Guyana has recorded the highest inflow of Foreign Direct Investment (FDI) for the Caribbean in 2022, according to the Economic Commission for Latin America and the Caribbean.
In 2022, Guyana benefitted from over US$4.3B in investments, the report found.
It was noted that the figure represents a 1.5% reduction in Foreign Direct Investment in Guyana when compared to the value of investments received in 2021.
“The performance is due, once again, to foreign investors’ interest in the country’s hydrocarbon sector,” ECLAC said.
The natural resources sector accounted for 99% of FDI inflows into the country in 2022 although inflows into the sector were 2% lower than in 2021.
According to the ECLAC Report, Manufactures, which represent 1% of the total, also recorded a drop, of 9%.
“The project announcements registered in 2022 indicate that the country’s hydrocarbon sector will continue to receive large investments in the coming years. In this connection, the United States-based oil company ExxonMobil announced a US$ 10 billion investment project in the country,” ECLAC reported.
In the Caribbean, Guyana was followed by the Dominican Republic, which received US$ 4.01B in FDI, 25% higher than in 2021 and the highest level in the last 30 years.
“An examination of FDI components shows that the result was due to a 39% increase in equity, which accounted for 56% of total inflows,” ECLAC explained.
Overall, Latin America and the Caribbean received US$224.5B in Foreign Direct Investment (FDI) in 2022 – an increase of 55.2% when compared to 2021.
It marks the highest value of FDI in Latin America and the Caribbean to date.
“This result is mainly attributable to the increase in FDI in some countries, particularly in Brazil; to growth in all the components of FDI, especially earnings reinvestment; and to the increase in FDI in the services sector,” ECLAC said in its report.
Brazil received 41% of the regional total of FDI and ranked as the No. 5 destination for global FDI, followed by Mexico (17%), Chile (9%), Colombia (8%), Argentina (7%) and Peru (5%).
It was explained that FDI inflows to Latin American and Caribbean countries had not topped US$200B since 2013.
“The challenge of attracting and retaining Foreign Direct Investment that contributes effectively to the region’s sustainable and inclusive productive development is more relevant than ever. There are new opportunities in an era of reconfiguration of global value chains and geographic relocation of production in the face of a changing globalization,” ECLAC’s Executive Secretary, José Manuel Salazar-Xirinachs said as he presented the study’s main conclusions during a press conference in Santiago, Chile.
He said the challenge is not only to attract and retain, but also to maximize FDI’s contribution to development. He said countries must focus on post-establishment productive development policies, which include the promotion of productive linkages, policies for adding value, human resources development, infrastructure and logistics, and building local capacities.
While these flows grew in Latin America and the Caribbean and in other regions of the world, they decreased in the United States and in some European Union countries. Overall, global FDI inflows shrank by 12% versus 2021, totaling $1.29 trillion dollars.