Chile, Mexico, Colombia: LATAM's Most Competitive Markets

The Institute for Management Development (IMD) released the World Competitiveness Ranking 2024, offering insights into the economic performance, government efficiency, business efficiency, and infrastructure of 67 economies. Among Latin American countries, Chile, Mexico, and Colombia emerged as the most competitive; nevertheless, each faces persistent challenges.

The IMD ranking was based on statistical indicators from various organizations and insights from interviews with 6,612 executives worldwide. According to the results, Singapore emerged as the most competitive market, followed by Switzerland and Denmark. The rest of the Top 10 includes Ireland, Hong Kong, Sweden, UAE, Taiwan, the Netherlands, and Norway.

In Latin America, Chile led with the highest ranking at 44th place, followed by Mexico at 56th, and Colombia at 57th. "Small economies like Singapore, Switzerland, and Denmark have the capacity to adapt to change and implement effective policies. They do not face the same challenges as larger economies like Mexico, where adapting to change is inherently more difficult compared to Switzerland," said José Caballero, Senior Economist, IMD.

According to IMD’s indicators, Chile saw a decline in economic performance, moving from 52nd to 55th, and in government efficiency, dropping from 32nd to 34th. However, it improved in business efficiency, rising from 45th to 41st, and in infrastructure, moving from 46th to 45th. Remaining challenges in Chile include political reforms to reduce fragmentation, improving public safety, and increasing productivity through new technologies.

Mexico experienced a decline in business efficiency, moving from 51st to 53rd, and in infrastructure, from 59th to 62nd. However, it improved in economic performance, moving from 30th to 25th, and maintained its position in government efficiency at 60th. Challenges for the country include reducing business uncertainty, promoting GDP growth, and enhancing logistics infrastructure for nearshoring.

Previously, president-elect Claudia Sheinbaum announced plans to build at least 100 industrial parks to take advantage of nearshoring and distribute domestic and foreign investment throughout the country. However, Julio Escandón, Director General, Banco BASE, noted that investors are not highly interested in the southern regions. "This proposal is challenging. You cannot box in investors or tell them, 'You have to be here because I say so.' Investors will go where capital is most profitable."

Meanwhile, Colombia experienced a significant drop in economic performance, moving from 37th to 58th, and in government efficiency, from 61st to 64th. However, it improved in business efficiency, rising from 59th to 50th, and in infrastructure, moving from 57th to 54th. Key challenges include implementing strategic projects for vulnerable populations, enhancing resilience to climate impacts, and closing productivity gaps in agriculture.