(MarketWatch) — Colombian companies are well-positioned for international expansion, the country’s finance minister said Tuesday.
Prosperous domestic markets, a stable economy, favorable terms of trade and a free-trade strategy have helped drive Colombian companies’ moves to expand abroad, Finance Minister Juan Carlos Echeverry said here Tuesday.
“Emerging multinationals is a new phenomenon,” he said, highlighting the global expansion of both private companies and public companies, like Ecopetrol SA (EC, ECOPETROL.BO, ECP.T), Colombia’s state-run oil company.
Colombia’s focus on free trade has helped make it a favorable platform for international expansion, Echeverry said. While “some other countries in Latin America are embracing protectionism,” Colombia, Mexico, Chile and Peru are pursuing a free-trade strategy, he added.
In addition, improvements in security and efforts to improve infrastructure, as well as Colombia’s “privileged” geographic location, have encouraged Colombian corporations’ expansion, he said.
Still, some challenges remain, both domestically and abroad. Opening up companies to the United States and Europe will bring on stronger competition, he said. Although some companies have issued debt domestically to fund purchases abroad, Colombia still needs deeper financial markets to enhance companies’ financing ability, he said. Also, despite recent improvements, “the security challenge” will likely be with Colombia for decades, he added.