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Venezuela & Latin America Business & Political Environment

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Venezuela & Latin America Business & Political Environment

  1. 1. <ul><li>Where to do business in Latin America? </li></ul><ul><li>Business & Political Outlook </li></ul><ul><li>February, 2009 </li></ul>
  2. 2. Spanish-speaking America: Chile, Costa Rica and Panama are the ones with better governance… Source: Kaufman, D., Kraay, A., and Mastruzzi, M., “2008: Governance Matters VII: World Governance Indicators 1996-2007; World Bank, 2008 <ul><li>Numbers indicate average percentile worldwide in the following categories: </li></ul><ul><li>- Voice & accountability </li></ul><ul><li>- Political instability and absence of violence </li></ul><ul><li>- Government effectiveness </li></ul><ul><li>- Regulatory quality </li></ul><ul><li>- Rule of law </li></ul><ul><li>- Control of corruption </li></ul><ul><li>Improving: </li></ul><ul><li>Chile, Colombia </li></ul><ul><li>Stable: </li></ul><ul><li>Panama, Mexico </li></ul><ul><li>Deteriorating: </li></ul><ul><li>Venezuela , Costa Rica </li></ul>Worldwide Governance Indicators by the World Bank 83,1 69,5 56,7 46,8 42,7 41,7 13,0 0 25 50 75 100 Chile Costa Rica Panama México Latin America Colombia Venezuela 2007 2003 1998
  3. 3. World Bank Governance Indicators Source: Kaufman, D., Kraay, A., and Mastruzzi, M., “2008: Governance Matters VII: World Governance Indicators 1996-2007”; World Bank, 2008 Voice and Accountability 0 25 50 75 100 Chile Costa Rica Panama Mexico Latin America Colombia Venezuela Rule of Law 0 25 50 75 100 Political Stability 0 25 50 75 100 Regulatory Quality 0 25 50 75 100 Control of Corruption 0 25 50 75 100 Government Effectiveness 0 25 50 75 100 Chile Costa Rica Panama Mexico Latin America Colombia Venezuela Chile Costa Rica Panama Mexico Latin America Colombia Venezuela Chile Costa Rica Panama Mexico Latin America Colombia Venezuela Chile Costa Rica Panama Mexico Latin America Colombia Venezuela Chile Costa Rica Panama Mexico Latin America Colombia Venezuela
  4. 4. Doing Business Rank: Chile, Colombia and Mexico rank better, followed by Panama and Costa Rica Source: Doing Business Project 2009; World Bank <ul><li>Numbers indicate average worldwide ranking in the following categories: </li></ul><ul><li>- Starting business </li></ul><ul><li>- Construction permits </li></ul><ul><li>- Employing workers </li></ul><ul><li>- Registering property </li></ul><ul><li>- Getting credit </li></ul><ul><li>- Protecting investors </li></ul><ul><li>- Paying taxes </li></ul><ul><li>- Trading </li></ul><ul><li>- Enforcing contracts </li></ul><ul><li>- Closing a business </li></ul><ul><li>(see backup slides for specific in each of these categories) </li></ul>Doing Business Rank (181 countries) 2007 & 2008 40 53 56 81 117 174 36 66 42 76 118 175 0 20 40 60 80 100 120 140 160 180 Chile Colombia México Panamá Costa Rica Venezuela
  5. 5. Chile: Doing Business Rank Region: Latin America & Caribbean Population: 16,594,596 Income category: Upper middle income GNI per capita (US$): 8,350.00 -11 101 112 Closing a Business 1 66 65 Enforcing Contracts -9 44 53 Trading Across Borders -4 37 41 Paying Taxes -5 33 38 Protecting Investors -7 61 68 Getting Credit -4 35 39 Registering Property -1 73 74 Employing Workers -2 60 62 Dealing with Construction Permits -13 42 55 Starting a Business -4 36 40 Doing Business Change Doing Business 2008 Doing Business 2009 Ease of...
  6. 6. Colombia: Doing Business Rank Region: Latin America & Caribbean Population: 46,117,464 Income category: Upper middle income GNI per capita (US$): 3,250.00 -2 28 30 Closing a Business 1 150 149 Enforcing Contracts 16 112 96 Trading Across Borders 28 169 141 Paying Taxes -5 19 24 Protecting Investors -8 51 59 Getting Credit -4 74 78 Registering Property 8 88 80 Employing Workers 8 62 54 Dealing with Construction Permits 12 91 79 Starting a Business 13 66 53 Doing Business Change Doing Business 2008 Doing Business 2009 Ease of...
  7. 7. Mexico: Doing Business Rank Region: Latin America & Caribbean Population: 105,280,515 Income category: Upper middle income GNI per capita (US$): 8,340.00 -1 22 23 Closing a Business -1 78 79 Enforcing Contracts -9 78 87 Trading Across Borders -7 142 149 Paying Taxes -5 33 38 Protecting Investors -8 51 59 Getting Credit -13 75 88 Registering Property -1 140 141 Employing Workers -4 29 33 Dealing with Construction Permits -36 79 115 Starting a Business -14 42 56 Doing Business Change Doing Business 2008 Doing Business 2009 Ease of...
  8. 8. Panama: Doing Business Rank Region: Latin America & Caribbean Population: 3,340,605 Income category: Upper middle income GNI per capita (US$): 5,510.00 5 77 72 Closing a Business 1 117 116 Enforcing Contracts 1 9 8 Trading Across Borders -3 171 172 Paying Taxes -3 101 104 Protecting Investors -3 25 28 Getting Credit -7 68 75 Registering Property 0 172 172 Employing Workers -3 70 73 Dealing with Construction Permits 3 35 32 Starting a Business -5 76 81 Doing Business Change Doing Business 2008 Doing Business 2009 Ease of...
  9. 9. Costa Rica: Doing Business Rank Region: Latin America & Caribbean Population: 4,462,193 Income category: Upper middle income GNI per capita (US$): 5,560.00 9 107 96 Closing a Business -1 131 132 Enforcing Contracts -12 82 94 Trading Across Borders 12 164 152 Paying Taxes -3 161 164 Protecting Investors -8 51 59 Getting Credit -3 42 45 Registering Property -1 76 77 Employing Workers -6 117 123 Dealing with Construction Permits -7 116 123 Starting a Business 1 118 117 Doing Business Change Doing Business 2008 Doing Business 2009 Ease of...
  10. 10. Venezuela: Doing Business Rank Region: Latin America & Caribbean Population: 27,467,021 Income category: Upper middle income GNI per capita (US$): 7,320.00 0 149 149 Closing a Business -1 70 71 Enforcing Contracts -1 163 164 Trading Across Borders 0 177 177 Paying Taxes -2 168 170 Protecting Investors -2 161 163 Getting Credit -8 84 92 Registering Property 0 180 180 Employing Workers -2 94 96 Dealing with Construction Permits -4 138 142 Starting a Business 1 175 174 Doing Business Change Doing Business 2008 Doing Business 2009 Ease of...
  11. 11. <ul><li>Chile occupies the highest ranking among Latin American countries (37), lagging behind only in bankruptcy legislation (101) and flexibility of labor law (73) </li></ul><ul><li>Colombia was among top ten reformers last year, advancing reforms on access to credit, investors´ protection, and bankruptcy law, while trailing other countries in taxes, trading and enforcing contracts (rule of law) </li></ul><ul><li>Mexico lost 14 places in the ranking (from 42 to 56), mainly due to the introduction of legislation that increases bureaucracy on business start-up and property registration </li></ul><ul><li>Panama remains somewhat stable, and despite good business climate on most of the indicators, it is still among the ten worst countries in the world in labor law and bureaucracy/inefficiency related to the process of paying taxes </li></ul><ul><li>The relative cost of doing business in Costa Rica remains high, besides ease of access to domestic credit and property registration, all other areas are considered costly, inefficient and bureaucratic by international standards </li></ul><ul><li>Venezuela ranks amongst the worst five business climates in the world </li></ul>Executive Brief on Doing Business Indicators
  12. 12. Latin America: Governance Indicators & Doing Business Ranking Best Profile Governance / Business Climate Panama and Costa Rica ease of doing business and overall business climate may dramatically improve under the FTZ provisions <ul><li>Sources: </li></ul><ul><li>Doing Business Project 2009; World Bank, 2008 </li></ul><ul><li>Kaufman, D., Kraay, A., and Mastruzzi, M., “2008: Governance Matters VII: World Governance Indicators 1996-2007; World Bank, 2008 </li></ul>ARGENTINA BOLIVIA BRAZIL CHILE COLOMBIA COSTA RICA ECUADOR EL SALVADOR GUATEMALA HONDURAS MEXICO NICARAGUA PANAMA PERU URUGUAY VENEZUELA R DOMINICANA 1 21 41 61 81 101 121 141 161 0 10 20 30 40 50 60 70 80 90 100 Political Stability Index Doing Business Rank

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