Thursday, June 01, 2006

Follow the money 

Recently in the comments section some information was given regarding direct foreign investment (FDI) in Venezuela that showed it having gone up significantly. Some, however, questioned the accuracy or relevancy of those numbers.

Today some numbers were given in the Wall Street Journal (page A6) on on foreign investment in various Latin American countries. While it is not directly comparable to overall FDI because it only gives U.S. investment is is still very revealing. Here is the information:

Foreign Direct Investment/Latin America

Net Investment from the U.S., in millions of dollars, quarterly frequency

Country Latest; Previous

Mexico 1,905; 1,101
Brazil 56; 881
Argentina 384; 180
Venezuela 504; 330
Colombia 151; 40
Chile 197; -207
Peru 52; 111

Note: Negative values indicate net inflow into the U.S.
Source: Moody's Economy.com

So lets see what we have here. First, the biggest investment winner is Mexico as they get far more than everyone else. But look at who is number two. Yup, good old Venezuela at 504 million in the last quarter. And if you take into account that Mexico's population is about 4 times greater than Venezuela's Venezuela matches them on a per capita basis.

What's just as illuminating is to see who the laggards are - Chile which as had negative net investment from the U.S. over the past half year, Peru which is quite low, Colombia which is quite low, and Brazil which, factoring in the size of the country, is also quite low.

So its interesting to see how Venezuela actually outperforms a lot of these other ballyhooed economies when it comes to one of the main capitalist measurements. So it would seem that when it comes time to put up or shut up as to whether or not Venezuela is a good place to invest American investors are more than happy to put up. So it would seem yet more anti-Chavez propoganda, in this case that Venezeula is not getting investment, has been debunked.


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