Academic Commons

Reports

Inward FDI in Uruguay and its policy context

Castillo, Graciana del; Garcia, Daniel

An analysis of trends in foreign direct investment (FDI) in Uruguay is difficult due to data problems. Nevertheless, balance-of-payments data reveal that inward FDI (IFDI) increased sharply in the second half of the decade 2002-2011 under analysis. IFDI flows relative to GDP rose annually on average to close to 6% in 2005-2011. This compares favorably with annual average flows of only 1% in the decade before the banking crisis and the sharp devaluation of the Uruguayan peso in 2002. At the time, investment in natural resources, including in farmland and real estate in Punta del Este, became very attractive. IFDI flows peaked at 7.5% of GDP in 2006, with the investment in the construction of the first cellulose plant in the country by a multinational enterprise (MNE) from Finland. The rapid increase in IFDI in the second half of the past decade took place amid high rates of economic growth (averaging about 6% a year on average), in combination with an adequate policy and regulatory framework and fiscal incentives to foreign investors. So far, Uruguay remains primarily a host country for FDI, with outward FDI (OFDI) that has been and continues to be insignificant.

Geographic Areas

Subjects

Files

  • thumnail for Profiles_Uruguay_IFDI_2012.pdf Profiles_Uruguay_IFDI_2012.pdf application/pdf 195 KB Download File

More About This Work

Academic Units
Vale Columbia Center on Sustainable International Investment
Publisher
Vale Columbia Center on Sustainable International Investment
Series
Columbia FDI Profiles
Published Here
September 4, 2012
Academic Commons provides global access to research and scholarship produced at Columbia University, Barnard College, Teachers College, Union Theological Seminary and Jewish Theological Seminary. Academic Commons is managed by the Columbia University Libraries.