LA CONVENCIÓN AZUL

La Convención Azul is the pre-eminent free-market forum, taking place on December 4th-6th in Buenos Aires, Argentina.

La Convención Azul brings together the foremost free- market advocates and thought-leaders from business, government, academia and the non-for-profit sector from across Europe and the Americas, in order to shape the debate on how trade and digital economy can become the driving force of global growth.

From keynote speeches to topic-driven panel discussions, La Convención Azul will provide participants with valuable insights into the ideas that are shaping our time and our century.

The agenda for this event reflects on major policy challenges In recent decades, trade has lifted hundreds of millions of in the digital economy and trade including: people out of poverty, whilst allowing consumers in the developed world to benefit from an abundance of cheap goods and new technologies, Therefore, whilst the rhetoric across both the developed • The digital market in Latin America – setting and developing world is dominated by protectionism and pessimism, regulation to promote its development; the path to future prosperity points in the opposite direction, towards • Creative industries in digital convergence, and freer trade and open markets. La Convención Azul marks a new beginning for this collaboration. • How free trade can spur economic growth between Europe and Latin America. Tomasz Poręba MEP President of New Direction; First Vice Chairman of Delegation to the Euro-Latin American Parliamentary Assembly The event will be held in English and Spanish, with live translation. No location could be more fitting for this forum than ECONOMETRICS AT A GLANCE - LATIN AMERICA 6 Argentina and Buenos Aires. Just days ahead of WTO’s Eleventh Ministerial Conference (MC11) and as the country ARGENTINA 8 prepares to assume the Presidency of the G20, Argentina BOLIVIA 10 is stepping up its efforts for more free-market reforms. BRAZIL 12 Argentina is ripe for free market ideas that can turn CHILE 14 the country into a beacon of economic resilience and COLOMBIA 16 sustainability across Latin America. COSTA RICA 18 ECUADOR 20 This high-level gathering is being organised by New Direction EL SALVADOR 22 – a foundation which boasts membership of 36 conservative GUATEMALA 24 political parties, including the governing parties of the United Kingdom, Poland, Finland, United States, Australia, Israel, HONDURAS 26 Turkey, and many more. MEXICO 28 NICARAGUA 30 La Convención Azul will seek to inspire a new generation PANAMA 32 of free-market supporters, by platforming rigorous PARAGUAY 34 discussions between some of the world’s finest exponents PERU 36 and practitioners in this field. Faced with the current rise of URUGUAY 38 protectionist policymaking and authoritarian politics, we VENEZUELA 40 believe that the time is ripe for a new strategy which defends the record of free-markets in raising living standards across ECONOMETRICS AT A GLANCE - EUROPEAN UNION 43 the world, and which champions a comprehensive reform agenda for the future. WORLD ECONOMIC FREEDOM REPORT 47

(1) World Bank. 2017. Doing Business 2017: Equal Opportunity for All. Washington, DC: World Bank. DOI: 10.1596/978-1-4648-0948-4. License: Creative Commons Attribution CC BY 3.0 IGO - Ease of Doing Business ranking (2) Central Intelligence Agency, United States of America,The World Factbook, https://www.cia.gov/library/ publications/resources/the-world-factbook/geos/ar.html - CIA Factbook Introductions and Communications Infrastructure and Economic Indicators (3) “Where we work.” World Bank, World Bank Group, www.worldbank.org/en/where-we-work - World Bank Economic Profile Section (4) Unctad. “Country Profiles.” UNCTADstat, United Nations Conference on Trade and Development, unctadstat.unctad.org/EN -Trade in Services Segment (5) “Your key to European statistics.” Home - Eurostat, European Commission, ec.europa.eu/eurostat - EU Trade in Services Statistics La Convención Azul provides a forum that encourages and values discussion and rigorous debate. I believe that free markets, individual liberty, private property, unrestricted commerce and small government are the ultimate instrument of poverty alleviation, conflict resolution and social justice.

Naweed Khan Executive Director, New Direction

6 7 reintegration. began aperiodofreform andinternational Mauricio MACRI inNovember 2015, Argentina economic stagnation. With theelection of policies isolated Argentina andcaused Cristina FERNANDEZ deKIRCHNER,whose 2003-15 saw Peronist ruleby Nestor and resignations ofseveral presidents. The years to violent publicprotests andthesuccessive a severe economic crisisin2001-02 that led challenges, themost formidable ofwhichwas by force, andhaspersisted despite numerous to seize theFalkland Islands(IslasMalvinas) Democracy returned in1983after afailed bid by amilitaryjunta that took power in1976. in subsequent governments was followed and direct andindirect militaryinterference After World War II,anera ofPeronist populism civilian andmilitaryfactions. between Federalists andUnitariansbetween dominated by periods ofinternal politicalconflict 20th century, muchofArgentina’s history was from 1860to 1930. Upuntil aboutthemid- providing thelargest percentage ofnewcomers from throughout Europe, withItalyandSpain and culture were heavily shapedby immigrants became Argentina. The country’s population their separate ways, thearea that remained After Bolivia,Paraguay, andUruguay went declared theirindependence from Spain. In 1816,theUnited Provinces oftheRioPlata Introduction ARGENTINA BUENOS AIRES population. children andadolescents upto age18,9.3% ofthe Allowance, whichreaches approximately 3.7 million various programs, includingtheUniversal Child The country prioritized socialspending through were6.2% inextreme poverty. official statistics, 28.6% lived in poverty, while 2008. Inthefirst halfof2017, according to of 7.6%. This trend continued butslowed after of 11.8%compared to average income growth of thebottom 40%grew at anannualized rate prosperity between 2004 and2008.Incomes in reducing poverty andboosting shared Argentina was thetop performer intheregion high tech industries. manufacturing subsectors, andinnovative services in Argentina hassignificant opportunitiesinsome agricultural andlivestock industries. Inaddition, energy. Itisaleadingfood producer withlarge-scale fertile landsandhasgreat potential for renewable of territory, Argentina isendowed withextraordinary agriculture. Within its2.8millionsquare kilometers Argentina hasvast natural resources inenergy and and integration into theglobaleconomy. sustainable economic development withsocialinclusion undergoing aneconomic transformation that promotes economies inLatin America.Argentina iscurrently than US$600billion,Argentina isoneofthelargest With aGross Domestic Product (GDP) ofmore Economic Profile 8 convergence to aprimaryfiscalbalance by 2021. objectives. The Government plansagradual the previous year’s record andtheofficially stated accumulated inAugust 2017 is1.9%ofGDP, below compared to 4%in2015. The primarydeficit The primarydeficit for 2016 ofGDP,was 4.3% this process inthesecond partoftheyear. in thefirst halfof 2017 andis expected to continue began to recover. Infact, GDPgrew 2.7% year-on-year concentrated inthefirst halfofthe year, theeconomy After aneconomic contraction in2016, of2.2% observer inthePacific Alliance. intention to jointheOECD andbecome an the presidency oftheG20in2018, expressing role ontheinternational stage andwillhold In addition,Argentina hastaken avery active national statistics system. import regime, reduction ofinflation and reform of international creditors, themodernization ofthe unification ofthe exchange rate, theagreement with speed to implement core reforms suchasthe The new administration hasmoved withsignificant significant changeinArgentine economic policy. Presidential elections at theendof2015 ledto a 9 with adeficitof6.982million US$. US$ worth ofservices, andexported 12.697 million, In 2016, Argentina imported atotal of 19.679 million TRADE INSERVICES 43,416,755 EASE OFDOINGBUSINESS RANK 116th POPULATION

COMMUNICATIONS INFRASTRUCTURE AND ECONOMIC INDICATORS TELEPHONE SYSTEM TELEPHONES -MOBILECELLULAR TELEPHONES -FIXEDLINES INTERNET USERS IMPORTS EXPORTS GDP increasing gradually andmobile-cellular subscribership is increasing rapidly; 64,033,692 30,786,889 9,938,630 installed between allmajorcities;networks are entirely digitaland submarine cablesystems that provide linksto Europe, Africa, Southand Microwave radio relay, fiber-optic cable, andadomestic satellite system competition andforeign investment encouraging thegrowth ofmodern the availability oftelephone service continues to improve to rural areas. 24.3% with 40earthstations serve thetrunknetwork; fixed-line teledensity is telecommunications technology; fiber-optic cabletrunklinesare being $20,000 15.5% Central America, andUS;satellite earthstations -112; 2 international $56.78 $53.24 BRAZIL BRAZIL country code -54; landingpoint for theAtlantis-2, UNISUR,South America-1, andSouthAmericanCrossing/Latin AmericanNautilus PER CAPITA (PPP) in2016 US$ TOTAL TOTAL TOTAL In 1998Argentina openeditstelecommunications market to billion billion 2016 2016 2016 soybeans andderivatives, petroleum andgas,vehicles, machinery, motor vehicles, petroleum andnatural gas, broadband Internet services are gainingground. gateways near BuenosAires (2016) 18.7% 7.7% GENERAL ASSESSMENT organic chemicals,plastics CHINA US INHABITANTS (JULY 2016) INHABITANTS (JULY 2016) SUBSCRIPTIONS PER 100 SUBSCRIPTIONS PER100 SUBSCRIPTIONS PER100 PARTNERS (2016) PARTNERS (2016) INTERNATIONAL COMMODITIES COMMODITIES $20,700 % OFPOPULATION $56.81 DOMESTIC 70.2% corn, wheat $57.18 (JULY 2016) 146 billion billion 2015 2015 2015 23 12.5% 7.6% CHINA US COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON $20,400 TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD 44 48 2014 23 23 21 4.4% GERMANY 5.5% VIETNAM

the ballot. via astill-undetermined method for himto appearon already beenchosen by hisparty to runagainin2019, presidential election. Despite theloss, MORALES has that would have allowed himto compete inthe2019 referendum to approve aconstitutional amendment change. InFebruary 2016, MORALES narrowly lost a which hasallowed himto continue hisprocess of control ofthelegislative branch ofthegovernment, MORALES easilywon reelection. Hisparty maintained In December 2009andOctober 2014, President empower thenation’s poor, indigenousmajority. change thecountry’s traditional politicalclass and of civilianrulein1982-after heran onapromise to the widest margin ofany leadersince therestoration Toward SocialismleaderEvo MORALES president -by In December 2005,Bolivianselected Movement illegal drugproduction. problems ofdeep-seated poverty, socialunrest, and established in1982,butleaders have faced difficult coup occurring in1978. Democratic civilianrulewas a seriesofcoups andcountercoups, withthelast much ofitssubsequent history hasconsisted of BOLIVAR, broke away from Spanishrulein1825; Bolivia, namedafter independence fighter Simon Introduction BOLIVIA SUCRE by savings accumulated duringtheeconomic boom, extensive publicinvestment program funded inpart from 17percent to 10percent. This planincludes an between 2016 and2020, reducing extreme poverty to maintain growth at anaverage rate of5percent Plan inearly2016. With thisplan,thegovernment aims 2016-2020 National Economic and SocialDevelopment basic services, theGovernment ofBoliviaapproved the continued poverty reduction andimprove access to In aneffort to maintain strong growth, assure and gross publicdebtisnearly40percent ofGDP. 2016. Fiscalsavings are approximately 15percent ofGDP from US$15.1 billionin2014 to nearlyUS$10.1 billionin International reserves remain highdespite declining and direct financingfrom the Central Bank ofBolivia. economic cushionsaccumulated duringtheboom expansive policiesthat took advantage oftheimportant prices ondomestic demandwas contained by and inequality stagnated. The effect oflow commodity 4 percent in2016 andprogress toward reducing poverty growth decreased from ahighof6.8percent in2013 to Due to aless favorable international context, GDP 0.47 inthesameperiod. percent in2014, whiletheGiniIndex fell from 0.60 to moderate poverty, from 59 percent in2005to 39 favorable economic context ledto areduction in averaged 4.9percent between 2004and2014. The macroeconomic policy, economic growth inBolivia Thanks to highcommodity prices andaprudent Economic Profile 10 such asmining,agriculture andmanufacturing. traditionally have beenless attractive for private investors, is alsoimportant to promote investments insectors that with theprivate sector to expand proven gasreserves. It exporter ofnatural gasintheregion requires joiningforces Additionally, consolidating thecountry’s positionasan macroeconomic stability. sufficient returns to cement long-term growth with the plan’s large-scale investment projects provide private investment. Itisalsocriticalto guarantee that protects themost vulnerable groups andpromotes increases thecoverage andquality ofpublicservices, spending efficiency must beimproved toensureit that needed to maintain macroeconomic stability. Public during theeconomic boom,prudent management is challenges. Despite theimportant cushionsaccumulated ambitious development agendafaces structural In thecurrent global context, thegovernment’s foreign direct investment. plan alsocallsfor increased private-sector activity and and plastics) andhydroelectric energy generation. The exploration, industrialization ofnatural gas(fertilizers Investment areas includeinfrastructure, hydrocarbon Central ofBolivialoansandexternal Bank financing. 11 million US$. and exported million, leadingto 1,204 adeficit of1,580 In 2016, Boliviaimported 2,784 millionUS$inservices, TRADE INSERVICES EASE OFDOINGBUSINESS RANK 11,138,234 149rd POPULATION

COMMUNICATIONS INFRASTRUCTURE AND ECONOMIC INDICATORS TELEPHONE SYSTEM TELEPHONES -MOBILECELLULAR TELEPHONES -FIXEDLINES INTERNET USERS IMPORTS EXPORTS GDP country code -591; satellite earthstation -1Intelsat (Atlantic Ocean) (2016) employs digitalmicrowave radio relay; someareas are served by fiber-optic Bolivian National Telecommunications Company was privatized in1995 but most telephones are concentrated inLaPaz, Cruz,andothercapital Santa 10,165,308 cable; system operations, reliability, andcoverage have steadily improved 4,354,678 re-nationalized in2007; theprimarytrunksystem isbeingexpanded and natural gas,silver, zinc,lead,tin,gold,quinoa,soybeans andsoy products 19.9% 19.3% 867,302 cities; mobile-cellular telephone useexpanding rapidly and,in2016, $7,200 $7.888 BRAZIL CHINA machinery, petroleum products, vehicles, iron andsteel, plastics PER CAPITA (PPP) in2016 US$ TOTAL TOTAL TOTAL billion billion 2016 2016 2016 $7 teledensity stood at 93 per100persons 13.6% 17.5% GENERAL ASSESSMENT BRAZIL US INHABITANTS (JULY 2016) INHABITANTS (JULY 2016) SUBSCRIPTIONS PER 100 SUBSCRIPTIONS PER100 SUBSCRIPTIONS PER100 PARTNERS (2016) PARTNERS (2016) INTERNATIONAL COMMODITIES COMMODITIES % OFPOPULATION $9.004 $7,000 $8.673 DOMESTIC 39.7% (JULY 2016) billion billion 2015 2015 2015 93 8 10.5% ARGENTINA ARGENTINA 11.4% COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON $6,800 TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD 106 99 84 2014 83 78 COLOMBIA 9.8% 8.8% US second term. will serve as president until 2018, completing her August 2016; hervice president, MichelTEMER, conviction that was upheldby theSenate in of President DilmaROUSSEFF inMay 2016, a Political scandalresulted intheimpeachment growing unemployment, andrisinginflation. has beenplaguedby ashrinkingeconomy, country’s rise. However, since about2013, Brazil South America,was seenassymbolic ofthe thefirstOlympic Games, ever to beheldin of the2014 FIFA World Cupand2016 Summer a contributor to globalgrowth. The awarding of theworld’s strongest emerging markets and in thelate 20thcentury, Brazil was seenasone weathered aperiodofglobalfinancialdifficulty development ofitsinterior. Having successfully to pursue industrial andagricultural growth and ceded power to civilianrulers. Brazil continues until 1985,whenthemilitaryregime peacefully half century ofpopulist andmilitarygovernment South America,Brazil underwent more thana By far thelargest andmost populouscountry in leader Getulio VARGAS rose to power in 1930. politically dominated thecountry until populist by themilitaryin1889. Brazilian coffee exporters and thesubsequent proclamation ofarepublic government until theabolitionofslavery in1888 in 1822,maintaining amonarchical system of Portuguese rule, Brazil gaineditsindependence Following more thanthree centuries under Introduction BRAZIL BRASÍLIA measures andareform agendato reestablish government would pursue several fiscaladjustment President ofBrazil. Heannounced that his President MichelTemer took office asthe new Rousseff on August 31st (2016), former Vice Following theimpeachment ofPresident Dilma investors. to underminingtheconfidence of consumers and political crisisfaced by thecountry -hascontributed necessary policy adjustments, -coupled withthe in commodity prices andaninability to make the in 2016. The economic crisis,asaresult ofthefall 3.8% in2015, andisexpected to fall at least 3%more 2.1% between 2011 and2014. GDPcontracted by annual growth of4.5%between 2006and2010 to since thebeginningofthisdecade, from anaverage The country’s growth rate hasdecelerated steadily Brazil iscurrently goingthrough adeeprecession. have stagnated since 2015. reduction ofpoverty andinequality appears to the population asawhole. However, therate of and 2014, compared to a4.4% income growth for on average, 7.1% (inreal terms) between 2003 level ofthepoorest 40%ofthepopulation rose, same period,from 58.1 down to 51.5). The income Gini coefficient fell by 6.6 percentage points inthe poverty andinequality dropped significantly (the 2003 and2014 lifted 29millionpeopleoutof Brazil’s economic andsocialprogress between Economic Profile 12 development. growth, environmental protection andsustainable ways to combine thebenefitsofagricultural development challenges-especiallyinfinding biomes. However, thecountry still faces major deforestation intherainforest andothersensitive Great progress hasalsobeenachieved inreducing lower anduppersecondary levels. quality andoutcomes ofthesystem, especiallyat the education, Brazil isnow struggling to improve the levels. After achieving universal coverage inprimary over thelast decade, inequality remains at high Despite theachievements inpoverty reduction moderate devaluation inthereal exchange rate). response to thecontraction oftheGDP(aswell asa GDP -incomparison in2014 with4.3% –mainlyin the current account deficithaddropped to 1.6% of balance ofpayments current account. By July2016, The crisishasledto significant adjustments inthe Congress. program hasproven difficultand faces oppositionin environment. However, implementation ofthereform confidence and to restore a favorable investment 13 41,806 millionUS$. and exported million, resulting 185,280 inasurplusof In 2016, Brazil imported 143,474 millionUS$inservices, TRADE INSERVICES 207,353,391 EASE OFDOINGBUSINESS RANK 123rd POPULATION

COMMUNICATIONS INFRASTRUCTURE AND ECONOMIC INDICATORS 244,066,759 TELEPHONE SYSTEM TELEPHONES -MOBILECELLULAR TELEPHONES -FIXEDLINES INTERNET USERS IMPORTS EXPORTS GDP 41,846,846 122,841,218 good working system includinganextensive microwave radio relay system technology hasbeenamajordriver inexpanding telephone service to the Ocean), 1Inmarsat (Atlantic Ocean region east), connected by microwave provide direct connectivity to South andCentral America,theCaribbean, including Americas-1, Americas-2, Atlantis-2, GlobeNet, SouthAmerica-1, the US,Africa, andEurope; satellite earthstations -3Intelsat (Atlantic and stand at about20per100persons; less-expensive mobile-cellular 17.6% $15,200 transport equipment, iron ore, soybeans, footwear, coffee, automobiles fixed-line connections have remained relatively stable inrecent years South AmericanCrossing/Latin AmericanNautilus,andUNISUR that machinery, electrical andtransport equipment, chemicalproducts, oil, country code -55; landingpoint for anumberofsubmarinecables, 19% $184.5 $139.4 relay system to Mercosur Brazilsat B3satellite earthstation (2016) CHINA lower-income segments ofthepopulation withmobile-cellular US PER CAPITA (PPP) in2016 US$ TOTAL TOTAL TOTAL billion billion 2016 2016 2016 and adomestic satellite system with64earthstations teledensity roughly 120per100persons 16.9% 12.6% automotive parts,electronics GENERAL ASSESSMENT CHINA US INHABITANTS (JULY 2016) INHABITANTS (JULY 2016) SUBSCRIPTIONS PER 100 SUBSCRIPTIONS PER100 SUBSCRIPTIONS PER100 PARTNERS (2016) PARTNERS (2016) INTERNATIONAL COMMODITIES COMMODITIES % OFPOPULATION $15,900 $172.4 DOMESTIC $190.1 59.7% (JULY 2016) billion billion 119 20 2015 2015 2015 ARGENTINA ARGENTINA 6.7% 7.3% COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON $16,700 TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD NETHERLANDS 30 2014 26 6.6% 5.6% GERMANY 6 6 6

as astable, democratic nation. and international leadership roles befitting its status government. Chilehasincreasingly assumed regional commitment to democratic andrepresentative rates by over half, andhelpedsecure thecountry’s 1980s, contributed to steady growth, reduced poverty economic policies,maintained consistently since the elected president was inaugurated in1990. Sound Augusto PINOCHET, whoruleduntil ademocratically- overthrown in1973 by amilitarycoup ledby General old Marxist government ofSalvador ALLENDEwas a seriesofelected governments, thethree-year- southern regions inhabited by theMapuche. After government gainedcontrol over thecentral and northern regions. Inthe1880s,Chileancentral Chile defeated Peru andBolivia to winitspresent Spanish until 1818.IntheWar ofthePacific (1879-83), in 1810, itdidnotachieve decisive victory over the Chile. AlthoughChiledeclared itsindependence people, theMapuche, inhabited central andsouthern the IncarulednorthernChilewhileanindigenous Prior to thearrival oftheSpanishin16thcentury, Introduction CHILE SANTIAGO DECHILE investments. private investment andlower returns onforeign in 2013 to 1.4 percent in2016 dueto reduced declined from percent ahighof4.2 of GDP lower copper prices, the current account deficit fiscal policy. Onthe external front, despite for theeducation reform andcounter-cyclical same timethegovernment increased spending offsetting theeffects ofthetax reform at the a negative impact onfiscalincome, partially economic growth andlower copper prices had 2012 to adeficitof2.8percent in2016. Sluggish shifted from asurplusof0.6 percent ofGDP in cyclical: The central government’s fiscalbalance As expected, fiscalpolicy hasbeen counter- wage employment. employment inresponse to thestagnation of relatively stable, largely dueto risingself- context, theunemployment rate hasremained affected private investment and exports. Inthis of decliningcopper prices, whichnegatively percent in2011 to 1.6 percent in2016 because Nevertheless, GDPgrowth fell from ahighof6.1 decreased from 26 percent to 7.9 percent. population livinginpoverty (on US$4perday) Between 2000and2015, for example, the the country to significantly reduce poverty. growing economies inrecent decades,enabling Chile hasbeenoneofLatin America’s fastest- Economic Profile 14 and quality ofsocialservices. dependence onminingandincrease theaccess to productivity, improve energy provision, reduce must address structural challengesto promote addition to mining.Inthelongerterm, thecountry private sector to stimulate investment insectors in short term, itiscrucialto recover thetrust ofthe time itincreases economic growth potential. Inthe expectations of agrowing middleclass at thesame Chile needsto buildconsensus to respond to the inclusive growth. To achieve thispotential, however, management provides asolidbasefor more Responsible macroeconomic and fiscal investment. that willpotentially generate arecovery ofprivate compensating for thepossible increase inimports copper prices willdrive increases inexports, will alsogradually fall given that higherinternational higher copper prices. The current account deficit expected to benefitfrom theeconomy recovery and structural balance rule. Additionally, fiscalincome is response to afiscalpolicy firmly rooted inthe The fiscaldeficitwilllikely decrease gradually in sector prospects improve andcopper prices rise. Growth isexpected to recover gradually asprivate- 15 3,450 millionUS$. and exported 9,625 million,resulting inadeficit of In 2016, Chileimported 13,075 millionUS$inservices, TRADE INSERVICES 17,789,267 EASE OFDOINGBUSINESS RANK 57th POPULATION

COMMUNICATIONS INFRASTRUCTURE AND ECONOMIC INDICATORS TELEPHONE SYSTEM TELEPHONES -MOBILECELLULAR TELEPHONES -FIXEDLINES INTERNET USERS IMPORTS EXPORTS GDP number offixed-line connections have stagnated inrecent years asmobile- 22,974,289 11,650,840 providing linksto theUSandto Central andSouthAmerica;satellite earth country code -56;landingpoints for thePan American,SouthAmerica-1, telecommunications equipment, industrial machinery, vehicles, natural gas 3,464,107 and SouthAmericanCrossing/Latin AmericaNautilussubmarine cables 28.6% 24.3% $24,100 infrastructure inSouthAmerica;modernsystem based onextensive $55.34 CHINA CHINA $60.6 privatization began in 1988;most advanced telecommunications PER CAPITA (PPP) in2016 US$ cellular usagecontinues to increase, reaching 130telephones TOTAL TOTAL TOTAL billion billion petroleum andpetroleum products, chemicals,electrical and 2016 2016 2016 copper, fruit,fishproducts, paperandpulp, chemicals,wine microwave radio relay facilities; domestic satellite system stations -2Intelsat (Atlantic Ocean) (2016) 14.7% 14.1% GENERAL ASSESSMENT US US INHABITANTS (JULY 2016) INHABITANTS (JULY 2016) SUBSCRIPTIONS PER 100 SUBSCRIPTIONS PER100 SUBSCRIPTIONS PER100 PARTNERS (2016) PARTNERS (2016) with 3earthstations INTERNATIONAL COMMODITIES COMMODITIES $24,000 % OFPOPULATION per 100persons $58.72 $62.18 DOMESTIC (JULY 2016) 66% 130 billion billion 20 2015 2015 2015 8.6% 9.3% BRAZIL JAPAN COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON $23,700 TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD SOUTH KOREA 44 49 ARGENTINA 2014 43 42 47 4.4% 6.9%

BOGOTÁ Colombian Congress approved on30 November 2016 of thesixpoints oftheagendaagreed in2012 the 7, 2018. After four years ofnegotiation andtheapproval in office on August 7th, 2014, whichwillend on August President JuanManuelSantos beganhissecond term Economic Profile liberties. peaceful, transparent elections andthe protection ofcivil relatively strong democratic institutions characterized by drug related security challenges,Colombia maintains departments. Despite decadesofinternal conflict and and now hasapresence inevery oneofitsadministrative reassert government control throughout thecountry, Colombian Government hasstepped upefforts to crimes andestablished truth-telling mechanisms.The for Peace” to address accountability for conflict-related for transitional justice that includesa“SpecialJurisdiction society andpolitics,itcreates analternative system the FARC to demobilize, disarm,andreincorporate into Colombian Congress. The accord callsfor members of November 2016, whichwas subsequently ratified by the signed arevised finalpeace accord withthe FARC in formal peace negotiations, theColombian Government trade, escalated duringthe1990s.After four years of Forces ofColombia (FARC) heavily fundedby thedrug insurgent groups, principallytheRevolutionary Armed conflict between government forces andantigovernment others are Ecuador andVenezuela). Adecades-long after thedissolution ofGran Colombia in1830(the Colombia was oneofthethree countries that emerged Introduction COLOMBIA contracted 1.5percent and0.6 percent, respectively. to decline, whilemanufacturing andconstruction extractives sector continued, asoilproduction continued and personal services continued. The slumpinthe and dynamisminfinancialservices, andsocial, communal phenomenon, grew at 6percent inthefirst halfof2017, Agriculture, whichisrecovering from theEl Niño exports contracted percent 3.2 inthefirst halfofthe year. domestic demand, net exports weighed ongrowth, as in 2016. Despite subduedimportgrowth, reflecting softer government consumption expanded at asimilarpace as flat. Notwithstanding fiscal consolidation efforts, execution ofpubliclyfunded projects kept investment prospects for theextractive industries, anddelays inthe inflation decelerated. Weak domestic demand, weak at apace of1.5percent duringthisperiod,even as export performance. Private consumption expanded external demandandcompetitiveness issues affecting on private consumption andinvestment, andweak the first halfof2017, with confidence effects weighing Growth hasbeensomewhat weaker thanexpected in sector was affected by theElNiñophenomenon. fall intheextractive sector. For itspart,theagricultural and construction services, whichpartiallyoffset the growth dueto thedynamismoffinancial, commercial The services sector remained themaincontributor to leader, Rodrigo Londoño ‘Timochenko’, inBogotá. signed onNovember 24 by President Santos andFARC de Colombia-Ejercito delPueblo). The agreement was Colombia (FARC-EP -Fuerzas Armadas Revolucionarias of Colombia andtheRevolutionary ArmedForces of the new peace agreement between theGovernment 16 consolidation andcreate space for post-conflict spending. cost containment measures are essential to continue fiscal context, theimplementation ofthe2016 taxreform and the actual fiscaldeficit reached4percent ofGDP. Inthis structural fiscaldeficit2.2 percent was ofGDP, while remains strong. In2016, thecentral government’s for thefirst timein2012, shows that fiscalmanagement The continued compliance withthefiscalrule, instituted expectations are well-anchored. over themediumterm. Inflation hasdecelerated and diversification, thereby supportingthegrowth recovery are expected to enhance competitiveness andfoster infrastructure program. Ongoingstructural reforms recovery ofnon-oilexports andoilprices, andthe4G 2019 period,witheconomic growth driven by the Growth isexpected to strengthen over the2018- converging towards thetarget range. oil prices, andthe4Ginfrastructure program. Inflation is is expected, driven by therecovery ofnon-oilexports and In theperiod2017 to 2019, arecovery ineconomic growth narrow thecurrent account deficit. terms oftrade improvements have helpedto further non-oil exports dueto persistent structural constraints, Although aweak pesohasnottranslated into higher 17 of 3.020 millionUS$. services, and exported 7,796 million,leadingto adeficit In 2016, Colombia imported 10,816 millionUS$in TRADE INSERVICES 47,698,524 EASE OFDOINGBUSINESS RANK 53rd POPULATION

COMMUNICATIONS INFRASTRUCTURE AND ECONOMIC INDICATORS TELEPHONE SYSTEM TELEPHONES -MOBILECELLULAR TELEPHONES -FIXEDLINES INTERNET USERS IMPORTS EXPORTS GDP 58,684,924 cellular service providers isresulting infalling localandinternational calling telephone subscribership isabout120per100 persons; competition among system, adomestic satellite system with41 earthstations, andafiber-optic 27,452,550 network linking50cities;multipleproviders ofbothfixed-line andmobile- modern system inmany respects withanationwide microwave radio relay US, partsoftheCaribbean,andCentral andSouthAmerica;satellite earth country code -57; multiplesubmarinecablesystems provide linksto the fixed-line connections stand at about15per100persons; mobilecellular 26.4% $20,000 7,115,984 petroleum, coal, emeralds, coffee, nickel, cutflowers, bananas,apparel cellular services, however, infrastructure remains poorinsmallurban $43.24 $33.38 stations -10(6Intelsat, 1Inmarsat, 3fullydigitalized international rates andcontributing to thesteep declineinthemarket share of US PER CAPITA (PPP) in2016 US$ fuels, machinery, vehicles, iron andsteel rods, pharmaceuticals TOTAL TOTAL TOTAL billion billion 2016 2016 2016 33.5% 19.1% GENERAL ASSESSMENT CHINA switching centers) (2016) centers andrural areas US INHABITANTS (JULY 2016) INHABITANTS (JULY 2016) SUBSCRIPTIONS PER 100 SUBSCRIPTIONS PER100 SUBSCRIPTIONS PER100 PARTNERS (2016) PARTNERS (2016) INTERNATIONAL fixed-line services COMMODITIES COMMODITIES $20,700 % OFPOPULATION $52.05 $38.28 DOMESTIC 58.1% (JULY 2016) 124 billion billion 2015 2015 2015 15 6.3% 6.3% 7.5% PANAMA MEXICO COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON $20,400 TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD 2014 24 28 25 52 57 4.7% BRAZIL

SAN JOSÉ high. Landownership iswidespread. tourism industries. The standard oflivingisrelatively its economy to includestrong technology and a large agricultural sector, Costa Ricahasexpanded dissolved itsarmedforces. Althoughitstill maintains democratic development. In1949, Costa Rica brief periodsofviolence have marred thecountry’s independence. Since thelate 19thcentury, onlytwo which timeCosta Ricaproclaimed itssovereignty and America, butthisfederation disintegrated in1838, at years later itjoinedtheUnited Provinces ofCentral jointly declared their independence from Spain.Two one ofseveral Central Americanprovinces that two andahalfcenturies. In1821,Costa Ricabecame highlands. The area remained acolony for some Cartago was established inthecooler, fertile central It was notuntil 1563 that apermanent settlement of brutal heat, resistance by natives, andpirate raids. including diseasefrom mosquito-infested swamps, proved unsuccessful dueto acombination offactors, century, initialattempts at colonizing Costa Rica Although explored by theSpanish earlyinthe16th Introduction COSTA RICA extreme poverty. percent of thecountry’s householdsare livingin from 19.5 to 18.6 percent. Meanwhile, by 2016, 6.3 period; andurbanpoverty, inthosesameyears, fell decrease from 30.3 to 25.7 percent for thesame and 2016. Inthecaseofrural poverty, there was a poverty from to 22.3 20.5 percent between 2014 Census, thecountry managedto reduce total Survey oftheNational Institute ofStatistics and According to data from theNational Household Caribbean. the lowest poverty rates inLatin Americaandthe compact, andsteady growth hasresulted inoneof The combination ofpoliticalstability, asocial deforestation. only tropical country intheworld that hasreversed biodiversity conservation; makingCosta Ricathe has beensuccessful inpromoting forest and Payments for Environmental Services (PES) program country builditsGreen Trademark. The pioneering policies andaccomplishments, whichhave helpedthe Costa Ricaisalsoaglobal leader for itsenvironmental foreign investment andgradual trade liberalization. outward-oriented growth, basedonopenness to economic growth istheproduct ofastrategy of expansion over thepast 25years. The post-1980s country, Costa Ricahasexperienced steady economic respects. Considered anuppermiddle-income Costa Ricaisadevelopment success story inmany Economic Profile 18 by transparent andaccountable public institutions. that guarantees thewelfare ofitspeople, supported problems andis committed to aninclusive society The government hasstrived to address these inclusion, growth, andsustainability. These affect thebasicpillars ofdevelopment: deteriorating fiscalsituation and stubborn inequality. pressing development challengesstand out:the Despite thesolidgrowth over thepast decades,two expected, andtheprospect for 2018 isof3.7 percent. 2016, respectively. This year, aslight drop to 3.9percent is there was apickupto 3.7 percent and4.3 in2015 and and 2012. Growth decelerated to 3.5percent in2013, and average real growth rate of4.9percent between 2010 economy rebounded following thecrisis,achieving an percent in2008andcontracted to 1percent in2009. The During theglobalcrisis,real GDPgrowth slowed to 2.7 regional average of3.8percent for thesameperiod. percent between 2000and2013, compared to the has tripledsince 1960anditsgrowth averaged 4.5 countries intheregion. Costa Rica’s GDPpercapita which continue to rank higherthanthoseofother reflected inits strong humandevelopment indicators, The country’s success over thepast decades isalso 19 surplus of5,081 millionUS$. services, and exported million,leadingto 8,288 a In 2016, Costa Ricaimported 3,207 millionUS$in TRADE INSERVICES 4,930,258 EASE OFDOINGBUSINESS RANK 62nd POPULATION

COMMUNICATIONS INFRASTRUCTURE AND ECONOMIC INDICATORS TELEPHONE SYSTEM TELEPHONES -MOBILECELLULAR TELEPHONES -FIXEDLINES INTERNET USERS IMPORTS EXPORTS GDP country code -506;landingpoints for theAmericasRegion CaribbeanRing bananas, pineapples,coffee, melons,ornamental plants, sugar, beef, seafood, point-to-point andpoint-to-multi-point microwave, fiber-optic, andcoaxial Caribbean, andtheUS;connected to Central AmericanMicrowave System; 8,063,091 3,217,277 System (ARCOS-1), MAYA-1, andthePan AmericanCrossing submarine 827,000 $16,400 cables that provide linksto South and Central America,parts ofthe 41% $14.66 good domestic telephone service interms ofbreadth ofcoverage $10.15 US PER CAPITA (PPP) in2016 US$ raw materials, consumer goods,capitalequipment, petroleum, TOTAL TOTAL TOTAL billion billion 2016 2016 2016 satellite earthstations -2Intelsat (Atlantic Ocean) (2015) cable linkrural areas; Internet service isavailable 37.1% electronic components, medicalequipment US NETHERLANDS 5.8% GENERAL ASSESSMENT INHABITANTS (JULY 2016) INHABITANTS (JULY 2016) construction materials SUBSCRIPTIONS PER 100 SUBSCRIPTIONS PER100 SUBSCRIPTIONS PER100 PARTNERS (2016) PARTNERS (2016) INTERNATIONAL COMMODITIES COMMODITIES % OFPOPULATION $15,900 $9.445 $14.42 DOMESTIC (JULY 2016) 13.5% 66% 165 billion billion CHINA 2015 2015 2015 17 5.7% PANAMA 6.9% COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON MEXICO $15,400 TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD 104 2014 88 92 83 82 5.4% BELGIUM QUITO CORREA. February 2013, andvoters reelected President Rafael independence. General elections were heldin a new constitution, Ecuador’s 20thsince gaining elected presidents. Inlate 2008, voters approved ouster ofthree ofEcuador’s last four democratically Protests inQuito contributed to themid-term 2004, theperiodwas marred by politicalinstability. Ecuador marked 30years ofciviliangovernance in that flared in1995 was resolved in1999. Although conflicts withitsneighbors. Aborder war with Peru 1904 and1942, Ecuador lost territories inaseriesof in favor ofthe“Republic oftheEquator.” Between withdrew in1830, thetraditional namewas changed a federation known asGran Colombia. When Quito independence between 1819and1822formed (Colombia), Venezuela, andQuito -gainedtheir 1717. The territories oftheViceroyalty -New Granada 1563 andpart oftheViceroyalty ofNew Granada in became aseat ofSpanishcolonial government in Inca Empire until the Spanishconquest in1533. Quito What isnow Ecuador formed partofthenorthern Introduction ECUADOR to increase non-oilpublic income andrestrict spending. Temporary measures were applied domestic financingand have somewhat reduced mobilized different sources ofexternal and curb spending.Government officials have also been forced to reduce public investment and limited fiscalsavings, thegovernment has Given Ecuador’s lackofalocal currency and remained largely unchanged. period, thepoverty rate andtheGinicoefficient from 11.7 percent to 18.8percent. Duringthis percent andurbanunderemployment increased unemployment rose from 4.5percent to 6.5 coast ofEcuador. Between 2014 and 2016, urban April 16,2016 earthquake onthenorthwest This situation was exacerbated by thedevastating oil prices andthestronger U.S. dollar, however. These achievements are threatened by declining for theremainder ofthepopulation. population segment was higherthantheaverage 0.47, given that income growth ofthe poorest percent. The Ginicoefficient fell from 0.54 to poverty declinedfrom 37.6 percent to 22.5 transportation sectors. During that period, investments, especiallyintheenergy and enabled increased socialspendingandimportant substantial external financing.This stimulus percent,4.3 driven by highoilprices and Between 2006and2014, GDPgrowth averaged Economic Profile 20 development andcontinue to reduce poverty. create quality jobs,whichwillinturnpromote to bediversified, increase productivity and flexible private sector willallow theeconomy emerging economic activities. Amore robust, and facilitating capitalandlabormobility of promoting increased private-sector investment systematically improve theinvestment climate by continue to drive growth, thecountry must a context inwhichpublicinvestment cannot and maintains private-sector confidence. In it protects themost vulnerable population macroeconomic stability at thesametime it more efficient withaview to consolidating gradually increase publicspending andmake made duringtheoilboom.The country must also participation andprotect key socialadvances sustainable growth withincreased public-sector international context, return to thepath of to adaptitseconomic structure to thenew challenge ofbuildingthenecessary consensus During thisdifficultperiod,Ecuador faces the However, they have alsoincreased publicdebt. financing ofpost-earthquake reconstruction. the effects oflow oilprices andenabledthe imports. These measures have temporarily eased 21 of 1,123 million US$. services, and exported 2,109 millio, leadingto adeficit In 2016, Ecuador imported millionUS$in 3,232 TRADE INSERVICES 16,290,913 EASE OFDOINGBUSINESS RANK 114th POPULATION

COMMUNICATIONS INFRASTRUCTURE AND ECONOMIC INDICATORS TELEPHONE SYSTEM TELEPHONES -MOBILECELLULAR TELEPHONES -FIXEDLINES INTERNET USERS IMPORTS EXPORTS GDP Panama, Colombia, Venezuela, andextending onward to ArubaandtheUS 13,882,280 8,693,739 fixed-line teledensity stands at about15per100persons; mobile-cellular country code -593; landing points for thePAN-AM andSouthAmerica-1 submarine cablesthat provide linksto thewest coast ofSouth America, 32.3% fixed-line services provided by multipletelecommunications operators; 2,441,173 industrial materials, fuelsandlubricants, nondurable consumer goods 23% $11,100 use hassurged andsubscribership hasreached 85per100persons $15.86 $17.43 petroleum, bananas,cutflowers, shrimp, cacao, coffee, wood,fish Virgin Islands intheCaribbean;satellite earthstation -1Intelsat US US PER CAPITA (PPP) in2016 US$ TOTAL TOTAL TOTAL billion billion elementary fixed-line service butincreasingly sophisticated 2016 2016 2016 6.8% GENERAL ASSESSMENT 19% CHINA CHILE mobile-cellular network (Atlantic Ocean) (2016) INHABITANTS (JULY 2016) INHABITANTS (JULY 2016) SUBSCRIPTIONS PER 100 SUBSCRIPTIONS PER100 SUBSCRIPTIONS PER100 PARTNERS (2016) PARTNERS (2016) INTERNATIONAL COMMODITIES COMMODITIES % OFPOPULATION $11,500 $19.05 DOMESTIC $20.7 54.1% (JULY 2016) billion billion 86 2015 2015 2015 15 COLOMBIA 6.6% VIETNAM 8% COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON $11,700 TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD 2014 65 59 82 55 71 4.2% 5.6% BRAZIL PERU

SAN SALVADOR lived below the poverty linein2015 including10 on national poverty lines,41 percent ofhouseholds poverty inrecent years. According to WBdata based persistently highpoverty levels, andincreased urban The country’s low growth hastranslated into expected to grow by in2017. 2.3% Central Americainrecent few years. The country is made ElSalvador theslowest growing economy of only averaged 1.9%.This sluggishperformance has low levels ofgrowth, whichbetween 2010 and2016 Yet, ElSalvador continues to suffer from persistent decline inimportswas more marked. trade balance, asbothimportsandexports fell, butthe performance also benefited from animprovement inthe (or 17.1 percent ofGDP). The country’s economic by US$306millionfrom 2015 to reach US$4,576 million by US$262 million,andremittances, which increased including asignificant declineinoilimports, which fell 2016. This growth was mainlydriven by external factors, Economic growth inElSalvador reached 2.4 percent in Economic Profile homicide rates andpervasive criminalgangs. reforms. ElSalvador isbeset by oneoftheworld’s highest signed atreaty that provided for militaryandpolitical to aclosein1992 whenthegovernment andleftist rebels year civilwar, whichcost about75,000 lives, was brought and from theCentral AmericanFederation in1839. A12- El Salvador achieved independence from Spainin1821 Introduction EL SALVADOR increased from 79 percent to 89 percent, andtheshare the population with access to improved water sources in the1990sto 93 percent in2016. Similarly, theshare of Immunization rates have alsoincreased from 76 percent (reducing under-5 mortality). contributed to ElSalvador’s ability to reach MDG4 access to healthcare facilities, particularlyby thepoor, services. For example, inthehealthsector, increased policies whichhave expanded access to public progress onthesocialfront thanksinpartto active of power. Moreover, ElSalvador continues to make elections have taken place withpeaceful transitions and five consecutive democratic presidential consolidated since theendofcivilwar in1992, on bothfronts. Democracy andpeace have been country hasaccomplished significant progress In terms ofpoliticalandsocialdevelopments, the Salvador’s debtprofile. growth performance, hasnegatively impacted El The risingdebt-to-GDP ratio, together withthelow almost onepercentage point higherthanin2015. expected to reach 61.3% ofGDPby theendof2017, deficit iscurrently around 2.8%ofGDPwhiledebtis progressively deteriorated inrecent years. The fiscal important isthecountry’s fiscalsituation, whichhas An additionalelement that isbecoming increasingly from thegrowing cost oflivingintheurbanareas. driven mainlyby an increase inurbanpoverty resulting 4 percentage points compared to theprevious year, These figures represent anincrease inpoverty ofabout percent whichlived below theextreme poverty line. 22 development andlong-term economic growth. variability, alsocompromises the country’s sustainable by environmental degradation andextreme climate vulnerability to adverse natural events, exacerbated In additionto theseproblems, ElSalvador’s affect investment decisionsandhinderjobcreation. make doingbusiness more expensive, negatively has beenontherisesince 2014. Crimeandviolence 39 homicidesperevery 100,000 inhabitants, violence contributed to reducing violence levels to fewer than truce established between street gangsin2012 affect thequality oflife ofitscitizens. While a and economic growth inElSalvador, andnegatively But crimeandviolence threaten socialdevelopment equal country inLatin Americain2015 after Uruguay. for thepoorest 20percent, makingElSalvador themost and 2015. This reduction was driven by income growth declined by about4percentage points between 2006 Inequality –measured by theGinicoefficient –also significant advances inurbanareas. level) andliteracy rates have increased, with themost In education, bothaccess (particularlyat theprimary percent to over 95 percent duringthesameperiod. with access to improved sanitation expanded from 56 23 surplus of756 millionUS$. services, and imported 1,721 million,leadingto a In 2016, ElSalvador exported 2,477 millionUS$in TRADE INSERVICES EASE OFDOINGBUSINESS RANK 6,172,011 95th POPULATION

COMMUNICATIONS INFRASTRUCTURE AND ECONOMIC INDICATORS TELEPHONE SYSTEM TELEPHONES -MOBILECELLULAR TELEPHONES -FIXEDLINES INTERNET USERS IMPORTS EXPORTS GDP services inlate-2016; growth infixed-line services hasslowed intheface of multiple mobile-cellular beganrolling outLong Term Evolution (LTE) data 1,785,254 48.3% 9,101,868 37.9% country code -503; satellite earthstation -1Intelsat (Atlantic Ocean); 933,377 offshore assembly exports, coffee, sugar, textiles andapparel, ethanol, $8,900 $8.823 $4.186 mobile-cellular competition; Internet usagegrew almost 400% US US raw materials, consumer goods,capitalfuels,foodstuffs, PER CAPITA (PPP) in2016 US$ TOTAL TOTAL TOTAL billion billion 2016 2016 2016 connected to Central AmericanMicrowave System (2017) chemicals, electricity, iron andsteel manufactures nationwide microwave radio relay system GUATEMALA 10.2% 14.2% HONDURAS GENERAL ASSESSMENT between 2007 and2015 INHABITANTS (JULY 2016) INHABITANTS (JULY 2016) SUBSCRIPTIONS PER 100 SUBSCRIPTIONS PER100 SUBSCRIPTIONS PER100 petroleum, electricity PARTNERS (2016) PARTNERS (2016) INTERNATIONAL COMMODITIES COMMODITIES % OFPOPULATION $9.384 $8,700 $4.381 29.0% DOMESTIC (JULY 2016) 148 billion billion 2015 2015 2015 15 GUATEMALA 13.5% 8.8% CHINA COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON $8,500 TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD 102 90 NICARAGUA 99 2014 79 111 6.5% 7.6% MEXICO

is expected to grow by 3.4 percent in2017. by 2.9percent, according to thelatest estimates, and percent in 2015. In2016, thecountry’s economy grew GDP growth rate of3.0 percent since 2012 and4.1 performers inLatin Americainrecent years, witha Guatemala hasbeenoneofthestrongest economic Thanks to prudent macroeconomic management, Economic Profile created, by someestimates, about1millionrefugees. which hadleftmore than200,000 peopledeadandhad peace agreement formally ending the internal conflict, year guerrillawar. In1996,thegovernment signeda of militaryandciviliangovernments, aswell asa36- second halfofthe20thcentury, itexperienced avariety Guatemala won itsindependence in1821.Duringthe After almost three centuries asaSpanishcolony, surrounding regions duringthe first millenniumA.D. The Maya civilization flourishedinGuatemala and Introduction GUATEMALA GUATEMALA CITY term socialobjectives. crucial to achieving thecountry’s medium andlong- marginal improvements, accelerating growth willbe growth. While pro-poor policy reforms could yield to reduce poverty through more rapid economic recovery, thenext few years represent anopportunity Given Guatemala’s capacity for macroeconomic indigenous. people livinginpoverty inthecountry, 52 percent are that poverty rose to 59.3 percent in2014. Ofall 2000 and2006.However, officialfigures indicate poverty rate from 56percent to 51 percent between Guatemala reported that thecountry reduced its The World study Bank Poverty Assessment in indigenous areas. mortality rates intheregion, especiallyinrural and worst poverty, malnutritionandmaternal-child inequality rates inLatin America,withsomeofthe in Central America,hasoneofthehighest Nevertheless, Guatemala, thebiggest economy 24 costs for thecountry. of crimeandviolence represent staggering economic is improving thelevels ofcitizen security. Highlevels An increasingly important challengefor Guatemala infrastructure andhumancapital. revenue to fundimportant pro-growth investments in reforms to mobilize increased private investment and Boosting growth willdependuponcontinued relative to thesize ofitseconomy. the lowest share ofpublicrevenues intheworld lack ofresources. Additionally, thegovernment collects development goals,yet itremains constrained by a Public investment isessential to achieving Guatemala’s 25 deficit of300millionUS$. services, and exported 2,694 million, leadingto a In 2016, Guatemala imported 2,996millionUSDin TRADE INSERVICES 15,460,732 EASE OFDOINGBUSINESS RANK 88th POPULATION

COMMUNICATIONS INFRASTRUCTURE AND ECONOMIC INDICATORS TELEPHONE SYSTEM TELEPHONES -MOBILECELLULAR TELEPHONES -FIXEDLINES INTERNET USERS IMPORTS EXPORTS GDP sugar, coffee, petroleum, apparel, bananas,fruitsand vegetables, cardamom, country code -502; landingpoint for boththeAmericasRegion Caribbean Ring System (ARCOS-1) andtheSAM-1 fiber-optic submarinecablesystem 19,208,673 persons; fixed-line investments are beingconcentrated onimproving rural opened theway for competition; fixed-line teledensity roughly 10per100 fertilizers, electricity, mineral products, chemicalproducts, plastic materials 1,675,000 of theCaribbean,andUS;connected to Central AmericanMicrowave that, together, provide connectivity to SouthandCentral America,parts 5,241,952 state-owned telecommunications company privatized inthe late 1990s fuels, machineryandtransport equipment, construction materials, grain, 38.1% 34% $7,900 connectivity; mobile-cellular teledensity about125per100persons $10.58 $16.76 System; satellite earthstation -1 Intelsat (Atlantic Ocean) (2017) US US manufacturing products, precious stones andmetals, electricity PER CAPITA (PPP) in2016 US$ TOTAL TOTAL TOTAL billion billion 2016 2016 2016 fairly modernnetwork centered inthecity ofGuatemala EL SALVADOR 11.5% GENERAL ASSESSMENT MEXICO 11% INHABITANTS (JULY 2016) INHABITANTS (JULY 2016) SUBSCRIPTIONS PER 100 SUBSCRIPTIONS PER100 SUBSCRIPTIONS PER100 PARTNERS (2016) PARTNERS (2016) INTERNATIONAL COMMODITIES COMMODITIES % OFPOPULATION $7,900 $10.82 $17.64 DOMESTIC 34.5% (JULY 2016) 126 billion billion 2015 2015 2015 11 HONDURAS 9.9% 7.1% CHINA COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD $7,700 EL SALVADOR 90 80 NICARAGUA 2014 86 65 63 6% 5% TEGUCIGALPA US$1.90 perday. 5 Hondurans live inextreme poverty, oronless than official data. Inrural areas, approximately oneoutof population living inpoverty in2016, according to major challenges,withmore than66percent ofthe Honduras isalow middle-income country that faces Economic Profile economy hasslowly rebounded. approximately $2billionindamage. Since then,the 1998, whichkilledabout5,600 peopleandcaused country was devastated by HurricaneMitch in Government forces fighting leftist guerrillas. The Nicaraguan Government andanallyto Salvadoran for anti-Sandinista contras fighting theMarxist in 1982.Duringthe1980s,Honduras proved ahaven a freely elected civiliangovernment cameto power After two andahalfdecadesofmostly militaryrule, Honduras becameanindependent nation in1821. Once partofSpain’s vast empire intheNew World, Introduction HONDURAS especially banana andcoffee. to thedeclining prices ofthecountry’s export crops, of itsrevenue over thepast two decades,inpartdue agricultural sector, for example, lost nearlyone-third The country isalsovulnerable to external shocks.Its Autonomous University ofHonduras). the Observatory ofViolence at theNational per 100,000 inhabitants in2016, according to of thehighest rates intheworld (59 murders has declined,Honduras continues to have one Although inrecent years, thenumberofhomicides challenge istherampant crimeandviolence. inequality inLatin America.Anothermajor country faces thehighest level ofeconomic Despite thefavorable economic outlook,the same growth expected for 2017. by 3.7 percent, according to thelatest estimates, the remittances. In2016, thecountry’s economy grew driven by publicinvestments, exports andhigher Honduras hasexperienced amoderate recovery, Since the2008-2009 globaleconomic crisis, 26 reduce poverty. that targeted socialprograms canpotentially for theirlivelihoods. Otherstudies have found live inrural areas anddependonagriculture income given that most ofthecountry’s poor education anddiversifying sources ofrural importance ofimproving thequality of World studies Bank have highlighted the effective socialsafety nets. management mechanisms,anddeveloping of households,expanding market-based risk focus onstrengthening theadaptation capacity Measures to mitigate theimpact oftheseshocks natural events suchashurricanesanddroughts. Additionally, Honduras issusceptible to adverse surplus of953 millionUS$. services, and exported 2,739 million,leadingto a In 2016, Honduras imported 1,787 millionUS$in TRADE INSERVICES 27 EASE OFDOINGBUSINESS RANK 9,038,741 105th POPULATION

COMMUNICATIONS INFRASTRUCTURE AND ECONOMIC INDICATORS TELEPHONE SYSTEM TELEPHONES -MOBILECELLULAR TELEPHONES -FIXEDLINES INTERNET USERS IMPORTS EXPORTS GDP Ring System (ARCOS-1) andtheMAYA-1 fiber-optic submarinecablesystem country code -504; landingpoint for boththeAmericas Region Caribbean in order to expand telephone coverage contributing to asmallincrease in coffee, apparel, coffee, shrimp, automobile wire harnesses, cigars, bananas, fixed-line connections are increasing butstill limited; competition among of theCaribbean,andUS;satellite earthstations -2Intelsat (Atlantic 7,832,802 5,241,952 32.8% 36.7% that together provide connectivity to SouthandCentral America,parts beginning in2003, private sub-operators allowed to provide fixed lines multiple providers ofmobile-cellular services iscontributing to asharp 442,929 $5,300 communications equipment, machineryandtransport, industrial raw $10.56 Ocean); connected to Central AmericanMicrowave System (2016) $7.841 fixed-line teledensity; mobile-cellular subscribership isroughly US US PER CAPITA (PPP) in2016 US$ TOTAL TOTAL TOTAL billion billion 2016 2016 2016 materials, chemicalproducts, fuels,foodstuffs gold, palmoil,fruit,lobster, lumber 10.7% 14.1% GERMANY GENERAL ASSESSMENT increase insubscribership CHINA INHABITANTS (JULY 2016) INHABITANTS (JULY 2016) SUBSCRIPTIONS PER 100 SUBSCRIPTIONS PER100 SUBSCRIPTIONS PER100 PARTNERS (2016) PARTNERS (2016) INTERNATIONAL 90 per100persons COMMODITIES COMMODITIES % OFPOPULATION $5,200 $8.188 DOMESTIC (JULY 2016) 30% $11.1 billion billion 88 2015 2015 2015 5 EL SALVADOR GUATEMALA 8.9% 8.6% COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD $5,100 103 GUATEMALA 94 96 2014 95 97 6.5% 7.3% MEXICO

percent. Conditions onfinancial markets have also Gross Domestic Product (GDP) growth at 2.3 expected duringthefirst halfof 2017 with annual The Mexican economy performed better than Economic Profile thousands ofdrug-related homicides. have engaged inbloodyfeuding, resulting intens of Mexico’s powerful drug-trafficking organizations in theimpoverished southern states. Since 2007, opportunities for thelargely indigenouspopulation income distribution, andfew advancement real wages, highunderemployment, inequitable Ongoing economic andsocialconcerns includelow year, althoughgrowth returned quicklyin2010. massive economic downturn inMexico thefollowing The globalfinancialcrisisinlate 2008caused a NIETO regained thepresidency for thePRIin2012. candidate Felipe CALDERON,butEnriquePENA (PRI). Hewas succeeded in2006by anotherPAN government, theInstitutional Revolutionary Party National Action Party (PAN) -defeated theparty in that anoppositioncandidate -Vicente FOX ofthe the first timesince the1910Mexican Revolution the 19thcentury. Elections heldin2000marked three centuries, itachieved independence earlyin Administered astheViceroyalty ofNew Spainfor colonized by Spainintheearly16thcentury. Maya, andAztec -Mexico was conquered and - includingtheOlmec,Toltec, Teotihuacan, Zapotec, The site ofseveral advanced Amerindiancivilizations Introduction MEXICO MEXICO CITY medium-term target of3percent. plus minus1percent around theCentral Bank’s next year to theuppersideofinterval of of June. Inflation is expected to come down overnight interest rate at 7.0 percent by theend points during thefirst halfof2017 leaving the hikedBank itsmonetary policy rate by 125basis currency depreciation. Inresponse, theCentral year andsomepass-through from accumulated domestic fuelprice hikes at thebeginningof August at 6.7 percent following theimpact of Annual consumer price inflation peaked in dragged by afall ofpublicinvestment. investment isflat for thesecond year ina row, by limitingreal laborincome growth. Total dampening consumers’ purchasing power pace even thoughincreasing inflation is consumption continues to expand at asteady been invigorating Mexican exports. Private strengthened U.S. industrial production have depreciation over thepast three years and derived from theaccumulated currency growth. Increased external competitiveness vigorous contribution ofnet exports to GDP A strong recovery ofexternal trade created a strengthen economic activity. environment managedto restore confidence and a gradual improvement inthecountry’s external monetary andfiscalpolicy responses, as well as earlier thisyear. Resilience to shocks,sensible the U.S. dollar, following asignificant depreciation improved asthepesoappreciated withrespect to 28 financial relations. disruptive impact ontrade, investment and the riskofterminating theagreement witha terms (November 2018). Itwould alsoraise elections inMexico (July 2018) andU.S. mid- process dueto theproximity ofthepresidential the trade agreement. This could complicate the would increase uncertainty aboutthefuture of that could delay negotiations beyond early 2018 North AmericanFree Trade Agreement (NAFTA) A contentious andprolonged renegotiation of as somebudgetary reallocations. natural disaster riskmanagement strategy aswell and insurance that make upthegovernment’s mainly fundedwithresources from reserve funds central andsouthernpartsofthecountry willbe two majorearthquakes inSeptember 2017 inthe Reconstruction after thedevastation causedby negative by two ofthemain credit rating agencies. on Mexico’s sovereign credit rating to stable from stance contributed to arevision oftheoutlook debt onadownward path. Animproved fiscal term at 2.5percent ofGDPandplace public should keep theoverall deficitinthemedium medium term fiscal consolidation program that The government remains committed to its 29 7,828 millionUS$. exported 24,097 million,leaving atrade deficitof In 2016, Mexico imported 31,926 millionUS$,and TRADE INSERVICES 124,574,795 EASE OFDOINGBUSINESS RANK 47th POPULATION

COMMUNICATIONS INFRASTRUCTURE AND ECONOMIC INDICATORS TELEPHONE SYSTEM TELEPHONES -MOBILECELLULAR TELEPHONES -FIXEDLINES INTERNET USERS IMPORTS EXPORTS GDP 73,334,032 111,724,654 metalworking machines,steel millproducts, agricultural machinery, electrical far outnumberingfixed-line subscribers; domestic satellite system with 120 19,599,886 linked to Central AmericanMicrowave System oftrunk connections (2016) competition hasspurred themobile-cellular market; fixed-line teledensity earth stations; extensive microwave radio relay network; considerable use equipment, automobile partsfor assembly andrepair, aircraft, aircraft parts quality andincreasing mobilecellular availability, withmobilesubscribers communications), 1Panamsat, numerous Inmarsat mobile earthstations); Intelsat, 2Solidaridad(giving Mexico improved access to SouthAmerica, cable system together provide access to Central America,partsofSouth America andtheCaribbean, andtheUS;satellite earthstations -120(32 country code -52; Columbus-2 fiber-optic submarinecablewithaccess to the US,Virgin Islands,CanarySpain,andItaly; theAmericas Region CaribbeanRingSystem (ARCOS-1) andtheMAYA-1 submarine $18,900 adequate telephone service for business andgovernment; improving Central America, andmuchoftheUSaswell asenhancingdomestic $387.4 $374.3 PER CAPITA (PPP) in2016 US$ TOTAL TOTAL TOTAL billion billion 2016 2016 2016 exceeds 15 per100persons; mobile-cellular teledensity is manufactured goods,oilandproducts, silver, fruits, 46.6% US of fiber-optic cableandcoaxial cable GENERAL ASSESSMENT about 90per100persons vegetables, coffee, cotton INHABITANTS (JULY 2016) INHABITANTS (JULY 2016) SUBSCRIPTIONS PER 100 SUBSCRIPTIONS PER100 SUBSCRIPTIONS PER100 PARTNERS (2016) PARTNERS (2016) INTERNATIONAL COMMODITIES COMMODITIES % OFPOPULATION $18,700 $395.6 DOMESTIC 59.5% (JULY 2016) $381 81% 18% billion billion 2015 2015 2015 CHINA 91 16 US 4.6% COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON JAPAN $18,400 TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD 2014 14 14 13 12 12

MANAGUA and theSupreme Electoral Council. presidency, thejudicial,National Assembly, control over allfour branches ofgovernment: the administration asthepresident hasgarnered full institutions have weakened undertheORTEGA Mitch in1998-are beingrebuilt, butdemocratic hit by theearliercivilwar andby Hurricane Nicaragua’s infrastructure andeconomy -hard have beenmarred by widespread irregularities. regional, andnational-level elections since 2008 2011, andmost recently in2016. Municipal, Daniel ORTEGA was elected president in2006, 1996, and2001, former Sandinista President 1980s. After losingfree andfair elections in1990, Sandinista contra guerrillasthrough much ofthe El Salvador prompted theUS to sponsoranti- power in1979. Nicaraguan aidto leftist rebels in guerrillas ledby DanielORTEGA Saavedra to civil war that brought theMarxist Sandinista classes by 1978 andresulted inashort-lived manipulation andcorruption spread to all Violent oppositionto governmental subsequent decades. but gradually ceded control oftheregion in Coast inthefirst halfofthe19thcentury, republic in1838.Britainoccupied theCaribbean in 1821andthecountry becameanindependent century. Independence from Spain was declared Spanish colony from Panama intheearly16th The Pacific coast ofNicaragua was settled asa Introduction NICARAGUA fell from 14.6 to percent. 8.3 percent; while inthesameperiodextreme poverty Nicaragua dropped from 42.5 percent to 29.6 between 2009and2014 general poverty in by theNational Development Information Institute, According to the2014 Standard ofLivingSurvey shift possible. fund for thepoorest countries, hashelpedmake this Development Association (IDA), theWorld Bank’s communities. Massive debtrelief by theInternational to fight poverty, particularlyin remote rural control modeto longer-term, pioneeringstrategies the country’s decisionmakers to shiftfrom crisis Nicaragua’s macroeconomic stability hasallowed investment andtrade. countries, withfavorable prospects for foreign direct ranks second ingrowth amongCentral American the forecast is4.6 percent, whichiswhy Nicaragua and 4.7 in2015 and2016, respectively. For thisyear, In 2011, growth hitarecord 5.1 percent, slowing to 4.9 prices. economic crisisof2008-09andrisingfood andoil investment, helpedNicaragua to weather theglobal a steady expansion ofexports andforeign direct Disciplined macroeconomic policies,combined with the average for Latin AmericaandtheCaribbean. has stood outfor maintaining growth levels above Despite globaleconomic turbulence, Nicaragua Economic Profile 30 surplus of497 millionUS$. services, and exported 1,578 million, leadingto a In 2016, Nicaragua imported 1,082 million US$in TRADE INSERVICES and rural infrastructure. spending, andincreasing investment insocial sectors by increasing thefight against poverty, reducing 2016. Itsoverall objective isto reduce inequality Development (PNDH)hasbeenupdated through To thisend,Nicaragua’s National Planfor Human resources furtheranddeliver sustainable results. projects leverage localinitiatives that stretch limited To better reach thecountry’s vulnerable families, IDA a dailychallenge. developed countries, where access to basicservices is more, Nicaragua isstill oneofLatin America’s least Despite thisprogress, poverty remains high.What’s 31 EASE OFDOINGBUSINESS RANK 6,025,951 127th POPULATION

COMMUNICATIONS INFRASTRUCTURE AND ECONOMIC INDICATORS TELEPHONE SYSTEM TELEPHONES -MOBILECELLULAR TELEPHONES -FIXEDLINES INTERNET USERS IMPORTS EXPORTS GDP country code -505;theAmericas Region CaribbeanRingSystem (ARCOS-1) improved; fixed-line teledensity roughly 6per100persons; mobile-cellular Intersputnik (Atlantic Ocean region) and1Intelsat (Atlantic Ocean) (2016) 1,466,152 since privatization, access to fixed-line andmobile-cellular services has 7,745,512 51.5% 19.7% telephone subscribership hasincreased to almost 130per100persons 366,636 fiber-optic submarine cableprovides connectivity to South and Central America, partsoftheCaribbean,and US;satellite earthstations -1 coffee, beef, gold,sugar, peanuts,shrimpandlobster, tobacco, cigars, $5,500 $6.384 $3.772 system beingupgraded by foreign investment; nearlyallinstalled telecommunications capacity now usesdigitaltechnology, owing to investments since privatization oftheformerly state-owned US US PER CAPITA (PPP) in2016 US$ TOTAL TOTAL TOTAL billion billion 2016 2016 2016 consumer goods,machineryandequipment, raw materials, automobile wiringharnesses, textiles, apparel 12.9% 13.8% telecommunications company GENERAL ASSESSMENT MEXICO CHINA INHABITANTS (JULY 2016) INHABITANTS (JULY 2016) SUBSCRIPTIONS PER 100 SUBSCRIPTIONS PER100 SUBSCRIPTIONS PER100 PARTNERS (2016) PARTNERS (2016) INTERNATIONAL petroleum products COMMODITIES COMMODITIES % OFPOPULATION $6.405 $5,300 $3.859 DOMESTIC 24.6% (JULY 2016) 130 billion billion 2015 2015 2015 6 EL SALVADOR 9.7% MEXICO 6% COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD $5,100 105 123 115 112 VENEZUELA COSTA RICA 2014 111 5.9% 7.8% 2007 and2016. transits andlarger ships-was carriedout between the Canal’s capacity -by allowing for more Canal An ambitiousexpansion project to more thandouble bases were transferred to Panama by theendof1999. area supporting theCanal,andremaining USmilitary was deposedin1989. The entire Panama Canal,the decades. With UShelp, dictator ManuelNORIEGA over theCanalwere turnedover inthesubsequent portions oftheZone andincreasing responsibility the USto Panama by theendofcentury. Certain signed for thecomplete transfer oftheCanalfrom between 1904and1914.In1977, anagreement was Canal was builtby theUSArmy Corps ofEngineers the structure (thePanama CanalZone). The Panama US sovereignty over astrip oflandoneitherside the USallowing for theconstruction ofacanaland Colombia in1903 andpromptly signedatreaty with Colombia. With USbacking,Panama seceded from latter dissolved in1830, Panama remained partof named theRepublic ofGran Colombia. When the a unionofColombia, Ecuador, andVenezuela - century, Panama broke withSpainin1821andjoined Explored andsettled by theSpanishin16th Introduction PANAMA PANAMA CITY below 4percent, inrural areas itisabout27 percent. extreme poverty, for example, while inurbanareas itis mainly inhabited by indigenouspeople. Regarding disparities remain. Poverty prevails inrural areas, Despite the gainsonpoverty reduction, sharpregional 280 thousandnew jobs. and 2015. Inaddition,theeconomy hasgenerated poverty reduction of21to 17percent between 2011 poverty lineofUS$4aday, itwould result inageneral poverty inrecent years. Ifwe usetheinternational Panama hasmadesignificant progress in reducing and logistics, mining,financialservices, and tourism. sector-led growth inkey sectors, suchastransport also supported by emerging opportunities for private Prospects for highgrowth inthecoming years are Private investment shouldalsoremain strong. additional traffic generated bythe expandedCanal. construction ofthesecond Metro lineandexpected investments shouldalsoremain high,withplanned remain oneofthehighest inLatin America.Public In themediumterm, Panama’s growth islikely to remains at 5.4 percent, thehighest inLatin America. and 2016, respectively. By 2017 and2018 theforecast coming down slightly to 5.8and4.8percent in2015 Panamanian economy grew by 6.1 percent in2014, 2013, more thandoubletheregional average. The annual growth was 7.2 percent between 2001 and fastest growing economies worldwide. Average Over thepast decade, Panama hasbeenone ofthe Economic Profile 32 environmental sustainability, includingmanagement. capital; (2) (1) inclusion andcompetitiveness andincludesfive themes: Development Plan2015-2019 rests ontwo pillars of office onJuly1, 2014. The Government’s 5-year Strategic The Administration ofPresident JuanCarlosVarela took skills, andtheeffectiveness ofpublicinstitutions. years. They include:infrastructure, education and left unaddressed, could hampergrowth inthecoming developing. Anumberofpriority structural areas, if that may become bindingasthecountry continues will require addressing somestructural constraints Yet sustaining growth over themediumto longterm renewed attention to inclusion. to bothgrowth prospects andtheGovernment’s poverty andboosting shared prosperity, thanks progress towards thetwin goals,endingextreme Panama iswell positionedto continue making continues to beaconstraint inthecomarcas. particularly access to water andsanitation, andhealth extreme poverty above 40percent. Lackofservices, “comarcas”, poverty isabove 70 percent and Moreover, inindigenousterritories, known as 33 surplus of7,883 millionUS$. services, and exported billion,leading to 12,329 a In 2016, Panama imported 4,446 millionUS$in TRADE INSERVICES Enhancing productivity anddiversifying growth; Enhancing quality oflife (3) (4) EASE OFDOINGBUSINESS RANK Improving infrastructure, and(5) 3,753,142 70th POPULATION Strengthening human Improving

COMMUNICATIONS INFRASTRUCTURE AND ECONOMIC INDICATORS TELEPHONE SYSTEM TELEPHONES -MOBILECELLULAR TELEPHONES -FIXEDLINES INTERNET USERS IMPORTS EXPORTS GDP country code -507; landingpoint for theAmericasRegion Caribbean Ring 2,000,833 America, andSouthAmerica;satellite earthstations -2Intelsat (Atlantic that together provide linksto theUSandpartsofCaribbean,Central 6,977,701 System (ARCOS-1), theMAYA-1, andPAN-AM submarinecablesystems 21.4% $23,000 Ocean); connected to theCentral AmericanMicrowave System (2015) 641,688 $22.08 $14.7 mobile-cellular telephone subscribership hasincreased rapidly US PER CAPITA (PPP) in2016 US$ fuels, machinery, vehicles, iron andsteel rods, pharmaceuticals TOTAL TOTAL TOTAL billion billion 2016 2016 2016 domestic andinternational facilities well-developed 25.7% INCLUDES THECOLON FREEZONE fruit andnuts,fish,iron and steel waste, wood INCLUDES THECOLON FREEZONE US NETHERLANDS 15.2% GENERAL ASSESSMENT INHABITANTS (JULY 2016) INHABITANTS (JULY 2016) SUBSCRIPTIONS PER 100 SUBSCRIPTIONS PER100 SUBSCRIPTIONS PER100 PARTNERS (2016) PARTNERS (2016) INTERNATIONAL COMMODITIES COMMODITIES % OFPOPULATION $22,300 $22.48 $15.93 DOMESTIC (JULY 2016) 54% 9.2% 188 billion billion CHINA 2015 2015 2015 17 COSTA RICA 6% 5.3% COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON MEXICO $21,400 TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD 105 110 2014 92 67 73 5.6% CHINA country’s return to democracy. free andregular presidential elections since the infighting in recent years, Paraguay hasheld relatively in 1989, and,despite amarked increase inpolitical military dictatorship ofAlfredo STROESSNER ended a large partoftheChaco lowland region. The 35-year Chaco War of1932-35 with Bolivia, Paraguay gained economically for thenext halfcentury. Following the and muchofitsterritory. The country stagnated Uruguay -Paraguay lost two-thirds ofitsadultmales 70) -between Paraguay andArgentina, Brazil, and 1811. Inthedisastrous War oftheTriple Alliance (1865- Paraguay achieved itsindependence from Spainin Introduction PARAGUAY ASUNCIÓN and anincrease inconstructions and manufacturing to beat 3.6% in2017 thanksto agoodsoy harvest Growth accelerated to 4%in2016 andisexpected and thecreation ofaFiscalAdvisory Council. Fiscal Responsibility Law (FRL), Inflation Targeting making important economic reforms, suchasthe significant progress onthemacroeconomic front after Over thepast decade, thecountry hasmade lower than10years ago, remains highandvolatile. deteriorated to 19.6% in2015. Income inequality, though bottom 40%was about1%in2013-15 andpoverty mildly The annualized growth rate oftheincome ofthe (regional poverty threshold) fell from 32.5% to 18.8%. Paraguayans wholive onless thanUS$4.0 perday of 8%between 2009and2014 andtheproportion of bottom 40%increased by anannualized growth rate and promote shared prosperity. The income ofthe Sustained economic growth helpedreduce poverty 70% ofallParaguayan exports in2016. economic activities, having represented more than modern soy andlivestock production are leading Yacyreta, alongwiththehighlyproductive and through thehydroelectric binationals Itaipuand heavy reliance onnatural resources. Electric energy although very volatile. This was duemainlyto its level ofgrowth higherthanthat ofitsneighbors, Paraguayan economy grew at anaverage of5%,a and openeconomy. Over thepast decade, the With nearly7millionpeople, Paraguay isasmall Economic Profile 34 remain majorproblems for development. However, thehighlevels ofpoverty andinequality transfer programs to benefitvulnerable populations. basic education andtheexpansion ofconditional including free access to primaryhealthcare and social front, withaseriesofreforms inthisarea, Nevertheless, progress hasbeenmadeonthe governance, thebusiness climate andformality. services, inadequate. Challengesremain to improve and thequality ofinfrastructure andpublic towards investment, taxation levels remain low and modify thecomposition ofpublicexpenditure Despite recent efforts to improve tax collection transparency inthepublicsector inthecountry. Access to PublicInformation was important to improve transparency. Inaddition,theapproval oftheLaw on agricultural income; andtheimprovement offiscal the introduction ofincome taxandcorporate taxon and financialsector; extend VAT to cooperatives), VAT reform (increase ofproducts intheagriculture measures includetheintroduction ofafiscalrule, the reforms hasmadesignificant progress as well. The The implementation ofmajoreconomic andstructural fiscal deficitinlinewiththeFRLtarget of1.5%GDP. production, withasmallcurrent account surplusanda 35 deficit of127 millionUS$. services, and exported 965 million, resulting ina In 2016, Paraguay imported 1,093 million US$in TRADE INSERVICES 6,943,739 EASE OFDOINGBUSINESS RANK 106th POPULATION

COMMUNICATIONS INFRASTRUCTURE AND ECONOMIC INDICATORS TELEPHONE SYSTEM TELEPHONES -MOBILECELLULAR TELEPHONES -FIXEDLINES INTERNET USERS IMPORTS EXPORTS GDP most modernfacilities concentrated inMontevideo; nationwide microwave radio relay network; overall fixed-line andmobile-cellular teledensity over 2,225,075 country code -598; theUNISOR submarinecable system provides direct refined oil,crudepassenger andothertransportation vehicles, vehicle 35.4% 5,116,736 27.3% connectivity to Brazil andArgentina; satellite earthstations - 2 Intelsat 1,113,566 $21,500 $8.037 $8.387 BRAZIL CHINA beef, soybeans, cellulose, rice, wheat, wood, dairyproducts, wool PER CAPITA (PPP) in2016 US$ TOTAL TOTAL TOTAL billion billion 2016 2016 2016 24.3% 185 telephones per100persons 10.5% ARGENTINA GENERAL ASSESSMENT BRAZIL (Atlantic Ocean) (2016) INHABITANTS (JULY 2016) INHABITANTS (JULY 2016) SUBSCRIPTIONS PER 100 SUBSCRIPTIONS PER100 SUBSCRIPTIONS PER100 parts, cellular phones PARTNERS (2016) PARTNERS (2016) INTERNATIONAL COMMODITIES COMMODITIES % OFPOPULATION $21,300 fully digitalized $9.334 $9.091 66.4% DOMESTIC (JULY 2016) 153 billion billion 2015 2015 2015 33 ARGENTINA 14.3% 7.6% RUSSIA COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON $21,200 TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD 105 112 94 99 2014 75 6.1% 7.1% CHILE US LIMA very narrow presidential runoff election in June2016. Latin America.Pedro Pablo KUCZYNSKI Godard won a Peru boasts oneofthebest performing economies in have fallen dramatically inthelast decade, andtoday administrations. Poverty andunemployment levels oriented economic policiesofthethree preceding in June2011, andcarriedonthesound,market- officer Ollanta HUMALA Tasso waselected president oversaw arobust economic rebound. Former army disappointing presidential term from 1985to 1990, the return ofAlanGARCIAPerez who, after a ethnicity. The presidential election of2006saw first democratically elected president ofindigenous Manrique asthenew headofgovernment - Peru’s spring of2001, whichinstalled Alejandro TOLEDO caretaker government oversaw anew election inthe his regime, whichledto hisresignation in2000. A 1990s generated mounting dissatisfaction with measures andaneconomic slumpinthelate president’s increasing reliance onauthoritarian in curtailingguerrillaactivity. Nevertheless, the turnaround intheeconomy andsignificant progress in 1990ushered inadecadethat saw adramatic insurgency. President Alberto FUJIMORI’s election economic problems andthegrowth ofaviolent to democratic leadership in1980, butexperienced After adozen years ofmilitaryrule, Peru returned remaining Spanishforces were defeated in1824. in 1533. Peru declared itsindependence in1821,and whose empire was captured by Spanishconquistadors Andean civilizations, most notablythat ofthe Incas Ancient Peru was theseat ofseveral prominent Introduction PERU debt remains oneofthelowest intheregion. 23.8 (8.5)percent ofGDP, Peru’s gross (net) public in export growth andlower imports.However, at 2.8 percent ofGDPin2016, owing to thesurge account deficitdeclinedsignificantly from 4.9 to investment continued to decline. The current demand, aspublicspendingreceded and attenuated by lower dynamismindomestic growth inminingexport volumes was partially temporary peakinminingproduction. Higher potential at 3.9percent in2016 dueto that economy isestimated to have grown above production and/or reached fullcapacity. The as several large miningprojects entered into on thebackofhigherminingexport volumes GDP growth continued to accelerate in2016 same period. declined from 27.6 percent to 9percent over the period. Extreme poverty (US$2.5aday 2005PPP) 6.5 millionpeoplegetting outofpoverty duringthis 2005 to 19.3 percent in2015. This isequivalent to (US$4 aday 2005PPP) fell from 45.5 percent in sharply reduced poverty rates. Moderate poverty The strong growth inemployment andincome have created ascenario ofhighgrowth andlow inflation. policies andstructural reforms indifferent areas external environment, prudent macroeconomic low inflation (averaging 2.9percent). A favorable average growth rate 5.9percent inacontext of region’s fastest-growing economies, withan Over thepast decade, Peru hasbeenoneofthe Economic Profile 36 efficiency ofpublicservices. productivity, reduce informality, andimprove requires structural andfiscal reforms to unleash phenomena suchasElNiño. Raisinggrowth to natural risks,includingrecurrent climatic in theUnited States. The economy isalsoexposed volatility, thespeedofmonetary policy tightening deceleration ofChina’s growth, capitalmarkets shocks incommodities prices, afurther Growth projections are vulnerable to external tax collection. back ofexpenditure measures andplansto improve deficits gradually over themedium term onthe Government expects to phaseoutcurrent fiscal especially for goodsandservices, andwages. The increases inrecurrent expenditures inrecent years, the economic slowdown, the2014 taxreform and stems from adeclineinrevenues that camewith increased over thelast years. The higher deficit Fiscal policy remains prudent, even asdeficitshave 37 1,652 millionUS$. and exported million,leadingto 6,304 adeficitof In 2016, Peru imported 7,956 millionUS$in services, TRADE INSERVICES 31,036,656 EASE OFDOINGBUSINESS RANK 54th POPULATION

COMMUNICATIONS INFRASTRUCTURE AND ECONOMIC INDICATORS TELEPHONE SYSTEM TELEPHONES -MOBILECELLULAR TELEPHONES -FIXEDLINES INTERNET USERS IMPORTS EXPORTS GDP TV sets, power shovels, front-end loaders, telephones andtelecommunication and petroleum products, natural gas;coffee, asparagus andother vegetables, adequate for most requirements; nationwide microwave radio relay system 13,975,422 petroleum andpetroleum products, chemicals,plastics, machinery, vehicles, 36,933,161 3,074,464 AM) submarinecablesystems provide linksto partsofCentral andSouth country code -51; theSouthAmerica-1 (SAM-1) andPan American(PAN- copper, gold,lead,zinc,tin,iron ore, molybdenum,silver; crudepetroleum 22.8% teledensity, spurred by competition among multipleproviders, now 120 23.5% equipment, iron andsteel, wheat, corn, soybean products, paper, cotton, fixed-line teledensity isonlyabout10per100persons; mobile-cellular $12,900 $37.02 America, theCaribbean,andUS;satellite earthstations -2Intelsat fruit, apparel andtextiles, fishmeal,fish,chemicals, fabricated metal $35.13 CHINA CHINA PER CAPITA (PPP) in2016 US$ TOTAL TOTAL TOTAL billion billion 2016 2016 2016 and adomestic satellite system with12earthstations 20.2% products andmachinery, alloys 17.3% telephones per100persons GENERAL ASSESSMENT (Atlantic Ocean) (2016) vaccines andmedicines US US INHABITANTS (JULY 2016) INHABITANTS (JULY 2016) SUBSCRIPTIONS PER 100 SUBSCRIPTIONS PER100 SUBSCRIPTIONS PER100 PARTNERS (2016) PARTNERS (2016) INTERNATIONAL COMMODITIES COMMODITIES % OFPOPULATION $12,600 $37.33 $34.41 DOMESTIC 45.5% (JULY 2016) 120 billion billion 2015 2015 2015 10 SWITZERLAND 5.8% 7.1% BRAZIL COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON $12,300 TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD 48 2014 59 39 38 52 4.5% 4.7% CANADA MEXICO

MONTEVIDEO continent. and laborconditions are amongthe freest onthe and National (Blanco) parties.Uruguay’s political of politicalcontrol previously heldby theColorado national elections that effectively ended170 years 2004, theleft-of-center Frente AmplioCoalition won government. Civilianrulewas restored in1985.In the militarycontinued to expand itsholdover the 1973. By yearend, therebels hadbeencrushed,but to cede control ofthegovernment to themilitaryin launched inthelate 1960s,ledUruguay’s president urban guerrillamovement namedtheTupamaros, that established astatist tradition. Aviolent Marxist widespread political,social,andeconomic reforms Jose BATLLE intheearly20thcentury launched three-year struggle. The administrations ofPresident years later andsecured itsfreedom in1828after a in 1821,Uruguay declared itsindependence four center. Claimedby Argentina but annexed by Brazil natural harborto become animportant commercial military stronghold, soontook advantage ofits Montevideo, founded by theSpanishin1726 asa Introduction URUGUAY economic resilience to external shocks. economic performance has given itagreater between 2003 and2016, Uruguay’s robust With an annualaverage growth rate of4.54% the last decade. prosperity that Uruguay successfully followed in reduction inpoverty andthe promotion ofshared and economic openness— paved theway to the Two maincharacteristics —a solidsocialcontract NATIONAL percapita income stood at US$21,625. as ahigh-income country. By 2016, thePPA gross In Julyof2013, theWorld placed Bank Uruguay electricity andsanitation. basic services suchaseducation, runningwater, of equality ofopportunity interms ofaccess to Index, Uruguay hasmanagedto attain ahighlevel According to theWorld Bank’s HumanOpportunity confidence that citizens have onthegovernment. corruption are reflected inthehighlevel of Index. Institutional stability and low levels of Opportunity Index andtheEconomic Freedom as theHumanDevelopment Index, theHuman terms ofvarious measures ofwell-being, such Uruguay occupies thetop spotsintheregion in America, andrepresents 60%ofitspopulation. In relative terms, itsmiddleclass isthelargest in the almost complete absence ofextreme poverty. income, low level ofinequality andpoverty and an egalitariansociety andfor itshighpercapita Uruguay stands outinLatin Americafor being Economic Profile 38 more complicated external environment. macroeconomic framework althoughinamuch Uruguay continues to maintain anadequate 77% ofexports goto 15different destinations. dependency onitsmaintrade partners; currently, diversified withtheaimof reducing the country’s 2017. Concerning export markets, thesehave been growth, thelatter hasincreased to 7.8% inJulyof (6.6%), althoughinview ofamarked slowdown in historically low unemployment levels in2014 reflected inthelabormarket, which registered Its robust macroeconomic performance was also alongside Argentina andBrazil. coefficients in Latin AmericaandtheCaribbean by thepensionsystem: thisisoneofthehighest around 87% oftheover-65 population iscovered on expanding program coverage; for example, population. Inclusive socialpolicieshave focused growth rate ofincome levels for theentire population increased muchfaster that theaverage levels amongthepoorest 40%oftheUruguayan in thesameperiod.Interms ofequity, income disappeared: itwent down from 2.5%to 0.2% 9.4% in2016, whileextreme poverty haspractically Moderate poverty went from 32.5% in2006to 39 surplus of723 millionUS$. services, and exported 3,006 million, leadingto a In 2016, Uruguay imported million US$in 2,283 TRADE INSERVICES EASE OFDOINGBUSINESS RANK 3,360,148 90th POPULATION

COMMUNICATIONS INFRASTRUCTURE AND ECONOMIC INDICATORS TELEPHONE SYSTEM TELEPHONES -MOBILECELLULAR TELEPHONES -FIXEDLINES INTERNET USERS IMPORTS EXPORTS GDP country code -507; landingpoint for theAmericasRegion Caribbean Ring 2,000,833 America, andSouthAmerica;satellite earthstations -2Intelsat (Atlantic that together provide linksto theUSandpartsofCaribbean,Central 6,977,701 16.4% System (ARCOS-1), theMAYA-1, andPAN-AM submarinecablesystems 18.8% $23,000 Ocean); connected to theCentral AmericanMicrowave System (2015) 641,688 $22.08 BRAZIL CHINA $14.7 mobile-cellular telephone subscribership hasincreased rapidly PER CAPITA (PPP) in2016 US$ fuels, machinery, vehicles, iron andsteel rods, pharmaceuticals TOTAL TOTAL TOTAL billion billion 2016 2016 2016 domestic andinternational facilities well-developed fruit andnuts,fish,iron and steel waste, wood 12.2% 17.9% GENERAL ASSESSMENT BRAZIL CHINA INHABITANTS (JULY 2016) INHABITANTS (JULY 2016) SUBSCRIPTIONS PER 100 SUBSCRIPTIONS PER100 SUBSCRIPTIONS PER100 PARTNERS (2016) PARTNERS (2016) INTERNATIONAL COMMODITIES COMMODITIES % OFPOPULATION $22,300 $22.48 $15.93 DOMESTIC (JULY 2016) 54% 188 billion billion 2015 2015 2015 17 ARGENTINA 13.3% 6.2% US COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON $21,400 TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD 105 110 ARGENTINA 2014 92 67 73 6.9% 5% US public companies andnationalized many private firms in programs. The government established avariety of which enabledincreased publicspendingonambitious Venezuela hasbenefited from historically highoilprices, From thebeginningofpast decadeuntil late 2014, Economic Profile medicine, andmedicalsupplies. and widespread shortages ofbasicconsumer goods, rights abuses,rampant violent crime, highinflation, among others. Current concerns include:human overdependence onthepetroleum industry for revenues, private sector investment andproduction, and currency exchange andprice controls that discourage through expropriations ofmajorenterprises, strict policies have expanded thestate’s role intheeconomy polarization hasgrown. The rulingparty’s economic and thepress have beencurtailed,andpolitical institutions have deteriorated, freedoms ofexpression branches ofgovernment. At thesametime, democratic exercised increasingly authoritariancontrol over other President Nicolas MADURO, theexecutive branch has from 1999to 2013, andhishand-picked successor, held sway since 1959. UnderHugoCHAVEZ, president social reforms. Democratically elected governments have who promoted theoilindustry andallowed for some was ruledby generally benevolent militarystrongmen For most ofthefirst halfofthe20th century, Venezuela Ecuador andNew Granada, whichbecameColombia). the collapse ofGran Colombia in 1830 (theothers being Venezuela was oneofthree countries that emerged from Introduction VENEZUELA CARACAS government hasworked to contain thesepressures international oilprices collapsed inlate 2014. The generated pressure on theexchange rate even before of theworld’s highest inflation rates. These imbalances provision ofbasicgoods,have cumulatively ledto one currency, andthecollapse ofthe private sector inthe financing, price controls, limitations onaccess to foreign public deficithasbeenlargely monetized. This source of billion. Access to external financingis restricted andthe needs estimated at between US$25billionandUS$35 percent ofGDPat theendof2015, andexternal financing 20 financing needs,withafiscaldeficit estimated at In theshortandmediumterm, Venezuela faces major macroeconomic adjustment. reversal interms oftrade orto cushion thenecessary Venezuela didnotaccumulate savings to mitigate a percent ofexports). Also, duringthe economic boom sector hassharplyincreased (oil now accounts for 96 performance. The country’s reliance onthehydrocarbon significantly affected Venezuela’s economic andsocial with inadequate macro andmicroeconomic policies,have Nevertheless, thecollapse ininternational oilprices, along 2012, amongthelowest rates intheregion. the decrease intheGiniIndex, from 0.49 in1998to 0.40 in official figures. Inequality alsodecreased, in as reflected 1998 to approximately 30percent in2013, according to led to asignificant decline inpoverty, from 50percent in population. Economic growth andredistribution policies and transfer resources to previously excluded partsofthe called misioneswere implemented to deliver basicservices banking andtelecommunications. Large socialprograms sectors suchasoilandgas,miningmetallurgy, cement, 40 designed policy to protect thepopulation livinginpoverty. these adjustments could beaccompanied by anactive, well- its extreme vulnerability to oilprice fluctuations. Finally, growth perspectives, andto diversify itsexports to reduce investment climate inaneffort to strengthen itslong-term to reestablish private sector confidence by improving the advances. Asacomplementary measure, Venezuela needs imbalances that are already reversing previous social pressing challengeisto contain themajormacroeconomic Consequently, Venezuela faces majorchallenges.The most although thenew prices are still heavily subsidized. government alsoannounced anincrease infuelprices, that theotherexchange rate would beafloating rate. The from perUS$to BsF 6.3 perUS$andordering 10BsF same timedevaluing thelowest official rate by 37 percent, government switched to adualexchange rate system, at the that isheavily dependent onimports.Inearly2016, the pressures, andsupplyproblems inaproductive structure goods, have triggered shortagesofbasicgoods, inflationary participation intheproduction anddistribution ofsomebasic exchange measures, andregulations onprivate sector to stem theoutflow of foreign currency. At thesametime, contraction ofimports. However, they have beenunable contributed to astrong external adjustment through a additional exchange rate controls. These measures have by implementing amultipleexchange rate system and 41 of 12,707 millionUS$. services, and exported 1,593 million, leading to adeficit In 2015, Venezuela imported millionUS$in 14,300 TRADE INSERVICES 31,304,016 EASE OFDOINGBUSINESS RANK 187th POPULATION

COMMUNICATIONS INFRASTRUCTURE AND ECONOMIC INDICATORS TELEPHONE SYSTEM TELEPHONES -MOBILECELLULAR TELEPHONES -FIXEDLINES INTERNET USERS IMPORTS EXPORTS GDP 27,600,893 Colombia, Ecuador, Peru, andBoliviaintheconstruction ofaninternational two domestic satellite systems withthree earthstations; recent substantial three majorproviders operate themobilemarket; combined fixed-line and transport equipment, construction materials, medicalequipment, petroleum country code -58;submarine cablesystems provide connectivity to Cuba 18,547,381 improvement intelephone service inrural areas; installation ofanational 7,752,232 stations -1Intelsat (Atlantic Ocean) and1PanAmSat; participating with agricultural products, livestock, raw materials, machineryandequipment, 35.1% 22.1% and theCaribbean,Central andSouthAmerica,US;satellite earth interurban fiber-optic network capableofdigitalmultimediaservices; $13,800 mobile-cellular telephone subscribership about115per 100 persons petroleum andpetroleum products, bauxite andaluminum,minerals, $20.19 $27.2 US US PER CAPITA (PPP) in2016 US$ TOTAL TOTAL TOTAL products, pharmaceuticals, chemicals,iron andsteel products billion billion 2016 2016 2016 chemicals, agricultural products 14.3% 17.2% GENERAL ASSESSMENT fiber-optic network (2016) CHINA INDIA modern andexpanding INHABITANTS (JULY 2016) INHABITANTS (JULY 2016) SUBSCRIPTIONS PER 100 SUBSCRIPTIONS PER100 SUBSCRIPTIONS PER100 PARTNERS (2016) PARTNERS (2016) INTERNATIONAL COMMODITIES COMMODITIES % OFPOPULATION $17,000 $36.46 $37.23 DOMESTIC (JULY 2016) 60% billion billion 89 2015 2015 2015 25 14.1% 7.4% BRAZIL CHINA COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON NETHERLANDS ANTILLES $18,400 TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD TO THEWORLD 40 69 2014 63 23 37 COLOMBIA 4.2% 8% We shouldn’t forget what the great Ronald Reagan used to say about the mindset of the statist, of the protectionist: “If something moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it.” Incredible as it may seem, this is how they think. They fear deregulation and free-market: it’s a sort of horror vacui. To them, not regulated does not mean free, but illegal.

Daniele Capezzone MP Direzione Italia, Italy

42 43 POPULATION EASE OF DOING BUSINESS RANK The ranks are designed for individual countries, however, the EU does particularly well, landing high ranks with its major countries, such as Denmark at #3, and Germany at #17, 516,195,432 though there are a few countries who arent doing as well, like Greece at #61, and Malta at #76.

EUROPEAN UNION Introduction body known today as the European Parliament. (Seven of these new countries - Cyprus, Estonia, Treaty’s provisions are part of the basic consolidated Members of the European Parliament were initially Latvia, Lithuania, Malta, Slovakia, and Slovenia - have versions of the Treaty on European Union (TEU) and Following the two devastating World Wars in the selected by national parliaments, but in 1979 the first now adopted the euro, bringing total euro-zone the Treaty on the Functioning of the European Union first half of the 20th century, a number of far- direct elections were undertaken and have been held membership to 19.) (TFEU) now governing what remains a very specific sighted European leaders in the late 1940s sought a every five years since. integration project. response to the overwhelming desire for peace and In an effort to ensure that the EU could function reconciliation on the continent. In 1950, the French In 1973, the first enlargement of the EC took place efficiently with an expanded membership, the Frustrated by a remote bureaucracy in Brussels and Foreign Minister Robert SCHUMAN proposed pooling with the addition of Denmark, Ireland, and the UK. Treaty of Nice (concluded in 2000; entered into massive migration into the country, UK citizens on the production of coal and steel in Western Europe and The 1980s saw further membership expansion with force in 2003) set forth rules to streamline the 23 June 2016 narrowly voted to leave the EU. The setting up an organization for that purpose that would Greece joining in 1981 and Spain and Portugal in 1986. size and procedures of EU institutions. An effort so-called “Brexit” will take years to carry out, but bring France and the Federal Republic of Germany The 1992 Treaty of Maastricht laid the basis for further to establish a “Constitution for Europe,” growing could embolden skeptics of EU membership in other together and would be open to other countries as forms of cooperation in foreign and defense policy, in out of a Convention held in 2002-2003, foundered member states. well. The following year, the European Coal and Steel judicial and internal affairs, and in the creation of an when it was rejected in referenda in France and the Community (ECSC) was set up when six members - economic and monetary union - including a common Netherlands in 2005. A subsequent effort in 2007 Economic Profile Belgium, France, West Germany, Italy, Luxembourg, currency. This further integration created the incorporated many of the features of the rejected and the Netherlands - signed the Treaty of Paris. European Union (EU), at the time standing alongside draft Constitutional Treaty while also making a Economic growth in the European Union (EU) is the EC. In 1995, Austria, Finland, and Sweden joined number of substantive and symbolic changes. The increasingly solid, both in terms of its pace and The ECSC was so successful that within a few years the EU/EC, raising the membership total to 15. new treaty, referred to as the Treaty of Lisbon, sought composition. The European economy has entered its the decision was made to integrate other elements to amend existing treaties rather than replace them. fifth year of recovery, which is now reaching all EU of the countries’ economies. In 1957, envisioning an A new currency, the euro, was launched in world The treaty was approved at the EU intergovernmental Member States. Private consumption remains the “ever closer union,” the Treaties of Rome created money markets on 1 January 1999; it became the conference of the then 27 member states held in main driver of growth. the European Economic Community (EEC) and the unit of exchange for all EU member states except Lisbon in December 2007, after which the process European Atomic Energy Community (Euratom), Denmark, Sweden, and the UK. In 2002, citizens of of national ratifications began. In October 2009, The prospects of investment becoming a second and the six member states undertook to eliminate those 12 countries began using euro banknotes and an Irish referendum approved the Lisbon Treaty pillar of growth are also good, as a recovery in trade barriers among themselves by forming a coins. Ten new countries joined the EU in 2004 - (overturning a previous rejection) and cleared the investment continues to benefit from very favorable common market. In 1967, the institutions of all Cyprus, the Czech Republic, Estonia, Hungary, Latvia, way for an ultimate unanimous endorsement. Poland financing conditions and improvements in corporate three communities were formally merged into Lithuania, Malta, Poland, Slovakia, and Slovenia. and the Czech Republic ratified soon after. The Lisbon profitability. The recovery of credit to the private the European Community (EC), creating a single Bulgaria and Romania joined in 2007 and Croatia Treaty came into force on 1 December 2009 and the sector is proceeding. Moreover, the global recovery Commission, a single Council of Ministers, and the in 2013, bringing the current membership to 28. EU officially replaced and succeeded the EC. The should increasingly lend support to trade.

44 45 surplus of167.3 billionEuros. services, and imported 689.4 billion,leadingto a In 2016, theEUExported 819.8 billionEuros in TRADE INSERVICES euro area budget linewithintheEU budget. Monetary Fund; andthecreation ofadedicated European Stability Mechanisminto aEuropean wide finance minister; atransformation ofthe organization, including:thecreation ofaEurope- a numberofkey reforms to theUnion’s The European Commission iscallingfor of theBrexit vote. received afurtherpositive pushintheaftermath during theeuro crisis,hasrecovered and Support for theEU, whichdipped significantly outcomes intheNetherlands andFrance. significant backlash- reflected intheelection Eurosceptical populismhasexperienced a Euro optimism,inspite ofBrexit, isrising. social policy, anddomestic andsecurity policies. to horizontal policies,suchasmigration and (particularly important for thefinancialindustry), and access to theEuropean singlemarket immense andrange from trade-related matters The pendingregulatory requirements are economy. “Brexit” -are putting astrain ontheEuropean EU andtheUnited Kingdom(UK)–theso-called an agreement onfuture relations between the concerning theduration ofexit negotiations and and broadened. However, theuncertainty last year. Growth expectations have brightened Sentiment hasimproved significantly over the from economic growth. getting adisproportionate share ofthegains inequality andconcerns that top earners are skilled jobshasfallen -contributing to rising their wages stagnate, andtheshare ofmiddle- People withlow andmiddleincomes have seen recovered, wage growth remains subdued. Even incountries where employment has Germany to more than20percent inGreece. around 4percent intheCzech Republic and Southern Europe. In2016, therates ranged from deficits persist insome countries, notablyin finally returned to pre-crisis levels. Large jobs it remains uneven, andtheemployment rate has The labormarket continues to improve, though

COMMUNICATIONS INFRASTRUCTURE AND ECONOMIC INDICATORS TELEPHONES -MOBILECELLULAR TELEPHONES -FIXEDLINES INTERNET USERS IMPORTS EXPORTS GDP fuels andcrudeoil,machinery, vehicles, pharmaceuticals andotherchemicals, 20.3% 20.7% aircraft, plastics, iron andsteel, wood pulpandpaperproducts, alcoholic $39,200 machinery, motor vehicles, pharmaceuticals andotherchemicals,fuels, $1.727 $1.727 CHINA USA $1.9 PER CAPITA (PPP) in2016 US$ trillion trillion 2016 2015 2015 precious gemstones, textiles, aircraft, plastics, metals, ships 632,500,000 213,800,000 398,100,000 EXTERNAL, EXCLUDING INTRA-EU TRADE EXTERNAL, EXCLUDING INTRA-EU TRADE TOTAL TOTAL TOTAL 14.3% 9.5% CHINA US PARTNERS (2015) PARTNERS (2015) beverages, furniture COMMODITIES COMMODITIES $38,100 $1.808 $1.692 $1.692 trillion trillion 2014 2014 2015 SWITZERLAND 8.4% COUNTRY COMPARISON COUNTRY COMPARISON COUNTRY COMPARISON 7.9% RUSSIA TO THEWORLD TO THEWORLD TO THEWORLD 3 2 2 COUNTRY COMPARISON COUNTRY COMPARISON $37,000 TO THEWORLD TO THEWORLD SWITZERLAND 2014 4.4% 2 5.9% 2 TURKEY freedom isreduced. choice andeconomic substituted for individual decision-making is increase, government controlled enterprises the size ofgovernment- by government, and As spendingandtaxation SIZE OFGOVERNMENT Area 1 WORLD ECONOMIC FREEDOM REPORT 47 MOST FREE THE CATO ANDFRASER INSTITUTE’S 2017 function ofgovernment. is themost important civil society. Indeed,it economic freedom and central element ofboth acquired property isa and theirrightfully Protection ofpersons PROPERTY RIGHTS LEGAL SYSTEM AND Area 2 www.fraserinstitute.org/studies/economic-freedom 2nd QUARTILE effectively. use economic freedom for thefuture andthus for individualsto plan it becomes difficult high butalsovolatile, inflation isnotonly property rights. When essential to protect Sound money isthus wages andsavings. value ofrightfully earned Inflation erodes the SOUND MONEY Area 3 3rd QUARTILE nations. individuals inother include businesses and to exchange doesnot reduced whenfreedom freedom, whichis essential to economic contracts, andsoon—is buying, selling,making in itsbroadest sense, EXCHANGE - FREEDOMTO INTERNATIONALLY FREEDOM TO TRADE Area 4 operate your business. you wish,orfreely hire orwork for whom exchange, gaincredit, that limittheright to onerous regulations they may also develop exchange internationally, to limittheright to use anumberoftools Governments notonly REGULATION Area 5

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