Americas Quarterly - Summer 2011

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 outside Spain.

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.

FRESH LOOK

However, this does not mean that Latin America has lost its appeal. Far from it.

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).