Development in Colombia: Between Petroleum and Agriculture
Since 2015, the number of Chinese companies operating in Colombia has increased from approximately twenty to over seventy. In 2017, another Chinese company, the state-giant Sinohydro, has been considering activities in Colombia. Created in 1950 and headquartered in Beijing, Sinohydro is considering picking up the contract left by the Brazilian company Odebrecht in Colombia’s Magdalena River Navigability project. This ambitious project along one of Colombia’s most important rivers requires dredging and upgrading infrastructure in order to make the river a major transport artery. The current contract is worth some US$873 million; furthermore, once completed, the project will allow the efficient transport of up to 10 million metric tons of cargo along a 256-kilometer stretch throughout the heart of Colombia and out onto the country’s Caribbean coast.
Development in Colombia: Between Petroleum and Agriculture
There are two main reasons for China’s interest in Colombia’s natural resources and infrastructure projects. Firstly, back in 2011, four Chinese engineers were kidnapped by the FARC guerilla in the southern and rural department of Caqueta while working for the oil extracting company Emerald Energy, which is owned by Sinochem. Therefore, in recent years, Beijing has becoming increasingly committed to the success of the Peace Process in Colombia because it will open up new markets, economic opportunities, and commodity sources for China in South America. The hostages were eventually freed as part of the Peace negotiations between the Colombian government and the FARC guerrilla in 2012. Secondly, the Asian Giant is interested in Colombia because it is a country with great agricultural output capacities, including some of the foodstuffs that China’s growing population and middle class is demanding.
Nevertheless, in spite of the economic promises and development opportunities brought forth by the pacification of Colombia’s rural regions, there are still challenges for Chinese companies. In recent years, the issue of petroleum extraction in regions such as the Nogal block in Caqueta, has awakened significant resistance by local populations, which are now pushing the Colombian government to hold local referendums before approving the exploitation of oil fields. Thus, local populations throughout rural Colombia are pushing for high-value and niche agriculture to be the sector championed by the government and foreign investors throughout the country. Similarly, another one of China’s major initiatives in Colombia is the construction of a highway through the country’s central valley towards the port of Buenaventura on the Pacific coast to export agricultural goods straight to China.
This is why, through Farmfolio’s initiatives in Colombia, our CEO Dax Cooke wants international investors to capitalize on agriculture as a unique natural resource by way of a new and innovative asset class. Simultaneously, Farmfolio’s Farmshare offerings contribute socially and economically to the Colombian and Latin American communities where they are settled. In this sense, Farmfolio’s investment model is unprecedented when it comes to foreign investment because it provides for sustainable and responsible economic development.