MercoPress. South Atlantic News Agency

Chile's economy the most competitive in LA.

Chile continues as the most competitive economy in Latinamerica according to a report from the prestigious Swiss IMD Business Administration Institute.

The list includes sixty countries and different world regions and the ruling axiom of the rating is "the capacity to create and maintain a business atmosphere that helps to sustain private companies' competitiveness".

The rating indicates Chile remained in position 26 in 2003, the best in Latin America followed by Colombia which climbed from 45 to 41; the Brazilian state of Sao Paulo which actually dropped from 43 to 47; Brazil also decreased 52 to 53; Mexico from 53 to 56, Argentina 58 to 59 and Venezuela 59 to 60.

The IMD index which has been published for the last fifteen years and includes 323 factors confirmed the United States as the country with the most competitive economy. Apparently the US leadership is closely linked to investments overseas.

"For each dollar invested in the US, four dollars were invested by American companies overseas", indicated the editor of the latest IMD report economist Stephane Garelli. "Competitiveness so far has prospered basically taking advantage of low cost opportunities in the rest of the world", added Mr. Garelli.

Among the most dynamic economies are Singapore that advanced from position four to second behind the US and the Chinese region of Zhejiang that climbed from 38 to position 19.

The report also reveals that countries such as Spain, in position 31 could be affected by the incorporation of ten more countries to the European Union.

In related news, Chile has also the lowest spread between local bonds and the US Treasury bonds, equivalent to 113 points, even when this has been the highest reading of 2004.

Mexico follows with a spread of 235 points; Peru, 469 points and Colombia 526 points. Brazil and Uruguay are above 700 points.

Chile actually managed to drop to 79 points last April, but the potential energy crisis in the country following Argentina's decision to reduce surplus exports of natural gas and the rocketing of the international price of oil have increased uncertainty about the future.

The spread is also described as the "country risk", that is the additional interest points which a country must pay to have access to international credit.