As Latin America begins to adapt to new geopolitical trends, its competitiveness levels have become a core measure of its long-term economic health. The latest publication of the ADEN Institute of Competitiveness provides a valuable overview of regional dynamics and trends. The 2025 Latin American Competitiveness ranking report is based on 125 indicators from ten pillars that include aspects such as infrastructure, access to quality healthcare, education, digital services, and others. In this blog post, we will explore some of the key findings from the report.
Latin America’s Most Competitive Countries in 2025
In 2025, Chile, Uruguay, and Costa Rica took the top spots in the Latin American Competitiveness Ranking report, indicating their superior performance in various factors that affect economic health. Following closely are Panama and Mexico, and trailing somewhat behind are Brazil, Argentina, Peru, Colombia, and the Dominican Republic.
According to the Latin American Competitiveness Ranking Report, Chile is now the most competitive Latin American country, having maintained its leading position due to its consistent investments in public services, notably in education and health. It also continues to outperform the region in institutional capacity and infrastructure. Chile’s competitiveness is complemented by a stable macroeconomic environment and government policies that attract both domestic and foreign investments.
Uruguay, which comes in second in the 2025 Latin American Competitiveness Ranking Report, has been praised for its effective governance and social stability. It is also one of the best in the region at addressing the population’s basic needs. Furthermore, Uruguay is recognized for its transparency and rule of law. Costa Rica is the third most competitive country in Latin America in 2025. The Central American nation has focused on sustainability and education, which has resulted in significant strides in these areas. Costa Rica has also become a hub for knowledge-intensive economic activities, such as medical technology and digital services.
Mexico and Panama also perform well in the Latin American Competitiveness Ranking Report, mainly due to their higher scores in individual categories, such as macroeconomic environment in the case of Mexico. However, it is important to note that Mexico has dropped in the overall ranking, coming closer to Brazil than in previous years.
Costa Rica, Panama, and Uruguay provide evidence that smaller, more focused economies can also achieve the same outcomes.
Performances in the Middle of the Ranking
The countries positioned in the middle of the 2025 Latin American Competitiveness Ranking Report, from sixth to tenth place, are Peru, Argentina, Brazil, Colombia, and the Dominican Republic. These countries have shown improvements in some areas, such as infrastructure and education, but they still lag behind in innovation and institutional capacity.
Peru, for instance, has always had a strong ranking in the labor market efficiency pillar, where it has been number one in the region since 2014. However, this has not translated into overall competitiveness, as it remains in the middle of the ranking due to issues with governance, technology, and digital infrastructure, as well as the need for institutional reform. Argentina and Brazil show a similar pattern of performance, with large and diverse economies with significant potential but held back by political volatility, bureaucracy, and inconsistent policy directions.
Countries Improving and Falling Backward in the Latin American Competitiveness Ranking
The 2025 Latin American Competitiveness Ranking Report also examines the changes in competitiveness levels among the countries in the region between 2012 and 2025. While some nations have improved their rankings, others have either stagnated or even fallen behind.
Notably, five countries have demonstrated significant progress and increased their positions in the competitiveness ranking. These are the Dominican Republic, Paraguay, Uruguay, Costa Rica, and Bolivia. One interesting observation is that the countries that have made the most significant improvements are not necessarily the largest or the wealthiest. Instead, these nations have excelled in improving their scores by tackling the fundamentals: infrastructure and investment, basic services, macroeconomic stability, and institutions.
Bolivia’s upward movement is particularly remarkable because it was among the lowest-ranking countries in 2012 and 2019 but has since moved away from the bottom tier through a focus on economic fundamentals and expanding basic services. On the other hand, the Dominican Republic’s rise is attributed to its strong tourism sector and reforms that have made it an attractive destination for investment.
In contrast, Venezuela has been one of the countries that has fallen farthest in the ranking, due to institutional fragility, economic instability, and lack of access to public goods, among other factors. The country’s trajectory stands out because it was once much closer to the regional average than it is now.
In addition to Venezuela, other countries that were relatively strong in 2012 and 2019, such as Mexico, Brazil, Colombia, and Ecuador, have also regressed toward the regional average, which indicates that the gains are not permanent and can be reversed without continuous effort and adaptation.
Disparities in Tech, Innovation, and Institutional Performance
The report highlights growing disparities between the more competitive countries and those that have fallen behind in various areas, even if the differences between nations were fairly similar in education and labor efficiency. However, there are significant gaps in other categories, such as digital access, institutional quality, and market openness.
Chile, Uruguay, and Panama, in particular, have continued to be the top performers in these areas, setting the standard for other countries in the region to strive for. By contrast, there are a larger number of countries falling behind, widening the gap between the high performers and everyone else.
The digital divide, in particular, is now one of the most important gaps, as the 2025 Latin American Competitiveness Ranking Report shows that access to technology and digital readiness are essential factors that underpin the competitive performance of the more dynamic nations.
The Role of Human Capital
One of the main lessons of the report is that human capital has become a more crucial factor in competitiveness than ever before. As production processes become more complex, value chains more geographically spread, and innovation more pervasive, countries need to have an educated, skilled, and tech-savvy workforce to take advantage of these new opportunities.
The emergence of Costa Rica as a regional hub for technology and service industries in Latin America is a prime example of how human capital can drive competitiveness. Costa Rica has long invested in its education and public healthcare systems, which have paid dividends in the form of a talented and capable workforce that has attracted investment. Similarly, Uruguay is pursuing a similar strategy, with a focus on digital government and innovation.
These examples also suggest that the definition of development in the region is changing. No country can compete solely on the basis of natural resources or cheap labor. The real competition is now for talent, ingenuity, and agility.
Policy Recommendations for Improving Competitiveness
The competitiveness ranking is not only a way to evaluate countries but also a guide to help policymakers identify areas where they can make improvements. Based on the report’s findings, policymakers in the region should focus on several key areas to improve their countries’ competitiveness.
The most important of these are strengthening institutions, expanding access to technology, investing in infrastructure, and developing a skilled workforce. In addition, countries also need to tackle the inequalities that can undermine long-term competitiveness, such as by expanding access to quality education, bridging the urban-rural technology gap, and improving bureaucratic efficiency.
Regional cooperation and integration are also essential for the future, with countries needing to coordinate more on regulatory standards, market access, and even best practices in public policy.
The Way Forward
The 2025 ADEN Latin America Competitiveness Report provides an invaluable overview of the current state of Latin American competitiveness and the factors that drive it. As the region’s economies continue to develop, the definition of competitiveness and development will continue to change, and countries will have to adapt to succeed.
For those that do, there are many opportunities to be seized.