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| 1998 report on foreign investment in Latin America and the Caribbean INTRA-LATIN AMERICAN INVESTMENT IS GROWING - Chilean companies have been the region’s largest investors, followed by those from Mexico and Argentina - Investment by Latin American countries elsewhere in the region increased considerably in 1997 compared with the previous year, when it had already quadrupled with respect to 1990, says the 1998 edition of ECLAC’s annual report, Foreign Investment in Latin America and the Caribbean. In 1997, Latin American investors committed US$8,365 million in privatization deals and other purchases of local companies in several countries of the region. Of this amount, 58% was accounted for by privatizations and the remaining 42% by the purchase of private sector properties. Chile (38%), Mexico (27%) and Argentina (24%) are the most active investing countries in the region, with some 88% of total operations identified in the study. ECLAC argues that intra-Latin American investment has been aided by a number of factors, including the reduction or elimination of restrictions on foreign capital, the kinds of privatization schemes adopted, advances in regional integration (Mercosur especially), strategic sectoral agreements between companies from different countries, and renewed strategies of market penetration, including the establishment of productive enterprises and the buying-up of local competitors. The phenomenon is particularly apparent in the Southern Cone (Mercosur, Bolivia, Chile and Peru), most notably in the active internationalization of Chilean firms, in Mexican investments in Central America and some South American economies (Argentina, Chile, Colombia and Venezuela), and, on a smaller scale, in investments between Colombia and Venezuela. The purchase of companies already involved in their main sectors of activity has been the modality most commonly used by Latin American investors to penetrate new external markets. Investment to set up new firms abroad has been less frequent and has been concentrated in large-scale projects in energy integration, exploration and exploitation of hydrocarbons, and, to some extent, manufacturing (especially in the case of Argentine investment). The main recipients of Latin American investment in 1998 have been Venezuela (39%), Brazil (23%), Colombia (19%) and Argentina (11%). Such investment has been associated particularly with the expansion of Chilean electricity companies - in most cases, in alliance with Spanish firms - into Brazil and Colombia, and with the activities of Argentinian and Mexican iron and steel companies in Venezuela. Argentina is the country where the presence of Latin American investors is most diversified, in terms of both origin and activity. LATIN AMERICA AND THE CARIBBEAN:
Source: ECLAC - Unit on Investment and Corporate Strategies The ECLAC study concludes that property transfers are concentrated in a few sectors, notably electricity, in a small number or countries, in several large-volume projects - privatizations, especially -, in a few investors (notably Chilean) and, as a result, in few companies. Chilean electricity companies stand out most of all, as they have been predominant in acquiring assets (generation, transmission and distribution), above all in Brazil and Colombia LATIN AMERICA AND THE CARIBBEAN:
Fuente: CEPAL, Unidad de Inversiones y Estrategias Empresariales. a/ Monto total de la operación, la
participación de empresas latinoamericanas puede ser menor al actual en consorcio con
otros inversionistas de fuera de la región. |