Doing Business 2016 Report Ranks Kosovo 66 out of 189

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The FINANCIAL — The World Bank Group’s latest Doing Business report recognizes Kosovo’s continued efforts to improve the regulatory climate for local businesses, although the pace of reforms has slowed.

Doing Business 2016: Measuring Regulatory Quality and Efficiency shows that over the past year, Kosovo implemented one reform making it easier for companies to pay taxes by abolishing the annual business license fee. This follows the reform trend as this is the fourth consecutive year Kosovo has implemented a reform in one or more area measured by Doing Business. However, the reform implemented this year is at a slower pace than from two years ago when the economy implemented three reforms and from last year when it implemented two.

“In recent years, Kosovo has been removing important obstacles to doing business in Kosovo, as reflected in its gradual and consistent advances in its international standing,“ said Jan-Peter Olters, World Bank Manager in Kosovo. “For these encouraging developments to translate into tangible improvements in domestic productivity and, ultimately, the generation of new and higher-paid jobs, the country must avoid the temptation of tactical politicking and focus on the strategic challenges of a long-term socio-economic development strategy spanning over several political mandates.“

In this year’s Doing Business report, five indicators saw methodology changes: Dealing with Construction Permits, Getting Electricity, Enforcing Contracts, Registering Property and Trading across Borders. For example, in the area of Registering Property, a new index on the quality of land administration measures the reliability, transparency and geographic coverage of land administration systems as well as aspects of dispute resolution for land issues.

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Notably, Kosovo scores a 20.5 out of 30 on this index due to high geographic coverage and a high quality infrastructure that ensures the reliability of information on property titles and boundaries.  While Kosovo performs better than the regional average on this metric, the country has room for improvement in the other quality indicators introduced this year. The methodology changes complete a two-year effort to expand benchmarks that measure the quality of regulation, as well as the efficiency of the business regulatory framework, in order to better capture the reality on the ground.

“A modern economy cannot function without regulation and, at the same time, it can be brought to a standstill through poor and cumbersome regulation. The challenge of development is to tread this narrow path by identifying regulations that are good and necessary, and shunning ones that thwart creativity and hamper the functioning of small and medium enterprises,” said Kaushik Basu, World Bank Chief Economist and Senior Vice President.

“There is persuasive research that shows how efficiency and quality of business regulations go hand-in-hand with producing more competitive, viable companies and firms that help to grow national economies. The increased emphasis on the quality of regulation, to complement the previous focus on efficiency, is aimed at providing greater clarity between well-designed and badly-designed regulations, making it easier to identify where regulation is enabling businesses to thrive and where it has the opposite effect,” said Augusto Lopez-Claros, Director of the World Bank’s Global Indicators Group, which produces the report.

Economies of Europe and Central Asia have performed well on the new quality benchmarks, while those in the Middle East and North Africa region have performed less well.

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In the global ranking stakes, Singapore retains its top spot. Joining it on the list of the top 10 economies with the most business-friendly regulatory environments are New Zealand, in second place; Denmark (3); Republic of Korea (4); Hong Kong SAR, China (5); United Kingdom (6); United States (7); Sweden (8); Norway (9); and Finland (10).

The world’s top 10 improvers—i.e., economies that implemented at least three reforms during the past year and moved up the rankings scale—are Costa Rica, Uganda, Kenya, Cyprus, Mauritania, Uzbekistan, Kazakhstan, Jamaica, Senegal, and Benin.

 

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