Latin America Talent: Best & Worst Countries  

LatAm talent, Chevron judicial victories, Colombia currency reform and doing business in Central America and Dominican Republic.

BY LATINVEX STAFF

Chile is the best country in Latin America when it comes to ability to develop, attract and retain talent for companies that operate there. Meanwhile, Venezuela is worst, according to the IMD Talent Ranking from Swiss-based business school IMD.

But both Chile and Latin America fare poorly compared to the rest of the world, the ranking shows. Of the ten worst countries worldwide, half are from Latin America. And compared to 2005 data, Brazil saw the worst decline in Latin America and second-worst fall globally.

The IMD ranking benchmarks 60 countries worldwide, including seven in Latin America. It looks at three factors to measure talent environment, including investment and development in home-grown talent, reflecting a country's public investment in education and the quality of its education system; appeal, reflecting a country's ability to retain home-grown talent and attract talent from overseas and readiness, reflecting a country's ability to fulfil market demands with its available talent pool.

Although the ranking has been published for the first time, IMD used its historical data to compare the countries with data from 2005. The results show that all Latin American countries except Peru declined. (Peru was not included in IMDs database in 2005)

The best-ranked countries have a balanced approach between their commitment to education, investment in developing local talent, and their ability to attract overseas talent," Arturo Bris, Director of the IMD World Competitiveness Center, said in a statement. "Countries with smart talent strategies are also highly agile in developing policies that improve their talent pipeline."

Chile – the best ranked Latin American country – ends up in 44^th place, or almost among the bottom 25 percent.  It also managed to see a dramatic 22 spot drop from 2005.

Mexico, the second-best country in Latin America in talent, fared better, only dropping six spots to 50^th place.

Brazil, however, saw the worst decline. It fell 24 spots to 52^nd place. Only Hungary saw a worse decline worldwide in the same period. Yet, Brazil lags Hungary, which still ended up in 51^st place on the 2014 ranking. The only comfort for Brazil is that it at least beat Russia.

Colombia and Argentina fare worse than Brazil, while Peru – a newcomer compared with 2005 – ends up behind those countries and ranks second-worst in Latin America and fourth-worst worldwide.

Venezuela ranks as worst in Latin America and the second-worst country on the ranking of 60 countries. Only Bulgaria is worse, the IMD ranking shows.

COLOMBIA PLANS CURRENCY REFORM

Despite ranking as the top Latin American country in ease of doing business, Colombia has one major drawback for foreign investors. Its currency, the peso, is traded at a ridiculously high rate compared to the US dollar.  As of today, one US dollar is worth 2,165 pesos.

That rate is the second-highest in Latin America and among the 14 highest in the world, according to a Latinvex analysis of exchange rate data from XE Currency Converter.

While Paraguay has an even higher exchange rate (4,641 guaranis per US dollar), the Latin American average is 407 per US dollar. In fact, Colombia and Paraguay are the only Latin American countries with four digit exchange rates compared to the US dollar. Two other countries – Chile and Costa Rica – are the only ones with three-digit exchange rates, while six countries have double-digit rates and 10 have single digits (including the dollarized countries of Ecuador, El Salvador and Panama).

A high exchange rate is normally linked with problem economies. Yet, Colombia’s rate is higher than countries like Zimbabwe, Angola and Syria.  

Now, there’s hope. Colombian Finance Minister Mauricio Cardenas said Oct. 30 that he will send a bill to Congress to slash three zeros from the currency, bringing the peso to about 2.1 per dollar, according to Bloomberg.

The highest denomination bill in Colombia is 50,000 pesos, or about $23. A government initiative to revalue the currency failed four years ago on concern that expenses to print new bills, change accounting and switch prices would outweigh the benefits, according to Bloomberg.

Hopefully this time, the reform will take place.

DOING BUSINESSS IN CENTRAL AMERICA AND DR

Panama City is the best city in Central America and the Dominican Republic when it comes to ease of business, while Nicaraguan capital Managua ranks among the worst, according to a new report from The World Bank.

The report looks at three key indicators for ease of doing business in 22 cities in Central America and the Dominican Republic, namely starting a business, dealing with construction permits and registering a property.

Panama City led all the cities in terms of starting a business, although it ranked among the three best in registering a property and six best in dealing with construction permits.

Costa Rica’s capital San Jose ranks second after Panama in ease of doing business, thanks to being the best city in the region in terms of registering a property while ranking among four best cities in starting a business and five best in dealing with construction permits.

Guatemala City ranks third in ease of doing business thanks to ranking second in starting a business and fifth in registering a property. However, it ranked 14^th in dealing with construction permits.

Dominican capital Santo Domingo ranks fourth thanks to ranking third in starting business. It fared worse in terms of the other two, ranking 10^th in dealing with construction permits and 14^th in terms of registering a property.

Source: Doing Business in Central America and the Dominican Republic, The World Bank

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