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The past decade has seen something of a reawakening for the mining industry, as improved security and political support have resulted in increased investment and mineral production. While still a relatively small percentage of the wider economy, revenues from mining exports have risen dramatically over the past decade. Mining activities expanded 6.3% in 2012, largely thanks to the 19% expansion in the mining of metallic minerals. The current administration has high hopes of expanding production of its primary mining exports – coal and gold – while formalising the vast number of informal operations and ensuring a stable and secure environment for private firms. This chapter includes interviews with Beatriz Uribe, President, Mineros; and Maria Constanza García, President, Agencia Nacional de Minería.

The energy sector reached a milestone in 2012 as crude oil production surpassed 1m barrels per day. Colombia’s current generation capacity of 14,420 MW is supplied primarily by hydroelectric power, which accounts for just over two-thirds of the total, with the remainder coming primarily from natural gas- and coal-fired thermoelectric plants. Since 2008 natural gas production has seen private sector output grow at 22.9% year-on-year. The sector has also seen the emergence of a biofuels industry as legislation mandating the use of biofuel mixes created domestic demand for the alternative energy source. Deficient infrastructure and security concerns continue to pose a challenge to the sector. This chapter includes interviews with Frederico Renjifo Vélez, Minister of Mines and Energy; Juan Esteban Calle, Empresas Públicas de Medellín; and Germán Arce Zapata, President, National Hydrocarbons Agency.

The insurance sector has experienced significant growth in recent years as a rise in disposable income, an expansion of the formal economy, falling unemployment and gradual advancement on major infrastructure projects have helped expand demand across the spectrum of general and life insurance products. The number of insured has doubled between 2008 and 2011 and, at an average growth rate of 9.6% over the past five years, contributions from pensions and social security policies are raising the industry’s capitalisation to new levels. Low penetration rates suggest ample room for growth while new opportunities are becoming apparent in the microinsurance segment. Proposed regulatory changes, which include plans to implement International Financial Reporting Standards by 2016, are expected to further strengthen the highly concentrated sector. This chapter includes interviews with David Bojanini, President, Grupo SURA; and Raúl Fernández Maseda, President, Mapfre Colombia.

Colombia’s increasingly deep, diverse and sophisticated capital markets suggest a coming of age for the sector, which in 2012 saw total annual traded volume reach $36bn and a record total market capitalisation of $270bn. Well-established sovereign fixed-income and foreign exchange markets have been complemented in recent years by a developing derivatives market, increased domestic corporate debt issuance and a rising stock exchange, with strong domestic and international investor appetite across a range of asset classes. The Integrated Market of Latin America, which brings together the equity markets of Colombia, Chile and Peru, currently ranks second to Brazil on the continent in terms of market size, and offers new opportunities for the region. This chapter includes interviews with Juan Pablo Córdoba, President, Bolsa de Valores de Colombia; and Alejandro Santo Domingo, Board Member, Valorem.

Characterised by strong supervision and relatively conservative lending policies, Colombia’s banking sector is among the most stable and profitable in the region, with a return on assets of 1.97% across all credit entities and a return on equity of 13.56% in 2012. Although the sector is dominated by large domestic conglomerates, conditions are ripe for investors. Consumer, microcredit and mortgage lending segments have seen substantial real annual growth rates. Increased sophistication of the sector should be expected as it moves to implement Basel II and Basel III requirements and works towards compliance with International Financial Reporting Standards by January 2015. This chapter includes interviews with José Darío Uribe, Governor, Central Bank of Colombia; Luis Carlos Sarmiento, CEO, Grupo Aval; and Carlos Raúl Yepes, President, Bancolombia.

Consistent macroeconomic growth in the past decade, averaging 4.5% from 2002 to 2012, has renewed investment confidence in Colombia. Strong economic performance is expected to continue with the IMF anticipating GDP growth of around 4.1% in 2013. With a liberal legislative framework for free trade zones and high investor protection, Colombia attracted the second-highest investment flows in the region as a percentage of GDP in 2012, at 26.2%. Five key engines for growth – mining, innovation, housing, infrastructure and agribusiness – are all set to receive a major boost as part of the government’s National Development Plan. This chapter contains interviews with Juan Pablo Rivera, President, Bogotá Free Trade Zone; Sergio Díaz-Granados Guida, Minister of Commerce, Industry and Tourism; Karel De Gucht, EU Trade Commissioner; Gerardo Hernández Correa, Superintendent, Financial Superintendence of Colombia; Rubens V. Amaral Jr, CEO, Banco Latinoamericano de Comercio Exterior; Jim O’Neill, Chairman, Goldman Sachs Asset Management; and a viewpoint from Douglas L Peterson, President, Standard & Poor’s Rating Services.