According to the World Bank's Doing Business ranking published by the CNN network

Top 5 worst countries to do business in Latin America

photo_camera AFP/PRESIDENCIA DE VENEZUELA/MARCELO - The President of Venezuela, Nicolás Maduro

The World Bank, through its Doing Business ranking, has classified the 12 Latin American countries according to 12 areas of the life cycle of companies. The objective is to determine which countries are the most suitable for investment and, on the other hand, to identify those that do not have the best conditions for investment. The openness of the company, the handling of construction permits, the payment of taxes, the obtaining of electricity, the registration of properties, the obtaining of credit, the protection of minority investors or cross-border trade, are some of the most important points evaluated by the ranking prepared by the World Bank.

Labour market regulation and government contracting are also some of the aspects taken into account when ranking countries. The list was headed by Venezuela, whose economy has been burdened for decades by the Chavista regime. The inflation of its currency - the bolivar - is one of the most important aspects. Its depreciation is so high that, right now, one euro is equivalent to more than 3,800,000 bolivars. It is also important to remember that some time ago the leader and the person most responsible for Venezuela's disastrous economic situation, Nicolás Maduro, decided to remove five zeros from the currency three years ago.

presidente-alberto-fernandez

The countries that complete the list as the five worst countries in Latin America to invest in are Haiti, Bolivia, Nicaragua and Honduras. However, there are countries that, despite being outside the top five, lead the list in some of the areas evaluated, as is the case of Argentina. The country presided over by Alberto Fernández tops the ranking of countries with the highest tax burden on the formal sector of the economy, not only in the entire region, but also in the world. This factor is one of the most negative, as it is one of the key factors in the decision to invest in one country or another.

In relation to this area, Matías Olivero Vila, partner in the tax department of Bruchou, an Argentine law firm, and Fernando Guntern, president of Copal's Tax Policy department, analysed the publication and highlighted that "in addition to the 35% increase in corporate income tax, which is going backwards with the reduction adopted by Mauricio Macri during his administration, which not only leads to a decrease in private investment, but also makes higher inflation possible".

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In general terms, Argentina's position is far from good. Of the 190 countries analysed by the World Bank's Doing Business ranking, Argentina ranks 170th in terms of its tax system. Guntern, taking as a reference the study prepared by the Argentine Institute of Fiscal Analysis (IARAF), has explained the serious consequences that the pandemic and all the crises derived from it have had for the change that was taking place in his country: "There was a downward trend between 2016 and 2018, but in 2019 with the crisis, the change of management and the pandemic, the changes were fried or reversed".

The data published by the World Bank comes as no surprise to anyone, although it is true that Argentina did not expect to find itself leading in some of the worst areas analysed. It is also true that the work of change on which they had been working for some time just before the COVID-19 pandemic has been severely affected and their recovery is still far from reaching pre-pandemic levels.

Latin America Coordinator: José Antonio Sierra
 

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