The FINANCIAL — A new IFC and World Bank report finds that since 2005, the Eastern Europe and Central Asia region leads the world in enhancing the business climate for local firms.
The region overtook East Asia and the Pacific to become the world’s second most business-friendly, after OECD high-income economies. Eastern Europe and Central Asia has implemented nearly 400 institutional or regulatory reforms since 2005, more than any other region in the world. The report shows Georgia joining the top 10 economies in the global ease of doing business ranking. Georgia implemented reforms in six areas, more than any other economy in the region. It made improvements in getting credit, paying taxes, trading across borders, enforcing contracts, resolving insolvency, and getting electricity.
Improving business regulation is a challenging task, and doing it consistently over time even more so, says World Bank. Yet some economies have achieved considerable success since 2005 in doing just that.
A few of these economies stand out within their region: Georgia, Rwanda, Colombia, China and Poland.
Georgia is the top improver since 2005 both in Eastern Europe and Central Asia and globally. With 35 institutional and regulatory reforms since 2005, Georgia has improved in all areas measured by Doing Business. In the past year alone it improved in 6 areas. As just one example, Georgia made trading across borders easier by introducing customs clearance zones in such cities as Tbilisi and Poti. These one-stop shops for trade clearance processes are open all day every day, allowing traders to submit customs docu- ments and complete other formalities in a single place.
Georgia also strengthened its secured transactions system. A new amendment to its civil code allows a security interest to extend to the products, proceeds and replacements of an asset used as collateral. Georgia has also distinguished itself by following a relatively balanced regulatory reform path. Many economies aiming to improve their regulatory environment start by reducing the complexity and cost of regulatory processes (in such areas as starting a business).
Later they may move on to reforms strengthening legal institutions relevant to business regulation (in such areas as getting credit). These tend to be a bigger challenge, sometimes requiring amendments to key pieces of legislation rather than simply changes in administrative procedures. Georgia has followed this pattern, focusing initially on reducing the complexity and cost of regulatory processes and later on strengthening legal institutions. But among a group of 5 top regional improvers, Georgia has improved the most along both dimensions.
Rwanda, the number 2 improver globally and top improver in Sub-Saharan Africa since 2005, has reduced the gap with the frontier by almost half. To highlight key lessons emerging from Rwanda’s sustained efforts, this year’s report features a case study of its reform process.
Local entrepreneurs in developing countries are finding it easier to do business than at any time in the last 10 years, highlighting the significant progress that has been made in improving business regulatory practices across the globe, according to a new report released today by the World Bank and IFC.
Over the past decade, nearly 2,000 regulatory reforms were implemented by 180 economies. The reforms have yielded major benefits for local entrepreneurs across the globe. For example: Since 2005, the average time to start a business has fallen from 50 days to 30—and in low- income economies the average has been reduced by half. In the past eight years, the average time to transfer property fell by 35 days, from 90 to 55, and the average cost by 1.2 percentage points—from 7.1 percent of the property value to 5.9 percent. In the past eight years, improvements to simplify tax compliance have reduced the time required annually to comply with the three major taxes measured (profit, labor, and consumption taxes) by 54 hours on average. Eastern Europe and Central Asia had the largest share of economies implementing regulatory reforms—with 88 percent reforming in at least one of the areas measured by Doing Business.
Singapore topped the global ranking on the ease of doing business for the seventh consecutive year. Joining it on the list of the top 10 economies with the most business-friendly regulation were Hong Kong SAR, China; New Zealand; the United States; Denmark; Norway; the United Kingdom; the Republic of Korea; Georgia; and Australia. Topping the list of economies that registered the biggest improvements in the ease of doing business over the last year were Poland, Sri Lanka, Ukraine, Uzbekistan, Burundi, Costa Rica, Mongolia, Greece, Serbia, and Kazakhstan.
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