Brazil, the Least Globalized Economy in Latin America According to
Results of the Latin Business Chronicle 8th Annual Latin
Globalization Index
MIAMI, Nov. 20, 2012 /PRNewswire/ -- For the second
consecutive year, Brazil continues
to be the least globalized country in Latin America, according to the eighth annual
Latin Globalization Index from Latin Business Chronicle.
The index of 18 countries looks at six factors that measure a
country's link with the outside world:
- Exports of goods and services as a percent of GDP.
- Imports of goods and services as a percent of GDP.
- Foreign direct investment as a percent of GDP.
- Tourism receipts as a percent of GDP.
- Remittances as a percent of GDP.
- Internet penetration.
The index uses data from the most recent full year, which in
this case is 2011.
LOWEST TRADE LEVELS
Latin Globalization Index 2012 offers a fresh look at Latin
reliance on international economics. Despite its size Brazil, the sixth largest economy in the
world, has the lowest percent of foreign trade as a percent of GDP
in the region.
Its exports of goods and services in 2011 were the equivalent of
11.9 percent of its GDP. Meanwhile, imports accounted for only 12.6
percent. Both figures are increased from 2010. This disconnect from
world trade flow shows that Brazilian growth has been fueled by
domestic consumption and investment. It also shows the gains in
which increased foreign trade might bring to this South American
country, were it to increase its international commercial
activity.
All in all, Brazil's
globalization score was 7.25 points, which reflects the still-high
protectionist restrictions which are widely criticized by foreign
investors. "Brazil's poor
infrastructure and complex tax system are two of the main reasons
for the closed economy", said Walter
Molano, head of Economic Research at BCP Securities.
In the same group of relatively closed economies are
Venezuela with a 7.82 score and
Colombia with 8.17.
Colombia, like Brazil, based its 2011 growth on domestic
consumption and investment. The country posted low import and
export to GDP ratios, which were compensated to a degree by a
larger proportion of FDI. Foreign investments were 4.04 of GDP, and
were concentrated in mines and oil & gas. Tourism was also low
in the country – 0.67 of GDP, the third lowest in the region.
GLOBALIZATION CHAMPIONS
As a whole, Latin America
became more globalized in 2011. Two countries which improved their
score the most were Nicaragua and
Chile.
Nicaragua is second to
Panama as most globalized country
in Latin America. In 2011 it
maintained a high volume of exports and imports as a percentage of
GDP - 45.9 and 78.1 percent respectively. It also reported the
largest FDI to GDP ratio in the region – 13.3 percent of GDP.
Chile climbed two positions to
number four in this ranking thanks to its strong international
trade position in exports and imports relative to the size of the
economy, but also thanks to an important increase in FDI and
internet penetration.
MEXICO
Mexico, the second-largest
economy in the region ranks 12 in the LBC Latin Globalization
Index. In 2011 it gained 0.74 points to score a final 10.40, just
above Peru and Argentina with 9.51 and 9.21 respectively.
Mexico has this intermediate
position due primarily to lower levels of FDI, remittances and
internet penetration than its peers when the size of the economy is
taken into account.
Latin Business Chronicle is an online news and information
service, the one-stop source for market intelligence on
Latin America's business and
technology. Latin Business Chronicle, a division of the Latin
Trade Group, offers key market intelligence beyond the daily
headlines, through extensive rankings, indexes and statistics.
Latin Trade Group is a leading provider of information and
business services to companies operating in Latin America. It
publishes award-winning content in Spanish and English for
distribution throughout Latin
America, the Caribbean and
the United States through print,
online media and events. Latin Trade group publishes Latin
Trade Magazine and Latin Business Chronicle, and is the organizer
of the Latin Trade Symposium and BRAVO Business Awards, the LT CFO
Series for financial executives of multinational corporations and
Trade Americas.
/Contact: Santiago Gutierrez,
executive editor, Latin Trade, 305-755-4713 or
sgutierrez@latintrade.com/
SOURCE Latin Trade Group