in Quebec's provincial election in April should end speculation about a third referendum on independence and signal the start of a new era for the territory's relations with the rest of Canada.

The Netherlands, which previously occupied top spot in the rankings, remains an attractive business location, ranking second globally. However, while the Netherlands is expected to make modest progress at reducing its tax burden and reforming its labour markets, these improvements will be offset by a deterioration in the macroeconomic environment, reflecting weaker GDP growth and public finances. The UK will also remain an attractive business location, even though it is one of only five countries out of the 60 covered by the Economist Intelligence Unit's rankings that registers a decline in its overall score for the 2003-07forecast period, compared with the previous five years. The fall in the UK's score reflects the country's increased exposure to international terrorism, weaker GDP growth and deteriorating public finances.

All regions bar North America are expected to enjoy improvements to their operating environments for business over the next five years. The fall in North America's score causes the decline in the US rankfrom first in 1998-2002 to fifth for 2003-07. This is the result of the US's increased exposure to geopolitical risk, major imbalances in the economy, and weakening public finances. Western Europe will close the gap somewhat with North America, but will continue to offer a less favourable environment despite modest progress in reducing tax burdens and making labour markets more flexible. The biggest absolute improvements occur at