Mexico Reverses Foreign Investment Flows Associated Press
go to original February 26, 2013

MEXICO CITY - After decades of depending on inflows of foreign capital to develop its economy, Mexico turned a corner and become a net exporter of direct investment capital in 2012, according to a report released Monday.

Mexico's central bank said that Mexican corporations invested about $25.6 billion last year in buying up foreign plants and companies, more than twice the $12.6 foreigners invested directly in Mexican firms. An official confirmed that was the first time in recent memory that outflows exceeded inflows.

For a country that still has one foot planted firmly in the developing world, that news worried some analysts and delighted others.

"Mexico is in no position to become a net exporter of capital," said economist Ernesto Piedras of the Mexico City-based Competitive Intelligence Unit. "Financing capital is a scarce resource in Mexico."

"Mexico is still a country with a strong need for capital, for investment in highways, dams, in telecommunications networks," said Piedras. "It's regrettable that we have more money going out than coming in."

The turnaround was due in part due to a steep drop in foreign investment in Mexico, from $21.5 billion in 2011 to $12.6 billion, accentuated by the decision by a Spanish bank to sell off about $4.1 billion in shares in its Mexican operations.

Read the whole story at The Washington Post

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