Colombia: trading places
Currently the fourth biggest economy in Latin America, Colombia’s goal is to trade places with Argentina, and move up to third place. So far, the plan looks promising. Foreign direct investment in Colombia in the first third of this year was $6 billion, a 25% increase, compared to the same period of 2011. Investment will likely get a further impetus as a result of the entry into force last month of a free trade agreement with the United States. In addition, Colombia is planning to negotiate trade deals with Costa Rica, Dominican Republic and Venezuela.
Close to 80% of the investments are in the resource sector, especially mining and oil. But the government is pushing diversification. Colombia's minister of info-communication was in the United States last week to seek investors, for a plan to expand fiber-optics and 4G networks nationwide, including 90% coverage by 2014.
In terms of output, economic growth for 2012 is expected to be a solid 5.5%, following a robust fourth quarter of last year, with an increase in GDP of 7.7%.
With annual national production valued at $2.1 trillion, Brazil remains the economic powerhouse of Latin America, followed by Mexico at $1 trillion. But with a GDP of $290 billion, Colombia trails Argentina by only around $80 billion. Venezuela recently has had the same GDP as Colombia. However, the value of Venezuelan output tends to be unstable, depending on oil prices.