Emerging Markets / October 17, 2019

3 Reasons to Invest in Colombia

1. Rapidly Developing Infrastructure

Colombia’s transportation infrastructure is developing at breakneck speed, which will facilitate supply chain integration and add value to assets in the region. New roads will allow products quicker access to ports, and new ports will allow quicker access to markets. Indeed, the opportunities for investment in infrastructure and construction are limitless, and dedicated financial institutions such as the National Development Financer have already raised huge amounts of money for new projects. 


The largest infrastructure development plan currently underway in Colombia is the Master Plan for Intermodal Transport. This bold and far-reaching program seeks $69.3 billion in capital for a wide array of projects including the expansion and modernization of 31 airports, the addition of 7,000 km of new roads, two tunnels, and improvements to Colombia’s tertiary road network. In addition, billions of dollars are being spent on the construction of three new ports, in Antioquia,Córdova, and Buenaventura, respectively. Each port is expected to have an annual cargo capacity of around 1.5 million tons, and will help exporters reach markets all over the world. 


As foreign direct investment pours into Colombia, infrastructure projects are charging ahead. These projects will be a tremendous boost for agricultural ventures in the region, as lower transportation costs will increase margins for even the most modest of exporters.


2. Favorable Government

The government of president Ivan Duque has shown itself to be highly favorable to foreign investment. The president has gone on record saying that he favors a market-oriented economic model, and has sought to maintain growth triggered by investment. The president has pledged to facilitate investment into infrastructure, agriculture, tourism, and the service industry, cutting taxes and promising to crack down on tax evasion. 


So far, Duque, who entered the presidency last year, has been lauded by international financiers and local businesspeople alike, and it appears that his vision, while ambitious, is certainly forward-thinking. The president plans to direct hundreds of millions towards the modernization of Colombia’s economy, pouring government money into creative industries such as filmmaking in order to diversify Colombia’s economic profile. Duque has also been successful in reducing the country’s fiscal deficit, which fell to 3.1% of GDP last year. 


Duque’s push for more foreign direct investment is on-target, and FDI now represents 4.8% of GDP, the second-highest FDI to GDP ratio in Latin America. His attempt to diversify the country’s exports presents a great opportunity for investment.


3. Ideal Location

Colombia’s geographic location is ideal for exports. Situated just south of Panama, the country has easy access not only to the Panama Canal but to both the Atlantic and Pacific oceans as well. This allows ventures in Colombia to access virtually any market in the world, from high-end European buyers to emerging middle-class consumers in places like China and India. The country is connected to over 4,300 shipping routes and serves more than 355 ports worldwide. 


In addition, the diversity of Colombia’s climate and topography allows for equally diverse industries and endeavors. The country has strong extraction industries due to its mountainous terrain and the presence of oil reserves, as well as highly favorable agricultural regions. Indeed, the famous Antioquia department is one of the most fertile zones anywhere on Earth, and locals insists that anything that touches the soil will grow. 


A beautiful and dynamic country with a rich culture and history, Colombia is becoming a favorite destination for tourists and investors alike. With Ivan Duque’s investment-friendly administration committed to infrastructure development and easy access to markets across the globe, Colombia has tremendous potential for growth.

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