TORONTO, 16 August — In a survey released Tuesday by the Economist Intelligence Unit, business environments in the world’s 60 largest countries were ranked based on such factors as policies toward foreign investment, trade laws and availability of skilled labor.
The EIU has developed a global business rankings model that considers 70 factors that affect the opportunities for, and hindrances to, the conduct of business in each country. The Netherlands is expected to be the best place in the world to conduct business over the next five years, the United States dropping to second and Britain was ranked third.
Canada’s ranking rose to fourth spot from the fifth that it placed for the period between 1996 and 2000. “The Netherlands scores particularly highly for its political environment, its policy toward foreign investment, its liberal foreign trade and exchange regime, and the availability of finance,” the report said.
The US downgrades to the Economic Intelligence Unit’s macroeconomic forecast have led to its falling back.
Rounding up the top ten countries are Switzerland, Ireland, Finland, Singapore, Sweden and Hong Kong.
Hong Kong, which was ranked the third best place to do business between 1996 and 2000, is expected to drop to 10th place in the period between 2001 and 2005 in large part because of regulatory and political changes, the report says.
Most EU countries move up the league table in 2001-2005, improving their position relative to other countries.
This reflects improved macroeconomic stability and a broad move toward deregulation, according to the report.
All regions are expected to improve their absolute operating environment over the next five years including countries in the Middle East and Africa, although their relative attractiveness will remain unchanged.
The Middle East and Africa as a region is ranked last after North America, Western Europe, Asia and Australia, Latin America, and Eastern Europe.
Although Saudi Arabia’s ranking dropped slightly from 40 to 42, its overall qualitative assessment as a country to do business in has improved to “moderate” in the years 2001 to 2005.
The biggest improvement will be seen in Eastern Europe but this is seen in part due to its weak starting point, the report said. North America sees the smallest improvement and that simply reflects the difficulty of further enhancing an already excellent business environment.
Overall, the Economist Intelligence Unit expects the global business environment to improve over the next five years. “While our forecasts are for weak global growth in 2001 and 2002, the economic outlook for the next five years as a whole is reasonably bright,” the report said.
Economic uncertainties and turbulences in some countries are not likely to have lasting damage on business operating conditions, according to the report.
Deregulation, liberalization and globalization are expected to continue in most countries and will continue to benefit business environments.
Recent protests at international meetings, including the G-7 summit in Genoa, Italy, are not expected to reverse this process, but they may slow the pace of globalization, the report concedes.
