Trinidad and Tobago foreign direct investment tops US$1 billion in 2013
Global foreign direct investment (FDI) continued its overall growth in 2013, reports UNCTAD (United Nations Conference on Trade and Development) in the World Investment Report 2014.
Developing countries increased their lead in FDI from 2012, with a new high of US$778 billion, or 54 percent of the global total.
While developed countries increased their FDI growth by 9 percent to US$566 billion, this is just 39 percent of global FDI flow. Developing and transition economies now make up half of the top 20 countries in FDI inflows.
The Caribbean and Latin America region’s FDI grew again in 2013, by 6 percent overall, to US$292 billion. But this lead in FDI growth was taken by the sub-region Caribbean and Central America, where flows increased 64 percent to US$49 billion.
Privatisations and decreased restrictions on FDI contributed to the growth of the services sector as the main target of FDI in the Caribbean, Central America and South America. The manufacturing sector was the next largest for Caribbean and Central American FDI projects.
In the SIDS (small island developing states), Trinidad and Tobago and the Bahamas had the greatest FDI flows with more than US$1 billion each.
Trinidad and Tobago was one of three SIDS that together captured 63 percent of developed-country transnational corporations’ (TNCs) SIDS greenfield projects. This was an increase from 2012, in which Trindad achieved 41 percent of the total FDI inflows of US$6.2 billion.
The Caribbean’s highest 2013 FDI inflows were achieved by the British Virgin Islands and the Cayman Islands, at $10 billion and above.
Trinidad achieved second tier group status of US$1.0 to 4.9 billion, with the Dominican Republic, the Bahamas, and Honduras.
FDI in Trinidad and Tobago is highly concentrated in the extractive industries which got more than 70 percent of total inflows to the country between 2001–2011. In 2013, while inflows decreased 30 percent to US$1.7 billion from US$2.45 billion in 2012, most of it was still in petroleum industries. According to the report, the decrease in FDI was due to “the halving of reinvested earnings as natural gas prices remained weak.”
Elsewhere in the Caribbean, flows to the Dominican Republic fell by 37 percent to US$2 billion after a high of US$3.1 billion in 2012.
At the launch of the World Investment Report 2014 at the Arthur Lok Jack School of Business, InvesTT President Racquel Moses noted UNCTAD was projecting a ten percent growth in global investment this year and 13 percent growth in 2015.
Moses said Trinidad and Tobago expects to report increased FDI inflows in 2014 as several projects are likely to close in the coming months, among them a solar PV cluster destined for Point Lisas.
With global FDI in a growth mode and reaching $1.45 trillion, UNCTAD is projecting that FDI flows could rise to $1.6 trillion in 2014, $1.7 trillion in 2015 and $1.8 trillion in 2016.