Foreign investment doubles in Brazil

Last year, Brazil received US$ 37.4 billion in foreign direct investment (FDI), double the US$ 18.8 billion of 2006 and a historic record. The figure is included in a preliminary report disclosed by the United Nations Conference on Trade and Development (Unctad) and exceeds forecasts by the Brazilian Central Bank made at the end of 2007, which estimated investment of US$ 35 billion for the year.
"The total broke the previous record, for 2000, when FDI reached US$ 33 billion, as did the volume of investment worldwide break the record for the same year, which had been US$ 1.4 trillion," said to ANBA the president at the Brazilian Society of Transnational Corporations and Economic Globalisation (Sobeet), Luís Afonso Lima. According to the Unctad, the global FDI flow was US$ 1.5 trillion last year. "Both flows, the Brazilian and the global, are related. Our record did not take place by chance, it is also related to what happened worldwide," added Lima.
In Latin America, Brazil was the main receptor of FDI in 2007, ahead of Mexico (US$ 36.7 billion) and Chile (US$ 15.3 billion). Both countries also presented growth of over 90% in the inflow of investment. The funds turned to Brazil even exceeded those turned to developed nations like Japan (US$ 28.8 billion) and Italy (US$ 28.1 billion).
Latin America and the Caribbean received a total of US$ 126 billion, an increase of 50% over 2006. To the Unctad, the growth was boosted by greenfield investment (new and in expansion), rather than cross-border international mergers and acquisitions, one of the main factors for expansion of the flow around the world.
The interest in the region, according to the organisation, was due to the strong regional economic growth and elevated corporate profits on the back of high commodity prices on the international market. Brazil is a great producer of agricultural and mineral commodities and, according to the Unctad, the inflow of investment into the country was largely turned to industries that used local raw materials in production.
Luís Afonso Lima, from Sobeet, mentioned the case of mining and industries connected to the sector, like ironworks. "In this case, Brazil is both an active and a passive agent," he said. That is, the country both receives foreign investment and invests in business abroad. Some examples are Brazilian companies like mining company Vale do Rio Doce and ironworks Gerdau, which have important businesses abroad. At the same time, international groups, like Arcelor Mittal, make heavy investment in Brazil.
According to the Unctad, the FDI flow to developing nations reached US$ 438.4 billion last year, an increase of 15.7% in comparison with 2006. In the list of countries that was disclosed by the organisation yesterday, Brazil was only behind China (US$ 67.3 billion) and Hong Kong (US$ 54.4 billion) among the emerging nations that received the largest volume of funds. Russia also received a larger volume of investment, US$ 48.9 billion, but the Unctad places the country in another category, that of "transition economies".
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