Hello! Welcome back to the Latin America Weekly newsletter. In this issue: Foreign investment woes are set to continue. A failed coup plot in Bolivia. New coronavirus variants. Mexico’s drug trade reaches tourist resorts.
Foreign capital flees Latin America, and doesn’t plan to return
Foreign direct investment (FDI) plunged 35 percent worldwide during the pandemic year, reaching its lowest level in 15 years. As shown in a new report by the United Nations’ Conference on Trade and Development (UNCTAD), no region suffered a bigger hit than Latin America — which managed to land a mere USD 88 billion in FDI last year, 45 percent less than 2019.
- While Covid-19 plays a major role in this process, structural frailties were already taking their toll before the coronavirus crisis and are likely to continue hindering business in the region in the post-pandemic period.
State of play. FDI in Latin America is inextricably linked to commodities, which explains varied results between countries:
- Oil exporters such as Colombia and Ecuador suffered due from a sharp drop in Brent prices. But while the latter compensated for losses with production-sharing contracts and lower taxes on mining, the former has been marred by social unrest.
- Despite...