Taken from Diario Libre
A new report from the Economic Commission for Latin America and the Caribbean (ECLAC), released yesterday, supports what was reported last week by the United Nations Conference on Trade and Development (UNCTAD) that Foreign Direct Investment (FDI) in the Caribbean had a positive variation.
The report, titled " Foreign Direct Investment in Latin America and the Caribbean 2023", details that the Dominican Republic was the second largest recipient of FDI after Guyana, but experienced the largest increase.
The report highlights that the increase in the Dominican Republic was due to a 39% increase in capital contributions, which represented 56% of total FDI inflows.
The second most important component was the reinvestment of profits, which represented 36% of the total, although it decreased by 14% compared to the previous year.
Business-to-business loans were the smallest component, representing 8% of the total, but they registered a significant increase compared to the negative result obtained in 2021.
Overall, the report indicates that the Dominican Republic received $4.01 billion in FDI, representing a 25% increase compared to 2021 and the highest figure in the last 30 years.
The United States leads as the largest foreign investor, accounting for 38% of the total received in 2022.
Also noteworthy is the 63% growth in capital from Spain, which represented 9% of the total invested in the country, second only to Mexico and Canada.
In which sectors was the most investment made?
The ECLAC report highlights that the services sector benefited the most, accounting for 76% of total FDI inflows to the Dominican Republic in 2022, amounting to US$3.034 billion . This sector is expected to continue growing in the coming years due to the dynamism of certain segments.
Furthermore, it is mentioned that the Punta Cana-Macao Energy Consortium (CEPM), belonging to the InterEnergy group, plans to invest $1 billion in increasing its renewable energy generation capacity in the Dominican Republic, through a green loan from Bank of America and multilateral banks.
This announcement, made during the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP27) in Egypt in 2022, would be in line with "net zero" and would contribute to ambitions related to sustainable tourism in the Dominican Republic.
The second most representative sector in terms of FDI was manufacturing ,which accounted for 15% of the total and experienced a 95% increase compared to the previous year.
On the other hand, the natural resources sector , which represents 9% of the total, received 30% less revenue than in 2021.
At a global level
Global reduction, but not in Latin America
Globally, according to ECLAC, foreign direct investment inflows fell by 12% in 2022, totaling US$1.29 trillion. However, Latin America and the Caribbean saw a record increase in FDI.
In 2022, the region received $224.579 billion in FDI, representing a 55.2% increase compared to 2021 and the highest value since records began.
Since 2013, FDI inflows into the region had not exceeded $200 billion, making the 2022 recovery a major milestone for investments over the past decade.
Photo: EFE Chile.
