Which countries are ahead of the pack, and what can be done to boost competitiveness? Ahead of the World Economic Forum on Latin America, in Lima, Peru, from 23-25 April, here is a list of the top five most competitive economies in the region, based on the Global Competitiveness Report 2012-2013.

  • Chile (33 out of 144): Well-functioning and transparent institutions, good infrastructure and high levels of competition that allow resources to be allocated efficiently make Chile the most competitive economy in the region. Improving education and innovation remain the main challenges to allow the country to move towards a knowledge-based economy.
  • Panama (40 out of 144): Stellar progress in developing its infrastructure and its financial markets has allowed Panama to rise in the rankings, from 49 last year. Challenges in its institutions linked to corruption and bribery, as well as in education, may hold back future progress if left unaddressed.
  • Brazil (48 out of 144): The sheer size of Brazil’s markets has allowed for significant economies of scale, while pockets of innovation excellence in certain companies have flourished. Both these factors have allowed Brazil to improve its competitiveness. However, strengthening public institutions to make them more efficient and transparent, improving poor infrastructure and addressing low levels of education are still important challenges for the years ahead.
  • Mexico (53 out of 144): Sound macroeconomic management coupled with improvements in the soundness and efficiency of financial markets has helped Mexico to improve its competitiveness from position 66 two years ago. However, crime and the costs associated with it, monopolies (both public and private) in strategic sectors of the economy such as energy or telecoms, and weaknesses in education and innovation have traditionally held it back.
  • Costa Rica (57 out of 144): Transparent institutions, along with fairly well developed information and communications technology infrastructures and an educated labour force have made Costa Rica one of the strongest performers in Central America. Growing crime, poor infrastructure and excessive red tape are areas to improve.

Image: Men are seen working on a construction site in Brazil REUTERS/Ueslei Marcelino