The Latin-American Situation on the Global Competitiveness Report Globalization and Competitiveness published by the World Economic Forum. Globalization as a concept has been discussed in many academic, political, The first part analyze the situation of each and social spheres, and so far, there is no country in the three indexes mentioned, clear definition on what it exactly is. A providing a brief description of the main very broad definition for globalization causes that led the country to that may be as an increasing process on particular situation. In this section one human activities beyond national borders. may find information collected from our But, to define every human activity may three main sources, KOF institute, be a very exhaustive task that is not the Heritage Foundation and the World main purpose of the Globalization and Economic Forum. Regional Integration Research Group. A fact is that Globalization is happening and On the second chapter, there is it is affecting our societies. preliminary comparative analysis between countries. We try to identify Analysing how societies are been similarities and differences on the scored influenced is the goal of our group. obtained by each State on the indices Instead of trying to conceptualize about studied. The next chapter is an attempt to globalization, the principal purpose of identify a relation between the concepts this paper is to identify the real of Globalization, Economic Freedom and consequences of globalization in our Competitiveness. Is there any relation? Is region, . The methodology there one recipe to reach development by of this project is to analyze the situation applying Globalization Economic of the last five years of Latin-American Freedom or Competitiveness? If one countries in terms of their score in the county is more globalized, would it be Globalization Index developed by the more competitive? Do you need to be KOF institute, the Index on Economic more competitive first, and then go to the Freedom built by the Heritage global arena? Those kind of questions are Foundation and finally, the Ranking in the ones we try to encompass in our analysis.

Finally, we conclude the article by giving some recommendations based on the good practices implemented by the countries with the highest scores. These recommendations may serve as a guiding route for other Latin-American countries to follow, in order to improve their situation in terms of Globalization and competitiveness.

This paper has been written by:

Alfonso, Jennifer Cala, Cesar Andres Gaitan, Luis Angel Gallego, Nathalia Martinez, Isned Rodriguez, Steffany Rojas, Maria Camila Trujillo, Laura

All of them, students of International Business at Politecnico Grancolombiano. The guidance, editing and coordination is responsibility of Professor Julio Cesar Botero R, leader of the Globalization and Regional Integration Processes research group. ARGENTINE REPUBLIC (CIA World Fact book, 2014) BACKGROUND

Argentine Republic is a federal republic located in southeastern South America. Covering most of the Southern Cone, bordered on the north with and , northeast with , east with and the South Atlantic Ocean, west with and the south with the Drake Passage.

The Argentine Republic is the fourth Total Area: 2.780.400 sq km largest country in America, is the second Population: 43.024.374 largest in Latin America and worldwide, GDP (ppp): $771 billion it is the eighth largest country. GDP - real growth rate: 3.5% GDP per capita (ppp): $18.600 Argentina's economy has several Unemployment rate: 7.5% advantages because it has a great variety Public debt: 45.8% of GDP of natural resources, thanks to its GDP - composition, by sector of origin: biodiversity and natural wealth Argentina Agriculture: 9.3% is among the 10 richest countries in Industry: 29.7% natural resources, providing the ability to Services: 61% generate food and fight global warming, Exports: $85.08 billion in education Argentina is considered one Imports: $71.3 billion of the most advanced in Latin America, Education: 6.3% of GDP besides agriculture is essential for the Military: 0.91% of GDP economy due to the extent of its territory Gini: 45,8. and climate variability has enabled it to Population below line: 30% generate optimal conditions for their HDI: 0.808. World Rank: 49 crops, and that much of the economy relies on the export of soybeans, crisis of 2001-2002, This crisis led to a and gas, vehicles, , and rebellion where his crucial point is the corn. suppression of Puente Avellaneda (2002), characterized by a massive mobilization. The Republic of Argentina in the last Argentina went through a serious decade was confronted with the strong economic and social situation, frequent impact of various economic and political adjustments, bad macroeconomic crises that affect not only the welfare of policies, the freeze of bank deposits society and those vulnerable sectors but Corralito and Corralon, multiplying of also the overall economy. currencies, the absence of international finance for both public sector and private, Argentina was dominated for a long time unleashed violent protests, the due to internal political conflict between resignation of President Fernando de la Federalists and Unitarians and between Rua on December 20 of 2001 and the civilian and military factions. After succession of four presidents World War II, an era of Peronist populism continuously. and direct and indirect military interference in subsequent governments Currently under President Cristina was followed by a military junta that took Fernandez de Kirchner has adopted a power in 1976. (CIA, 2014). According series of economic policies such as Lewis “the justicialist party, better known devaluation of the peso accumulating a as the peronist party, has in recent fall nearly 22% in the year, also the decades been Argentina´s dominant Argentine government has failed to reach Political force. Ideologically, it is often a compensation agreement with Repsol labeled as conservative and has for the expropriation of YPF and an traditionally been nationalistic in its agreement to pay its arrears to the Paris economic and foreign policies”. (2001, Club. (CIA, 2014). p.8) However Argentina has been recovering Argentina passing through one of the showing rapid and stable growth, despite deepest crisis in history, the economic the different economic problems it has Argentina during the 20 year history of been facing in the last years. the index has been characterized by being a state with a repressed economy. With its overall score dropping by 23.4 points, INDEX OF ECONOMIC FREEDOM Argentina has registered the second most severe score decline since the Index began. The state’s interference in the Argentine economy has increased since 2003. Institutional shortcomings continue to undermine the foundations for lasting economic development. The judicial system has become more vulnerable due to political interference and corruption. Regulatory pressure on the private sector has continued to rise, with populist spending measures and price controls further distorting markets.

Argentina’s economic freedom score is Rule of law 44.6, placing its economy the 166th freest in the 2014 Index. Your overall score was The government in 2013, imposed reduced by 2.1 points, showing a decline draconian bans on foreign currency in investment freedom, business freedom, transactions to protect dwindling dollar labor freedom, and the management of reserves. Besides approved a law with the government spending. Argentina is objective of weaken the judiciary. The currently ranked 27th of 29 countries in government through to his power and the South and Central America and its corruption has seized private property overall score is far below the regional and and largely manipulated official world averages. statistics to reduce interest paid to

bondholders.

Government Size percent tariff rate. The government’s policy of import substitution is one of The fiscal freedom decreased by nearly many non-tariff barriers to . The one point and the government spending government continues to interfere in the fell by 2.2 point over the previous year. financial sector and the presence of The top individual and corporate tax rates foreign banks has fallen in recent years. are 35 percent. Government revenue Analysis equals 34.6 percent of GDP, and government spending is 40.9 percent of total domestic income. Public debt is about 45 percent of GDP.

Regulatory efficiency

About the business freedom was reduced by 6.2 points, 2.5 points in labor freedom and monetary freedom was reduced only in 0.4. The government continues to In recent years Argentina has been regulate all activities in private showing a reversal in ranking of businesses, the prices of electricity, Economic Freedom keeping close to the water, and gasoline, and pressures last places. In the last year, Argentina fell companies to fix prices and wages. 6 locations now ranking 166th out of 178

countries, defining it as a Repressed Open markets Economic Freedom. Several of the

reasons are related to the previous year, The only aspect that has improved the price controls, this is not something new Argentina’s economy is trade freedom to Argentina, the freezing of prices on increasing 1.3 points however investment supermarket chains, was imposed by the freedom fell 10 points and financial Argentine government as a measure to freedom remained the same compared to curb the high inflation, that after the sharp the previous year. Argentina has a 5.6 currency devaluation suffered earlier this relations of mutual interdependence”. year significantly increased inflation in Studying the index through three the country, making it a threat to the dimensions Economic globalization, economy. Political globalization and social Also currently the Argentine government Globalization. has had a constant involvement in the economy. Other factors such as import In terms of globalization Argentina is restrictions, as Argentina increasingly currently ranked 80th in a total average of makes use of non-automatic licensing, 58.38 defining it as a mostly non- pre-registration and permission of the globalized country. imports, this allows greater control of the trade, but these controls primarily affect Economic Globalization goods such as and electronics. Argentina's economic system is Argentina is in the position 140 with a becoming more fragile due to corruption score of 39.53 points, falling 10 places since according to the Corruption from the previous year. Argentina's GDP Perception Index Argentina ranks 106 in 2013 showed a variation of 3.0% with 34 points characterized as one of the compared to 2012 and has grown by 0.9% most corrupt countries in the world. This over the first quarter. On the other hand and the policy intervention has largely though Argentina in 2012 showed the limited economic freedom of the country. highest number of foreign investment in (TRANSPARENCY, 2014) the last decade, FDI inflows decreased to $ 9.082 million in 2013, 25% less than the INDEX OF GLOBALIZATION previous year. Regarding non-tariff barriers, the government has imposed Dreher (2005) defined globalization, several policies based largely on import based on the definition of Norris (2000, substitution but have affected the p.155) as process “that erodes national importation of goods, measures such as boundaries, integrates national inspections, restrictions on entry ports economies, cultures, technologies, and use licenses import. Besides the governance and produces complex restrictions on capital flows have also and currently has more than 80 embassies affected the economy. and consulates abroad. In a globalized world the association plays a key role to Social Globalization achieve significant progress in all aspects. Argentina actively participates in many It is ranked 90th with a score of 52.61 international organizations such as CAN, points, up two places from the previous , CELAC, G20, IMF, year. It is classified into three categories, UNESCO, OAS, Paris Club and many personal contacts, information flows and others. Argentina also has accessed a cultural proximity. number of international treaties such as the Antarctic Treaty signed in 1959 the Regarding international tourism Treaty of Montevideo signed in 1980 and Argentina has had a positive growth in in constitutional matters has been part of the last 10 years, the number of arrivals in the United Nations Convention against Argentina for 2012 was 5.585 million. On Torture to enter into force on June 26, the other hand Argentina is one of the 1987, the Convention on the Elimination leaders in the use of internet, people with of All Forms of Discrimination against internet access in 2013 was 59.9 better at Women was created in 1946, the 4 points based on the previous year. In Genocide Convention adopted in 1948, addition to the study of the index includes the Convention on the Rights of the Child the number of McDonald's restaurants in 1989, the International Covenant on and Ikea because it’s synonymous with Economic, Social and Cultural rights in globalization, Argentina has 1966 among many others and is a party to approximately 209 restaurants and all major treaties of humanitarian law and businesses Ikea 0. .

Political Globalization GLOBAL COMPETITIVENESS INDEX It is in 14th place with a score of 93.06 points up a position with respect to 2013. WEF define competitiveness “as the set Argentina has a large presence abroad of institutions, policies, and factors that determine the level of productivity of a country”. The index consists of 12 pillars, The most problematic factors for foing which are divided into three different bussines groups; Basic requirements, Efficiency enhancers and Innovation factors. Thus each pillar receives a different score depending on the development in which the economy is.

Argentinas GDP growth 1990-2013 Overall, Argentina has been showing a decline in recent years, showing its strongest decline in the 2012-2013 report when retreated 10 locations, positioning it in the place that is now. Currently Argentina in terms of competitiveness hasn't changed from the previous report, Position Argentina by pillars of global continues ranked 104th of 144 countries competitiveness index with a score of 3.8 points characterizing it as one of the least competitive countries in the world.

One of the main concerns of Argentina is its economic resilience and flexibility in a rapidly changing global economic context characterized by lower commodity prices because Argentina doesn't have the strength to face a drop in prices and is very important because the economy depends heavily on exports of raw materials. This along with various economic imbalances currently facing, major problems such as the deterioration drastically affect the Argentine economy. in the labor and financial markets, Furthermore the country is facing adverse continue to hamper and hinder largely the macroeconomic conditions that have functioning of the economy and the affected their access to credit, another country's potential. But benefits from main concern, because it's considered factors such as the large size of the market increasingly need access to credit as and the possibility of developing essential to increase the competitiveness significant economies of scale. and development of the country. In terms of Innovation factors has a Overall, Argentina about Basic percentage of 16.9% locating it in 96th requirements has a percentage of 33.1% place with a score of 3.4 points ranked 104th with a score of 4.1 points. characterized by factors such as business In terms of institutions ascended 6 places sophistication in the 96th place and it's but despite rise in the ranking, Argentina capacity for innovation in the 80th place. suffers from a weak institutional set, in terms of corruption, Argentina is one of It also identifies the major problems the countries with higher levels of factors in investing as inflation, foreign corruption, locating it in the 139th place, exchange regulations, corruption among government inefficiency in 142nd place, others. Once again Argentina is government favoritism and transparency characterized by constant government issues facing the country in terms of intervention in the market, subsidies, wastage of public funds are in 143rd excessive regulation of prices, import place, the deficiency in infrastructure and restrictions, freezing interest rates etc... high inflation are among the main attributes to the fall in the index and problems facing the country affecting prevent rise in the ranking of global even more the country's competitiveness. competitiveness.

In terms of Efficiency enhancers has a ANALYSIS percentage of 50% placing it in the position 93 with a score of 3.8 points Argentina is a country that has great competitiveness depend highly on the opportunities but government highest level of economic freedom that mismanagement has gradually affected have a country. Thus, making the country the economy of the country. By analyzing has more free trade, with a transparent each of these three indexes we see that policy environment, reaching a higher Argentina has fallen in each of these level of welfare and development for the indicators and variables that determine population. the competitiveness of a country and economic growth in a globalized world. Argentina's economy over the past 20 They agree that Argentina in recent years years has experienced a series of major has been experiencing stagnation in all structural and macroeconomic changes aspects, economic, political and social. that show internal weakness of the Argentina economy generated by the Economic freedom brings greater inconsistency of the economic policies progress for the country, there is labor that have been implemented. Due to this freedom, financial, and investment. Is Argentina last year had massive protests strongly related to cleaner environments, against the fragile government and its human development and poverty policies. eradication. Globalization is becoming more A policy adopted this year was the drastic important for the development of the devaluation which also affected the country which measures connectivity, economy because in the beginning this economic integration, and global measure cheapened imports but due to interdependence of countries in international competition, exports fell economic, political and social terms. affecting the productivity of the country. Competitiveness makes emphasis on Several sectors have been affected by innovation, competitive economy is one these policy measures have created an that grows rapidly over time. unattractive environment for investment, protectionism, loss of competitiveness These three indexes are closely related and difficulty of doing business in because globalization and Argentina becoming worse keeping it bad economic decisions made by close to the last places. President Cristina Fernández making the judiciary more transparent and efficient, The three indexes agree that Argentina is and institutionalizing the fight against currently in an unstable and corruption. (HERITAGE, 2014). uncontrollable economic situation and the most influential aspects in the reversal of REFERENCES the rankings are related to the actions of the government, consider that the most CIA. (2014). The World Factbook CIA. important economic problems and Obtenida el 10 de Octubre de 2014, de listened with most frequently are due to https://www.cia.gov/library/publications/ capital controls, restrictions market, the-world-factbook/geos/ar.html subsidies, rising inflation, corruption, Dreher A. (2005). Does Globalization distrust of institutions and Affect Growth? Evidence from a new unemployment. these are just some indez of Globalization. Obtenida el 30 de aspects to that must currently face the octubre de 2014, de Argentine government and gradually http://kops.unikonstanz.de/bitstream/han push the country to high economic crisis, dle/123456789/11955/TWI_res06.pdf?se preventing him from having a stronger quence=1 and more competitive economy. Lewis D. (2001). The history of Argentina should take advantage of every Argentina. EEUU: Greenwood opportunity that are presented by Publishing Group. adopting merket friendly reforms and try to change the focus of the current Roberts J. (2010). Cronyism and government before they destroy Corruption Are Killing Economic completely the economic freedom of Freedom in Argentina. Ontenida el 24 de Argentina. Have a different point of view octubre de 2014, de about the destructive economic policies http://www.heritage.org/research/reports that have adopted toward international /2010/04/cronyism-and-corruption-are- financial institutions. Thus correct some killing-economic-freedom-in-argentina

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(n.d). (2014). Foreign Embassies and Consulates in Argentina. Obtenida el 17 de noviembre de 2014, de http://embassy.goabroad.com/embassies- in/argentina

BOLIVIA Since he assumed office in 2005, Bolivian President Evo Morales has used the confiscation of property and the nationalization of redistributing wealth. A new Constitution has expanded the executive branch and given the control of the state most of the natural resources and the key industries, including the gas and electricity.

Re-elected in 2009 to 64 percent of the

votes, Morales promised move toward Total Area: 1,098,581 sq km Bolivia "socialism community." In Population: 10,631,486 Bolivia, the president may be reelected GDP (ppp): $59.11 billion only once, but Morales has announced GDP - real growth rate: 6.8% that it will be submitted to a third term in GDP per capita (ppp): $5,500 2014. Unemployment rate: 7.4%

Public debt: 36% of GDP According to Morales, Bolivia associated GDP - composition, by sector of origin: closely with and and has Agriculture: 9.2% strengthened relations with Iran. Both the Industry: 38.5% foreign private investment and local have Services: 52.3% been reduced, and approximately half of Exports: $12.16 billion Bolivia's population still lives in poverty. Imports: $9.282 billion Almost 60 percent of the working Education: 6.9% of GDP (2011) arrangements are informal, and drug Military: 1.47% of GDP (2012) trafficking has increased. Gini: 47 (2011) (heritage.org/index/country/Bolivia Population below poverty line: 45% ) HDI: 0.66. World Rank:113

(CIA World Fact book, 2014) BACKGROUND In 1982 established a democratic civilian water and basic sanitation, mainly in rural government but there have been many areas, that there are serious health problems of extreme poverty, social problems. unrest, and manufacture of illicit drugs. Bolivia has good natural resources with a Since December 2005 Evo Morales has strong growth thanks to captive markets been the president. The president has for exports of . But Bolivia been elected by the widest margin since remains one of the least developed of the the restoration of civilian government in continent due to State policies that 1982, with the promise of changing the discouraged foreign investment and traditional political class, and help the growth. poor, the indigenous majority in this nation. In December 2009 he won the The Bolivian government passed a election or the party that is part took law to the detriment of foreign control of the legislative branch, what he companies increasing the royalties for the meant to continue more easy with the exploitation of hydrocarbons operating proposed change. (CIA, 2014). under joint venture contracts benefiting the state-owned company in exchange for Bolivia has the income a share in default . The global inequality more high in Latin America recession slowed growth, but Bolivia and one of the highest in the world. registered the highest growth rate in Public education is of poor quality and South America during 2009, thanks to the opportunities of education is among the high prices of raw materials since the most unequal of Latin America, 2010 Bolivia has had a growth, however where indigenous children and in rural has not been constant due to the lack of areas do not know how to read or write, foreign investment and the internal social or cannot complete the primary school. conflicts. (CIA, 2014). By the lack of education and family planning services do that Bolivia has a high rate of fertility. This to have more children without any form of education. The lack of safe drinking freedoms, in particular the rights of BOLIVIA´S ECONOMIC property and investment freedom, whose FREEDOM scores plummeted 40 and 55 points, respectively. Regulatory efficiency, measured via the free enterprise, freedom of labor and monetary stability, has also greatly diminished as a State interference in the economy has grown. Bolivia was a economy "moderately free" during the first 10 years of the index but has been in a downward spiral of economic freedom since 2005 with the economy to dive into the ranks of the "repressed" in the past two years, the Bolivia’s economic freedom score is Bolivians are suffering in a climate of 48.4, making its economy the 158th freest increasing economic subjugation. The in the 2014 Index. Its overall score is 0.5 high raw material prices have recently led point better than last year, with notable to a strong economic growth, but the improvements in investment freedom and long-term economic development trade freedom offsetting declines in remains hampered by institutional business freedom, fiscal freedom, and weaknesses. government spending. Bolivia is ranked

25th out of 29 countries in the South and Rule of law Central America/Caribbean region, and There have been cases of corruption and its overall score is far below the world mismanagement of the government in the and regional averages. past few years. With the law, specifies During the 20-year history of the index, that the government is who controls the the economic freedom of Bolivia has access to natural resources and limited deteriorated in 8.5 points, the sixth worst access to foreign investors. Expropriation drop score. Significant declines have is a problem, as is the illegal occupation occurred in six of the 10 economic of the privately owned rural. Bolivia has a average tariff rate of 3.7 percent. Piracy and counterfeiting are not uncommon. The government screens new Government size foreign investments, and the legal and The tax rate on individual income is regulatory systems can be difficult to higher than the 13 percent, and the navigate. The financial sector remains maximum corporate tax rate is 25 vulnerable to interference by the State, percent. Other taxes include a value- with credit to the private sector in added tax (VAT) and a tax on financial expanding slowly. Capital markets are transactions. The total tax burden is 22.2 focused on the negotiation of the percent of GDP. The public expenditure government bonds. amounts to 35.4 percent of GDP and has (heritage.org/index/country/Bolivia been funded by the revenues from the gas ) and mining. The public debt is about 33 percent of the gross domestic production. ANALYSIS Bolivia has good natural resources will Regulatory efficiency put in a good economic position and Despite some measures to reform the competitiveness to other countries of the regulatory framework cumbersome, continent and the world. His big problem persistent bureaucracy and the lack of is the deficiency of education and transparency often make the formation political inestability. Since the and functioning of the private companies government has closed the doors to costly and burdensome. Non-wage labor foreign investors to exploit Bolivia costs of hiring a worker is moderate, but resources that the country by itself cannot the rigidity of the whole in the hiring and do. If the country would provide firing is high . The prices of fuel, confidence to investors would improve subsidized and controlled by the their investment rate and would be a government, are frozen for years at a competitive country in the world with the time. Electricity is also subsidized. potential resources that this country has.

Open markets Economic Research of the KOF Konjunkturforschungsstelle Federal Polytechnic School in Zurich, whose globalization index measures three dimensions: economic, political and social. In addition, calculates an overall index of globalization.

According to this study the globalization index of Bolivia is 53.14 and is ranked In comparison with free economies, 100. In the year 2009, the index was 53.86 Bolivia is way below average. Even is , in the year 2010 was 53.33 . From 2009 below the regional average, considering until 2011, the index decreased by 0.72 . that in the region there are many countries with an economy closed by political Economic globalization involves the instability as Bolivia, but the country is creation of a global market that is deleted incompetent for not having at least all tariff barriers to allow the free moderately free economy, under the movement of capital: financial, world and regional average. The average commercial and productive. In economic improve by providing more opportunity globalization Bolivia ranks 102, with an for investors to do of Bolivia a country index of 53.89 , in the year 2009, the with a better economy. index was 56.21 , in the year 2010 was 55.25 . From 2009 until 2011, the index INDEX OF GLOBALIZATION decreased by 2.32 . Could be in a better The globalization Index is an indicator position if not restricting both the access that measures the connectivity, to foreign investors and the barriers that integration and global interdependence of hinder the free movement of trade. the countries in the cultural, ecological, economic, political, social and Social globalization relates to the impact technological areas. The data have been that this process has on the life and work collected and processed by the Institute of of the people, as well as on their families and their societies. Includes the concerns and problems related to the impact of GLOBAL COMPETITIVENESS globalization on employment, working There are 12 pillars in the global conditions, income and social protection. competitiveness, which are grouped into In this aspect Bolivia is in the post 139 three indexes. The first, basic with an index of 35.48 . In the year 2009, requirements that encloses the pillars of the index was 35.04 , in the year 2010 was the 1 to 4 and are the key to the factor- 34.73 . It is clear that although in the year driven economies. The four pillars that 2010 the index decreased compared to the are measured in this first stage are, previous year, in the 2011 increased 0.75 institutions, infrastructure, . Although in this index has been an macroeconomic environment, health and increase, remains very low the index, primary education. The second stage consequence of the little education that efficiency enhancers is the key to the there are in this country and the illiteracy efficiency-driven economies. This stage that exists. grouped six stages, higher education nd training, godos market efficiency, labor Political globalization is the process that market eficciency, financial market allows you to develop institutions and development, technological readiness, mechanisms on a planetary scale to market size. The last stage innovation and address the issues that affect all the sophistication factors is the key to inhabitants of the Earth. In this aspect innovation-driven economies and encases Bolivia ranks 63 with an index of 77.82 the last two pillars business sophistication . In the year 2009, the index was 77.98 , and innovation. in the year 2010 was 77.73 .Although Bolivia is in the transition between the 2011 increase the index from the previous first and second stage year, is below than the index of the year 2009.

The biggest problems of Bolivia to do business and be competitive are the access to finance, the strict government restrictions for foreign investment and political instability, which affect that foreign investors see with good eyes the possibility of investing and put your business in this country. Prefer to seek other horizons in which their capital and their businesses have a security. The index is 3.8 on 7, a rate below the average that is located as a country just in development to be competitive.

ANALYSIS-CONCLUSION world and other countries of Latin In conclusion it is clear that for Bolivia, America. The natural resources that has the main difficulties to be competitive could be harnessed to make Bolivia and to be open to a globalization more a country globally competitive. A efficient policies are their problems. The management of the government that it is political instability and the restrictions not unstable and that provides imposed on foreign investors, make greater guarantees to foreign investors Bolivia a country less attractive for would improve the development of the investment. Bolivia at the international level and to the interior of the country in its And even though the country has done population. has made efforts to improve education, infrastructure, and other factors that contribute to the development of the country , closing their doors to globalization and to the entry of foreign investment, do not generate a breakthrough in international indexes . Political management that has been given has not been the best. We might deduce that the power was still in the hands of Evo Morales because the majority of the population is indigenous and see this President a referent. Although the handling that has wanted to give it and the current that has followed has not been the best in terms of foreign affairs primarily with the capitalist countries .

For these reasons we can say that Bolivia is stagnant with respect to the REFERENCES - (2014). KOF Index of Globalization. Recovered:http://globalization.ko f.ethz.ch/ - (2014). Index of economic freedom. Recovered: heritage.org/index/country/B olivia - (2014). Central Intelligence Agency. CIA World Fact book. Recovered: https://www.cia.gov/library/publi cations/the-world-factbook/ - Prestel, C. La Globalización. Globalización Política Recovered: http://recursostic.educacion.es/se cundaria/edad/4esoetica/quincena 9/quincena9_contenidos_3d.htm - OIT. (2003). La Dimensión Social de la Globalización. Recovered: http://www.ilo.org/public/spanish /wcsdg/globali/globali.htm - La globalización económica. Recovered: http://www.amschool.edu.sv/pae s/civica/la_globalizaci%C3%B3n _econ%C3%B3mica.htm

BRAZIL Background

Officially the Federative Republic of Brazil. Is the largest country in South America, by population it is the largest Portuguese-speaking country in the world. Currently Brazil has industrial and agricultural growth with a fast development, exploiting many natural resources; it is South America's leading economic power and a regional leader.

Total Area: 8,514,877 sq km Population: 202,656,788 (July 2014 est.) GDP (ppp): $2.19 trillion Brazil is located in Eastern South GDP - real growth rate: 2.3% America. It is bordered on the north by GDP per capita (ppp): $12,100 Venezuela, , and the Unemployment rate: 5.7% French overseas region of French Guiana; Public debt: 59.2% of GDP on the northwest by ; on the GDP - composition, by sector of origin: west by Bolivia and ; on the Agriculture: 5.5% southwest by Argentina and Paraguay Industry: 26.4% and on the south by Uruguay. The official Services: 68.1% language is Portuguese. The capital Exports: $244.8 billion is Brasilia with 3.813 million people in Imports: $53.5 billion population. (CIA World Fact book, 2014) Education: 4.4% of GDP Military: 3.28% of GDP Brazil's government type is federal Gini: 51.9 republic and has five fundamental Population below poverty line: 21.4% principles sovereignty, citizenship, HDI: 0.744 World Rank: 79 dignity of human beings, the social values (CIA World Fact book, 2014) of labor and freedom of enterprise, and political pluralism. The branches of power are executive, legislative and judiciary. The executive and legislative are organized independently in all three INDEX OF ECONOMIC FREEDOM spheres of government, while the judiciary is organized only at the federal and state/Federal District spheres. The chief of state is the President Dilma Rousseff since 1 January of 2011. The president and vice president elected on the same ticket by popular vote for a single four-year term. (CIA, 2014)

Brazil has a mixed economy with abundant natural resources. Agriculture, mining, , and service Brazil’s economic freedom score is 56.9, sectors all well-developed. Major export making its economy the 114th freest in products include aircraft, electrical the 2014 Index. Its score is 0.8 point equipment, automobiles, ethanol, textiles, worse than last year, with declines in footwear, ore, , , labor freedom, monetary freedom, fiscal juice, soybeans and corned . The freedom, and trade freedom. Brazil is GDP is $2.416 trillion in 2013. It exports ranked 20th out of 29 countries in the products mainly to , , South and Central America/Caribbean Argentina, and .1 region, and its overall score is below the world average. Over the 20-year history Brazil have problems with Illicit drugs of the Index, Brazil’s economic freedom

because it’s second-largest consumer of score has improved by only 5.5 points. in the world and is illicit producer Rule of Law of cannabis currently has a large-scale The Corruption affect economic freedom eradication program to control cannabis. for this Brazil had massive nationwide (CIA, 2014) protests in 2013 over poor public services and the bad level of political and The Brazil average tariff rate is 7.9 institutional effectiveness. Contracts are percent. Is not allowed to import used secure, but the judiciary is inefficient and or cars. Foreign investment in subject to political and economic several sectors is limited by the influence. government. Banking and capital markets Limited Government are advanced. But the role of the state in The top individual income tax rate is 27.5 credit markets has also steadily expanded, percent. Overall tax revenue is 34.8 and public banks now account for 50 percent of GDP. The government has percent of total to the private sector. vowed to boost spending to ease protesters, but expenditures stay in steady at 39.1 percent of the domestic economy. Public debt is about 69 percent of GDP. Regulatory Efficiency Regulatory efficiency remains poor, and the application of regulations is appalling. On average, it requires over 100 days to incorporate a company, and obtaining The index of economic freedom it results necessary permits takes 400 days. The for many factors, among them are the bad labor markets not allow the supply level of political and institutional increase and hinders job. Agricultural effectiveness, because the judiciary is subsidies increased from 2011 to 2013 intervened and this makes it inefficient to and are about $10 billion. In 2013, have a high public debt. Brazil doesn’t subsidies for electricity were also have a good control system. Create a increased. society takes a long time and other important factor is that the foreign investment is limited. This reasons affect that some factors decrease to compare last year to this year how freedom From Open Markets Corruption, Fiscal Freedom, Trade

Freedom and Monetary Freedom score of 51.59. Regarding to social principally. globalization, it is located in 115th spot Some problems are lack of skilled labour, with 43.61. In terms of political deficient educational, inadequate globalization, Brazil has 94.72 points and investment, high and inefficient public is the 8th country in the list respect to spending, high public debt and debt other countries in the world. servicing costs, corruption thriving on inequalities. More specifically, the three dimensions One of principal problems is the heavy of the KOF index are defined as: government intervention in the economy Economic globalization, characterized as of Brazil with topics like bad assignation long distance flows of goods, capital and of capital one consequence that the services as well as information and population doesn't believe in your perceptions that accompany market government and the private sector doesn’t exchanges; Political globalization, grow. characterized by a diffusion of government policies and social INDEX OF GLOBALIZATION globalization, expressed as the spread of ideas, information, images and people. Globalization is a process that pretend do away with national boundaries, integrates Economic globalization economies, cultures, technologies and governance and produces relations of In economic globalization Brazil is in the mutual interdependence. position 113 this is because Brazil has some barriers to the foreign investment The globalization index for 2014 in Brazil also have restrictions on trade and capital. is 59.78 this is the average that covers the Brazil also exhibits a weaker economic, social and political dimensions macroeconomic performance. of globalization. The heavy government intervention in the Brazil is in the position 76 of the general economy continues to cause the ranking. In economic globalization, misallocation of capital, limit mobility, Brazil is placed in 113th position with a and fuel a sense of injustice (CIA, 2014) Brazil is placed in the twenty principal Social globalization contributors to United Nations peacekeeping operations, and has About social globalization Brazil is in the participated in peacekeeping efforts in the position 115 is bad because is the way of Middle East, the former Belgian Congo, measure of how the population interact Cyprus, Mozambique, Angola, and more with persons of other countries through recently and Haiti. international telecom traffic also traffic Information flows. Brazil has a recent GLOBAL COMPETITIVENESS advantage in this sphere regarding the INDEX event of the World Cup where thousands of people traveled to Brazil and of course We define competitiveness as the set of interacted with their culture in different institutions, policies, and factors that scenarios. determine the level of productivity of a country. The level of productivity, in Political globalization turn, sets the level of prosperity that can be reached by an economy. The In Political Globalization Brazil obtained productivity level also determines the the best position because Brazil have a rates of return obtained by investments in foreign policy where Brazil participate in an economy, which in turn are the many supranational organizations and try fundamental drivers of its growth rates. In participate in principal actions of the third other words, a more competitive world, is significant that Brazil have economy is one that is likely to grow sovereignty over your natural resources faster over time. through of the control in development own. The position is 8 and this aspect The next chart shows, the GDP growing improvement the average that Brazil has. between 1990-2013 in Brazil. [2]

Brazil has a large global network of diplomatic missions, with representations in over 125 countries. [3] Macroeconomic Stability, Health and Primary Education); Efficiency enhancers (Higher Education and Training, Goods Market Efficiency, Labour Market Efficiency, Financial Market Sophistication, Technological

Readiness, Market Size), and Innovation Brazil drops one position and ranks 57th and sophistication factors (Business this year. This for many factors one by Sophistication, Innovation). insufficient progress in addressing its These pillars are shown in the following persistent transport infrastructure and an chart. important deterioration in the functioning of its institutions, with a real preoccupation about government efficiency and a level increased of corruption, also have a difficult of access to financing, and a bad education system. Brazil as for other BRICS economies, will require implementing reforms and engaging in productive investments. With its tight labor market and high taxes, Brazil is the least competitive of the big four emerging markets according to the

World Competitiveness Index by Swiss business school, the Institute for The country have to face difficulties Management Development, or IMD.[4] related to recent shifts in the global

economy, like a drop in the international The Global Competitiveness index is price of commodities and potential composed by 12 pillars of outflows of capital that had come into the competitiveness, as are shown: Basic country from some advanced economies requirements (Institutions, Infrastructure, during the height of the financial crisis. However Brazil gets benefits in aspects how it’s large market size and its fairly sophisticated business community, with pockets of innovation excellence research-driven. In terms of social sustainability in Brazil the inequality is still very high and, despite some developments, the country is characterized by that its population is limited access to the healthcare system and the social safety net.

In terms of tax regulations and tax rates Moreover, these factors are a bit Brazil have that implement changes compensated by its low youth because searching greater openness and unemployment and almost universal engagement in all types of cross-border access to improved drinking water. The exchanges could produce opportunities adoption of tighter environmental for productivity enhancements and regulations is needed to make sure that economic growth. Brazil’s rich natural resources is managed responsibly and will remain an advantage Also is evident that the poor road and rail for future generations. infrastructure, combined with

cumbersome procedures and bottlenecks According to the next chart, it’s important at Brazil’s ports, limits growth in Brazil. to take into account tax regulations, Brazil must build the necessary restrictive labor regulations and infrastructure to integrate states into a inadequate supply of infrastructure are single domestic market and then connect the most outstanding barriers that Brazil to the world. executives face at doing business in

Brazil. Brazil has sectors with global market

forces, but others remain heavily

protected and taxed, a great example of that brazil should that eliminate trade and tariff barriers is Brazil’s agriculture sector that is more productive since it was gradually opened; Brazil began eliminating price controls and marketing boards that regulated production of certain crops; it also reduced export tariffs and import restrictions then of this changes was evident the development in the sector, the production of tractors and other agricultural equipment, has quadrupled in the past three decades, and exports of these have increased 24-fold since 1970. Today the yields for Brazil’s main crops are on a par with those of developed economies. (World economic Forum, 2014)

The policy-makers have focused on mitigating the risks of openness, but today government and business leaders must to harness the potential of global flows to increase productivity and the innovation.

Brazil participate in a large global Analysis network of diplomatic missions, with representations in over 125 countries and Analyzing these three indices we can say is one of principal contributors to United that globalization is the global economic Nations peacekeeping operations. competitiveness and have a very close relationship of globalization and Although Brazil have a good foreign competitiveness or rather an economy policy internally there a problem with a with global competitiveness is what make regulatory efficiency poor. The a country with power in this moment. government has vowed to boost spending to ease protesters for to improve the bad Currently Brazil is considered a regional public services and increased subsidies leader in South America for its emerging for sectors how agriculture and system of economy, strong levels of growth and electricity. your abundant natural resources however Brazil have many aspects negative to For another hand the foreign investment improve for begin in terms of corruption is limited in some sectors this aspect is Brazil had massive protests for the poor analyzed in the index of economic public services and this is cause of bad freedom and is evidenced in the economic institutional effectiveness this is the globalization in the same aspects because problem in the government that the coincide in that Brazil has some barriers judiciary is inefficient. to the foreign investment also have The previous aspect is analyzed in the restrictions on trade for example in tax index of economic freedom but on the rates and tax regulations. other hand in the index of globalization in terms of political globalization Brazil The country have to face difficulties obtained a good position or one of the related to recent shifts in the global best in all indexes because Brazil have a economy , with a drop in the international foreign policy with an important commodities and potential outflows of objective is that Brazil participate in capital that had come into the country many supranational organizations also from some advanced economies during reforms and engaging in productive the height of the financial crisis. investments. still ranks a low 119th in market competition and 102nd in In the next chart showing the ranking for public institutions. Among the BRICs, the BRIC’S, China Ranks 28th this China has lost 22 places in terms of country continues to the BRICS market competition since 2010, and both economies by a wide margin—well ahead and Brazil have lost considerable of Russia (53rd), (56th), ground in all three areas. (WEF, 2014) Brazil (57th), and India (71st). (World economic Forum, 2014) These results prove how important it will be for emerging economies to promptly and efficiently implement structural reforms. Those reforms are necessary to increase their competitiveness, build their resilience against future external shocks, allow a more efficient allocation of

resources, and facilitate the transition

toward more productive activities. (WEF, The necessary reforms for BRIC´S are 2014) particularly critical in three areas: (1) In the next chart showing the ranking for boosting competition, especially in the Latin America Top 10. (World strategic sectors of the economy, by economic Forum, 2014) removing bottlenecks and barriers to entry; (2) making the labor markets more flexible and more effective at using all existing talent; and (3) improving the efficiency of public institutions, which is also crucial to ensure an effective implementation of structural reforms. [8]

In general for Brazil as for other BRICS economies, will require implementing Finally in the level of Latin America Brazil ranks the third position. Overall, the region suffers for problems related to weak investments, a fall in exports and commodity prices, and tighter access to finance. In conclusion the situation of Brazil is the same of the countries of Latin America, some with other aspects that worsen the situation but how an example Chile have a good position and are related to a strong institutional setup with low levels of corruption this is an important differential of the rest of countries.

More integration with global markets and value chains would provide competitive pressures that spur Brazilian companies and leaders to improve. The ranks Brazil only 124th in the world for ease of trading across borders, and it notes that the cost of exporting a container from Brazil is $2,215 – more than double the OECD average (World Bank 2013). Pursuing agreements with larger and more developed markets would allow increasing trade; Brazil should integrate in the production networks of multinationals, and increase its access to leading-edge technology and processes. [5] http://www.forbes.com/sites/kenr [REFERENCES] apoza/2013/05/30/brazil-ranked- least-competitive-of-brics/ Government of Netherlands. (2014). Relations Netherlands. Why Brazil should open up to the world. Recuperado el 10 de Octubre de (s. f.). Recuperado a partir de 2014, de http://forumblog.org/2014/07/bra http://www.government.nl/issues zil-open-gdp-growth/ /international%20%20relations/b razil [IMAGENES] WEF_GCR2014- Nueva Sociedad. (2014). La politica 15_Latinamerica_Image.png exterior del Brasil entre el primer (Imagen PNG, 1136 × 934 y tercer mundo. Recuperado el 30 píxeles) - Escalado (37 %). (s. f.). de Octubre de 2014, de Recuperado 25 de noviembre de http://www.nuso.org/upload/artic 2014, de ulos/550_1.pdf http://www3.weforum.org/docs/i mg/WEF_GCR2014- List of diplomatic missions of Brazil. 15_Latinamerica_Image.png (2014, noviembre 24). En Wikipedia, the free encyclopedia. WEF_GCR2014-15_Brics_Image.png Recuperado el 6 de Noviembre (Imagen PNG, 1136 × 580 de, píxeles) - Escalado (60 %). (s. f.). http://en.wikipedia.org/wiki/List_ Recuperado 25 de noviembre de of_diplomatic_missions_of_Braz 2014, a partir de il http://www3.weforum.org/docs/i mg/WEF_GCR2014- Forbes. (2014). Brazil Ranked Least 15_Brics_Image.png Competitive Of The BRICs Recuperado el 6 de Noviembre de, CHILE BACKGROUND Chile is a country of America located in the southwestern tip of South America. Its official name is the Republic of Chile and its capital is the city of Santiago. It is divided into three areas which are continental Chile comprises a long narrow strip of land on the west coast of the Southern Cone that extends over 4270 km mostly from the southeastern shore of the Pacific Ocean to the Andes. Total Area: 756,102 sq. km Chile Island corresponds to a group of Population: 17,363,894 volcanic islands in the South Pacific: the GDP (ppp): 320.5 billion archipelago of Juan Fernandez and GDP - real growth rate: 4.4% Desventuradas islands belonging to GDP per capita (ppp): $19.100 South America, Salas y Gómez Island Unemployment rate: 6.5%. and Easter Island, geographically located Public debt: 11.2% of GDP in Polynesia. The third, called Chilean GDP - composition, by sector of origin: Antarctic Territory is an area of the Agriculture: 3.6% Antarctic; this claim is frozen as required Industry: 35.4% by the Antarctic Treaty of which Chile is Services: 61% a signatory, without its signature Exports: $77.94 billion constitutes a waiver. Due to its presence Imports: $75.7 billion in the Americas, Oceania and Antarctica, Education: 4.5% of GDP Chile defines himself as a tri-continental Military: 2.04% of GDP country. Gini: 50.8 Republic of Chile is a South Population below poverty line: 15.1% American country occupying a long, narrow strip of land between HDI: 0.82. World Rank: 41 the Andes Mountains to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the large street protests have become a northeast, Argentina to the east, and constant problem for the government. the Drake Passage in the far south. Despite that, Chile maintains its Chile's northern desert contains great leadership in foreign investment, is the mineral wealth, principally . The first country in South America to join the relatively small central area dominates in Organization for Economic Cooperation terms of population and agricultural and Development, is the world's largest resources, and is the cultural and political copper producer, and the economy is very center from which Chile expanded in the open to imports, but it is also a leading late 19th century when it incorporated its exporter of minerals, timber, fruits, northern and southern regions. Southern and seafood, and wine. Chile is rich in forests and grazing lands, and features a string of volcanoes and INDEX OF ECONOMIC FREEDOM lakes. The southern coast is a labyrinth of fjords, inlets, canals, twisting peninsulas, and islands. Chile has increasingly assumed regional and international leadership roles befitting its status as a stable, democratic nation. In January 2014, Chile assumed a nonpermanent seat on the UN Security Council for the 2014-15 term. From 1999-2009 the leftist government

of Augusto Pinochet maintained institutions and market-based economic The economic freedom score in Chile is policies. But since Sebastian Piñera took 78.7, being the seventh freest economy in power in 2010 have increased corporate the world in the 2014 index, and the one taxes and intervened personally to stop with the highest degree of economic the construction of a coal-fired plant that freedom in the region of South and had cleared all regulatory hurdles. None Central America / Caribbean. of it has complied with the left, and the Chile has been consistently ranked as one It also takes into account respect for of the "mostly free" to be higher in areas property rights thus expropriation is such as freedom from corruption, somewhat atypical. investment freedom and financial The rates of delinquency thanks to the freedom, monetary freedom and trade above have declined significantly over freedom economies. the period 2009-2013. Chile still remains a world leader in Limited Government economic freedom thanks to its principles In this regard it is noted as the maximum of keep limited government and taking tax rate on individual income of Chile prudent management of public finances, was reduced to 40%, which tends to since this has kept the deficit and public greater domestic investment. The debt budget under control. This is corporate tax rate has increased to 20% reflected in the active participation of the that would cover new educational country in negotiating the Trans-Pacific expenses. Partnership that reflects its commitment The fall in the price of raw materials to trade and investment liberalization. could squeeze revenue, though public Rule of law spending has remained stable at 23.2% of The legal aspect carries great weight in GDP and public debt occupies about 11% analyzing the economic freedom of Chile of the national economy. because the Constitution makes a very Regulatory Efficiency important role in establishing the This aspect is one of the most important independence of the judiciary and in showing that Chile may increase or therefore the courts are generally free of decrease its position in economic political interference. During the last freedom, since it shows how the years, the Chilean government approved incorporation of a business takes less than relevant laws against corruption, 10 procedures, without capital paid transparency and financing of campaigns minimum required though to complete that help the reputation of good the licensing requirements remains slow government of Chile. and costly. The increases to the minimum wage have exceeded productivity growth in recent years and there is a price support by the freedom for corruption, Government government for agriculture that are less spending and investment freedom. And than 5% of total farm income, indicating worsens in Business Freedom, Labor one of the lowest rates among OECD Freedom, Fiscal Freedom and Monetary countries. Freedom in comparison with previous Open Markets years. Chile tariff rate is 4% which is low and Chile has been characterized by its high allows the entry and investment products position in the rankings, but had a minor and services in the country. punctuation this year compared to 2013 in Foreign investment is welcome and the response to new reforms and tax charges financial system is dynamic by presented by the country, as well as an facilitating high levels of bank and increase in the minimum wage would provides efficient access to financing. exceed productivity gains. There are reforms to improve market liquidity capital and the processes to As I mentioned above Chile shows a improve access to financial services for decrease in the aspect of fiscal freedom small businesses have progressed. due to increased first category tax that is paid by companies. In terms of freedom of business and labor freedom, there is a need to improve aspects such as job flexibility, costs of doing business in the country and increased productivity at work, as well as also promote Chilean peso and to stay ahead of other currencies.

With the issue of free trade, investment From the aspects that define the economic and finance, Chile stands out for being an freedom of a country, Chile remains in open economy to foreign investment, has property rights, freedom of trade and been handled bank independence and financial freedom. Improvement in good tariffs which facilitates the process of investment and appreciation of the country.

In conclusion they have to improve the handling and speed when opening and closing a business, labor rigidity, the tax

burden on businesses and individuals and In 2012 (index 2013), during the raising the minimum wage above the administration of President Sebastian average growth productivity. Piñera, Chile obtained the highest score And the highlights include the security of since makes this ranking, reaching 79.0 contractual agreements, transparency and points. This is due to advancements efficiency of the courts, respect for bureaucratic important matters, property rights which indicates a low specifically, in the reduction of time and level of corruption, the management of number of procedures to start a business public finances, debt stability published, and various measures within the Agenda and the removal of regulatory obstacles to Competitive Impulse that have improved doing business. Gauge freedom of business. On the other hand, in trade weighted That might be the difference with the average tariff rate is 4%, non-tariff current index. barriers are relatively low and search for

FTAs is continuous. Domestic and KOF INDEX OF GLOBALIZATION foreign investments generally receive the KOF team defines globalization as "the same treatment and they are transparent process of networking connections and efficient. The banking sector is well between actors at distances of several capitalized and stable, offers a wide range continental mediated through a variety of of services, like financial system. streams, including people, information

and ideas, capital and goods. These are characteristics that make Chile Globalization is conceptualized as a a highlight over many countries in Latin process that erodes national boundaries, America and made better punctuation in integrates national economies, cultures, investment freedom. technologies and governance, and produces complex relations of mutual Economic Globalization interdependence”. It is ranked 23th with a score of Are three index analyzed by KOF which 80.80points in this aspect. are: economic, social and political aspects Chile's economy is the sixth largest in of globalization. Latin America in terms of gross domestic . Economic globalization is measured by product (GDP) nominal and seventh in the actual flows of trade, foreign direct terms of GDP in investment and portfolio investment, as (PPP) economy. Chile has the highest per well as the restrictions applying to these capita income in Latin America and flows. belongs to the category of high-income . Social globalization is expressed as the countries, according to the World Bank. spread of ideas, information, images and people. It is estimated by personal The Chilean economy is one of the contact, information flows, and cultural strongest since it has high levels in proximity. relation to competitiveness, economic . Political globalization is characterized freedom, financial development, by the degree of political cooperation. It economic growth and most favorable is measured by the number of embassies, debt of the continent, becoming one of the membership of international most dynamic economies in Latin organizations, participation in UN America. Security Council missions, and number of international treaties. Foreign investment is a noteworthy aspect of Chile since sack nearly 28% of In terms of globalization Chile is investments in Latin America in 2012 and currently ranked 37th in a total average of attracted 50% of these in the same year, 72,41 points defining it as mostly being also the second largest in terms of globalized country. Being the most foreign trade economy. globalized country in Latin America. Based on this, we can say that the main economic sector in Chile is the services to 61% of GDP, followed by industry 35.4% of GDP and agriculture 3.6%. Being the largest producer of copper, lithium, It was Latin American leader in the iodine and other products like fresh deployment of a concession system has , , plums, dried , facilitated public-private collaboration to salmon, trout and lithium carbonate. the Financing and execution infrastructure. With the purpose of The destinations most appreciated by attracting innovative entrepreneurs Chile for its exports are China 23.9%, US around the world through the world 12.2%, 10.6% and Brazil with "startup Chile" program. 5.5%. And the main imports are oil and its It is also the country of Latin America derivatives, chemicals, electrical and with the highest rate of introduction of telecommunications equipment, broadband internet two megabytes or industrial machinery, vehicles and natural more in terms of fixed or mobile gas. connections. Therefore ranks first in The main countries of origin of these Latin America in the world ranking of imports were US with 21.9%, China growth and development of the 18.2%, Argentina and Brazil with 6.7% to information technologies sector. 6.5%. Political Globalization Social Globalization It is ranked 30th with a score of 89.70 It is ranked 91th with a score of 52.51 points in this aspect. points in this aspect. It is one of the largest recipients of Chile has nine companies according to foreign direct investment in the world. Forbes among the most important in the Part of the OECD since 2010 list, and the world, according to America Economic report of the World Economic Forum said magazine, among the 80 internationalized that is one of the economies with the best Latin American companies are 20 macroeconomic world government, with Chilean companies. solid institutions and low corruption Chile is also friendly to entrepreneurship points. and innovation development. The country has an established Different aspects of competitiveness on , clear legal rules and 12 pillars that make up the Global independent institutions. Competitiveness Index are captured. That pillars are institutions, Chile adopted a development model infrastructure, macroeconomic based on the idea of freedom, based on a environment, health and primary democracy where there is legal certainty, education, higher education and training, free enterprise, competition and goods market efficiency, labor market encouraging foreign investment. efficiency, financial market development, Since 1974 the foreign investment is technological readiness, market size, regulated under the principles of non- business sophistication and innovation. discrimination and guarantee of tax stability, ensuring foreign capital.

GLOBAL COMPETITIVENESS INDEX The World Economic Forum's Global

Competitiveness Report remains the best Classification Chile in based of the 12 indicator to show the evaluation of pillars national competitiveness worldwide. Allowed a platform for dialogue between government, business and civil society on the actions needed to improve economic prosperity. Competitiveness is related to the level of productivity of a country taking into account several factors that determine it. And so the same level of productivity is related to the level of prosperity that is given through the economy. In terms of Competitiveness, it is necessary analyze the advantage and barriers to doing business into account the weaknesses as innovation and sophistication. The country continues to develop and improve those aspects that make it stand out which are, strong institutional structure whereby low levels of corruption and efficient government are evident; solid macroeconomic stability with low levels of public deficit and debt; and efficient markets that still has some barriers in the labor market by constant firing costs.

Another aspect to consider in this ranking is the way of doing business in the country. Therefore, the report of the World Bank reveals that Chile is one of the five largest economies in Latin America where it is easier to do business. In which it performs particularly well in the areas of starting a business, Chile is ranked 33 of 144 economies registering property, paying taxes and evaluated with a score of 4.6 measured 7 trading across borders. as the highest. Since 2013, entrepreneurs in Chile have Recovers lost the position last year and been able to register limited liability remains the most competitive economy in companies through a unified electronic Latin America, with a very stable profile. record company that is accessible from We must highlight the development of the anywhere for free. This online business financial market Chile which puts him in registration has made the incorporation this position. Although it also must take process faster and more convenient, allowing higher productivity among local ANALYSIS entrepreneurs. Starting a new business in Chile now Chile is currently regarded as an takes only five days and a half, on par emerging economy that is notable for with international best practices. having political, social and economic standards that could compares easily with It is important to note the ease with which development economies. a country to doing business, because it is It is a country with a geographical small one of the keys to potentiate, assess and space but who knows manage natural and improve the country's competitiveness, spatial resources are there, so it is one of more facilities for access to foreign the largest recipients of foreign investment, generate more competitive investment in the world, in addition to country globally. In this case that is one have major multinational with great of the predominant factors for the influence abroad. position currently occupied by Chile. In economic terms, Chile is the seventh While it is important to note also that the freest economy in the world and can say country needs to diversify its economy, it is the only Latin American economy in pointing it toward knowledge-based that position, so their competitiveness and because there are major weaknesses in the development is above the Latin American education system, speaking in terms of countries. quality, lacking because of this human As said the World Economic Forum, is capital to improve production or create "one of the economies with better innovative projects, problems turns out to macroeconomic world government, with be a barrier to doing business. strong institutions and low corruption." In addition, the country has a low It is definitely a mostly free country investment in innovation advancement of according to the index of economic knowledge as an important aspect for the freedom "Heritage Foundation" because economic development and thus it has adopted policies that favor the increasing competitiveness. continued growth of the country, domestic measures that allow has little corruption, investment freedom, financial maintaining a sound financial system; the freedom and overall freedom economic. creation of an efficient tax system; the In addition to the prudent management of opening of its economy; a pension system public finances. based on capitalization and continuous Foreign investment is welcome making it improvement of infrastructure through a highly competitive by having a tariff the use of advanced public-private rate of 4%, also managing bank partnership”. independence and good rates that allow easy access to investment within the Speaking of political and institutional country. It is also the country in Latin terms, is a stable and solid country with a America that have greater growth and consolidated democracy, clear legal rules sustainability of GDP in recent years and institutions. despite the economic crisis. Have reduced The Chilean Ambassador to , said mortality rates and poverty too. that "Chile adopted a development model based on the idea of freedom, which is As Vittorio Corbo,( Research Associate expressed through democracy in the of the Centre for the Study of Public, political sphere, which has allowed an Former President of Banco Central de alternation in government of the country Chile and Professor of Economics at the and Power legislative-and the market Catholic University of Chile and the economy with our economic organization University of Chile), said "these advances founded on respect for private property have played a prominent role at the system where there is legal certainty, free political and economic reforms enterprise, competition and undertaken by the various governments", encouragement of foreign investment.” among which “the creation of an autonomous central bank with a clear Thus, the main factors that mandate to ensure price stability; the competitiveness and freedom that introduction of a fiscal rule to reduce presents Chile is derived , among others, public spending cycles and maintain clear rules of the game, a solid sound fiscal solvency; banking institutional framework where activities supervision and regulation aimed at that improve the economy such as motivation to foreign investment, tends according to "" ranks is the respect for property rights and first in Latin America. equality and justice on law. This explains the high degree of Besides Santiago de Chile as capital, competitiveness of the country and who offers ample business services for is ranked 33 of 144 economies, the most communications, financial services, competitive in Latin America. infrastructure, air links and quality of life. The ease of starting business and cross- border trade are the basis of this Moreover, freedom and globalization go competitiveness since it gives easy access hand in hand in Chile because thanks to to investment and this is one of the main internal progress made by the country, the aspects that develop and potentiate an results are reflected externally, making it economy to go to be competitive. besides a mostly free country also globalized and competitive in certain However, despite all the initiatives and aspects. positive results showing in Chile, must Regarding the KOF Globalization Index, also indicate areas for improvement that Chile is largely globalized and major would place in a better position in long globalizing also from Latin America as term. mentioned above with respect to GDP Chile still has deficiencies in production and for having the highest per capita and this is due in part to the lack of quality income for the region, for its economic in education. freedom, its low external debt and the Furthermore, although progress has been accumulation having outside of capital made in the diversification of products, is stock which is great. still keeping the price high dependence on international markets, with respect to It's a nice country for business since copper and other minerals. according to the Doing Business report of It requires a macroeconomic management the World Bank 2013, Chile ranks 37th and introduction of new reforms to ease for business, hand in hand with other tensions that exist with respect to the high relevant aspects such as the growth of the growth of the country and the relationship technology sector information that with the labor market, rigidities existence of markets and asset prices in particular regarding the level required private debt.

As a socially aspect, Chile has very high levels of social inequality, concentrating economic power in some families and where economic sectors are controlled by certain companies as well. Should then improve on aspects such as quality of education, economic diversification and innovative projects generating company in the country.

In conclusion we can say that much of the positive results are due to Chile is a responsible country, in terms of how to organize its economy and foreign investment given bargaining power. Taking into account other relevant issues such as legal seriousness of the country, the formality and transparency in institutions, business opportunities and easy access, the low rate of corruption tending stability and economic freedom that attracts and provides a good environment of business and develops largely the competitiveness.

COLOMBIA Background

Colombia is the northern country in South America. It shares coasts on both Atlantic and Pacific Ocean.

As almost all Latin-American countries, cities in Colombia are very populated, people migrated internally due to political violence and looking for a higher income in the largest cities.

Total Area: 1.138.910 sq. Km Colombia has been facing one of the Population: 46.245.297 eldest armed conflicts in the world. For GDP (ppp): $526,5 billion more than half a century, guerrillas, GDP - real growth rate:4.2% (2013 est.) paramilitary units, organized crime and GDP per capita (ppp): $11.100 the armed forces has been struggling for Unemployment rate:9.7% (2013 est.) territorial control. At the beginning, the Public debt:39.6% of GDP (2013 est.) conflict was an ideological one, with the GDP - composition, by sector of origin: guerrillas promoting socialism and the Agriculture: 6.6% central government protecting the Industry: 37.8% liberalism and democracy. Nowadays, the Services: 55.6% conflict has evolved in to a war business, Exports:$58.7 billion (2013 est.) financed by illicit drugs, human Imports: $53.5 billion (2013 est.) smuggling and extortions. Education:4.4% of GDP (2012) Military:3.28% of GDP (2012) The internal conflict is one of the main Gini: 55.9 reasons of the economic situation of Population below poverty line: 32.7% Colombia, the rural sector has been HDI: 0.71. World Rank: 98 abandoned because of fear, and foreign (CIA World Fact book, 2014) investment are too shy to go to Colombia due to the high risk they face in some Colombia’s economy depends heavily on regions. Hoverer in the last decade, exports of petroleum, coffee, and cut national armed forces have controlled flowers and is positioned to surpass partially the guerrillas and the Argentina as South America’s second- paramilitaries, generating a more stable largest economy. Poverty has been situation for those who plan to invest in reduced thanks to robust economic Colombia. growth and a “prosperity for all” policy conducted by president Santos. However, The “democratic security” policy pursued economic reforms stated on the Santos by former President Alvaro Uribe (2002– administration have been widely 2010) significantly reduced crime and criticized inside and outside Colombia. violence and increased government There is a fear among local and foreign control of national territory. Uribe also investors due to the change in taxes helped to re-establish business collect and restrictions to the free trade confidence. Former Defense Minister policies advances in the previous Juan Manuel Santos, elected president in governments. June 2010, has engaged in controversial peace talks with the rebel group FARC. INDEX OF ECONOMIC FREEDOM He has also emphasized global economic integration.

The Trade Agreements entered into force between Colombia and countries like the United States, the , , Chile among others, has encouraged job creation and investment. Colombia has pursued free trade agreements with dozens of other nations and is one of four members in the Pacific Economic freedom is an ideological Alliance. (Heritage, 2014) concept, applied to the field of market economy, which comes from economic liberalism. In terms of economy, a free Regulatory efficiency society, individuals are free to work, produce, consume and invest in Colombia has few regulatory bottlenecks. everything they want. It takes less than 10 Procedures to start a business, with no minimum equity The last numbers in Colombia about required. economic freedom are better in 6.2 points. The numbers in Colombia in The non-salary cost of hiring is moderate, terms of economic freedom are better at but informal work continues to grow. 6.2 points. Increases in these figures are During 2013 the increased government in 70% of economic freedoms, including aid for coffee producers even though trade freedom, monetary freedom, labor these aids are much lower than those of freedom, and freedom from corruption. other countries in the same region.

It is necessary to continue with the efforts Open markets that have been made to maintain the growth of economic freedom for a Colombia tariff rate is an average of dynamic economic development. 5.6%, is part of the being the world's ninth largest economy. The Unfortunately the judicial system and financial sector remains competitive. By corruption are some aspects that do not reforming the development of the capital improve in the country causing concern. markets promotes improving flexibility and market competitiveness. RULE OF LAW

The increase of corruption in recent years in various government departments is worrying because although measures to reduce these indices are taken has not been possible.

GLOBALIZATION

Globalization is a set of transformations in the visible world political and economic order since the end of the twentieth century. It is a phenomenon that has created common ground on economic, technological, social, cultural

and political spheres, and thus became the

world in an interconnected world into a According to the chart Colombia has a global village. relatively good economic freedom, which can increase the confidence of both Colombia has 59.29 on the globalization Colombian investors as extraverts which index, which has placed at the 77th has produced several trade agreements position. with different countries of the world

(CAN, MERCOSUR FTA with USA, In economic globalization, Colombia is ) and others who are in the placed in 94th position with a score of process of being signed. These 57.21. Regarding to social globalization, agreements have increased exports and it is located in 106th spot with 46.62. In imports therefore the above Increases terms of political globalization, Colombia revenues of the country and therefore the has 80.61 points and is the 59th country Citizens. in the list respect to other countries in the

world. The economic freedom score of

Colombia has improved in 6.2 points in Economic globalization the last 20 years Colombia improvement in seven of ten items of economic According to economic freedom scale, freedom like a monetary freedom and Colombia, in terms of economic labor freedom all this makes Colombia a globalization is a fairly globalized “mostly free” economy. country.

Colombia has been signing various trade agreements that facilitate exports and imports, reducing tariffs in the future reach 0 likewise passes for products that Colombia exports with lower than normal tariffs. Also measures taken by the government benefit international investors.

Social globalization

On the other hand, social globalization has three dimensions: personal contacts, information flows, and cultural proximity. in the last 10 years these are the numbers in terms of personal contacts the improvement in score is 3.03 points, information flows the decrease in score is 2.67 points and in terms of cultural proximity score the decrease is 3,10 points, but overall in social globalization the decrease is only 0.92

Political globalization

(Wikipedia, 2014) (central inteligence agency ) The Republic of Ecuador is a representative democratic republic in northwestern South America, bordered by Colombia on the north, Peru on the east and south, and the Pacific Ocean to the west. Ecuador also includes the Galápagos Islands in the Pacific, about 1,000 kilometers (620 mi) west of the Total Area: 283,561 sq km mainland. (Wikipedia, 2014) But Population: 15,654,411 Ecuador hasn't always been as we know it GDP (ppp): $157.6 billion (2013 now, 480 years ago was part of the Inca est.) Empire until the Spanish. Quito, the GDP - real growth rate: 4% (2013 est.) capital, became the seat of the Spanish GDP per capita (ppp): $10,600 colonial government in 1563 and part of Unemployment rate: 4.2% (2013 est.) the Viceroyalty of New Granada in 1717. Public debt: 23.2% of GDP The territories of the Viceroyalty - GDP - composition, by sector of origin: New Granada (Colombia), Agriculture: 5.9% Venezuela, and Quito - gained their Industry: 35.1% independence between 1819 and Services: 59% (2013 est.) 1822 and formed a federation Exports: $25.48 billion (2013 est.) known as Gran Colombia. When Imports: $26.22 billion (2013 est.) Quito withdrew in 1830, the Education: 4.4% of GDP (2012) traditional name was changed in Military: 2.83% of GDP (2012) favor of the "Republic of the Gini: 48.5 (December 2013) Equator." Between 1904 and 1942, Population below poverty line: 25.6% Ecuador lost territories in a series of (December 2013 est) conflicts with its neighbors. A HDI: border war with Peru that flared in 1995 was resolved in 1999. A border above replacement level fertility war with Peru that flared in 1995 and the population most likely will was resolved in 1999. Although keep growing rather than stabilize. Ecuador marked 30 years of civilian (central inteligence agency ) governance in 2004, the period was ECONOMIC FREEDOM marred by political instability. Protests in Quito contributed to the mid-term ouster of three of Ecuador's last four democratically elected presidents. In late 2008, voters approved a new constitution, Ecuador's 20th since gaining independence. General elections were held in February 2013, and voters re-elected President Rafael CORREA. (central inteligence agency ) The score in the Economic Freedom in Ecuador's high poverty and income Ecuador is 48.0, , making its econo- my inequality most affect indigenous, the 159th freest in the 2014 Index. 1.1 mixed race, and rural populations. points higher than last year , with The government has increased its deteriorations in the manage- ment of social spending to ameliorate these government spending and freedom problems, but critics question the from corruption offset by efficiency and implementation of its improvements in investment freedom, national development plan. trade freedom, and labor freedom. Nevertheless, the conditional cash Ecuador is ranked 26th out of 29 transfer program, which requires countries in the South and Central participants' children to attend America/Caribbean region, and its school and have medical check-ups, overall score is far below the world and has helped improve educational regional averages. attainment and healthcare among for 20 years, this index has fallen nearly poor children. Ecuador is stalled at 10 points, for 20 years, this index has fallen nearly 10 points. Aspects like the 44 percent of GDP. Public debt is low, but investment freedom, government the economy continues to suffer from a spending, and prop- erty rights have debt default in 2008. deteriorated 30 points or more. although REGULATORY EFFICIENCY in 1990 the economic freedom in this Despite ongoing reform efforts, the country rose to “moderately free”, this overall regulatory environment remains has declined steadily since.. burdensome. Starting a business takes RULE OF LOW almost two months, but the cost of Ecuador is a country with many political, obtaining necessary permits has been economic and social difficulties, has long reduced to about half of the level of suffered from political instability and average annual income. Lack of corruption. flexibility in the labor market hinders job The weak and politicized judiciary and growth. lack of investigative capacity in Although government oversight agencies contribute to an atmosphere of impunity. Illicit payments for official favors and theft of public funds reportedly take place frequently. Expropriation is a problem, and the government is constitutionally empowered to control strategic sectors such as natural resources. dollarization produces a modicum of LIMITED GOVERNMENT monetary stability, the state makes Ecuador’s top individual income tax rate extensive use of subsidies and price is 35 percent. The top corporate tax rate controls. has been reduced to 22 percent, and the OPEN MARKETS special rate for reinvested profits remains Ecuador’s average tariff rate is 4.1 at 15 percent. Other taxes include a value- percent, and non-tariff barriers continue added tax (VAT) and an inheritance tax. to interfere with trade. In 2012, the The overall tax burden is 17.6 percent of International Centre for Settlement of GDP. Government spending has risen to Investment Disputes (ICSID) hit Ecuador with the largest penalty in the ICSID’s 60 history for expropriating property. 50 40 Government interference in the 30 underdeveloped financial sector is 20 10 growing, and state banks have become 0 more dominant. 2007 2008 2009 2010 2011

Ecuador continues to lag notably in Ecuador's economy has traditionally been promoting the rule of law and based on agriculture, mining and . strengthening the legal framework. The Since the seventies the oil industry judicial system remains vulnerable to occupied a vital role in the development political interference, with corruption of the country, but from this century, further exacerbating institutional exports of agricultural products are the shortcomings. Expansionary public real engine of economic growth. spending threatens fiscal sustainability. According to macroeconomic data, INDEX OF ECONOMIC Ecuador is in a constant growth, gross GLOBALIZATION domestic product has been tripled in the last 10 years, in the same upline is its per th Ecuador is currently ranked as the 95 capita income has increased 235% over country in KOF globalization ranking, the same period. But in recent years, with a general average of 60 points over exports of Ecuador are down and this 100 and classifies the country as almost directly affects the economic no Globalized. globalization and keeps in mind that Ecuador is recovering from an economic ECONOMIC GLOBALIZATION crisis that took years ago. th Ecuador reached the 128 position in the world, scoring 43.09 in 2011, 1.26 points SOCIAL GLOBALIZATION more than the previous year. Ecuador scored 47.02 in 2011 in the social globalization aspects; this positions the country as the 105th in the world, according to the KOF Index of Globalization. 48 globalization, scoring 81.14 in the KOF 47 Index of globalization. 46 45 81,8 44 81,6 43 81,4 42 81,2 2007 2008 2009 2010 2011 81 The poverty line in Ecuador in 2011 is $ 80,8 2007 2008 2009 2010 2011 72.87, that is if a person receives an average monthly income below that amount is considered poor in Ecuador. The main challenge facing Ecuador is: According to ECLAC, affiliated body of work on the functioning of its institutions, the United Nations, Ecuador in the last the lack of independence of the judicial ten years has reduced poverty by 16 system, inefficient operation of their percentage points. In 2011, 32.4% of resources, labor and financial markets. Ecuadorians live in poverty and 10.1% in extreme poverty. From December 2006 to December 2011 totaled 93,700 COMPETITIVENESS Ecuadorian middle class. In 2012 For analyzing global competitiveness Ecuador will be the second biggest in index, was necessary to use the report for Latin America reduced poverty, falling the year 2013-2014 since in the last report 4.7 points in one year. Inequality has also Ecuador was not included because of data declined, the Gini coefficient fell from availability issues. 0.539 in December 2006-0473 in Key Indicators, 2012 December 2011. This means that poverty has declined, but the wealth has also been better distributed; these aspects can try the slight growth in social globalization of Ecuador. POLITICAL GLOBALIZATION Ecuador was positioned in 2011 as the 58th country in the world in political

Global Competitiveness Index

The Most Problematic Factors For

Doing Business In the reporting year 2013-2014 Ecuador was in the 71th position in the ranking of The Global Competitiveness Index, improves by 15 places in the ranking, respect to the last year. Ecuador received a punctuation of 4.18, so its position in the ranking. Although Ecuador has a low country

credit rating (121st), maintains a stable macroeconomic condition (44a), for this reason it has been able to obtain financing and loans. The main challenge facing Ecuador is: work on the functioning of its institutions, the lack of independence of the judicial system, inefficient operation of their resources, labor and financial markets. According to economic reports, this for the creation of the Vice Ministry of development is due to improvements in Basic Industries, where large investments efficiency factors in technological in strategic industries will be made. readiness, innovation, infrastructure and macroeconomic stability. ANALYSIS In this report the categories of FDI Ecuador's economy is mainly based on (Foreign Direct Investment) and agriculture, mining and fishing. The technology transfer also had a better exploration and oil exports have played a rating for the country, like the signing of major role in the Ecuadorian economy broadband internet. Ecuador also showed since the 1970s, however, over the last a good performance of the domestic century, economic development depends industry. on exports of cocoa and , which Ecuador's economy achieved significant Ecuador was the largest exporter of world growth allowing warn that government for decades. business management and decisive In March 2000, Congress passed a series action, lead to certain levels of stability of structural reforms that also provided and growth prospects. for the adoption of the US dollar as legal Also, thanks to the consistent economic tender. Dollarization stabilized the policy, contained in the Productive economy and positive growth again in the Transformation Agenda, the Code of years that followed, helped by high oil Production and Industrial Policy, the prices, remittances and increased non- Business Confidence Index in July 2012 traditional exports. recorded an increase of 12.9% over the In recent years, levels of foreign previous year. investment in Ecuador have been the Ecuador walks towards the lowest in the region as a result of an diversification of production, with unstable regulatory environment, weak production bets involving strategic rule of law, and the displacement effect of reduction in imports $ 650 million and public investments. increased exports $ 500 million through In 2013, oil production marginally 2015. Additionally, they work in reversed a downward trend and expected developing the institutional framework that production increased slightly in 2014, although prices would probably be In relation to the information above, we lower than in previous years. And to give conclude that Ecuador is on good track answer to these expectations the president but still needs to strengthen many of Ecuador, Rafael Correa, said the his economic issues so they can get to have economy grew 4.9% in the first quarter of development and competitiveness 2014 despite the global economy there is compared to different countries in the a slowdown in growth. region. the role of the current president of This is good news for Ecuador since the that country, Rafael Correa, stands out for oil sector grew the first tirmestre almost its economic and trade policies appear to 13% while the non-oil sector grew by a have been effective. significant 4.3%. But global conditions REFERENCES are now much more difficult for Ecuador Económica. (2014, November economic emerging such as the 24). Retrieved from Ecuadorian. http://www.ecuadoreconomica.co This year there is great uncertainty in the m/ global economy, this directly affects the Ecuador Económica. (n.d.). Retrieved Ecuadorian economic growth and thus from became known in the United Nations http://www.ecuadoreconomica.co Economic Commission for Latin m/ America and the Caribbean (ECLAC) Ecuador es más competitivo en el where the growth forecast for the region ranking mundial. (2014, declined from 3.2% to 2.7% in 2014, due November 24). Retrieved from to lower than not expected expansion in http://www.industrias.gob.ec/ecu Brazil and Mexico. ador-es-mas-competitivo-en-el- Facing a 2013 trade deficit of $ 1.1 ranking-mundial/ billion, Ecuador erected technical barriers Inversión extranjera directa. (2014, to trade in December 2013, causing October 24). Retrieved from tensions with its major trading partners. http://es.wikipedia.org/w/index.p Ecuador also decriminalized violations of hp?title=Inversi%C3%B3n_extra rights, in February njera_directa&oldid=77108647 2014. (n.d.).

MEXICO BACKGROUND

Geographically speaking, Mexico does not belong to South America but to North America, and for this reason it should be consider a Latin country only in terms of ethnology. Since this country’s population makes it through the TOP 20 of the world’s most populated places, it could be assured that it is in fact the place

where the largest populations of Spanish Total Area: 1,972,550 km2 speakers are, especially when 70% of Population: 114.9 million their people are concentrated in urban GDP (PPP) areas. $1.7 trillion

3.9% growth in 2012 Over the last two decades Mexico is 5-year compound annual growth 1.6% surprisingly making a transition from a $15,312 per capita small economy to a widely open and Unemployment rate: 4.8% diverse economy. As good as this sounds, Public debt: is not without drawbacks, since there are GDP - composition, by sector of origin: high rates of , just as it Agriculture: 3.6% happens in other countries of Latin Industry: 36.6% America. In the case of Mexico, this Services: 59.8% (2013 est.) affects the places of the country with Exports: $ 370,900,000,000 2013 est. various types of social concerns (such as Imports: $ 370,700,000,000 2013 est. violence or border state issues) specially Education: 5.2% of GDP the southern states. Now, there is also a Military: 0.6% of GDP major fact when it comes to economics Gini: 47.2 functioning, and that is the income Population below poverty line: 52.3% distribution, which most of the times is HDI: 0,756 World Rank: 71 inequitable. This inequality is far more (CIA World Fact book, 2014) obvious back in 2008’s massive INDEX OF ECONOMIC FREEDOM economic recession. World Rank: 55 Current economic and social concerns Overall score: 66.8 include few advancement opportunities for the largely Amerindian population in the impoverished southern states, also the high rates of underemployment for a segment of the population. The global financial crisis beginning in late 2008 caused a massive economic downturn the following year, although growth returned quickly in 2010. Mexican economy has a mixture of modern and outdated practices in both its Rule of law industries and in agriculture. Corruption in Mexico is present in all Furthermore, the Mexican economy is levels of society and is a cultural factor increasingly being dominated by the that remains along the time, fed by and private sector. Recently, the government empowering monopolists, party bosses, has made improvements in infrastructure and other mafias. Entrance of billions of and has opened competition in seaports, narco-dollars to Mexico each year from electricity generation, the U.S. affects politics particularly at the telecommunications, airports, state and local levels. Although contracts distribution of natural gas and railroads; are generally upheld, usually courts are all of which is a positive action in contrast vulnerable to political interference, which with the violence and drug troubles makes them inefficient. Mexico struggles with. Limited Government The new government has proposed a tax overhaul given that the top individual income and corporate tax rates are 30 percent, also the corporate income tax is set to decline to 29 percent in 2014 and 28 domestic bank credit to the private sector percent in 2015. Other taxes include a accounts for less than 20% of GDP. value-added tax (VAT). The overall tax burden is 10.6 percent of gross domestic income. Government spending equates to 27 percent of GDP, and public debt is equal to 43 percent of domestic output.

Regulatory Efficiency In general, the process of implementation has been simplified, and there is no minimum capital required for initiation. Although Mexico grew in the score of Although it is taken six days on average economic freedom in the Index, getting to launch a business, it takes over two the 55th position in the score by showing months to complete the requirements for an improvement in some aspects of licensing. Energy plans and tax reforms market opening, fiscal management and have been announced by the government, government spending; the country still however it is still needed a lot of changes has some issues to resolve in order to to reduce subsidies. improve and develop the economic freedom. A reform initiative that was aimed to increase labor market flexibility was Open Markets weakened by amendments to protect the Mexico tariff rate on average is 2.2% and most powerful ones in the country. by numerous trade agreements has been The judicial system is still vulnerable to achieved unilaterally reduce non-tariff political interference, whereas propriety barriers. Foreign investment is restricted rights are not protected. in several sectors of the economy by the Corruption is one of biggest issues government. There is a greater openness Mexico is currently having and interferes in the financial system and strengthened with its economical freedom the regulatory framework, however, the development. during the 2009 economic recession, INDEX OF ECONOMIC 2010 was a year of adjustments and 2011 GLOBALIZATION a year of strong economic recovery for México is currently ranked as the 70th the country. country in KOF globalization ranking, Social Globalization with a general average of 70 points over Mexico scored 51.79 in 2011 in the social 100, which barely classifies the country globalization aspects; this positions the as Mostly Globalized. country as the 94th in the world, according to the KOF Index of Globalization: Economic Globalization Mexico Social Globalization México reached the 78th position in the Score world, scoring 61.59 in 2011, 0.65 points 73 72,5 more than the previous year: 72 Mexico Economic Globalization 71,5 Score 71 73 2007 2008 2009 2010 2011

72,5 - Personal Contact aspects: 72 71,5 71 In mid-2013 a new law of 2007 2008 2009 2010 2011 telecommunications was created. This Due to the high dependence of Mexico new law generated a reform, which had as with the US, the 2008 economic crisis its main task to point out a new regulator, affected considerably Mexico’s one that would eliminate barriers to economy, the unemployment rate rose foreign investments and reduce the fees from 3,96% to 4.6% and the steady of the most dominant operators. The aim decline in oil production had a budgetary of these reforms was to make the impact forced to raise taxes such as value telecommunications market more added tax, the income tax and institute competitive in Mexico. The new taxes on telecommunications. telecommunications sector in Mexico However, after the crisis of 2008, which retains a significant growth potential over involved significant economic losses the next 5-10 years with a population of around 109 million and fixed-line Mexico currently holds forty-two teledensity of around 17%. consulates in Canada, and diplomatic - Cultural proximity aspects: relations with 90 countries, which include The increase in foreign population during 228 international treaties and agreements the decade from 2000 to 2010 is an involving the United States. important aspect that should be emphasized, since the population INDEX OF GLOBAL increase of foreigners in Mexico was of COMPETITIVENESS 53%: Mexico passed from 483.968 to 1.034.958 foreign residents in the country, where 738.103 of the population are from the US. Political Globalization Mexico was positioned in 2011 as the 80th country in the world in political Although the country fell six points in the globalization, scoring 72.74 in the KOF ranking of competitiveness, Mexico has Index of globalization: taken important structural reforms in the Mexico Political Globalization Score past year. The decline in the ranking 73 reflects the perception of impaired 72,5 functioning of institutions, the quality of 72 the education system, which does not 71,5 comply with the skills required by the 71 2007 2008 2009 2010 2011 Mexican economy; Additional to the low

level of implementation of ICT. The need Mexico currently has 79 embassies, 72 for effective reforms to increase the level consulates, 7 permanent missions to of competition and efficiency in the international organizations in the world functioning of markets of Mexico and 6 diplomatic missions to open. implementation is emphasized. There are The political and diplomatic presence in some changes that have been recently Mexico, Central America and the observed, particularly in the Caribbean has improved in recent years. telecommunications market. In the process of improving, Mexico can Mexico, in terms of competitiveness is continue to count on its traditional not fully sustainable, even in strengths: a large internal market of environmental issues, where several economies of scale, a relatively stable factors are penalized, and in view of its macroeconomic environment and a lot of lax regulations, this may be the reason for sophisticated business, which is very the poor performance of the country's uncommon in its stage of development. most dimensions of Forestry, water management, fish stocks and carbon intensity. Regarding the performance of social sustainability, despite the limited coverage of the social safety net, a widespread informal economy and its relatively high level of inequality, is offset by a low level of youth unemployment, widespread access to water and sanitation.

ANALYSIS Despite their early recovery of one of the Corruption is one of the main problems largest recessions the country has Mexico is currently facing, affecting all experienced in history, so dependent aspects analyzed in this report. Various economy, as is the case of Mexico with the initiatives for a reform in areas such as United States, and with such levels of improving working conditions and corruption, Mexico has a very low chance entrepreneurship has been laid down to to be competitive with other economies protect individuals or the government in that already have economic empowerment power interests. This also explains why the policies and laws seeking to manage and economy is increasingly being dominated regulate resources efficiently. by the private sector, because even though While Mexico fails to decrease the level of the government has invested in corruption, shortcomings in important infrastructure improvements and has factors for economic, political and social worked to promote competition and growth as educational quality and business creation, private interests prevail improvement implementation and effective in its decisions and strengthen the use of ICT will negatively affect the monopolies and the political interests of a process of expansion and economic few. development country. Corruption has also affected political globalization, as though it has increased Finally, it is essential to create laws and foreign residents in Mexico during the last reforms and even institutions to monitor decades, the perception of an inequitable and promote equity and strengthening the functioning of state institutions is not country's judicial system, which is also attractive to foreigners looking to invest in vulnerable to political interference. the country, in addition to the lack of protection of copyright, which will decrease the chances for Mexico to strengthen its economy through foreign investment.

PARAGUAY In the research presented below it will be unveiled with broad strokes the South American country Paraguay, is a landlocked country. The country is rich in natural resources: the world's largest drinking water reservoir (Guarani Aquifer). It's also the world's fifth largest exporter of soya beans, as well as a renowned producer of beef. Despite this, it is one of the poorest countries in South America. (BBC, 2012) Paraguay achieved its independence from Total Area: 406,752 sq. Km Spain in 1811. In the disastrous War of the Population: 6,703,860 Triple Alliance (1865-70) - between GDP (p p p): $45.9 billion Paraguay and Argentina, Brazil, and GDP - real growth rate: 12% Uruguay. Paraguay lost much of its GDP - per capita (PPP): $6,800 territory. The country stagnated Unemployment rate: 6.6% economically for the next half century. Public debt: 15.7% of GDP Following the Chaco War of 1932-35 with GDP - composition, by sector of origin: Bolivia, Paraguay gained a large part of the Agriculture: 20.4% Chaco lowland region. (CIA, 2014) Industry: 17.7% The 35-year military dictatorship of Services: 61.9% Alfredo STROESSNER ended in 1989, Exports: $14.7 billion and, despite a marked increase in political Imports: $12.37 billion infighting in recent years, Paraguay has Education: 4.8% of GDP held relatively free and regular presidential Military: 1.66% of GDP elections since the country's return to Gini: 48.0 democracy. Paraguay is located in Central Population below poverty line: 34.7% South America, north east of Argentina, HDI: 0.676 south west of Brazil, has total area of (CIA World Fact book, 2014) 406,752 sq km and they border countries BACKGROUND are Argentina 1,880 km, Bolivia 750 km, 1990s saw slow, steady growth, but by Brazil 1,365 km. (CIA, 2014) 2002 the economy was in serious trouble, Paraguay has the following natural partly because of a financial crisis in resources Hydropower, timber, iron ore, neighbouring Argentina. Emergency loans manganese and limestone. - conditional on economic reforms - were current issues Environment are negotiated with the IMF. deforestation; water pollution; inadequate Corruption is widespread and Paraguay is a means for waste disposal pose health risks centre for smuggling, money laundering for many urban residents; loss of wetlands and organised crime. and has international environmental The triple border region, where Paraguay agreements that are Biodiversity, Climate touches both Argentina and Brazil, has Change, Climate Change-Kyoto Protocol, long been associated with drug-smuggling Desertification, Endangered Species, and other contraband trade. Hazardous Wastes, Law of the Sea, Ozone It is also home to a large Middle Eastern Layer Protection, Wetlands, but had not community, and the United States has ratified any of the previous agreements. identified it as a source of funding for The type of government that has Paraguay Islamic militant groups - though Argentina, is constitutional republic. Brazil and Paraguay reject that allegation. Paraguay`s agricultural products are The commercialization of agriculture, , , soybeans, corn, wheat, population growth and forest clearances tobacco, (manioc, tapioca), fruits, have led to a dramatic increase in the vegetables; beef, pork, eggs, milk; timber. number of landless families. Up to 95% of Paraguayans are mestizo, This has boosted migration into urban areas people of mixed Spanish and native and shanty towns have burgeoned. Around American descent. Many speak the 60% of Paraguayans live in poverty. language of the indigenous Guarani; the Much of the north-west is taken up by the rest are bilingual or only speak Spanish. Chaco, a vast and largely uninhabited There is a Japanese community, a legacy of plain. (CIA, 2014) post-World War II migration. With few mineral resources, Paraguay's INDEX OF ECONOMIC FREEDOM economy revolves around agriculture. The often goes unpunished as judges favor the powerful and wealthy. At Paraguay is very noticeable in inequality. Limited government The top individual income and corporate tax rates are 10 %. Other taxes include a value-added tax (VAT) and a property tax. The overall tax burden equals 13.4 percent of gross domestic income. Government

Paraguay’s economic freedom score is spending makes up one-fifth of the 62.0, making its economy the 78th freest in domestic economy. Public debt is a modest the 2014 Index. Paraguay is ranked 15th 11 percent of GDP. out of 29 countries in the South and Central Regulatory efficiency America/Caribbean region, and its overall Exists within the regulatory a minimum score is above the world average. capital requirement for starting a business, Improvements in half of the 10 economic but the process still takes more than a freedoms have been outweighed by score month. The cost of completing licensing declines of more than 10 points in property requirements remains almost twice the rights, business freedom, and investment level of average annual income. The labor freedom. market’s lack of flexibility hurts formal- The overall entrepreneurial environment sector job growth. State-owned companies remains constrained. An overbearing have monopolies for petroleum products regulatory framework, exacerbated by poor and (100 percent hydro-generated) access to credit and high financing costs, electricity markets. stifles economic activity and retards the Open markets development of a vibrant private sector. Paraguay’s average tariff rate is 4.5 percent. Tariffs provide about 13 percent of government revenue. The level of financial Rule of law intermediation has been improving Corruption cases languish in the courts for gradually, but an inefficient legal years without resolution, and corruption framework remains a considerable impediment to the creation of a more It is clear that poverty has declined in the dynamic financial sector. Capital markets last decade, particularly from 2011 remain underdeveloped. onwards, continues to affect one in four Paraguayans, while poverty extreme one in ten. In the last decade, Paraguay has made significant progress in relation to the macroeconomic, solid and strong results in fiscal, monetary and with the onset of major and social reforms. One of the most important aspects in recent

years has been access to free primary health Paraguay is a country that is fortunate to care and basic education, as the growth of have lots of natural resources. One of the conditional cash transfer programs to mark most outstanding activities of Paraguay's is on the most vulnerable populations. energy manufacturing as livestock and Respect the recent economic development, agriculture. Paraguay has experienced high volatility in Throughout the country large flows of growth. After a fall in Gross Domestic water that demarcate the hydrographic Product (GDP) close to 1.2% in 2012, the network of the "cuenca de la plata", where economy rebounded strongly with growth is the Guarani Aquifer, which is considered of 13.6% of GDP, the highest growth rate one of the largest reserves of fresh water on in Latin America in 2013. the planet is going through. The situation of international reserves In Paraguay the economic is small and continue to have very high levels, so much open and is very dependent on agricultural so that over US $ 7.200 million at the end production and foreign trade, especially of August this year. The rate has remained soybeans and beef which represented stable in recent years. approximately 40% of exports in 2013 Globalization However, the high levels of poverty and Globalization is an inevitable phenomenon inequality remain challenges for in human history that's been bringing the development. world closer through the exchange of goods and products, information, are not yet feeling the impact, because knowledge and culture. But over the last global crisis occurred after exports most few decades, the pace of this global important of Paraguay, mainly grain, integration has become much faster and namely, after the business of exports of the more dramatic because of unprecedented 2008 harvest have been realized, so the true advancements in technology, impact feel just 2009 and will extend communications, science, transport and beyond 2010, this will be so because no we industry. affect prices, and commodities are no The average index covers the economic, products to expect improvement in social and political dimensions of international prices due to the cost of globalization. storage and a number of other financial Paraguay has 57.53 in index globalization, nature of the producers who must repay the which has placed it in the 81th position. In loans financing the harvest that were economic globalization, Paraguay is placed awarded and that in the majority of cases in 105rd position with a score of 53.46. they are short term. Regarding to social globalization, it is Social globalization located in 103rd spot with 47.51. In terms The election process has not altered the of political globalization, Paraguay has basic social relationship; deepening social 77.78 points and is the 65th country in the inequality and development of conflicts list respect to other countries in the world. today are the difficulties to continue Economic globalization holding a representative democracy. The Paraguay operates in international trade, dictatorial legacy policy affects the present virtually all economic sectors in the Real and the future. Sector is a supplier of raw materials, which A little over a year of governance, the represents most of their export, thus implementation of a project conservative represents a significant fraction of GDP, change is beginning to show its conflicting currently the major markets import those edges can be seen through the economic goods from Paraguay are reduced downturn, the development of social aggregate demand, that will make conflict and the loss of legitimacy of the commodity prices experience a significant political leadership. Promises of economic decline globally, it is likely that exporters reactivation. Of fighting poverty and fighting for social justice. Globalization inability to have about 75 million in the based on globalization of capitalism is not Public Budget. Among the positive absent in our country. Result is the highlights that for the first time, the widening gap between rich and poor and Education Ministry had about 5,000 items deepening inequalities and dependencies for pro bono teachers, the program was between nations of central and peripheral extended technology in classrooms, and an endangering our existence as a species and educational channel is enabled. life itself on the planet. Political globalization The deficit in the Paraguay at all levels is Paraguay did not follow in the 1960s and part of the deterioration 1970s, the substitution model imports General of the peoples of Latin America adopted by most Latin American countries, and the world impoverished and and developed by the same token, highly increasingly globalized. Nearly 2 million protectionist policies. It was thus more 557 thousand Paraguayans live in poverty. exposed than other countries in the region Between 1999 and 2003 poverty in to international competition. In addition, Paraguay increased from 33.7% to 41.4% the permeability of its borders and its and extreme poverty (those with incomes institutional weakness to contain the flow below the cost of a basic food basket) of of smuggled imports from Brazil and 15.5% to 20.1% Argentina made him the most open Education had a tough year as the economy in Mercosur. However, the authorities themselves because in 2009, degree of openness and low protection did became effective exchange Minister that industrial production gained Horacio Galeano Perrone, who was international competitiveness. replaced in office by his former deputy, Indeed, Paraguay has been detained in a Luis Alberto Riart. Thus, the emergence of stadium in very low industrial development influenza A H1N1 caused many students because of the economic model that would be absent in much of the winter favored the export of agricultural months which, in turn, impacted on the commodities; the structural constraint of school calendar. the narrowness of the domestic market Another event that marked education this (relatively formal, then surpassed by the year, teachers were constant strikes and the constitution of Mercosur); and also probably to the difficulty of emerging Important court cases had resolution as industries to develop in the high-intensity well as its share of surprises. The Supreme environment of smuggling, in the absence Court gave a final cut to the case Ycuá of genuine political support factory Bolaños to ratify the ruling of first instance activity. sentenced to prison convicts major casualty This result is not surprising when you in 2004. Another case that came to an end consider that you are growing evidence that was the dismissal of the former chairman countries that trade less with the rest of the of the President Luis González Macchi, in world and whose foreign trade is highly the case of secret accounts abroad. dependent on commodity exports tend to Several events marked the news in 2009, grow less than the rest; and that countries but the possibility of impeachment against that rely on exports of natural resources the president, Fernando Lugo, dominated show a greater disadvantage now than the scene. The opposition argues that there before the period of intense globalization are arguments (buying land Teixeira, poor and technology in the late twentieth performance and even to irresponsible century changes. parenting), but also recognizes that there On the other hand, one can not overlook are limitations to the votes to carry out this that the international competitiveness process in Congress. depends not only on the efficiency or COMPETITIVENESS productivity that companies are able to The competitiveness of the develop, but also to a large extent on Paraguayan production and its factors external to the firm. That is, the exports in recent years has become a competitive environment including, among major topic of discussion at the other variables, macroeconomic stability national level. While Paraguay has and institutional quality. In the case of held for the last 20 years GDP growth Paraguay, high levels of corruption in and GDP per capita by an average of public administration, weak institutions 3% and 1%, respectively percentage, and poor enforcement of the principle of this was not sufficient to achieve legality are factors that significantly greater competitiveness and deteriorated business climate. prosperity. This growth has been uneven in the different sectors of the population and the various regions the country. So in 2010, the unemployment rate was 5.7% and the underemployment rate of 22.9%. The 34.7% of the population is in poverty, equivalent to a total of 2,197,309 persons in the population.

According to the Global Competitiveness Overall, the statistics indicate that Index 2011 - 2012 of the World Economic Paraguayan exports them six fold between Forum, Paraguay ranks 122 of 142 2000 and 2011 (from USD 869 million to countries, representing a position USD 5.486 million). This increase was extremely low. Key indicators that explain mainly due to the export of agricultural this low level competitiveness highlights commodities (products with low or no innovation (133), low quality of processing). Note that the export of institutions public (132), the lack of processed products has also had a efficiency in the (127) labor market, the significant increase, from USD 438 million lack of a appropriate infrastructure (125), to USD 2.221 million, constituting a large higher education (116) and the limited part of our exports, representing on average progress technology (112), thereby 50% for the period 2000/2011. imposing significant economic costs for business and reducing the economic development process. Additionally, the report of the World Economic Forum, The Global 12 PILARES Competitiveness Report 2011 - 2012, indicates that the main obstacles to doing spending, labor freedom, trade freedom, business Paraguay stand in order of among others. importance corruption (17.3%), hand force When we talk about property rights and with inadequate rating (16.1%), inefficient corruption is when a person to invest in a government bureaucracy (15.1%), country not at risk of being dispossessed of inadequate supply of infrastructure your company or your project while their (10.5%), and restrictive labor laws (9.0%). work is conditioned or limited; when you Importantly, given the low tax burden in live in a country where the government the country, the rules and tax rates listed as spends more than it needs, its economic less influential when it comes to doing freedom will be very low because the business in the country. government charged more taxes or the country will have inflation. When there is economic freedom in a country and its citizens can`t be autonomous is work or to invest and people do not want to produce and choose to operate elsewhere. The phenomenon of globalization is making a big impact on all countries, because if a country wants its products to Analysis enter and compete in the market you have Economic freedom is an important right of to relate to other countries to be sold and all people to direct their work and property. there link relative to other countries. When speaking of an economically free In Paraguay there is an Executive Working society, individuals are free to work, Group dedicated to the implementation of produce, consume, and invest in whatever the proposed Internal Control Model they want. In the Index of Economic defines the objectives and scope of work, Freedom mentioned several criteria are the working group should report very considered as property rights and precisely the Technical Working Group, in corruption, fiscal freedom, government order that it continued with the development of Plan Design and Implementation. This group works with performance standards, where the functions are required, and responsibilities are delegated to each of those responsible with working times, schedules and more. With regard to the definition of activities is where an internal control is implemented and implemented a standard model; when responsibilities are allocated to achieve government objectives should ensure that all activities are entirely satisfactory and well defined. To perform a good development of all activities required a schedule where a running order and also a definition of resources required to perform all scheduled activities and subsequently trained people needed will be translated to perform all these processes as precisely as possible, so with a team of high quality internal control is implemented in Paraguay for the realization of all their activities are already being political or economic optimum as possible.

BIBLIOGRAPHY

https://www.cia.gov/library/publications/t he-world-factbook/geos/pa.html http://news.bbc.co.uk/2/hi/americas/countr GDP per capita (ppp): $11,100 y_profiles/1222081.stm Unemployment rate: 3.6% (2012 est.) (http://ulisesvenialgo.blogspot.com/2010/0 Public debt: 14.9% of GDP (2013 est.) 2/comercio-internacional-y- GDP - composition, by sector of origin: globalizacion.html) Agriculture: 6.2% http://www.paraguay.com/especiales/lo- Industry: 37.5% que-dejo-un-2009-complicado-en- Services: 56.3% paraguay-5433 Exports: $41.48 billion (2013 est.) (http://www.bvsde.paho.org/bvsacd/cd53/ Imports: $42.13 billion (2013 est.) dersal/cap9.pdf ) Education: 2.8% of GDP (2012) http://www.paraguay.com/especiales/lo- Military: 1.28% of GDP (2012) que-dejo-un-2009-complicado-en- Population below poverty line: 25.8% paraguay-5433 (CIA World Fact book, 2014) file:///C:/Users/OEM/Downloads/Politicas %20competitividad%20Paraguay_Mercos ur_20110426_093111.pdf

PERU BACKGROUND This country is between Chile and Ecuador west of South America, is smaller than Alaska, and it has a tropical climate; The desert this in the west and temperate too cold in the Andes. In this country there are many areas the land jungles Amazonian and have seashore in the western part. The wonders of South American countries are the natural resources. In this case Peru

has, , petroleum, fish, iron and many Total Area: 1,285,216 sq km others. Is the second largest producer of Population: 30,147,935 and third largest copper producer. GDP (ppp): $344 billion The Peruvian economy has grown in the GDP - real growth rate: 5.1% (2013 est.) international prices of metals and minerals, 1000, but this not reaches needs of the although it's depend on this for the price population being that nearby of 1000 increase. Agriculture is manifested in peoples go to hospitals and only there are , coffee, , corn, oranges, 1.5 beds for the services of health. Now medicinal plants, among other. its exports speaking of child job it is of 5 to 14 years. are among $ 41,480, and imports $ 42.13 What stands out in this country is its flag billion. The currency of exchange rate is has a red color to the side a coat of arms of the US dollar; its permanent crops are at the cinchona tree and yellow horn of 0.66%. The concern in this country it is abundance. Finally one must know that deforestation because much the felling of Peru is formed with a head of state that is trees is illegal, in the wake of this the the President Tasso and capital city has the polluted air; Water are two vice presidents with 130 jobs for the also being polluted. Ethnic groups are congress of the republic. Through this we Amerindian, mestizo (mixed Amerindian can see that is Peru in recent years and white), white, black, Japanese, INDEX OF ECONOMIC FREEDOM Chinese, and others, the official language is FREEDOM TREND Spanish, although they have the Quechua language, that is also official and other native Aymara languages (with large minor) Amazonian languages. The most important religion is Roman Catholic. Poverty is one factor that affects all countries and in Peru is 25.8%, the economic situation produced disadvantages about 2 million have emigrated to the USA, Spain and Argentina. Is a population of 30,147,935, and the 68.9% of the population buys The economic freedom of Peru is of 67.4, contraceptives, more of the expenditures for 2014 came a index of 47 in the economy made for health that are of 4.8%; The the country this is due it has a weakness doctors that graduate and then get work are that is the job, being that, haven't capacity neither processes necessary that people Peru the scandals are common over need for a job worthy; Peru have an corruption. improvement in trade freedom, although LIMITED GOVERNMENT free trade is 0.8 lower than last year. Peru The income and tax rates are above 30 holds the position 7 out of 29 countries of percent, and other taxes have the (VAT) tax the region of American, Caribbean Central and tax on financial processes. Gross and South and its overall score is above the national income was 17 percent in the tax world average. In recent years of burden. The leftist government has continuous history in an improvement in commitment fiscal policies, with this economic freedom with 11 points, has government spending falling to 19 percent improved two points to the extent of the 10 of GDP and public debt is below 20 percent economic freedoms and thus a monetary of GDP freedom and international trade is created, REGULATORY EFFICIENCY in which has also improved by more than The starting a business has procedures that 35 points, and reinforced by the can complement and perform in Peru, has a participation in the global economy on delay of even a month and requires a trade. minimum capital; the requirements are In the area of economic development are expensive to buy a license and this request weak and becomes the long term; The takes much time by a answers, something judicial system is relatively inefficient important is to know that even though it is RULE OF LAW complex to create a company is growing Corruption in Peru is a problem, is a slowly the employment and the negative area that affects Peru in all government gives subsidies to people with aspects. when was position of ex president little capital. Alan Garcia was started an inspection by Also help with money for the growth of corruption in Congress, but the government electricity and motor fuels of kitchen and in of former President Alan had very few 2013 the subsidies for gasoline decreased penal accusations, in 2012, many people of in this country the Congress was under investigation for OPEN MARKETS corrupt practices; this government is in In 2013, in Colombia, México, Chile y one judiciary produces that distrust and in Peru started proceedings free-trade called the Pacific Alliance, for that export and competition to increase the economy of this import into countries can be help among country, too, through the corruption It has them, been neglected education and the idea is to but in this country the government invest in education and culture, when prohibits imports of used vehicles and grown from within is understood that the clothing. When investment of other domestic economy begins to grow strong country start in Peru are treated equally. and support internal processes to reduce One problem is that Credit of private sector poverty. increased interaction with the alliance pacific COUNTRY COMPARISONS economic doors opened and this also gives the country economic fruits because its history of free trade has good potential, also, will be good for that all its weaknesses become strengths the for thus their strategies are not to return the same Peru of last years, so, increases economy internal. GLOBLIZATION

The globalization is one part fundamental Peru is a country with great potential, but of the countries, with this measured the they have a disadvantage in corruption factors in city from increases economics, because it is of enough scandals and the cultural, policy, have a percent that help poverty is one factor of debility; has an people and companies to construct one economic freedom in trade advertising, and country development; is evaluated with the although companies are created are likely following percentages each globalization to continue to grow although their process: processes are slow; imports are restricted Very Good-100-80, only on clothing and vehicles used is good Good-79.9-70, to note that when this area is restricted in Rregular-69.9-60, Peru is understood that the idea is to be a Bad-59.9-50, power in sales of cars and clothes without very Poor-49.9-0, Nothing-N/A. 75.98 over 100%, meaning that in 2011 the Perú in the world is number 53 in country was in good process in its globalization index, with percent 65.73 economic, over the years this country about 100% its globalization is in strengthened in its economy following this REGULAR condition, in economic percentage increases each year for growth globalization Peru this in the spot 35, with in the city. percent 75.98 about 100% its economy is Earlier in Peru's economy was based on in GOOD condition, now talking of social mining, processing and export, agricultural Globalization this country is the 121, with and fishery resources, while for the last percent 42.35%, this means that Perú is years, this process has changed VERY POOR in their processes social; the considerably with the supply of exportable political globalization this in the spot 44, goods and services, became the fifth Latin and have 85.49%, what makes us American economy. understand that the political globalization The country's economy is affected by basic this country have in a position VERY economic rights due to the weakness of the GOOD. justice system is a failure in the ability to Economic globalization improve coordination of government, although in his earlier years is evidence that because there are social inclusion and this not it was in one good position is see creates instability and conflict. reflected that the economy of Peru is In 2011, exports amounted to 46,270 located for the 2011 in one 75,98% of million. Based on the mining products, and economic Globalization, leaving it on a during the first month of 2013, there was a regular economy fall of 32% in exports compared with 2012

80,00 and too in the 2012 was a conflict with 60,00 export enterprises because there was not

40,00 Economic enough money, and exports were reduced 20,00 Globalization to 2, 1%. During 2012, of the 7,801 0,00 exporting companies, a total of 2465

1999 2002 2005 2008 2011 stopped making exports due to the

As shown in the scale of economic freedom problems of poor infrastructure, excessive Peru has in economic globalization of logistics costs; in 2013 non-traditional agricultural exports fell. In this year the Peru is facing a crisis as companies are economy has grown thanks to the service breaking because they are not very process, construction and mining, for competitive to face the globalized world, is January to March financial, insurance and in the process of industrialization is slow pension services grew by 12.9%, followed and affects their production and trade; by construction with 5, 3%. Mining also Peru has a telecommunications system that grew 5.2%, driven by higher production covers most of the territory, , is noteworthy levels of copper, iron, and silver. that have airports that are rated for Social globalization connection with other countries, most for 2007 it was on a scale of 44.24%, what has Internet. to towards a social globalization very poor, for Peru in 2003 there were 74.4% of although in 2011 was at 42.35% of social energy throughout the country, providing globalization, is unable the comply the visibility at night to most population; expectations because decreases instead of education is managed by the Ministry of increase, this even prevents enter a string Education, but 87.73% of Peruvians three of social globalization high, because it or more years old literate keeps in a social globalization poor Have 54 companies in Mc Donald’s.

46,00 According to economic freedom scale, 44,00 Perú in terms of social globalization is a 42,00 40,00 Social non-globalized country because of its score 38,00 Globalization (42.35) 36,00 34,00

1999 2002 2005 2008 2011

Cultural diversity helps Perú because it Political globalization promotes the development of the country Although initially its economic with its ethnic, social, traditions, resources, globalization it was in a regular state, are regions, fauna, flora and landscape. All this can be seen that in the passing of the years means that Peru is in the eyes of the world is in a very good position, because in the and attracts the attention of many tourists, 2011 has a political globalization in business leaders and rulers to help 85.49% domestic economic growth. 100,00 80,00 60,00 40,00 Political Globalization 20,00 0,00 Although the country is growing one can 1999 2002 2005 2008 2011 show that in 1990 Peru was with a GDP According to economic freedom scale, (PPP) in $3000 a sum of goods and services Perú about the political globalization It produced by the country very low, to elapse is a country with a political very good the years has changed its GDP (PPP) and process in the globalization with a increased enough as evidenced in 2012 that punctuation of (5.49) it is located on a $ 11,000 approximately of Peru has invested in signed agreements to goods and services, but it is see that has not avoid double taxation with Brazil, Chile passed to the countries of Latin America and Canada, too have FTAs with China, and the Caribbean, in the area of GDP , Canada, USA and Chile. Is in (PPP) the process of negotiation with México, Global Competitiveness Index Japan and Korea. This country has 22 embassies in different countries of the world, and into country have 13 embassies of different countries; on February 17, 1995, was signed in Brazil '' Declaration of Itamaraty Peace '', where he proceeds to remove all military forces of each country, also the 1929 treaty called treaty of Lima where it ends the dispute over the territories between the provinces of Tacna and Arica

GLOBALIZATION COMPETITIVE

The index of competitiveness of Peru in the year 2014 scored ranking de 65 between 144 in a score of 4.2 from 1 to 7 which tells us that even this with an economy of low sustainability. Peru is with low infrastructure which weakens the process of one competitive economy, and as infrastructure is slow, the health and primary education are in processes low growth, because the infrastructure is an area that need the education and health systems for that give fruit, as the technology not is it competitive because is not growing within the country.

The most problematic factors for doing business

Peru in education has a very low improvement in quality; and technology has little growth, markets have increased, as labor has positioned, but has a deficiency in income sources, markets have increased, as labor has positioned, although, it has a recruitment process that not good. Peru is a country where corruption is shown in high percentages, but equally it is fighting corruption, although, not reflected no changes; And therefore the quality of education and internal processes should be restructured to make technology be owned by individuals and businesses and so it will be held for economic growth using the barriers be open to all those wishing to technology increase their economy, and will be a While in the area of innovation capacity not country of great powers that include the increase, these actions require time to ability to provide assistance to low-profile develop and bear fruit; although their companies. minerals have risen in price and have a REFERENCES benefit in this area, the country needs more :: INFORMACION BÁSICA DEL capital for growth and robustness of the PERÚ ::” system;. http://www.consuladoperubaires.org/sobre ANALYSIS lperu.html (November 25, 2014). Is necessary that Peru obtain a reform in the “Crecimiento de La Economía de Perú En system educational because it does not 2014 | Portafolio.co.” meet basic needs of the population, also http://www.portafolio.co/internacional/cre needs to be increased the level of cimiento-la-economia-peru-2014-0 competences of Peruvian economic. (November 25, 2014). The Competitiveness, economic freedom “Diversidad Cultural Perú.” and globalization hold hands to get http://diversidadculturalsocierdadperu.blo everyone have in common purpose, is gspot.com/ (November 25, 2014). necessary to project the education in a “Economía Del Perú - Wikipedia, La system that teach, and fill the head small of Enciclopedia Libre.” student to be big businessman, after taking http://es.wikipedia.org/wiki/Econom%C3 an hourly intensity in education, all %ADa_del_Per%C3%BA (November 25, dreamers, who have a launched project to 2014). be supported by the government, if these “El Perú Ya Alberga a Más de 550 projects are launched in the market Locales de Comida Rápida | Negocios | national, the competitiveness will be taken Economía | El Comercio Peru.” covering internal growth, then his can http://elcomercio.pe/economia/negocios/p launch international companies that have eru-ya-alberga-mas-550-locales-comida- raised big capital to project in competences rapida-noticia-1565099 (November 25, multinational, and when this process is 2014). achieved in Peru the economic freedom “Información Básica | Embajada Del Perú En Argentina.” http://embajadadelperu.int.ar/?page_id=54 7 (November 25, 2014). Silva, E. A. (2009d, March 19). Diversidad cultural Perú: Tema Central. Retrieved November 25, 2014, from http://diversidadculturalsocierdadperu.blo gspot.com/2009/03/tema- central_5648.html

URUGUAY Background

Is located in the southern of South America, between Argentina and Brazil and bordering with Atlantic Ocean, the capital is Montevideo and is the second smallest South American country after Suriname. Is divided in 19 departments. The official currency is Uruguayan peso and the official language is Spanish but in the frontier with Brazil the Portuguese is mixed with Spanish. Total Area: 176,215 sq km Population: 3.332.972 The climate is warm temperature and about GDP (ppp): $56.27 billion the terrain is fertile. Uruguay has a natural GDP - real growth rate: 3.5% resources such as arable land, hydropower, GDP per capita (ppp): $16,600 minor minerals and fish. Unemployment rate: 6.5% The agriculture, the livestock and the Public debt: 62.8% of GDP service sector that include transportation, GDP - composition, by sector of origin: communication and financial services are Agriculture: 7.5% important for this country. About Industry: 21.5% environmental Uruguay has a big problem Services: 71% with water pollution from meat packing Exports: $ 10.5 billion industry and waste disposal for the above Imports: $12.5 billion problems this country is part of an Education: 4.5% of GDP important international agreements in Military: 1.95% of GDP terms of environment such as Gini: 45.3 (2010) Environmental Protocol and Climate Population below poverty line: 18, 6% Change Kyoto Protocol. (CIA World Fact book, 2014)

The Uruguay´s independency was 25 Uruguay is member of the UNITED August of 1825. NATIONS, MERCOSUR, OEA, The president is Jose Mujica (since 1 UNASUR and other important March 2010). The president and vice- international organizations. president are elected by popular vote for This country is ranked first in Latin five years. America in democracy, lack of corruption and peace. Uruguay has a free market economy The education is free and mandatory. The characterized by an export- oriented to population have access to the free agricultural sector, a well-educated work education since the primary until the force and high levels of social spending. university. One of the most important The principal agricultural products that this achievements of education in the country is country has are rice, beef, fish and lumber the high rate of literacy (97, 7%) according and in other hand, the principal industries to the I.N.E. (National Institution of that the country has are , Stadistics in Uruguay) electrical machinery, transportation equipment, petroleum products, textiles About transnational issues Uruguay has a and chemicals. problem with the illicit drugs because has a weak border control along Brazilian The export commodities more important frontier, increasing consumption of cocaine are beef, soybeans, rice and wood. And the base and synthetic drugs. The situation in export-partners of this country are Brazil Trafficking in persons is other problem of (18, 6%), China (17, 9%), Argentina (6, this country, many womens and girls 2%) and (4, 3%). exploted in sex trafficking and foreign The import commodities are crude oil, works in domestic service and agriculture transportation vehicles, vehicle parts and are vulnerable to forced labor. (CIA, 2014) cellular phones. The principal import partners are China (16, 4%), Brazil (14, 9%), Argentina (14, 6%), USA (9, 1%) and Paraguay (7, 3%). ECONOMIC FREEDOM that not allow a more dynamic development.

Rule of Law

Uruguay is one of Latin America`s least corrupt countries. This country has a transparency law criminalizes and the judiciary is independent but still is backlogged. The situation in the private property is secure, the contracts are forced

and the expropriation is unlikely. The score in the Economic Freedom in

Uruguay is 69.3, making its economy in the Limited Government position 38 in the 2014 Index. It score is 0.4 lower than last year, with declines in fiscal The index related with the limited freedom, labor freedom, monetary freedom government is that the public expenditures and trade outweighing improvements in are equivalent to one-third of the domestic freedom from corruption, business freedom economy, the government debt is 54 and investment freedom. In comparison percent of GDP and the overall tax revenue with countries of South and Central constitutes 27.2 percent of the economy. America also with the Caribbean region

Uruguay is ranked in the 5 position. Regulatory Efficiency

Uruguay usually has been ranked near the The non-salary cost of employing a upper boundary of the moderately free working is low and the restrictions on work category because this country have hours are not flexible. The government shut government policies that promote the down the state-owned oil refinery in 2011 global trade and investment and the private but subsidies increased in the electricity sector contributes to economic growth, but company in 2012. the state interference in the financial sector

Open Markets larger share of income, for this reason Uruguay have minimum level of indigence The average tariff rate in Uruguay is 3.8 in comparison with other countries of the percent. The financial sector continues to region. Nowadays exist a low rate of evolve, but the government is involved unemployment and the employment is in a through ownership and allocation of credit. highest level. Capital markets are underdeveloped and concentrate on government debt. The growth of wages and pensions is significant for the country, Uruguayan The Index of Economic Freedom has been citizens earning minimum wage but can existed over 20 years and Uruguay has afford a decent life. advanced over 6 points and the improvements in some of the 10 economic Uruguay´s economy is the result of a highly freedoms include: Investment freedom, literate population, the decrease of poverty trade freedom, monetary freedom and and of a strong presence of the state, all freedom from corruption, this score has these strategies implemented in the improved by 20 points. (Freedom, 2014) mandate of Jose Mujica that was part of guerrilla. He also increased the purchasing power and the wealth had a better distribution. The country has recovered for its consolidated democracy, its organization and for its high standards of welfare.

INDEX OF GLOBALIZATION

The country is in the position number 51 in Uruguay is the country in the region with the ranking of the KOF with a index of better distribution of income in which the 66.04. “rich people” have a lower portion of the wealth generated in the county and in which the “poor people” have access to a Tree important aspects are necessary for public safety because exist a high level of measure the globalization: Economic, juvenile crime, complaint by sexual acts, Social and Political. delinquents and homicides.

Economic globalization in Uruguay is In political globalization Uruguay is in the ranked in the position 60 with an index of position number 49 with an index of 84.29. 65.46. Exist a regime in Uruguay and The Uruguay is distinguished by its exchange of economic freedom, which has political history. Its culture of negotiation more than 30 years of operation. and compromise, by attachment of the The inflow and outflow of foreign society to the ideas of political liberalism, exchange and people is absolutely free. by disregard and marginalization of the Uruguay was one of the first Latin Catholic Church and the Army in the American economies that evolved into a affairs of State. These and other factors trade international open and unrestricted. contributed to give the country peaceful and democratic coexistence frame and In the social globalization Uruguay is mark with strong strokes, their peculiarities ranked 85 with an index of 54.05. Social regionally. (KOF, 2014) Globalization is all the concerned with the quality of life, education, security, health, etc…in this aspects the country offers a GLOBAL COMPETITIVENESS high quality of life that is hard to find in other part of the world, this statement is affirmed by many foreigners who reside in Key Indicators, 2013 Uruguay, who often comment that they perceive a remarkable superiority in the quality of life enjoyed in this country, compared to other parts of the world. Also is the country with the highest literacy rate in Latin America (98%) with free and compulsory education but at the same time Global Competitiveness Index have serious problems with drugs and

Uruguay, in the latter period received a score of 4.05points score placed him in the 85th position in the ranking, eleven points behind in the previous year. Is important emphasize, although there is a noticeable drop in position evidence that

the major cause of the collapse was not the deteriorating conditions inside the country, was the improvement in the score received other countries on Uruguay. On another note, from the results of the report, was possible to analyze the profile of Uruguay according to a Unsupervised segmentation or segmentation clusters. The results of this study were very similar to those presented in the graph of the Forum, placing Uruguay in the media segment and identifying countries main pillars to pay The Most Problematic Factors For attention. Doing Business To continue on a path of growth in the long term will be essential to make special emphasis on the pillars of efficiency and innovation, since these are where Uruguay is currently laggard. (Forum, 2014) In economically free societies, ANALYSIS governments allow the capital, labor and goods to move freely. (Freedom, 2014) Analyzing these three aspects are clear that Countries with economies that foster exist many benefits of economic freedom, investment, labor and productivity are globalization and competitiveness. These among the most developed in the world. aspects help that a country advances in the world and have more opportunities to Is important emphasize in economic expand. globalization which involves the creation of a global market in which all tariff Economic freedom, globalization and barriers are removed to allow free competitiveness are associated. movement of capital: financial, The freest countries have higher per capita commercial and production. With an incomes, lower unemployment, lower economic globalization Uruguay will inflation, and greater poverty reduction, incursion in an international market more democratic institutions better and better integrated. environmental protection. Also is important emphasize in the social dimension. It concerns to the impact that According to the study of economic this process has on the live and work of freedom, countries that enjoy greater people, their families and societies. Also economic growth and poverty reduction are concerned to the impact of globalization on those who achieve consistently higher employment, working conditions, income scores on a scale from 0 to 100 in this case and social protection, security, culture and Uruguay is considerate in a moderately free identity, inclusion or exclusion and social in terms of economic freedom. In cohesion of families and communities. Of economically free society, individuals are the above aspects we can conclude that free to work, produce, consume, and invest Uruguay has a high standard of living, as they please, with that protected by the working and education compared to other state and not limited by the same freedom. countries of the region. Political globalization has united the world, making it one. Actually a country cannot live isolated from the international environment. It has built an interaction Bibliography between countries that are increasingly CIA. (2014, 11 24). Central Intelligency being strengthened more and more.. Agency. Retrieved 11 22, 2014, from www.cia.gov/library/publications/the- All the above aspects allow that a country world-factbook/ in this case Uruguay could have Forum, W. E. (2014, 11 22). The Global competitively in the world and a Competitiveness Report. Retrieved 11 22, competitive country generates wealth in 2014, from economic growth, providing a climate of www3.weforum.org/docs/WEF_GlobalCo favorable business, resulting in more and mpetitivenessReport_2014-15.pdf better jobs and a better standard of living Freedom, I. O. (2014, 11 22). Index of for population. Is important that the Economic Freedom. Retrieved 11 22, country invest more in innovation, 2014, from www.heritage.org/index/ infrastructure and the relationship between KOF. (2014, 11 22). Index Of wages and productivity. I cite these factors Globalization. Retrieved 11 22, 2014, because they are where Uruguay worse. from globalization.kof.ethz.ch/ This country have many patents registered, Observador, E. (2012, 07 03). El that is to say that innovation is not an Observador. Retrieved 11 20, 2014, from advantage in Uruguay. And the country www.elobservador.com.uy/noticia/227344 must improved in this aspect for be more /uruguay-registro-caida-de-innovacion- dynamic with the other countries in the tecnologica/ world. (Observador, 2012) Pais, E. (2012, 08 9). El Pais. Retrieved The strategy of President Jose Mujica 11 20, 2014, from focuses on four areas in which the progress historico.elpais.com.uy/120819/pnacio- of the country could be more competitive: 658603/nacional/mujica-a-medio-camino/ public education, safety, environment and energy. It appears that the Uruguayan people support that the political continue with the development in these aspects. (Pais, 2012)

VENEZUELA BACKGROUND Venezuela is widely known for its petroleum industry, the environmental diversity of its territory, and its natural features.

Hugo Chavez was president from 1999 to 2013, sought to implement a Socialism system, which purported to alleviate social ills while at the same time attacking

capitalist globalization and existing Total Area: 912,050 sq. km democratic institutions. His successor, Population: 28,868,486 President Nicolas Maduro, continues GDP (ppp): $13,600 Chavez's socialist programs. GDP - real growth rate: 1.6%

GDP per capita (ppp): $13,600 Social investment in Venezuela during the Unemployment rate: 7.9% Chavez administration reduced poverty Public debt: 34.2% of GDP from nearly 50 % in 1999 to about 27 % in GDP - composition, by sector of origin: 2011, increased school enrollment, Agriculture: 7.3% substantially decreased infant and child Industry: 21.8% mortality, and improved access to potable Services: 70.9% water and sanitation through social Exports: $91.78 billion investment. During these governments, a Imports: $59.32 billion lot of social programs where developed in Education: 6.9% of GDP some aspects such as: education, nutrition, Military: 1.05% of GDP healthcare, and sanitation thanks to Gini: 39 petroleum incomes (CIA, 2014). Population below poverty line: 31.6%

HDI: 0.76. World Rank: 93 As soon as Chavez came to power in 1999,

more than one million predominantly

middle- and upper-class Venezuelans emigrated, because of a repressive political system, lack of economic opportunities, steep inflation, a high crime rate, and corruption. Most of them emigrated to Canada, Colombia, and the United States (CIA, 2014).

Venezuela remains highly dependent on oil revenues, which represents 96% of export Economic freedom is a fundamental right earnings, about 45% of budget incomes, of every human to control his or her own and around 12% of GDP (CIA, 2014). labour and property. In terms of economy, a free society, individuals are free to work, Former President Hugo Chavez's efforts to produce, consume, and invest in any way increase the government's control of the they want. Moreover, in free societies, economy by nationalizing firms in the governments allow labour, capital and agribusiness, financial, construction, oil, goods to exchange freely, and renounce and steel sectors hurt the private from coercion or constraint of liberty investment environment, reduced beyond the extent necessary to protect and productive capacity, and slowed non- maintain liberty itself (TOVAR, 2012). petroleum exports. Economic restrictions in Venezuela have Yet most Venezuelans live in poverty, been generating bad results in trade many of them in shanty towns, some of freedom, rule of law, competitiveness and which sprawl over the hillsides around the entrepreneurship. This is reflected in the capital, Caracas (BBC, 2014). country score under the 2012 Index of Economic Freedom. In spite of going up a step and ranking 174 out of 179 economies, Venezuela is still in the worst conditions for growth and economic freedom. INDEX OF ECONOMIC FREEDOM

Venezuela’s economic freedom score is Venezuela’s average tariff rate is 8.6 36.3, which becomes its economy the percent. There are not tariff barriers restrict 175th freest in the 2014 Index. Venezuela imports of cars and agricultural products. is ranked 28th out of 29 countries in South Therefore, it could take a lot of time to and Central America and Caribbean region. import goods. Restrictive currency controls, expropriation of private property, Venezuela’s economic freedom has been and other government measures discourage decreasing 23.5 points, which means the foreign investment. Banks are controlling worst decline of any country. Some the financial sector, which has remained categories such as: property rights and the under state control. area of market openness have had Long-term finance is scarce. significant losses.

Rule of law Little by little Venezuelan political system starts turning into a black shade where there isn’t anyone who could change that situation. Corruption and inflation is going up and no one can do anything about it.

Government size Government expenses have reached 40% After the death of Hugo Chávez in 2013, of GDP; the public debt is increasing up to which led to elections where Nicolas 60% of growth domestic product. Maduro won and became his successor. At that time Venezuelans had been living Regulatory efficiency more than 14 years of socialism, therefore There is no a minimum capital to create political freedom there wasn’t. Food is business, but this process could have been running out of, inflation is rising, taking 27 procedures and 100 days. The corruption is spreading, and the capital, labour market remains under state control. Caracas, becomes as one of the most Open markets dangerous cities in the world. export a 20ft container to Venezuela, it will Economic freedom is very important for take 49 days and the cost per load is any country, because it’s an indicator that USD2.590, which represents 50% more measures quality life. Currently, it’s widely than any other product in Latin-America. known that Venezuela has the worst level Besides, for creating business in another of economic freedom according to the country it takes 141 days more than you Heritage Foundation, which doesn’t allow could spend on any other region. This is a to citizens to have good life conditions. sample which shows all the barriers are imposed for countries who want to trade Venezuelan crisis is the result of a radical with Venezuela. government change which was promoted by The ex-former president Hugo Chavez, GLOBALIZATION who wanted to get the support of citizens, fed up of the corruption of the last Globalization is well-known as the process governments whose led to Venezuela to a that decreases national boundaries and revaluated populist socialism, with a high integrates economies, cultures and corruption level too, but with an extra technologies in order to generate ingredient: “the popular help”, gave him an interdependence among them. important legitimacy to get a constitutional reform in order to keep running The average index covers the economic, Venezuelan political System during the last social and political dimensions of years of his life. Therefore, the remaining globalization. of those ideas which have this country into a very deep economic and social crisis that Venezuela has 51.63 in index no one had ever seen before. globalization, which has placed it in the 104th position. In economic globalization, Venezuela situation is every time more Venezuela is placed in 127th position with difficult as long as the time goes by, in a score of 43.38. Regarding to social economics and social aspects, which globalization, it is located in 100th spot with isolates this country from opened 49.01. In terms of political globalization, markets. For example, if someone wants to Venezuela has 66.94 points and is the 95th country in the list respect to other countries Foreign investment has been restricted in in the world. the petroleum sector. The exploration, production, refinement, transportation, Economic globalization storage, and foreign and domestic sale of hydrocarbons are reserved to the state. According to economic freedom scale, Venezuela, in terms of economic Social globalization globalization is a non-globalized country. On the other hand, social globalization has Venezuela keeps restrictions on three dimensions: personal contacts, professional services, audiovisual services, information flows, and cultural proximity. and telecommunications services. The sub-index on personal contacts Moreover, in any company with more than includes international telecom traffic, ten workers, foreign employees are degree of tourism, transfers, foreign restricted to 10% of the work force, and population, and number of international Venezuelan law limits foreign employee letters. The sub-index on information flows salaries to 20% of the payroll. includes number of internet users, share of households with a television set, and trade Between 2008-2010 Venezuela had been in newspapers. The sub-index on cultural nationalizing a lot of companies such as: proximity includes trade in books and banks, cement companies, gas stations and number of McDonald’s restaurants and a large amount of companies who are Ikea located in a country. involved in agricultural products. In addition, Venezuela was withdrawn from According to economic freedom scale, the in April 2006, Venezuela, in terms of social globalization because President Chavez did not agree is a non-globalized country because of its with the policy that countries who belong score (49.01). In the graph below the last 6 to this community kept in touch with USA years score are shown in this aspect ( The (Demetrios, 2013). Swiss Institute of Technology in Zurich, 2014). convention about certain conventional weapons that are indiscriminate or unnecessarily harmful. It is also belongs to the Ottawa Convention on anti-personnel mines, although not to the new convention on cluster bombs. Almost all the major human rights conventions have been acceded to, with the exception of the disability Political globalization rights and migrant workers' rights conventions. Venezuela is also a According to economic freedom scale, party to most of the protocols to the Venezuela, in terms of political human rights conventions. globalization is almost non-globalized Finally, regarding to international country (66.94 points). crimes, Venezuela is a party to the Venezuela has acceded to the most of Rome Statute of the international the international conventions criminal court, the convention on regarding to: armed conflict, human genocide, and the main counter- rights, weapons, counter-terrorism terrorism conventions. It’s important and international crimes. to take into account that has not Venezuela takes part into the Geneva acceded to the convention concerning Conventions, but it doesn’t belong to the removal of statutory limitations the convention on environmental on war crimes, or the slavery modification in armed conflict. In convention yet. (Geneva Academy of contrast, Venezuela belongs to the International Humanitarian Law and most of the conventions and protocols Human Rights, , 2014). regarding to means and methods of On the other hand, Venezuela has 96 warfare including those concerning to foreign ambassadors such as: the use of gas, chemical weapons, Argentinian, Armenian, Belgian etc. biological weapons, and the 1980 (sa, 2014). COMPETITIVENESS (Institutions, Infrastructure, The situation of Venezuela is getting Macroeconomic Stability, Health and worse, instead of getting better. Primary Education); Efficiency enhancers (Higher Education and Training, Goods Venezuela has been submerged in a Market Efficiency, Labour Market very deep macroeconomic crisis, with Efficiency, Financial Market high levels of inflation and Sophistication, Technological Readiness, corruption, public debt, and deficit Market Size), and Innovation and combined with a weak government sophistication factors (Business which does not allow distributing all Sophistication, Innovation). resources as should be. These pillars are shown in the following chart with its scores and ranking Therefore, all these problems delay respectively. processes required to achieve important assets such as: well educated population.

The next chart shows, Venezuela GDP growing between1990-2013. In 2013 had a peak reaching USD12.472.

As we can see, Venezuela has got 3.35 The Global Competitiveness index is points in 2014 in the Competitiveness composed by 12 pillars of competitiveness, Index published by the World Economic as are shown: Basic requirements Forum, which measures how a country uses Analysis its resources and how to provide well conditions to habitants. Venezuela has a lot of natural resources, which could become it as one of the most This score places Venezuela in 134th important south american economies, but position, therefore, this country has a the last governments have had a negative deficient world competitiveness level. impact on its economy.

Currently, Venezuela is deeply inmersed into a dark and dense layer of corruption The following chart summarizes the most which does not allow to increase its problematic factors seen by executives in incomes and make its economy far Venezuela’s economy for doing business. stronger.

According to the next chart, it’s important Competitiveness and economic freedom to take into account that foreign currency measure how strong a country is. regulations, restrictive labour regulations Productivity and competitiveness are quite and inflation are the most outstanding closed, because they both depend on each barriers that executives face at doing other. The more productivity a country has, business in Venezuela. the more competitive it will be. Every time is heard: prices are rising, and food is running out of and productivity is decreasing, so that, the low-class people suffer the consequences of this economic crisis.

In spite of this devastating problem, Venezuelan government instead of looking for a solution, it is focus on keeping an unfinished struggle against other countries

which could be one way to help it to get out important it could be for its economy, of this dramatic situation. because this natural resource is not being well-worked in a positive way for the Too many citizens start worrying about wellbeing of the population. their economic feature because, there is not any hopes for them, so that, emigration After the description in detail of the aspects becomes as one of the easiest ways to solve mentioned before such as: globalization, this economic problem. economic freedom and competitiveness, Venezuela is not well marked. Too many Moreover, Venezuelan high-social class is people think that these results are cause of facing a terrible situation because a bad direction since Former Chavez Venezuela’s government does not give arrived to power (CIA, 2014). them any support. Generally this social class provides These tree aspects have a special bond, employees, speeds up economies in any because they are interdependent, and show country. how stable a country is in economic, political and social terms. It’s widely known that trade balance in any country defines how strong an economy is. Venezuelan government should start However, Venezuelan government is not opening its markets with the world in order willing to give up and open its markets to to increase and improve its economy, as the world easily to become more long as, trade barriers are reduced in terms competitive and get out from this problem. of tariffs, quotas, and commodities. Although Venezuelan exports are far If this happens, abroad investment will be higher than imports, this country imposes coming, employment rates are increasing, some barriers in order to make more the population will be motivated to get a lot difficult the exchange of goods and of goods and services and different services among several countries. countries could be interested in exporting products to Venezuela. All of the above Venezuela has a competitive advantage on mentioned will improved and increase petrol, but this country has not realized how Venezuelan GDP (BBC, 2014). FOREIGN TRADE BARRIERS. On the other hand, education cannot be Recuperado el 30 de Octubre de isolated, because well-prepared people 2014, de could work together to fight against social http://www.ustr.gov/sites/default/fi poverty and social inequality and at the les/2013%20NTE.pdf same time to get better working conditions. Geneva Academy of International In conclusion, while Venezuela continues Humanitarian Law and Human with this type of government, citizens will Rights, Switzerland . (2014). Rule never get good life conditions. of Law in Armed Conflicts . Recuperado el 30 de Octubre de References 2014, de http://www.geneva- The Swiss Institute of Technology in academy.ch/RULAC/international Zurich. (2014). Globalization _treaties.php?id_state=231 effects. Recuperado el 30 de sa. (2014). Foreign Embassies and Octubre de 2014, de Consulates in Venezuela. http://www.theglobaleconomy.com Recuperado el 2014, de /Venezuela/kof_soc_glob/ http://embassy.goabroad.com/emb BBC. (24 de Septiembre de 2014). BBC assies-in/venezuela NEWS LATIN AMERICA AND TOVAR. (05 de Mayo de 2012). EL CARIBBEAN . Recuperado el 05 de UNIVERSAL. Recuperado el 15 de Octubre de 2014, de Octubre de 2014, de http://www.bbc.com/news/world- http://www.eluniversal.com/econo latin-america-19649648 mia/120505/venezuela-ranks-174- CIA. (2014). THE WORLD FACTBOOK in-the-index-of-economic-freedom CIA. Recuperado el 05 de Octubre de 2014, de https://www.cia.gov/library/public ations/the-world- factbook/geos/ve.html Demetrios, M. (2013). 2013 National Trade Estimate Report on