How can industrial policy aid in improving ease of doing business?
By Jerry Haar
When John Price and I wrote Can Latin America Compete? several years ago we were unflinching in our criticism of the region for failing to undertake sweeping microeconomic and institutional changes, such as improved access to capital, investment in infrastructure, and regulatory reform. We urged the region to undertake at the minimum incremental reforms across nearly a dozen areas (including public safety, judicial reform, and education) to boost its competitiveness, lest it continue to lose out to emerging markets in Asia.
Since then, Latin America has, indeed, introduced measures to improve competitiveness, and these changes should be applauded. However, unfortunately, other regions—particularly Asia, Central Europe and Sub-Saharan Africa—have reformed at a faster rate. In addition, even within Latin America the gap has widened between countries and within cities and sub-regions within individual countries. Most notable are the “Asia-facing” nations of Peru, Colombia, Chile, and Mexico versus the “Atlantic-facing” nations of Argentina, Brazil, and Venezuela. One need only read the just-released World Bank Doing Business 2015 report. The first four countries rank among the top 50 out of 189 nations whereas Argentina (124), Brazil (120) and Venezuela (182) fair miserably.
As all nations in the Hemisphere strive to boost their competitiveness, there is one thing that they would agree …
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