Wednesday, March 20, 2013

U.S. Falls to 22nd in List of Top Countries for ... - Yahoo! Finance

As the March Madness college basketball tournament approaches, we're sure to see scores of those giant, foam "we're #1" fingers waving around in the weeks to come. As much as hoop fans will boast about the most modest accomplishments, the good old USA will be doing none of it, having just found itself outclassed by nearly two dozen countries in a competition designed to single out the best places in the world invest.

According to new research released today from the Milken Institute, when it comes to attracting new money, the world's largest economy came in 22nd place on the list of 98 countries ranked by their Global Opportunity Index.

"The most important reason why the U.S. has dropped is the build up of public debt at the Federal level and at the state level," says Ross DeVol, chief research officer at the Milken Institute, in the attached video. "We're beginning to look a lot like Europe."

Add in ongoing economic problems as well as what DeVol refers to as "opaqueness or lack of transparency" in how we regulate our financial markets, pointing to Dodd-Frank and laws that are continuously being written and revised. "That leaves a lot of ambiguity as to what the rules will be."

On the positive side of things, Milken conducted the analysis to drive sensible investment and development but also to foster conversation and reflection as to how countries can reduce barriers that disrupt the flow of capital across borders. To do so, Milken studied five criteria including; economic fundamentals, regulatory barriers, the ease and cost of doing business, the burden of regulation and corruption, and finally the rule of law and the protection of property and investor rights.

Here are the top five countries:

5. The United Kingdom

"Extreme transparency," as well as consistency in the way the rule of law is handled, DeVol says, are among the reasons why people want to do business with the Brits. "There is no worry that contracts will be enforced."

4. Canada

This resource-rich nation may be cold climatically but it is red-hot when it comes to attracting investment from beyond its borders.

3. Denmark

The Danes top a strong showing from all the Scandinavian countries. While not the cheapest place to live and operate, a highly educated and skilled labor pool continue to help attract bucks from abroad.

2. Singapore

The financial hub of south Asia continues to be a center for global business and serves as an easy and predictable gateway to China and the region. DeVol says high levels of human capital also put Singapore near the top.

1. Hong Kong

While still a place "in transition" DeVol says the former British territory is using its toes to mainland China more than ever, as are the Chinese who rely on Hong Kong "as a conduit to make its currency more internationally convertible."

It is worth noting that on its website, Milken allows users to re-weight the sorting criteria to suit their own priorities.

Source: http://finance.yahoo.com/blogs/breakout/u-falls-22nd-list-best-countries-foreign-investment-122409731.html

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