Colombia Looks to Turn Commodities Wealth Into Development

Colombia Looks to Turn Commodities Wealth Into Development

Following a decade-long oil and mining boom, Colombia is facing the challenge of how to harness its energy wealth and push development forward.

Since former President Alvaro Uribe opened up Colombia’s oil and mining sectors in the early 2000s, Colombia has gone from producing just more than 500,000 barrels per day (bpd) in 2002 to nearly 1 million bpd in 2012. Over the same period, it has seen foreign direct investment inflows jump from $2.1 billion to $15.8 billion, more than half of which was destined for the oil and mining sectors last year. Some 68 percent of Colombia’s $369 billion GDP in 2012 came from oil and mining. With the economy growing at 4 percent, the oil and mining boom has left Colombia with enough wealth to make a big difference in its development.

“Part of that growth is coming from a commodities supercycle that has clearly helped Colombia and other Latin American countries,” says Jamele Rigolini, Andean region economist at the World Bank. But growth does not always mean development. For Colombia, structural limitations behind its shining oil and mining sectors could hold development back if the country doesn’t put its energy wealth to good use.

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