2009, A crisis year: Foreign investment in Latin America

Since the early 1980s, foreign investment has become the main source of foreign capital for developing and least-developed countries. With the drastic reduction of bank loans, direct and portfolio investment are the most important alternatives to fund public and private needs of capital. Foreign investment is particularly important for least-developed countries and small developing countries. As a consequence, growth and development in many regions of the world depend on foreign capital, and any shortage could have detrimental consequences. Unfortunately, the economic crisis that started in 2008 seems to be contracting the total amount of FDI; particularly this seems to be the case in Latin America, as has been reflected in the latest report of the Economic Commission for Latin America and the Caribbean. This brief article aims to analyse this report and its implications for the region.