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Multinationals raise investments in the country

(12/23/2010) .

 

Brazil will stay with 3.4% of the global flow of productive investment this year - the highest rate of the decade. Multinational companies are bringing to the country U.S. $ 38 billion to build new factories and invest in infrastructure.

The volume of Foreign Direct Investment (FDI) in Brazil in 2010 exceeds $ 25.9 billion of 2009 and recovers the 2007 level. It is second only to the record of US$ 45 billion in 2008. In relative terms, however, the performance was better only in the period of privatization. Between 1997 and 1998, the country attracted about 3.9% and 4.1% of FDI in the world.

Foreign investment in manufacturing added $ 3.73 billion in November, the second best result for the month in the history. The strongest inflow of productive capital in recent months has made the Central Bank raise the FDI projection for 2010 from U.S. $ 30 billion to $ 38 billion. "I dare to say that this number may even be surpassed," said Altamir Lopes, head of economic department of the Central Bank.

The strong pace of the economy, which was little affected by the crisis, acted as a magnet for multinationals. "With the capital flows still retracted and the arrays repatriating funds, this is an excellent result," said Luis Afonso Lima, president of the Brazilian Society for the Study of Transactional Business and Economic Globalization (Sobeet, the acronym in portuguese).

Another relevant factor is the poor global performance, caused by the incipient recovering on the U.S. and Europe. About $ 1.1 trillion should circulate across the planet  in productive investments  this year, same level as in 1999 and well below the peak of U.S. $ 2.1 trillion reached in 2007. According to the United Nations Conference on Trade and Development (UNCTAD), global flows will only recover the lost ground in 2015.

Due to the crisis, the source of capital has shifted. Countries like Switzerland (16.9% of total), Netherlands (12.3%) and Austria (8.9%) are highlighting in this scenario. Companies use subsidiaries to take advantage in bilateral agreements and to protect their investments. Analysts believe that much of this capital come from Asia.

Much of the investment is directed to the natural resource sectors. From January to November, agriculture, mining and oil accounted for 43% of the total compared with 27% from the same period in 2009.

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