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The real winners in foreign investment

Tuesday, November 1, 2011

We have already noted the increase in foreign direct investment in Central America during the first half of the year. Now the United Nations Economic Commission for Latin America has confirmed the tendency has made it official.

Central America received $4.1 billion of direct foreign investment January through June, up from $2.9 billion in the same period of last year. The amount is important, not only because of the size but also because all the region’s nations received a share of the winnings. Nobody was a loser.

But let’s not get ahead of ourselves. The figures don’t lie, but they do reveal discrepancies and flaws within the progress that is being made in Central America.

Panama received $1.42 billion of foreign investment and Costa Rica $1.06 billion.But no other country in the region achieved $500 million. Central America is a region of nations that have and others that have not.

Comparison with other regions and countries is also relevant. Colombia, which has a population similar to that of Central America, received $7 billion in foreign investment.

In other words, Central America’s “triumph” is relative. Above all when comparisons are made with Chile, which received “only” $6.9 billion of foreign investment, 14 percent less than in the same period of last year.

Chile has less than half the population of Central America, yet it won very handsomely in competition with the region. In soccer terms, the result would be more like Chile 6, Central America 1.