Measuring business climate for agriculture and forest investments in Angola and Brazil

Resumen

For investments in agriculture to be attractive, they need to be profitable. This profitability depends not only on the intrinsic nature of the investment project and the capabilities of the promoter, but also on the conditions offered by the business climate in the country, sector, and local factors that influence the costs and benefits of investments. This article presents a model to measure the business climate for agriculture investments and uses the examples of Brazil and Angola to illustrate its use. Although both countries have major opportunities to improve their performance and become more attractive to investors, Angola faces bigger challenges. The article also discusses some policy issues that affect factors that can improve the business climate for agriculture, forest, and rural investments in Brazil. To be more useful to investors, it is recommended that the detailed development and calculation of an Agriculture Investment Attractiveness Index, as an international public good, be undertaken periodically not only for Angola and Brazil, but also for other Sub Saharan African and Latin American countries. For the case of large countries with several administrative and/or geographical regions, such as Brazil, it is also useful to create and calculate a similar index to measure the business climate at the sub-national level.