Amid Wars and Economic Malaise, Latin America Could Be a Place to Grow

While most of the world faced a decrease in foreign direct investment (FDI) last year, Latin America stood as a strong outlier.

Photo of Morgan Stanley headquarters
Photo by Alex Proimos via CC BY 2.0

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South of the border, down Mexico way, is where investment capital is going to stay. 

While most of the world faced a decrease in foreign direct investment (FDI) last year, Latin America stood as a strong outlier, according to the United Nations’ latest World Investment Report published Thursday. It isn’t hard to understand why.

Point Your Compass South

With everything going on in the world — from war in Europe and the Middle East to anti-espionage laws in China and spy-vetting in Silicon Valley — Latin America is looking pretty enticing to investment groups: 

  • FDI remained stable in Latin America in 2023 per the UN, with the region drawing in $193 billion thanks to demand for commodities and critical minerals for clean energy technologies. In 2022, The US accounted for the largest share of Latin America FDI inflows at 38%.
  • Last year, Morgan Stanley expanded its business assets in Latin America by 6%, to roughly $120 billion, Bloomberg reported. Latin America is important for “reorganizing supply chains and accessing everything from food and industrial metals to transition fuels and pharmaceutical ingredients,” John Moore, head of Morgan Stanley’s Latin America operations, told the outlet. 

We Saw ‘Em First: Other economies have their sights set on Latin America, too — namely, China. One out of every 10 cars sold in Mexico last year were from Chinese automakers, Reuters reported, and Chinese investment flow to Latin America increased between 2022 and 2023, bolstering the solar, wind, and hydropower sectors, according to The Diplomat. In response to China’s growing presence, the US Congress introduced the Americas Act in March; it would help facilitate more free trade deals between the US and Latin America. The US really doesn’t like seeing its nemesis get all buddy-buddy with its next-door neighbors.