AMÉRICAECONOMÍA/Worldcrunch

SANTIAGO -- During the Spanish conquest, the indigenous tricked the invaders with tales of El Dorado, a fabulous city of gold hidden deep in the Amazon jungle. Centuries later, however, the legend is proving somewhat prescient. Thanks to Brazil's economic boom, its cities, both large and small, are shining bright – and gaining some serious ground in our annual Latin America urban competitiveness ranking.

Brazil's cities compare favorably to their counterparts in Latin America's Spanish-speaking countries in terms of per capita GDP (12% higher), unemployment levels and investments. The comparison holds up even though AméricaEconomía decided this year to include several of Brazil's ‘B-level" cities: Campinas (20^th), Fortaleza (29^th), Manaus (29^th) and Belém (33^rd).

The country's top ranked city is São Paulo, which rose one spot to number two in this year's ranking. Among other things, the Brazilian metropolis has made real improvements to its infrastructure and upgraded its connectivity, including increasing from 33 to 48 the number of international destinations its airport serves.

Miami, which many experts (and AméricaEconomía) consider part of the region, was again judged the most competitive Latin American city, after also garnering the top spot in 2010.

Among the key variables considered for the 45-city ranking list are the number of investment banks, the price of luxury office space, the number of residents per ATM machine, services available for companies and executives, electric-based public transportation and human capital.

Last year's No. 2 city was Santiago, Chile, which fell to third in the 2011 ranking because of a drop off in its brand value and because it lags behind other cities in terms of human capital. According to a report by SCImago, a firm that specializes in ranking research institutions, only 2,373 scientific studies per 1 million residents are carried out in the Chilean capital, fewer even than in the nearby Valparaíso-Viña del Mar metropolitan area (2.681). By comparison, the scientific research figure per 1 million residents in Campinas, Brazil is 6,222. For Miami and São Paulo the numbers are 5,198 and 3,445 respectively.

Medellin and San Juan lose ground

For that same reason, several Brazilian cities rose in this year's ranking. Brasilia, Brazil's capital, jumped four spots to number 9, passing San Jose, Costa Rica (12^th) and Monterrey, Mexico (13^th). Brazil's Porto Alegre (15^th) and Belo Horizonte (17^th) gained ground as well – at the expense of Medellin, Colombia (17^th) and San Juan, Puerto Rico (18^th).

Besides the Brazilian cities already mentioned, four other cities making their first appearances on the annual competitiveness ranking are Chile's twin cities Valparaíso–Viña del Mar (19^th); the Colombian cities of Cartagena (27^th) Barranquilla (31^st); and Arequipa (34^th) in Peru. Overshadowed by the much larger capital cities in their respective countries, all four are ripe for new business and investment. And in some ways, they even offer advantages that the capitals do not. Compared to the Colombian capital of Bogota (8^th), for example, Cartagena and Barranquilla are much more environmentally sustainable, particularly in terms of CO2 emissions.

Rounding out the top 10 on this year's list are Mexico City, Mexico (4^th); Rio de Janeiro, Brazil (5^th); Buenos Aires, Argentina (6^th); Panama City, Panama (7^th); and Lima, Peru (10^th). The lowest ranked cities are Bolivia's La Paz (43^rd), the Venezuelan capital of Caracas (44^th), and Santa Cruz (45^th), also in Bolivia.

One unlikely standout in this year's ranking is Tegucigalpa, Honduras (42^nd), which improved in nearly all of the urban competitiveness variables thanks to the relative calm that has returned following the country's political upheaval of 2009.

Read more from AméricaEconomía in Spanish

Photo - Ben Witte