The 2014 IMD Competitiveness Ranking was released today and for the big economies of Latin America, the news was not good. Of the seven Latin American countries included in the rankings, only Argentina moved up (from 59 to 58) while Venezuela stayed stable as the least competitive country of the 60 in the rankings. Brazil, Mexico, Colombia, Chile and even current economic star Peru all fell.
Rankings like this have to be taken with a grain of salt. Since it is a relative ranking, a rise or fall in the ranking can be as much a factor of other countries’ performances as anything Chile or Mexico might be doing. Moreover, some factors, like currency fluctuations, can significantly affect a country’s competitiveness yet are not something that governments can completely control.
That said, this should be a worrying data point Latin American governments as it represents a continuation of a decades-long trend of Latin America continuing to fall behind, even when it moves forward. Several of the countries included in the ranking have been actively working to improve their international competitiveness, yet are, according to this methodology, doing so more slowly than elsewhere. If Mexico can pass its most aggressive economic reforms in decades and become relatively less competitive, what are the chances it will ever achieve meaningful catchup-up growth with the developed world?
At the end of World War II, Latin America’s per capita GDP was higher than Japan’s and comparable to Eastern Europe and the Soviet Union. In the decades since, country after country has caught and passed Latin America. To reverse this, Latin America is going to need to consistently be moving up, on rankings like this one.