According to preliminary figures released
by the Colombian National Bank, foreign direct investment (FDI) fell by 25% in
October year-on-year, from $13 billion to under $10 billion. This sharp
reversal was driven by a strong decline in investment in the extractive sector,
which had been the primary source of FDI investment in previous years.
El
Espectador noted that oil prices are unlikely to rebound any time soon, as
speculators have driven the oil prices back below $40 per barrel for the first
time since August. The collapse in global oil prices was what originally scared
investors away from Colombia, so this news, while unsurprising, will not be
welcomed by the Colombian oil industry.
In addition to stubbornly low prices, Colombian oil
production has also started falling.
Production in October fell just short of the government’s 1 million bpd goal,
averaging just 999,000 bpd. The Colombian authorities are worried by the fall
in production, as it can no longer be attributed to production problems caused
by terrorist attacks. Colombia needs to replace its dwindling reserves, or oil
production will just keep on falling.
Business journal La
República noted that despite the crisis that’s engulfed the Colombian extractive
sector, workers in the sector are the best-paid in Colombia, according to a
survey carried out by the Colombian Human Resources Federation. Nonetheless,
extractive sector workers received the fewest pay increases in Colombia.
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