According to the Milken Institute’s Global Opportunity Index 2021: Focus on Latin America report (the Report), Chile has the most potential to attract foreign investment in Latin America. The Report evaluated countries’ appeal based on how supportive their policies and institutions are to foreign investment, using the think tank’s 2021 Global Opportunity Index white paper.
Sweden came first in the white paper’s global rankings, followed by the UK and the US. Over 96 variables are taken into consideration in the white paper, including economic openness and performance, transparency and workforce talent and diversity. The variables are further divided into 5 main categories: business perception, financial services, international standards and policy, economic fundamentals and institutional framework.
In the Report, Chile’s strong performance across all the categories, especially its ‘friendliness’ towards foreign investors, earned it the top spot. Uruguay, Costa Rica, Mexico and Panama followed.
Seven new variables were added to the evaluating criteria this year, including adapting to the digital economy, a fast-moving market. The diversity and qualifications of the labour force, as well as the existing financial system were highlighted as high-performing categories for Latin American countries, especially compared to other developing economies.
However, a lack of investor’s rights and the cost and time required to set up new businesses, as well as the percentage of firms citing corruption, labour regulations and taxes, were noted as two key areas where the region underperforms.
Published on February 11, 2021