Foreign Direct Investment (FDI) inflows to LAC declined by 7.9 percent to $167.043 billion in 2016, due to low commodity prices, sluggish economic growth and global trend of shifting investment in developed economies, according to the UN Economic Commission for Latin America and the Caribbean (ECLAC). At 3.6 per cent of the region's gross domestic product (GDP), against the global average is 2.5 per cent, investment by transnational corporations in the region's economies is crucial. Brazil got the lion’s share: 47 per cent, a 5.7 percent increase; while Mexico at second place, fell by 7.9 percent.
The IMF in its quarterly update on Latin America & Caribbean forecast a gradual upturn for Latin America’s economy in 2017 and 2018, based largely on Argentina’s and Brazil’s recoveries from their recessions. It postulates 1 per cent in 2017 (UN ECLAC estimates 1.1 per cent) and 1.9 per cent in 2018, which is still weak but more optimistic than a year earlier. The recovery will rely upon economic reforms and better governance –(for example: fight against corruption, anti-cyclical macro-economic measures, vigilant institutions, reasonable levels of foreign direct investment, a shunning of populism) - absent any major upturn in commodity prices. Greater regional integration has also helped.
US oil major Exxon announced in late July another significant find in offshore Guyana. The Payara field, which could pump 120,000 bpd by 2020, raises Guyana’s estimated recoverable resources to about 2.25-2.75 billion barrels. On the South American Caribbean coast, with an Indian-origin diaspora up to 45 percent of its 700,000 population, Guyana neighbours Venezuela but has rejected the latter’s claims in these waters.
September 12, 2017