Singapore and Colombia on Tuesday signed a agreement that sets out a reciprocal agreement to protect foreign investment between the two countries.
The Agreement for the Reciprocal Promotion and Protection of Investments (APPRI) establishes clear rules for investment that encourage entrepreneurial activity on both sides of a Colombia-Singapore relationship that reached $2.2 million in FDI from Singapore to Colombia during 2012.
Colombia’s Minister of Commerce Sergio Diaz-Granados welcomed a Singaporean mission of entrepreneurs to explore potential in innovation, sustainable development, IT, agribusiness, and the hydrocarbon sectors. Yet, most of Singapore’s business interest, according to the Ministry, falls within the services sector, like tech and BPOs.
Last year, President Juan Manuel Santos visited Singapore with a delegation of entrepreneurs to explore opportunities for Colombian investment in the Southeast Asian city-state.
But this is not Colombia’s first step in a push to improve ties with Asia.
Santos’ administration has made significant efforts to pivot toward the Pacific rim. Earlier this year, Colombia assumed leadership of the Pacific Alliance and joined Mexico, Peru and Chile to eliminate tariffs among the trade block, and orient their economies toward Asia. In early July, Foreign Minister Maria Angela Holguin met with Southeast Asian leaders to improve ties with Thailand and other Southeast Asian economies.
Colombia has initiated a trade agreement with South Korea and India’s Ambassador to Colombia, Riewad Warjri, calls Colombia the next best place after Brazil for Indian companies to do business in Latin America.
The deal with Singapore was welcomed by investors Wednesday.
“[Colombia] has a potential in the services sector that could be more competitive through this agreement. Colombia has an advantage here,” said the analyst.
What Colombia desperately needs is efficiency to sustain its growing economy, which is projected to reach 4% of GDP in 2013. Lancheros believes that Colombia’s trade agreements, like the one with Singapore, will promote competition. And competition, he says, will develop Colombia.