Russian Direct Investment in Countries of Latin America

Abstract

Russian direct investments in Latin America and their scale and structure are analyzed. This study is based both on official statistics on foreign direct investment (FDI) stocks and on information about the investments of Russian MNEs in Latin American countries published on company websites and in the media (including trans-shipping FDI). It is shown that Latin America has attracted insignificant Russian FDI so far, and it looks modest even against the background of Africa which is also poorly developed by Russian MNEs in the Global South. Moreover, in Africa there are at least bridgeheads for further Russian investment expansion. There are several negative factors: the remoteness of Latin America from Russia, language barriers, the lack of sufficient awareness of potential investors about business development opportunities in the region and the general backlog accumulated over the past periods from Western and local investors-competitors in business activity in Latin America. Moreover, individual significant projects of Russian direct investors are still to a small extent related to the structure of commodity exports from Russia to various Latin American states. In 2022 conditions for new Russian direct investments in most countries of the region have not improved at all due to sanctions pressure on Russia from the United States and EU countries, traditionally dominant among investors in Latin America (along with mutual flows of FDI made by their own Latin American MNEs). At the same time, the article emphasizes that without the entry of Russian MNEs into the number of major players, at least in most countries of the region, it is impossible to talk about a full-fledged economic turn of the Russian Federation to the global South.