New figures showing a sharp decline of foreign investments in Latin America made big headlines in many countries in the region in recent days, but there is other, less noticed data that should trigger even bigger alarm bells. I’m talking about the latest indicators of innovation, which have a much bigger impact on the future.
Granted, the new figures on foreign investments released last week by the United Nations’ Conference on Trade and Development are nothing to be sneered at. Foreign direct investment in the region fell by 14 percent last year after four years of consecutive increases, UNCTAD said.
The reasons for the decline were mainly the drop in commodity prices — which drew fewer investments for ports and other infrastructure projects to ship raw materials — and some governments’ anti-investment policies. Foreign investment in Argentina fell by 42 percent last year, and in Venezuela by 88 percent.
But while these figures should be a cause for concern, the biggest threat for the region’s future will be many countries’ failure to innovate and produce newer and more value-added products. Few if any economists are predicting any recovery of commodity prices anytime soon.
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Etiquetas: Andres Oppenheimer, innovation, Latin America
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