The Role of Foreign Direct Investment in Colombia's Economic Development

Colombia’s efforts towards political stabilisation and sound macroeconomic policy have enabled the country to boost its economic development and enhance its investment climate. As a result, foreign direct investment (FDI) inflows have increased rapidly, also benefiting from the commodity price boom. After a temporary decline in 2009-10 due to the world economic crisis, Colombia’s FDI inflows are expected to reach a record level in 2011. The surge in Colombia’s FDI outflows reflects a more general trend shared with other Latin American countries, which have become an important source of FDI abroad, notably within the region.Privatisation, which is open without any limitations to foreign investors, has led to a significant increase in the weight of the private sector, which today accounts for 85% of GDP. According to the National Development Plan for 2010-14, FDI annual inflows are forecast to exceed USD 13 billion in 2014. However, rather than simply increasing the amount of FDI, the government’s objective is to enhance the qualitative role of FDI in the country’s development, notably its contribution to job creation and infrastructure improvement.