns are higher, a few other important drivers are specific to the region. In particular, the ongoing boom in prices of natural resources (especially metals) and the growing attractiveness of domestic consumer markets-supported by several years of solid economic growth and poverty reduction efforts-for mass consumption services (including telecommunications, retail commerce and financial services among others) played an important role. Moreover, a growing share of earnings originated from the consistent stocks of FDI accumulated over the years, which is being reinvested in the region (reinvested earning accounted for an average 42% of total FDI in the last five years). This helped to boost the numbers, although it also entrenched current sectoral profiles and the region's existing production structure.
Country Report Jamaica
FDI to Latin America remained strong in 2012
FDI distribution and composition
The rise of intra-regional FDI and internationalisation of translatins