There was a historic leap in the rest of Latin American, said the Economic Commission for Latin America and the Caribbean (Eclac)
According to an Economic Commission for Latin America and the Caribbean (Eclac) report about foreign direct investment (FDI) in Latin America and the Caribbean in 2010, Venezuela is the only country in the region that posted a negative balance, with FDI inflows declining USD 1.4 billion.
The report pointed out that Venezuela’s strategy “focuses on the nationalization of foreign assets rather than on foreign direct investment as a core development objective.” It cited as an example the nationalization of the local subsidiary that the US glass container manufacturer Owens Illinois had in Venezuela.
The nationalization of companies owned by multinationals determines that there is a negative investment flow despite the fact that “several major investment projects were also made, totaling USD 668 million, mainly in the form of reinvested earnings,” the Eclac said.
Alvaro Calderón, Economic Affairs Officer, Unit on Investment and Corporate Strategies, Eclac said that the nationalization strategy carried out by Venezuela “is unique. There is not another similar (strategy) in Latin America. The goal is to put industrial development in the hands of the State. These are strategic options carried out by governments.”
During 2009 and 2010, the global financial crisis undermined FDI in Latin America, but the region started to recover last year and attracted USD 112.63 billion in FDI.
This figure is 40 percent higher than the USD 80.38 billion received in 2009 and is the third largest figure in historical terms.
Calderón stressed that “the macroeconomic management by the major economies in the region during the global crisis provided security for foreign investment; large companies have recovered and resumed their projects. Latin America is attractive as a market and for its production costs.”
Translated by Gerardo Cárdenas