Monday, August 16, 2010

Colombia bullish on foreign investment

Colombia has become a favorite destination for foreign investment in Latin America. The foreign investors are getting into petroleum, mining, services and manufacturing. Colombia's foreign trade ministry expects $10 billion in foreign investment this year, approaching the record $10.6 billion of 2008. In 2009 FDI was 7.2 billion dollars.

The Colombian Minister of Energy and Mining announced on 15 August 2010 that he expected investment of 28 billion dollars in oil exploration and production in the next four years and increse the oil production to 1.4 million bpd by 2014 from 963,000 bpd in June 2010. Colombia is emerging as South America's third-largest oil producer behind Brazil and Venezuela. About 5.6 billion dollars of direct foreign investment went into petroleum and mining in 2009. Colombia's known oil reserves rose 22 percent in the last eight years to 1.9 billion barrels with production jumping 45 percent.

The foreign investors who were deterred by the internal problems of Colombia in the past are now encouraged by the improving siuation of the country. Farc is irreversibly fading out. There is steady reduction in kidnapping, crime and narcotraffic. In any case, the Colombian economy has been stable and growing even despite those challenges. Politics has also been mature and there is a general political and economic consensus on the future of the country. The election of Manuel Santos, the new president , who had earlier served in the cabinet of Uribe means continuation of the policies of crackdown on crime and market-friendly approach.

Colombia is the only Latin American country to have an Investment Promotion Officer (Alejandro Pelaez) in their embassy in Delhi. Mr Juan Alfredo Pinto Saavedra, the Colombian Ambassador is one of the most active Latin American diplomats, reaching out to Indian business and media.

OVL and Reliance have already invested in the petroleum sector of Colombia. TCS, Infosys, United Phosporous, NIIT, Bajaj, TVS, Hero Honda, Havells, Essel Propack and Praj have operations in Colombia. In 2009 India´s exports to Colombia reached 504 million dollars. Colombia is the third largest destination of India´s exports to latin America. More Indian companies should enter this market which offers lot of potential for India´s investment and trade.

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