Latin America’s Quest for Globalization. The Role of Spanish Firms

Since the Spanish government gradually eliminated the restrictions on foreign direct investments (FDI) by Spanish enterprises between 1977 and 1992, Spanish FDI reached important proportions, making Spain the twelfth home country for FDI in the world in 2000 by “stock”. The “position” or “stock” of Spanish FDI abroad grew from $1.931 billion in 1980, to $15.652 billion in 1990, and to $160.202 billion in 2000 (see Table 1). This meant an increase of 8,294% in this period of twenty years, the fifth largest percent growth among the top home economies in the world (see Table 2). Although the growth in amount of Spanish FDI abroad in this short period of time was very large, what made these investments even more interesting was the fact that they were very highly concentrated in two geographic areas, the European Union and, especially, Latin America (see Figure 1), where Spanish FDI flows surpassed those coming from the United States in 1999 and 2000. The United States was the main home to inward FDI in Latin America since the mid-twentieth century (see Figure 2). By the turn of the century, the seven Spanish firms included in this chapter (BBVA, SCH, Telefónica, Endesa, Iberdrola, Unión Fenosa and Repsol-YPF) had assets worth $283 billion and 128 million customers in Latin America, and they had become prominent actors in the economies of the region. For the Latin American societies, the Spanish FDI since the 1990s was very important, not only because the amounts of money that came into the economies were large, but also because new firms came in, from a country that until the 1990s had not been present in Latin America through FDIs. These