will increase: 95 percent of Inditex
Group store openings are now overseas, especially in Asia.
With the deepening of the crisis,
there was mounting concern that
Spanish FDI to Latin America might
suddenly grind to a halt.
It is true that the record levels
reached in previous years are unlikely to be seen again soon. As Toral
notes, FDI peaked in 2002, when
Spain accounted for 22 percent of all
FDI stock received by Latin America. But by 2009, Spanish FDI stock
in Latin America fell to 13 percent of
total global outflows, and FDI destined for Latin America accounted
for barely 10 percent of all investment
As Toral reminds us, interpreting
the next wave of Spanish investments requires an understanding
of the first wave. This makes Toral’s
book a very timely read. Readers
without much background knowledge will find it readable and easy
to understand, but regional scholars will also find it informative.
The book also nicely complements
previous studies, in particular The
Rise of Spanish Multinationals: European Business in the Global Economy
(2005), Mauro Guillén’s milestone on
the issue of Spanish corporate internationalization.
In the new decade, Latin American
investors are poised to return the favor. With Brazilian, Mexican and
Chilean companies making inroads
in Europe, Spain is a lucrative target.
The Spaniards would be well advised
to keep their attention focused on the
region, and encourage an even greater
two-way connection with Latin American MNEs when they arrive.
However, this does not mean that
Latin America has lost its appeal. Far
Spain’s comparative loss of weight
is due to the upsurge in new Asian
investors arriving on the scene—
plus the investment boom by Latin
Americans in their own continent.
While Banco Santander was taking
complete control of its Mexican
subsidiary, Telefónica was doing the
same with Vivo in Brazil. Together,
the two companies invested a
respectable $10 billion in Mexico
and Brazil last year.
On the energy front, the oil
company Repsol YPF announced
plans to continue investing in Latin
America with some $5 billion in
prospective oil projects in Brazil.
REVIEWED BY SERGIO AGUAYO
And that’s not all. Today’s crisis
in Spain may prompt many firms
whose presence in Latin America is
still rather limited to speed up their
overseas expansion plans. One such
company is Indra Sistemas, S.A., an
information technology company
that multiplied its contracts in the
region in 2010, particularly in Brazil,
Peru and Chile. In the energy sector,
Acciona Energy last year signed the
largest-ever loan in Latin America for
renewable energy—$375 million—
while Abengoa announced a $180
million investment to build Mexico’s
largest cogeneration plant.
Mexico’s progress continues to be inhibited by resistance to change—a resistance that today, according to Jorge Castañeda, has
placed Mexico’s democracy and the
country at a crossroads. In Mañana
Forever? Mexico and the Mexicans,
the former Mexican foreign minister (2000–2003) analyzes the Mexican
character and spirit and from that develops a roadmap for emerging from
the current crisis.
Admittedly, changing the national
character is a tough challenge. In his
view, Mexicans are known for their
individualism, their aversion to competition and risk, and an irrepressible
impulse to ignore laws.
While Castañeda’s intellect shines
through the work as he mercilessly
points out the many contradictions
of the Mexican people, several of his
points are opaque or even superficial.
Mexico’s torturous and stormy history is a continuing burden. It has led
to a national penchant for self-vic-timization and has complicated its
foreign relations, particularly with
the United States. As the process of
economic integration fostered by the
North American Free Trade Agreement (NAFTA) continues, cross-bor-der issues such as crime, migration
and border security affect Mexicans’
Javier Santiso is professor of economics at ESADE Business School
in Spain and director of the
ESADE Centre for Global Economy and Geopolitics (ESADEgeo).
Mexico and the Mexicans