BY CHRONICLE STAFF
Latin America's overall competitiveness is improving, according to the 2008-09 Global Competitiveness Index from the World Economic Forum. Brazil is gaining ground, while Mexico is becoming less competitive, the index shows. Mexico's decline, coupled with the growth of Panama, has led Panama to replace Mexico as Latin America's second-most competitive economy.
The Global Competitiveness Index looks at competitiveness in 134 nations worldwide, including 18 in Latin America. It is based on twelve pillars of competitiveness, including institutions, infrastructure, macroeconomic stability, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market sophistication, technological readiness, market size, business sophistication and innovation.
AVERAGE SCORE GROWS
Latin America's overall competitiveness is improving, according to a Latin Business Chronicle analysis of the new index, which was released last week. The average score for Latin American countries on the index reached 3.91 this year, up from 3.89 last year. Half of the countries - 9 - saw improvements in their scores, while eight aw declines and one (Argentina) saw no change, according to our analysis.
Chile remains the most competitive economy in the region, with an economy that is more competitive than those of countries like Spain, China and the United Arab Emirates. However, Chile's competitiveness score declined slightly from last year.
Brazil, Latin America's largest economy, is now ranked fifth in the region when it comes to competitiveness. That compares with seventh place last year and in 2006. Brazil's score grew from 3.99 points last year to 4.13 this year. That represents an improvement of 0.14 points. No other country in Latin America improved its score that much. Brazil's economy is now more competitive than EU member Greece.
MEXICO, PANAMA, COSTA RICA
After improving last year - from 4th place in 2006 to second place in 2007 - Mexico is now once again ranked fourth. Mexico's score fell from 4.26 points last year to 4.23 points this year.
Panama saw its score go from 4.18 points last year to 4.24 points this year. Meanwhile, Costa Rica boosted its score by 0.12 points - from 4.11 last year to 4.23 points this year. That was the second-best increase after Brazil. Costa Rica now ranks as Latin America's third-most competitive economy, behind Chile and Panama and ahead of Mexico.
Panama, Costa Rica and Mexico can boast economies that are more competitive than countries like Croatia, Hungary and Turkey.
WINNERS AND LOSERS
Countries that have improved their competitiveness include Colombia, Uruguay, Honduras, Peru and Guatemala. Apart from Chile, countries that saw declines include El Salvador, the Dominican Republic, Ecuador, Venezuela, Bolivia, Nicaragua and Paraguay.
The economies of Venezuela and Ecuador are less competitive than those of countries like Ghana and Suriname.
Paraguay continues to be the least competitive economy in Latin America and now lags behind economies like Ethiopia and Lesotho when it comes to competitiveness. It ranks 124th worldwide, which means it's among the 11 worst countries on the ranking.
CAFTA BEST, ALBA WORST
Based on trade groups, CAFTA remains the most competitive, while ALBA is the least competitive, according to the Latin Business Chronicle analysis of the the latest competitiveness index from the World Economic Forum. CAFTA has an average score of 3.88 points, an improvement of 0.04 points. Mercosur is the second-most competitive trade group, with an average score of 3.86, up 0.08 points. The Andean Community ranks third, with 3.75 points - a decline of 0.001 points. ALBA ends up last again, with an average score of 3.59 - an improvement of 0.05 points.
However, there are big differences within each trade group. In the Andean Community, Colombia's score of 4.05 is way ahead of lowest-ranked Bolivia, with 3.42 points. In CAFTA, Costa Rica's score of 4.23 is much higher than lowest-ranked Nicaragua, with 3.41 points. In Mercosur, Brazil's score of 4.13 is much better than lowest-ranked Paraguay, with 3.40 points. And in ALBA, Honduras's score of 3.98 makes it far more competitive than lowest-ranked Nicaragua at 3.41 points.
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