Enhancing India CARIFORUM Economic Relations and Prospects for Cooperation

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INVESTMENT SCENARIO IN THE CARIFORUM COUNTRIES

The Foreign Direct Investment (FDI) inflows into the CARIFORUM countries aggregated at only US$ 0.4 billion in 1970, and 1980. The situation was similar for next ten years, as the FDI inflows remained at US$ 0.6 billion in 1990. However, it was the last decade of the previous century when the FDI inflows started growing significantly in the CARIFORUM countries. The FDI inflows experienced a five-fold jump as it increased to US$ 3.1 billion in 2000. Since then, the growth trajectory of FDI inflows have been positive, with the inflows peaking at US$ 10.2 billion in 2008. Post the financial crisis of 2008, the foreign direct investment inflows dropped by almost half, as world financial markets crumbled. FDI inflows then slowed to US$ 4.4 billion in 2013, before they doubled to US$ 8.8 billion in 2014. After 2014, again, FDI inflows moderated and averaged at around US$ 6 billion in the next four years. Hurricanes like natural disasters in these years slowed down the pace of FDI inflows in the countries of the region. The year 2019 saw a healthy growth of 20 percent in the FDI inflows. In 2020, the FDI inflows to the region have fallen by 16.7 percent to reach US$ 5.9 billion. The reasons for this fall in the FDI inflows can be broadly attributed to a collapse in tourism led by the coronavirus pandemic and a staggering fall in international commodity prices. Thus, both the service dependent and the commodity dependent economies have taken hits in terms of investment inflows. FDI inflows are expected to recover to the pre-crisis level only by 2023 (Figure 10) .

Investment Scenario in the CARIFORUM Countries

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