| Private investment in Latin America and the Caribbean (LAC) averaged 16.5 percent of GDP in the five-year period 1998-2002. Foreign direct investment averaged 3.8 percent of GDP during the same period. The informal economy represents 67 percent of GNP in Bolivia, 60 percent in Peru and 40 percent in Brazil. Selected investment climate indicators An annex to the World Development Report 2005 contains indicators from the World Bank’s Investment Climate Surveys and the Doing Business Database, with explanations of how the indicators were constructed. Findings for the region include:
Investment Climate Surveys
Doing Business Database Investment Climate Surveys - The Investment Climate Surveys in Bolivia (2001), Brazil (2003), Ecuador (2003), Guatemala (2003), Honduras (2003), Nicaragua (2003) and Peru (2002), cover 4700 registered firms. In addition, 450 micro and informal firms were interviewed in Brazil and 250 in Guatemala in 2004.
- Policy uncertainty ranks as the number one concern. Five of the eight countries with the largest proportion of firms ranking policy uncertainty as a major or severe constraint are in LAC. Seventy-six percent of firms in Brazil report policy uncertainty is a major or severe constraint.
- Corruption is the second most severe constraint in the region. More than half of firms report that bribes are paid to “get things done.” Bribes paid equal 6-7 percent of sales in Guatemala, Honduras and Nicaragua.
- Macroeconomic instability is the third most-reported constraint.
- The interpretation of regulations is unpredictable. All the Latin American countries surveyed fell in the top third of countries reporting that this is a problem. In Guatemala, almost 90 percent of firms report that regulations are not interpreted consistently, 79 percent in Peru and 66 percent in Brazil.
- Days to clear customs is a bottleneck in many countries. All the Latin American countries surveyed were in the bottom half of the distribution in terms of the days needed to clear imports through customs. In Honduras it takes about 5 days to clear customs, while in Ecuador it takes 16 days.
- Crime is reported as a major or severe constraint by half of firms, twice the proportion of any other region and four times the proportion in Eastern Europe and Central Asia. The costs of crime range from just under three percent of sales in Brazil to 10 percent of sales in Peru.
- Losses from electricity outages average 3.7 percent of sales in Guatemala and Brazil to seven percent in Nicaragua.
Doing Business Database - Registering a business takes 203 days to register a business in Haiti. The region’s average of 74 days to register a business is almost 50 percent higher than the world average of 51 days.
- Enforcing a contract takes 275 days in El Salvador, but 1459 days in Guatemala.
|
RSS