Foreign Direct Investment In The Caribbean Again Drops

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FDI inflows to the Caribbean took a hit again last year due to the impact of COVID-19 on tourism. (Photo by ERIKA SANTELICES/AFP via Getty Images)
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By NAN Staff Writer

•News Americas, NEW YORK, NY, Mon. Jan. 25, 2021: Foreign Direct Investment in the Caribbean fell by 18 percent last year, according to latest date from UNCTAD, though that drop was far less than 2019.

The report, released Sunday, said the FDI inflows into the Caribbean last year was just USD 3.2 billion, as the region was hit by COVID-19, which drastically impacted investment in the tourism sector.

However, there was somewhat good news for the Dominican Republic, which even though it has seen the highest rate of COVID-19 infections and deaths in the Caribbean, saw its FDI inflows drop by only 9 percent. The country was helped by investments in the manufacturing sector and new projects in medical devices.

 The news comes as the Economic Commission for Latin America and the Caribbean (ECLAC), said Friday that the region’s foreign trade in 2020 had its worst performance since the global financial crisis of 2008-2009 because of the economic crisis prompted by the global COVID-19 pandemic and the restrictions imposed by governments to stop its spread. 

In its annual report, unveiled on Friday, ECLAC estimated that the value of regional exports dropped -16 percent in 2020.

However, FDI flows to the Caribbean in 2019, had reported a worst decline. In the Caribbean, excluding offshore financial centers, flows declined by 32 percent in 2019. That contraction was owed to lower FDI – $2.5 billion – in the Dominican Republic, the largest recipient in the sub-region, despite strong economic growth there in 2018.

Flows to Haiti and Jamaica also had fallen in 2019, to $105 million and $775 million, respectively.