CAFTA: Dominican Republic Best!

MIAMI.- The Dominican Republic has the best business climate in CAFTA and the fifth-best in all of Latin America, according to the third annual Latin Business Index from Latin Business Chronicle.

Although the country has seen growing interest from foreign investors in recent years, it managed to score among the worst in Latin America on the latest economic freedom from the Heritage Foundation. However, thanks to having Latin America's third-best macro environment and fifth-best political environment, it managed to end up among the top five business climate winners. President Leonel Fernandez has received widespread praise for boosting GDP growth and stabilizing inflation after receiving one of the worst macro economies in Latin America nearly four years ago.

Chile captured the top spot on the index, followed by Panama, Peru and Uruguay. The worst country by far is Venezuela, which managed to score lower than Haiti because of higher inflation, less economic freedom and a lower ranking from the World Bank's ease of doing business survey. Bolivia, Nicaragua and Honduras joined Venezuela and Haiti as Latin America's worst countries for business.

The index of 19 countries is the broadest measure of business climate in Latin America. Rather than looking at the size of a country's GDP or GDP per capita, it looks at five key categories and 27 subcategories to measure the recent, current and future business environment in a country. They are:

a.. Macro Environment (GDP growth 2006 and 2007, estimated growth this year and forecasted growth next year, inflation 2006 and 2007, estimated inflation this year and forecasted inflation next year).

b.. Corporate Environment (corporate tax rates, access to capital for entrepreneurs, ease of doing business (including starting and closing a business) and economic freedom).

c.. Globalization & Competitiveness (globalization, competitiveness, tariffs, education/ health and security for companies and businessmen).

d.. Technology Level (PC, Internet, broadband, wireless and fixed telephony penetration).

e.. Socio-Political Environment (political freedom, political stability, political outlook, business policies of government and corruption).

Brazil, Latin America's largest economy, ends up in 9th place, according to the index. Mexico, the second-largest economy in the region, fares better and ends up in sixth place.