FDI down in Central America and Caribbean
The manufacturing sector as a whole saw a decline in FDI due to a sharp drop in flows to Central America and the Caribbean.
In Central America and the Caribbean (other than financial centres), the decline in FDI inflows was largely due to a 20% fall in flows to Mexico, which mainly resulted from a halving of inflows to the manufacturing sector (CNIE, 2009). Although Mexico remained the subregion’s main recipient in 2008, its share in the subregion’s total inflows decreased from 76% in 2007 to 65%, suggesting that FDI growth was uneven among the countries of this subregion. Indeed, FDI inflows soared from $830 million to $3 billion in Trinidad and Tobago, which became the subregion’s second largest recipient country due to the $2.2 billion acquisition of RBTT Financial by Royal Bank of Canada. Inflows increased by 83% to $2.9 billion in the Dominican Republic, despite a strong decline in the traditional sectors such as tourism, free zones and real estate, suggesting that the Dominican Republic- Central America Free Trade Agreement (DR-CAFTA) might have opened new investment opportunities for foreign firms. In Costa Rica, FDI increased by 7%, to $2 billion. It was driven by strong growth in agriculture, which compensated for declining FDI in all the other activities.67 Increases were also registered in Belize, Cuba, Guatemala, Honduras and Nicaragua – although from low levels – while El Salvador, Haiti and Jamaica registered declining inflows.