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| Developing Countries and FDI Essay

Today Colombia is one of the most dynamic economies in the third world. Unfortunately, this is not something that a great many people around the world know. Colombia is not the same country it was twenty years ago; it is not the country it was ten years ago. Today Colombia is a modern, thriving, and safe country where anyone can find a place to come home. In recent years, the country has experienced a sustained increase in Foreign Direct Investment (FDI). This is consistent with regional FDI patterns, which increased and in 2011 represented 10.2% of total FDI worldwide at 153.5 billion USD. Through 2012 the trend continued; during the first six months of the year FDI increased by 8%, relative to 2011. Undoubtedly, this marked (and sustained) growth in FDI owes to the fact that most all Latin American countries are developing, which ultimately means that they signify new markets with significant growth potential towards the future.

For many years now the United States has regarded Colombia as its most important ally in South America. The country’s commitment to cooperating with Colombia and establishing stronger bonds of friendship is more than clear after Congress finally ratified Colombia’s Free Trade Agreement (FTA). Of course, provisions such as the FTA have led many to believe that Colombia relies entirely on the United States for its growth and development. On this point, it is important to point out that notwithstanding the invaluable contributions that the United States have made in recent times, Colombia is starting to grow and develop independently from the United States. In fact, its position as a developing country has helped it keep the recession more controlled. As well, it is important to keep in mind that Colombia has managed to continue on growing and developing consistently throughout much of the last decade. Throughout the past decade, Colombia has become a major receiver of Foreign Direct Investment (FDI) as the country has gone above and beyond in order to increase foreign investor trust. Various industries are starting to grow and develop in the country (including, though not limited to, great advancements in the African Palm industry).

It becomes clear that Colombian government should stay the course. Government is clearly committed to more actively joining the process of globalization. Thus far, the results have been significantly positive, thus making it clear that government needs to continue fighting the armed conflict (with guerillas), corruption, and criminality in general. As investor trust continues to increase, so will FDI. Also, increased trust will lead to more FTA agreements with other countries; more allies would signify even more FDI coming into the country. As well, the fight on crime and corruption needs to be complemented by changes in the country’s laws, specifically in matters concerning foreign capital and taxation (as it pertains to foreign individuals and businesses). As well, it is important to point out that Colombia is an active party in the process of ongoing regional integration, acting as a member state of the OAE, the ACN, and the USAN, among others. Participating in regional integration opens the regional market as a whole for the country; it also opens Colombia to the Latin American market, thus increasing its FDI growth potential.

Today, Colombia is trying to catch up with the likes of Chile and Brazil, the two regional leaders, and even though this will not be easy, the country has never been as committed to doing it (or has it ever had such potential). Only time will tell if the country will manage to continue growing and developing as significantly and sustainably as it has managed to do throughout the last decade. However, I dare say that the country will, especially as it continues to mature and strengthen its bonds of friendship and cooperation with the United States of America, as well as the European Union and Asia.

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