Brazil and the other full members of Mercosur – Argentina, Paraguay and Uruguay – rank poorly in the Forbes magazine annual Best Countries for Business. In Latin America, Chile and Peru get the best positions: 24 and 42 respectively, out of 134 countries surveyed worldwide.
Brazil did particularly bad in red tape (99), tax burden (112) and trade freedom (112). Its best position was in innovation with a 34th place.
In Latin America and the Caribbean behind Peru come Trinidad Tobago (49), Mexico (57), Panama (60) and Uruguay, 61.
Colombia figures in position 62; Paraguay, 85; Brazil, 89; Argentina, 95, Nicaragua, 111; Ecuador, 114; Bolivia, 123 and Venezuela, 130.
The Best Country for Business is Canada followed by New Zealand, Hong Kong, Ireland, Denmark, Singapore, Sweden, Norway, UK and the US. In the tail of the list are Burundi, Zimbabwe and Chad.
While the US is paralyzed by fears of a double-dip recession and Europe struggles with sovereign debt issues, Canada’s economy has held up better than most. The 1.6 trillion dollars economy is the ninth biggest in the world and grew 3.1% last year. It is expected to expand 2.4% in 2011, according to the Royal Bank of Canada.
The Best Countries for Business are determined by looking at 11 different factors: property rights, innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape, investor protection and stock market performance.
Forbes leaned on research and published reports from the Central Intelligence Agency, Freedom House, Heritage Foundation, Property Rights Alliance, Transparency International, the World Bank and World Economic Forum to compile the rankings.
The Brazilian positions in the several fields analyzed are: 112 in trade freedom, 66 in monetary freedom, 61 in property rights, 34 in innovation, 51 in technology, 99 in red tape, 59 in investor protection, 59 in corruption, 42 in personal freedom, 112 in tax burden, and 69 in market performance.
The performance of Mercosur countries according to Forbes ranking:
Argentina Brazil Paraguay Uruguay Chile
Trade Freedom 114 112 52 52 8
Monetary Freedom 126 66 25 90 47
Property Rights 84 61 114 42 27
Innovation 73 34 119 62 41
Technology 60 51 106 45 42
Red Tape 112 99 82 109 49
Investor Protection 92 59 46 76 27
Corruption 88 59 119 23 20
Personal Freedom 42 42 63 1 1
Tax Burden 104 112 77 114 35
Market Performance 26 69 NA NA 53
Latin America managed economic and social advances since the 2009 international crisis but not in democratic or institutional qualities for the common citizen, according to a report from the German foundation Konrad Adenauer, released this week in Mexico.
The Adenauer foundation says governments emerged financially strong from 2009 and have advanced with patronage webs to the loss of citizens’ freedoms
The Democratic Development Index, DDI for Latin America in its 2011 edition points out that democracy and institutional quality are paramount for the development of democratic societies and in this case the report does not provide encouraging news.
The countries under scrutiny for the report included Argentina, Bolivia, Brazil, Colombia, Costa Rica, Chile, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Dominican Republic, Uruguay and Venezuela.
The DDI-Lat collected by the KA foundation worked with polls consultant Politat that pointed out that DD in Latin America again dropped this year (5.8%) on a regional average.
Politat director Jorge Arias said that the erosion is the result of the advance of governments, to the loss of citizens, through patronage networks.
The systemic approach to DD is focused on issues such as political rights, civil liberties, institutional quality and political efficiency and social and economic development.
In this latest report, (the tenth edition) countries with a High DD include Chile, Uruguay and Costa Rica. Chile has held the lead position for the last eight years.
Medium DD has Argentina, Brazil, Mexico, Panama and Peru.
Low DD, Colombia, El Salvador, Paraguay, Bolivia, Honduras and Dominican Republic and with Minimum DD, Nicaragua, Venezuela, Ecuador and Guatemala.
Arias said that during the 2009 crisis Latin America experienced a happy coincidence: low interest rates, low prices for industrial goods and a sustained positive price for export commodities which found a strong demand from China and India.
This enabled the region to take-off faster from the crisis but in a scenario with financially stronger governments which openly intervened in support of the needy and those punished by the consequences of the crisis.
In the item political rights and civil liberties there was an overall backdrop of 3.5%, mainly because of “rampant crime and the insecurity situation”. However Colombia and Venezuela advanced in this point, 17.9% and 14.3%, “which does mean they have become icons of respect for human rights”. They advanced because of recent elections held in both countries.
Arias underlines that narcotics and drug trading is one of the great threats to the region but the reaction of society and its leaders is not sufficiently strong, particularly in those countries hit hard by violence.
The areas most affected by this phenomenon are Central America and Mexico given their closeness with the world’s largest consumer of drugs, the US.
“The drugs problem from a democratic point of view is that we see a scarce reaction from governments, communities and media given the magnitude and gravity of the problem”, underlined Arias.
As to the current global turbulence with the double US and EU crises, Arias anticipated a similar situation to 2009, which means LatAm could clear the hurdle, although it all depends on how China and India evolve.