On 12 October, Yildrim pulled out of
the deal, claiming conditions precedent
had not been met. While the issues are
being decided by international
arbitration, Batista may not talk with
other potential buyers. There was one
around in April – a group of sovereign
investment funds and other large
investors represented by Blackstone,
the world’s largest private‑equity
investment company.
Fears for the investment
climate
In its 2015 report, the OECD said
Colombia’s economy had done
remarkably well over the last ten years.
Strong growth had been driven by a
mining boom and foreign direct
investment into the commodity sector,
as well as broader‑based investment.
Inflation had been contained to
within a 2 – 4% target range since
mid‑2009. However, lower coal prices
had contributed significantly to a
widening of the current account deficit.
Current external debt was 24% of GDP,
largely financed by foreign direct
investment. The increase in the deficit
could make Colombia more vulnerable
to fluctuations in the global risk
appetite for investors. The balance of
risk was tilted to the downside:
geopolitical risks could affect
Colombia’s coal exports and the current
income tax regime continued to impact
on investment decisions.
Transport infrastructure remained a
constraint on growth, since almost half
of Colombia’s exports were logistics
intensive. Enhancing access to
international markets was needed to
take advantage of recently signed free
trade agreements with the EU and the
US. A new oil and mining revenue
sharing system had decentralised
planning and improved the framework
for infrastructure investment. But more
building capacity was required to
strengthen planning and execution.
Significantly, the income per capita
in Colombia was the seventh highest of
36 OECD countries. It was double that
of the US, and more than double that of
the UK. This suggests that Colombia
will need to raise considerably more tax
revenues in the near future to finance
social expenditures. The OECD
concluded that Colombia should shift
some of a growing tax burden from the
corporate to the personal.
The World Bank recently reported
that economic growth in Colombia was
4.6% over 2014, well above the regional
average of 1.5%. However, further
decreases in oil prices had been
impacting the Colombian economy
during 2015 and, in this adverse
environment, growth was expected to
slow to 2.9% over the year and 3.2%
over 2016, but still remain the highest of
that in the Latin American countries.
Fiscal management continued to be
among the strongest in the region. In
2014, the structural fiscal deficit was
2.3% of GDP and expected to be in the
order of 2.2% for 2015.
Editor's note
This month‘s regional report comprises
complementary articles from Barry Baxter and
Paul Bright. Every effort has been made to
ensure the figures quoted in both articles are
consistent. Remaining discrepancies result from
the authors’ use of different statistical sources.
Wirtgen Surface Miners cut, crush and load material in a single operation.
Wirtgen is the only manufacturer to cover a performance spectrum of up to
3,000 tons per hour with direct loading by conveyor belt. This high output is
based on high-performance cutting technology and a wealth of experience
acquired in three decades of application technology. Take advantage of inno-
vative solutions from the technology leader.
Road and MineRal Technologies
WIRTGEN GmbH . Reinhard-Wirtgen-Str. 2 . D-53578 Windhagen
Tel.: +49 (0) 2645 131-0 .
Surface Mining =
SiMple Mining
