Sunday, April 12, 2015

Alarm bells ringing for the Colombian economy

On Friday, the Economic Commission for Latin America and the Caribbean (CEPAL) announced that it was downgrading its predictions for GDP growth in Colombia from 4.3% to 3.6%. El Tiempo warned that Colombia and the rest of the region must be on alert: “The main driver of growth in the region, which for years was the exploitation of hydrocarbons and other mining products, has ended.” Fedesarrollo director Leonardo Villar added that the collapse in the value of Colombia’s main export, oil, is a situation that few countries have ever experienced. He does not expect Colombia to begin growing at better than 4% per year until at least 2017.

In mining-related news, the union at the Cerro Matoso mine, operated by BHP Billiton, announced a strike starting April 14th at 3pm. According to Domingo Hernández García, the president of the Sintracerromatoso union, the workers are going on strike because the mine unilaterally decided to increase the workday from 8 hours to 12 hours. Portafolio noted that news of the strike comes at a bad time for the mining company, as production has been in decline and prices have also fallen for the mine’s product, nickel.

In other news, AngloGold Ashanti announced that it had received approval to sell the La Garruca mining concession in Colombia’s Antioquia department to the Canadian mining company Bellhaven Copper & Gold Inc. Portafolio noted that this is AngloGold’s second such sale already this year, but company representatives insisted that the two transactions are unrelated.


Clinton has come under scrutiny in a report that revealed that, as U.S. Secretary of State, she changed her stance on a free trade agreement with Colombia only after Frank Giustra, the Canadian founder of the Pacific Rubiales oil company, promised to donate $100 million to the Clinton Foundation. At the time, Pacific was being heavily criticized for its efforts to suppress a strike among its Colombian workers.

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