Targeted Foreign Investment in Colombia
Between 1990 and 2009, the amount of Foreign Direct Investment (FDI) of Chinese origin entering Colombia totaled US$1.7 billion dollars. Subsequently, Chinese FDI into Colombia accounted for US$6 million in 2010; US$239 million in 2011; US$996 million in 2012; and US$776 million in 2013. This means that a total of US$3.8 billion worth of Chinese FDI entered Colombia between 1990 and 2013, which represents approximately 7.5% of all Chinese FDI that entered Latin American during that time. However, in terms of the specific number of projects per country within the region, Colombia only accounted for 5.2% of the projects that were financed with Chinese capital between 1990 and 2010. Nevertheless, it is difficult to determine with certainty the true origin of all FDI entering Colombia, particularly concerning Chinese capital, given that many countries and foreign investors use international tax havens as points of entry into the region.
Targeted Foreign Investment in Colombia
Although the presence of Chinese capital and FDI in Colombia’s fossil fuels industry has increased substantially in recent years, it remains limited when compared to other emerging countries. Simultaneously, it is clear that Chinese capital is mainly focused on the extraction of crude oil, which is in line with China’s strategic economic interests within the region. However, despite the fact that the Colombian economy has, in recent years, increased its dependence on the import of value added goods, such as refined petroleum, it is not clear that this is due, solely, to its growing economic relationship with China. On the other hand, it is clear that the substantial increase in oil extraction in Colombia and its increasing dependence on oil exports are linked to Chinese investment in and consumption of Colombian crude oil.
Moreover, as in other developing countries, whatever Chinese investment in Colombia is destined to non-oil industries is concentrated on infrastructure projects, which can be considered the connecting grid of global commerce. This means that Chinese investments contribute to opening channels for the movement of goods and the development of services. However, they do not necessarily contribute to advancing the Colombian economy to one that provides these services or domestically manufactures added-value goods. In this sense, the integration of Colombia into the world market could be counterproductive if the national economy does not take proper advantage of this integration and becomes a producer, not just a consumer, of manufactured goods.
This is why, through Farmfolio’s initiatives in Colombia, our CEO Dax Cooke wants both international investors and the local economy to capitalize on agriculture as a unique natural resource by way of a new and innovative asset class. Farmfolio’s Farmshare offerings contribute socially and economically to the Colombian and Latin American communities where they are settled by empowering them to grow and upgrade their entrepreneurial vision. In this sense, Farmfolio’s investment model is unprecedented when it comes to foreign investment because it provides for innovative, sustainable, and responsible economic development in emerging markets.
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