The Chilean economy is the best positioned in the world to take advantage of a changing global economy, according to the recently-published Change Readiness Index of a major international auditing firm.
Using economic, governance and social measures to gauge 60 of the world’s emerging market economies, the report by Netherlands-based KPMG – considered one of the “Big Four” global auditors – turned up some surprising results.
It found that despite the hype around the BRIC countries of Brazil, Russia, India and China, smaller countries – with Chile foremost among them – are the “best geared” to grasp the opportunities that will arise from a rapidly changing global economy.
“In the current uncertain economic conditions, countries, businesses and institutions around the world are undergoing unprecedented change with new challenges and opportunities every day,” the report says. “Some countries, however, are better able to manage and mitigate the risks associated with change and capitalize on new opportunities.”
In placing Chile at the head of its index, the report considered indicators such as economic diversification, corruption, entrepreneurship, the relationship between business and government, the health of civil society and the investment climate.
“Chile has made considerable efforts in recent decades to diversify their export structure with noticeable impacts on economic growth,” the report says. “Chile’s competitive position is also supported by high levels of domestic and foreign competition and by an efficient financial market.”
The Change Readiness Index idea emerged from the 2011 World Economic Forum in Davos, as business and policy leaders sought a way to help clarify investment opportunities in times of economic uncertainty and promote effective policy models.
“Understanding a country’s capacity to handle new and unexpected developments is critical to advancing effective policy,” Dr. Alison Evans, director of the Overseas Development Institute (ODI), which worked with KPMG to produce the report, told The Guardian.
And as supporting evidence emerges in coming years, concrete action should develop from the report’s findings.
“The results of the index are surprising and, when verified, are expected to provide important new insight for policy development and donor action aimed at strengthening government and national capability,” said Timothy A. A. Stiles, KPMG’s Global Head of International Development Assistance Services.