BY CHRONICLE STAFF

Panama has replaced Chile as the Latin American country with the best business climate,
according to the fifth annual Latin Business Index from Latin Business Chronicle.

The index of 19 countries is the broadest measure of business climate in Latin America. Rather
than looking at the size of a country’s GDP or GDP per capita, it looks at five key categories and
27 subcategories to measure the recent, current and future business environment in a country.
They are:

• Macro Environment (GDP growth 2008 and 2009, estimated growth this year and forecasted growth next year, inflation 2008 and 2009, estimated inflation this year andforecasted inflation next year).

• Corporate Environment (corporate tax rates, access to capital for entrepreneurs, ease ofdoing business (including starting and closing a business) and economic freedom).

• Globalization & Competitiveness (globalization, competitiveness, tariffs, education/ healthand security for companies and business executives).

• Technology Level (PC, Internet, broadband, wireless and fixed telephony penetration).

• Political Environment (political freedom, political stability, political outlook, business policies of government and corruption).

Brazil, Latin America's largest economy, ends up in seventh place, an improvement from ninthplace
in 2009 thanks to increasing its score by 0.49 points to 14.301.

PANAMA: TOP STAR
Panama improved its score by 0.60 points to 17.628. It joined the group of top five countries in
corporate environment (replacing El Salvador as the fifth-best nation) and technology level
(replacing Peru as fourth-best).

In the category globalization and competitiveness, Panama replaced Costa Rica as the top
country (from being second-best a year ago).

Meanwhile, it kept its ranking as the second-best country in macro environment and as the fourthbest
country in political environment.

Panama is now the only country that is among the top five in all our five main categories. By
comparison, Chile is in four, Uruguay in three, while Peru, Costa Rica and the Dominican
Republic are in two each.

The $5.2 billion expansion of the Panama Canal, along with a fast-growing shipping sector, is
already earning it the title of the Singapore of the Americas. Multinationals like Procter & Gamble,
Dell and DHL all have regional hubs or headquarters in Panama. Panama can also boast being
host of the world’s top shipping registry, the world’s second-largest free zone (after Hong Kong),
and the largest international banking center in Latin America.

Still, Panama wants more people to know about its attractiveness. "Panama is a jewel waiting to
be discovered," President Ricardo Martinelli recently told a conference in Panama organized by
Citigroup and Panama's Commerce Ministry.

To be sure, Panama is not perfect. Corruption is still a problem (with Panama ranking as the10th
most transparent country in Latin America on Transparency International’s latest Corruption
Perceptions Index). However, slowly, but surely Panama has become Latin America's
business star, as this year’s top spot shows.

© Copyright Latin Business Chronicle

This is an excerpt from the original report. To see the full report, please visit latinbusinesschronicle.com