Foreign Direct Investment (FDI) into Colombia has grown significantly throughout the last several decades. Between 1994 and 2004, the annual FDI into Colombia averaged US$2.5 billion dollars. However, between 2005 and 2015 the amount of FDI coming into Colombia rose to approximately US$14 billion annually. While there was an increase in FDI coming into Colombia, the main industries benefiting from it also shifted. As of 2005, the main recipient of FDI in Colombia has been the mining and extractive industry, instead of the services industry. This shift corresponded with the global increase in fossil fuel and mineral commodity price increase, which also led to an increase to 8% of the percentage of Colombia’s gross domestic product (GDP) dependent upon the extractive sector. Meanwhile, the origin of FDI coming into Colombia has not changed dramatically throughout the last decades. For instance, Latin America and the Caribbean represent some 35% of the global FDI coming into Colombia, while the European Union and the United States each represent about 20% (respectively). This is due mainly to the fact that many multinational corporations and major foreign investors use the same regional mechanisms to funnel their investments. That is to say, approximately 33% of FDI coming into Colombia from Latin America and the Caribbean has been funneled through the well-known financial hub and fiscal paradise that is Panama. Likewise, almost 40% of the regional FDI coming into Colombia originates from similar offshore structures based in the Cayman Islands, Barbados, Bermuda, Anguilla, and the Virgin Islands. For example, between 2010 and 2011 the official amount of Canadian FDI in Colombia, as registered by the national government, was of almost US$600 million. Nevertheless, for the same period, the Financial Times FDI Intelligence database records investment of Canadian origin into Colombia to be of US$6.4 billion. Similarly, between 2007 and 2012, the official amount of Chinese FDI into Colombia was of US$35 million. However, the Financial Times FDI Intelligence database estimates the actual amount to be of some US$2 billion.
Foreign Direct Investment and Extractive Industries in Colombia
Mansarovar Energy Colombia is the largest foreign company of Chinese capitalization active within Colombia’s oil industry, having entered the country in 2006. Currently, Mansarovar Energy operates in the Colombian municipalities of Puerto Boyaca, Puerto Nare, Barrancabermeja, Bolivar, Simacota, Puerto Parra, and Cimitarra, most of which are located along the central region of the country in the department of Santander. However, Mansarovar’s entry into the Colombia oil exploitation industry has not been without difficulties. On June 6, 2017, the community of Cumaral in the department of Meta in central Colombia voted against the initiation of exploration and exploitation activities within their territory by Mansarovar Energy citing environmental and health concerns. Therefore, in order to win over the local communities in which it operates and expects to operate, in July 2017, Mansarovar Energy announced investments of approximately US$1.3 million on social responsibility projects within these communities. Simultaneously, Mansarovar Energy and other foreign companies have asked the Colombian government for legal clarity and regulatory predictability when it comes to the sale and concession of exploratory and exploitation contracts for natural resources, particularly fossil fuels.