Ecuador continues to climb positions in the latest Global Competitiveness Report, published recently by the World Economic Forum, based on Geneva. This year, the country moved from 86th to 71st place in the ranking, overtaking countries like Uruguay, El Salvador, and Bolivia. Ecuador also climbed 15 places in last year’s 2012-2013 ranking.
The report, which comprises 148 countries, analyzes the policies and factors from which each economy grows and develops. Thus, it compares the countries’ potential for growth and prosperity. In the 2013-14 edition, the authors constructed the ranking with statistics provided by both the country and international bodies — along with the Executive Opinion Survey from the World Economic Forum, which was answered by more than 13,500 businesspeople around the world.
In the case of Ecuador, the most significant progress is visible in the areas of infrastructure, education quality, and innovation. However, in the case of innovation — that is the acceptance and usage of new technologies and institutions — the country’s rating is still low, relatively speaking.
The report points out that Ecuador is benefitting from stable macroeconomic conditions, which have made access to financing through shares and loans easier. Presumably assisted by dollarization, these enable local companies to more easily carry out investment projects.
In spite of this positive trend, however, the country is still facing important challenges which restrain its competitive potential. In particular, the way institutions work continues to be weak, and concerns over the lack of independence in the legal system undermines trust in the general legal framework.
INCAE Business School, in its analysis of the results for eight countries in Latin America (embedded above, in Spanish), argues that the greatest obstacles for doing business in Ecuador are: corruption, security, labor regulations, fiscal regulations, and tax rates. They add that to achieve an efficient use of talent, it is necessary to strengthen the adoption of new technology, as well as rules that would attract investment, and to remove trade barriers.
At the regional level, Latin America has reached a plateau in its performance in terms of competitiveness. Chile, despite having lost one place, is still the best positioned at 34th, followed by Panama at 40th. At the international level, Switzerland leads the Global Competitiveness Report for the fifth consecutive year, followed by Singapore and Finland.
Translated by Mariano Filippini.