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A new survey shows how Latin America ranks worldwide in terms of globalization. February 4, 2002 Panama is the most globalized country in Latin America, while Peru is the least, according to the latest Globalization Index compiled by A.T. Kearney and Foreign Policy magazine. And Argentina, whose government is weighing its relations with the outside world (especially the IMF and private investors), is the third-most globalized country in Latin America, the survey shows. The release of the new survey coincides with the latest "global" meeting of opponents of globalization, which opened in Brazil - one of the least globalized countries in the world, according to the index.  The World Social Forum, which took place in the city of Pôrto Alegre, included several workshops and meetings focusing on the negative results of globalization and is meant to be an alternative to the annual World Economic Forum.  The 2002 Globalization Index looks at thirteen different factors which indicate a country's level of relations with other countries. The factors are international trade, foreign direct investment,

Use these valuable links relative to this Special Report from Latin Business Chronicle and other investment news in and about Latin America. .. Additional Resources Latin Business Chronical  Globalization's Last Hurrah?  To Dollarize or Not  Panama Country Brief  Offshore Investments  2nd Passports  Tax Havens  Living in Panama  World Stock Markets  Contact Latin Business Chronical  .

The grade was largely due to the extensive trade at the Colon Free Trade Zone, which long has been the world's second-largest after Hong Kong and almost exclusively trades with the outside world rather than with Panama itself. 

"Panama's percentage of total trade as a share of its GDP was 165 percent in 2000, which certainly qualifies it for the top 10 slot," says Valerie Norville, managing editor of Foreign Policy. 

Panama also ranked third on the Top 10 list of Income Payments and Receipts - a category that reflects gains on financial assets held abroad and payments made to temporary workers, for example by multinationals. In this category Panama ranked ahead of countries like the UK, Singapore and Sweden. 

In addition to the Colon Free Zone, other factors behind Panama's high level of globalization include the
canal linking the Atlantic and Pacific Oceans, the world's largest shipping registry (in number of ships),
Latin America's largest international banking center (in number of banks) and a major offshore company
register. 

The second-most globalized country in Latin America is Chile, which ranked 34 globally - ahead of countries like Saudi Arabia, Japan and Russia.

Argentina's global rank of 44 put it ahead of countries like Egypt, Morocco and India, while Mexico's rank of 50 was ahead of Thailand, the Philippines, China, South Africa and EU-member Turkey. 

However, the latter five countries all ranked ahead of Venezuela, Brazil, Colombia and Peru. The four Latin American nations all rank towards the survey, just one rank ahead of the last-ranked Iran. 

While Panama's achievement was impressive, the survey shows that it and the other Latin American countries all rank behind 13 of the 15 members of the European Union, Eastern European countries like the Czech Republic, Slovakia, Hungary, Croatia and Poland, and - of course - global powerhouses
like the United States, Canada, Switzerland and Singapore. 

Yet, Panama's rank partly mirrors the global list. Whereas Panama's economy is much smaller than the other seven Latin American countries it outranks, the global list is headed by countries like Ireland, Switzerland and Singapore - not the giant economies of the United States (ranked 12), Germany (14) and Japan (38). 

The recent declines in foreign direct and portfolio investment in Argentina will likely impact the country's ranking in the next index, says Norville. 

"That's very likely. We've already seen an indication of that trend," she says. 

Between the 2001 and 2002 indexes, foreign direct investment's share of Argentina's GDP fell from 9 percent in 1999 to about 4 percent in 2000, while portfolio investment fell from 2.25 percent of GDP in 1999 to less than one percent in 2000, according to Norville. 

"Certainly, if those numbers continue to decline that will be reflected in the ranking," she says. 

However, other factors may help offset those declines, she warns. Those factors include increased exports and tourism arrivals as a result of a weaker currency. 
 
 

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