Wanna Do Business in Latin America?

The World Bank recently put out rankings of nations who have made pro-business reforms. The results from a Latin American standpoint were surprising. Overall, seven countries jumped in the rankings and twelve fell. Mexico, Peru and Guatemala were among the top ten, with Mexico coming in third. On the ass-end of the scale, Venezuela took a hard dive, and now is 164th out of 175 countries.

What does this mean? Well, from a logical standpoint, developing countries should try and encourage the formation of new businesses. Entrepreneurship is a fantastic way to decrease poverty and create jobs. Governments should encourage this phenomenon by limiting the number of steps it takes to actually get a business up and running. Less permits, less time waiting in lines, less ministries to visit...all leads to lower start-up costs. Here are the criteria set forth by the World Bank as the "key steps" to successful reform:

1. Start simple and consider administrative reforms that don’t need legislative changes.
2. Cut unnecessary procedures, reducing the number of bureaucrats entrepreneurs interact with.
3. Introduce standard application forms and publish as much regulatory information as possible.
4. Improving how regulations are administered by using the Internet.

By these standards, El Salvador was one of the few countries worldwide to successfully implement all four steps. Venezuela has actually regressed, due to a repressive business climate imposed by the Chavez regime and an utter lack of transparency. By blurring the lines between public and private sector, Chavez has chased off both domestic and foreign business opportunities. This is completely ridiculous, given the insane oil revenues that Venezuela generates at the moment. The scary part is that (despite "official" government proclamations) poverty and crime in Venezuela are getting much worse. Imagine what will happen if and when oil revenues drop back down to reasonable levels. This country will face an unseen social disaster that it is ill-equipped to handle. For the good of all its citizens, just hope that some miracle allows for free and fair elections in December, and that Chavez is booted out on his ass...