A Comparative Analysis of the Competitiveness of Central American Countries Based on the Global Competitiveness Index before the COVID-19 Pandemic

Abstract

A country’s global competitiveness is a fundamental element that facilitates the understanding of why some countries generate more wealth than others, as well as better sources of income in a sustainable manner. With globalization and market integration, governments are reviewing the current values of economic, business, social, and environmental variables that define multidimensional competitiveness indices. Central American countries face difficult economic situations with challenging political and social ramifications. This study presents a comparative analysis of the competitiveness of Central American countries in a globalized environment before the COVID-19 pandemic. For this purpose, multivariate statistical analysis and Cluster analysis have been applied to data from the World Economic Forum (WEF) Global Competitiveness Index 2018, contrasting it with the publication of the same index for 2019. This methodology allows to rank countries with similar levels of competitiveness and shows the relative position of each country about countries belonging to the same group and countries belonging to other groups with different levels of competitiveness. The results show differences in competitiveness at the country level in 12 variables or composite indicators of the Global Competitiveness Index, the most important being Macroeconomic Stability, IT Adoption, and Infrastructure, with the most significant differences between countries. This result contributes to the current policy discussion on measures to achieve sustainable competitiveness of Central American economies.