Latin America Advisor 2023-09-12 – Inter-American Dialogue

LATIN AMERICA ADVISOR

A daily publication Of the dialogue

September 12, 2023

Why Is Mexico Lagging Behind in Attracting FDI?

Foreign direct investment in Latin America reached $225 billion in 2022, a record high. However, Mexico attracted only 17 percent of that total. Mexico City is pictured. // File Photo: Mexican Government.

Q

Foreign direct investment in Latin America hit a record high in 2022, with $225 billion committed from investors to Latin America and the Caribbean—55 percent more than 2021, according to the U.N. Economic Commission for Latin America and the Caribbean, or ECLAC, the Financial Times reported Aug. 30. Yet Mexico, which accounts for nearly a quarter of the region’s economic activity, secured only 17 percent of its total foreign investment last year. What accounts for the investment boom in the region, and why is Mexico lagging behind? What factors would make Mexico more attractive in the nearshoring trend? Will Mexico’s prospects change after the 2024 election?

A

Arturo Sarukhan, board member of the Inter-American Dialogue and former Mexican ambassador to the United States: “Mexico has been underperforming in terms of growth, inclusion and poverty reduction as compared to similar countries. Its economic growth averaged just above 2 percent a year between 1980 and 2022, limiting progress in convergence relative to high-income economies. But now it has also been walking backward into the political patterns under which it lived before 2000. As the United States recalibrates its ties with China and reshoring to North America rears its head, Mexico faces the proverbial gap between promise and reality. The promise: by virtue of geography, its four-decade-long trade and economic integration with the United States, the modernizing of the NAFTA—now USMCA—and the consolidation of the key paradigm prevalent among the three trading partners of integrated supply chains and…”

Top News

Dominican Gov’t May Close Border With Haiti Over Water Dispute

The Dominican Republic’s president said the country may close its border with Haiti amid a dispute over water from a shared river.

Tesla, Suppliers to Invest $15 Billion in Mexico’s Nuevo León: Governor

Tesla and its suppliers are to invest some $15 billion over two years in Mexico’s Nuevo León, the state’s governor said Monday.

Colombia’s Coca Cultivation Hits All-Time High

Colombia’s amount of land under coca cultivation rose 13 percent last year to a record high, a U.N. office said Monday. Colombian Justice Minister Néstor Osuna said coca cultivation is growing at a slower pace than in the past. // File Photo: Colombian Government.

Complete editions of the Latin America Advisor are delivered on a biweekly basis to members of the Dialogue’s Corporate Program and other subscribers. Sign up below for a free complimentary preview subscription.

ABOUT THE LATIN AMERICA ADVISOR

The Inter-American Dialogue publishes the Latin America Advisor every business day for a distinguished membership of informed corporate leaders, scholars, and government officials invested in Latin America’s development and future. The Advisor‘s highly regarded Q&A section covers questions submitted by subscribers themselves. Commentators regularly include heads of state, business leaders, diplomats, economists, analysts, and thought leaders from around the world. Many of the world’s largest and fastest-growing companies subscribe to the Advisor. To subscribe, click here. For terms and conditions, click here. For more information, contact Gene Kuleta, editor of the Advisor, at gkuleta@thedialogue.org.

Subscribers

Staff

Gene Kuleta
Editor
P. 202.463.2920
E. gkuleta@thedialogue.org

Carl David
Goette-Luciak
Reporter

Nili Blanck
Reporter

board of advisors

Diego Arria
Director,
Columbus Group

Merike Blofield
Professor of Political Science,
University of Hamburg

Devry Boughner Vorwerk
CEO,
DevryBV Sustainable Strategies

Joyce Chang
Global Head of Research,
J.P. Morgan

Marlene Fernández
Corporate Vice President for Gov’t Relations,
Arcos Dorados (McDonald’s)

Peter Hakim
President Emeritus,
Inter-American Dialogue

Donna Hrinak
Director,
Adtalem Global Education

Jon E. Huenemann
Council Member,
GLG Inc.

James R. Jones
Chairman,
Monarch Global Strategies

Craig Kelly
Senior Director,
Int’l Gov’t Relations,
Exxon Mobil

Barbara Kotschwar
Professor of Political Economy,
Georgetown University

John Maisto
Director,
US Education Finance Group

Nicolas Mariscal
Chairman,
Grupo Marhnos

Thomas F. McLarty III
Chairman,
McLarty Associates

Beatrice Rangel
Director,
AMLA Consulting

Ernesto Revilla
Head of Latin American Economics, Citi

Gustavo Roosen
President,
IESA

Andrés Rozental
President, Rozental &
Asociados

Shelly Shetty
Managing Director,
Sovereigns, Fitch

asia & Latin America

education

energy transition & Climate

Migration, Remittances & Development

peter d. bell rule of law

cities

Women & Girls