Colombia has overtaken Mexico as the third largest recipient of foreign direct investment (FDI) in Latin America and the Caribbean, the United Nations said Tuesday.
The United Nations Economic Commission for Latin America and the Caribbean (CEPAL) said in a report that Colombia’s newly acquired ranking as FDI destination country was due to a 18% increase in foreign investment in Colombia while Mexico’s FDI dropped 35%.
Colombia FDI vs Mexico FDI
Despite the steep increase, Colombia remains an investment midget compared to Brazil, which received more than four times as much foreign investment than the Andean country.
2012 FDI per country
According to the CEPAL, the boost of Colombia’s FDI numbers was partly due to a few large acquisitions made by foreign companies.
FDI in Colombia increased again in 2012, up 18% from the value of 2011, reaching 15.823 million dollars. As in previous years, about half of this figure corresponds to the natural resources sector, particularly the oil industry, which received 5.377 billion dollars, and mining, where 2.250 billion entered. The FDI received in 2012 for these sectors is similar to the previous year, while inflows directed to other activities, mainly the manufacturing and electricity sectors, increased. The acquisition of the pharmaceutical company Laboratorio Franco Colombiano (Lafrancol) by the Chilean Corporacion Farmaceutica Recalcine (CFR) (562 million dollars), and Boyaca Power Company (EBSA) by the Canadian investment fund Brookfield (415 million) were the origin of much of this hike.
According to the CEPAL, Colombia and other South American countries failed to translate foreign investment into job creation. For each million dollar invested in Colombia, three jobs were created. The economic commission said that the natural resources sector is largely to blame for this as it creates only one job for every two million invested dollars. Call centers, a growing industry in Colombia, creates 73 jobs for each million.
MORE: Colombia FDI statistics