Latin America has seen a gradual increase in FDI since 2003, and the trend looks set to continue in 2011.
The most popular destination countries are Mexico, Colombia and Brazil, and top source countries for the region are the US and Spain. According to greenfield investment monitor fDi Markets, sectors that have received the most growth are software, IT and business services.
While the number of projects has increased, capital expenditure on such initiatives has sunk back to near 2007 levels, after nearly doubling in 2008 and 2009. Capex reached $65.9bn in 2007, $129.9bn in 2008 and $68.4bn this year to date. Much of this was due to a weaker fourth quarter for investment, which in previous years was one of the strongest periods for projects in Latin America.
A recent investment saw German systems provider Orga Systems establish a delivery centre in Buenos Aires, Argentina. The project will have created 200 jobs by 2011, although the amount invested was not disclosed. Meanwhile, Colombian firm Allus Global BPO Center, a provider of business process outsourcing services, invested $5m to establish itself in Peru, creating about 2000 jobs.
Of the top three countries, Colombia has been getting a lot of attention in the past few years as it emerges from a conflict that, while still going on, has quieted significantly. The country has seen a larger influx of FDI so far in 2010 compared to 2009.
The coal, oil and natural gas sectors have so far received the most FDI. Up to September 2010, figures from fDi Markets recorded 77 projects for the country, compared to a total of 61 in 2009.
Colombia is on pace to receive more than 80 projects in 2010, which would be a record for the country, beating the previous high of 78 projects recorded in 2008.
Canadian oil and gas producer Pacific Rubiales has announced plans to invest up to $2bn in 2011 and 2012 to increase production at its Colombian operations. Another Canadian firm, Canacol Energy, is to construct a new facility in Colombia as part of a $46m investment in the country.