The United Nations Conference on Trade and Development's (UNCTAD’s) World Investment Report for 2021, has shown that among all the countries in the Caribbean, Trinidad and Tobago suffered the worse in Foreign Direct Investment (FDI) in 2020 with negative FDI in the hundreds of millions of US dollars.
The negative figure was put at US$439 million (approx TT$3 billion) and the report noted that it was mainly due to the slow down in the energy sector.
Negative FDI values indicate where outflows of investment exceed inflows and largely results when the loans from the affiliate to its parent exceed the loans and equity capital given by the parent to the affiliate.
Haiti, was among the countries that performed better than T&T, with positive FDIs.
The report noted that in 2020, FDI in the Caribbean region, excluding the offshore financial centres, declined 36 per cent to US$2.5 billion.
The report pointed out that the Caribbean region suffered from the collapse in tourism and the halt in investment in the travel and leisure industry triggered by the pandemic.
"The overall contraction was mainly caused by a 15 per cent decline in FDI to the Dominican Republic, the major recipient in the region, to US$2.6 billion," it said.
It then referred to Haiti, which saw a drop in its foreign direct investment but still remained in the positive.
"FDI flows dropped from US$75 to US$30 million, in response not only to the pandemic crisis but also to civil unrest and the alarming worsening of the humanitarian crisis that has continued since 2018."
However, the report then pointed out that Trinidad and Tobago did not just see a drop, but went from positive foreign direct investment to negative FDI.
"Finally, FDI to Trinidad and Tobago turned negative, to -US$439 million, with a severe impact in the energy industry, which accounts for approximately half of GDP."
Almost US$70 billion flowed into the Caribbean region in 2020 as foreign direct investment, despite the COVID-19 pandemic and the devastating toll it has taken on most regional economies. The amount was at least $8 billion more than 2019.
The British Virgin Islands, The Cayman Islands, the Dominican Republic and Guyana all reaped investments of a billion and up.
The BVI saw the largest inflow at US$39,620,000 followed by Cayman Islands with US$23,621,000.
The Dominican Republic and Guyana rolled in US$2,554,000 and US$1,834,000, respectively.
Apart from Trinidad and Tobago, Suriname was the only other country with negative FDI, as that country's FDI dropped to -US$27 million.
For more info: https://unctad.org/system/files/official-document/WIR2021_ch02_en.pdf