The UN Highlights Chile as One of the Countries with the Highest Foreign Direct Investment

Foreign direct investments remained almost stable in Latin America last year (-1%), totaling $193 billion.

Written by: Ignacio Teson • Thursday, June 20, 2024 • 2 min read

The report highlights the boost in the region’s mineral extraction industry for the energy transition, particularly in Chile, which also stands out for its green hydrogen projects and solar and wind energy production.

Foreign direct investments remained almost stable in Latin America last year (-1%), totaling $193 billion, making it the least affected developing region by the general trend of declining investments, according to the annual UN Trade and Development report.

The analysis published on Thursday by the United Nations technical body notes that several Latin American countries have benefited from the sustained demand for raw materials and minerals vital for producing clean energy technologies.

As seen globally, there were considerable differences between countries within the region. Mexico and Brazil continued to be the strongest magnets for foreign investments, with Chile increasingly becoming an attractive destination.

In South America, Argentina, Chile, and Guyana saw the most significant growth in foreign direct investment last year, offsetting more negative results in Peru and Brazil. Despite these setbacks, Brazil remained the country with the highest investment inflows, according to the report.

Elsewhere in the region, Mexico maintained a stable flow of incoming investments, while in the Caribbean, the Dominican Republic stood out with a 7% increase in foreign investments.

During the report presentation, the head of the organization, Rebeca Grynspan, analyzed international efforts to “decentralize” supply chains, which became evident during the pandemic. She noted how some Latin American countries are benefiting from this situation.

Grynspan pointed out that Mexico and Costa Rica in Latin America, Vietnam in Asia, and certain West African countries are strengthening their roles in a more decentralized global supply chain, although this trend is not yet strong enough.

She commented that the region has shown significant resilience in greenfield projects (construction of new facilities, with renewable energies playing a crucial role), which saw a global slowdown last year.

In this context, she highlighted announcements of major foreign investments in large projects in Brazil and Chile, “which can be explained by the great potential Latin America has in renewable energies.”

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ABOUT THE AUTHOR See More

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.