Santiago  – Foreign direct investment (FDI) in Latin America and the Caribbean reached a record 126.3 billion US dollars in 2007, the United Nations Conference on Trade and Development (UNCTAD) said Wednesday in the Chilean capital Santiago.

UNCTAD expected the figure to continue to rise in 2008.

Brazil, Mexico, Chile and Argentina received a combined 67 per cent of the inflow, with Brazil alone claiming three out of every 10 dollars that arrived in the region.

In total, South America obtained 72 billion dollars in FDI in 2007 – a figure that is larger than the combined gross domestic products of Bolivia, Ecuador and Uruguay.

Central America and the Caribbean, aside from tax havens, saw an increase in FDI received to 34 billion dollars, but the UNCTAD report warned that this might be at risk in the face of the ongoing credit crisis in the United States.

Brazil alone received 28 per cent of FDI in the region, followed by Mexico at 21 per cent, Chile at 11 per cent, the Cayman Islands at 9 per cent, Colombia at 7 per cent and Argentina at 4 per cent.

UNCTAD said that the rise in investment was tied to the high prices of commodities.

The organization noted that some Latin American economies are receiving hardly any foreign investment, notably Bolivia, El Salvador and Nicaragua.

The report criticized what it described as a growing deficit in infrastructure spending in many countries across the region, with a need to catch up on some 90 billion dollars per year in this sector.

With the exceptions of Chile and Colombia, spending on roadbuilding, energy supply and ports has fallen sharply since 1980, with Argentina and Brazil lagging furthest behind, according to a study by the World Bank.

This failing in turn hampers the region’s export capacity. Existing infrastructure can hardly bear the surge in exports from 437 billion dollars in 2003 to an estimated 750 billion dollars in 2008.

Despite the region’s economic growth, at least 40 million people continued to live in poverty in Latin America and the Caribbean.