The general manager of the Central Bank of Colombia stated on Tuesday that he expects foreign investment to fall 5% by the end of 2014, faulting continued guerilla attacks on the country’s energy infrastructure.
In an interview with Caracol Radio on Tuesday, general manager Jose Dario Uribe said that the decline in foreign investment is “in large part” due to guerrilla attacks on the country’s oil pipelines and energy infrastructure.
Both the FARC and the ELN have been attacking energy infrastructures, with a total of 60 successful strikes between June 1, 2013 and July 14, 2014. Within the last few weeks, there have been two attacks on the Bicentenario oil pipeline in eastern Colombia, both attributed to the ELN.
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Portfolio investment to the country, or highly liquid investment flows going towards debt and minority equity positions, mirror these recent problems. According to preliminary data from the Central Bank, between January and July portfolio investment outpaced that going towards the oil and mining sectors.
MORE: JP Morgan predicts fall in Colombia FDI in 2013
Despite the anticipated drop, Uribe was keen to point out that foreign investment in Colombia has grown to around $16 billion since 2003, when it was just $1.5 billion. The 10-fold growth increase has been largely attributed to the development of the country’s oil and coal industries, where attractive regulations for foreign companies, such as allowing 100% ownership structures, and rising market prices have increased exploration and production. Oil and coal together make up more than half of the country’s total exports.
MORE: Colombia’s oil, mining boom is over: Central Bank official
Sources
- Inversión extranjera en Colombia caerá este año alrededor de 5% (Caracol Radio)
- Inversión extranjera bajó a Julio (Dinero)
- Colombia Analysis (U.S. Energy Information Administration)