Foreign Direct Investment and Income Inequality in Latin America

There is a heated debate on the effects of Foreign Direct Investment on development. Proponents argue that FDI is good for development, and hence the rapid expansion of FDI in Latin America in the past decade and a half is manna from heaven. In some cases, it is indeed difficult to imagine whether the same development level could have been achieved without FDI. Critics, however, contend that FDI leads to more poverty, isolation and a neglect of local capabilities. Recent difficulties with privatisation in Latin America, which involved FDI, appear to tell us that not all share in the benefits.