The FINANCIAL — A new IFC and World Bank report finds that for the ninth consecutive year, Eastern Europe and Central Asia led other regions in improving regulations for entrepreneurs. Ranked 16th, Georgia leads the region in the ease of doing business.
This year, Singapore led on the overall ease of doing business, followed by Hong Kong SAR, China; New Zealand; the United States; and Denmark. The Republic of Korea was a new entrant to the top 10. The 12 economies that have improved the ease of doing business the most across several areas of regulation as measured by the report are Morocco, Moldova, the former Yugoslav Republic of Macedonia, São Tomé and Príncipe, Latvia, Cape Verde, Sierra Leone, Burundi, the Solomon Islands, the Republic of Korea, Armenia, and Colombia. Two-thirds are low- or lower-middle-income economies.
This past year, 21 of the region’s 24 economies improved business regulations for domestic firms by implementing a total of 53 reforms in areas such as resolving insolvency, dealing with construction permitting, enforcing contracts, and protecting investors. Amid a global economic crisis, 40 percent of the region’s economies improved insolvency proceedings by implementing such measures as amended bankruptcy laws.
Ranked 16th, Georgia leads the region in the ease of doing business. Georgia continued its broad program of reform by simplifying business start-up, and expanding access to credit. Since 2005, it has introduced new company and customs codes, a revamped property registry, broad judicial reform, and a credit bureau.
Armenia rose six places in the global ranking to 55 by implementing five regulatory and institutional reforms between June 2010 and May 2011, the most in the region. Cyprus climbed to the 40th spot by strengthening investor protections.
The Russian Federation eased the process of registering property, reduced the number of documents needed for trade, and made getting electricity less costly by revising the connection tariffs. Georgia, Latvia, FYR Macedonia, Moldova, the Russian Federation, and Ukraine each implemented four regulatory reforms.
New data show that improving access to information on business regulations helps entrepreneurs. “Increasing transparency and access to regulatory information is important to creating a healthier business environment,” said Sylvia Solf, lead author of the report. “To date, 60 percent of economies in Eastern Europe and Central Asia provide easy access to fee schedules or documentation requirements for trade, business start-up, construction permits, or electricity connections.”
A new measure that looks at how economies changed their business regulations over the past six years shows that all economies in Eastern Europe and Central Asia have made their regulatory environments more business-friendly. “Research shows that a streamlined business regulatory environment helps a country’s economic growth,” said Augusto Lopez-Claros, Director, Global Indicators and Analysis, World Bank Group. “By simplifying regulations and expanding access to credit, countries in Eastern Europe and Central Asia continue to enhance opportunities for entrepreneurs.”
In East Asia and the Pacific region Singapore topped the rankings on ease of doing business for the sixth straight year. Hong Kong SAR, China, held onto the second spot—in part by introducing an online system for company registration and making it easier to secure an electricity connection.
The report shows Chile as the regional leader in latin America and caribbean, ranking 39thglobally. Chile improved by introducing immediate temporary operating licenses for new companies and launching an electronic data interchange system for trade. Peru, which ranks 41st, strengthened investor protections and abolished the start-up capital requirement for small businesses.
Colombia is among the top 12 economies worldwide that have improved the ease of doing business the most in 2010/2011. Colombia, ranked 42nd, made it easier to start a business, pay taxes, and resolve insolvency.
Over the past six years, Colombia, Mexico, and Peru have been among the 40 economies worldwide that have done the most to improve their regulatory environments for entrepreneurs. This year, Mexico continued its consistent efforts to improve regulation for businesses by easing the administrative burden of paying taxes, enhancing access to credit, and easing the process of getting construction permits, and improved in the global rankings to 53.
Morocco improved its business regulation the most compared to other global economies, climbing 21 places to 94, by simplifying the construction permitting process, easing the administrative burden of tax compliance, and providing greater protections to minority shareholders. Since 2005, Morocco has implemented 15 business regulatory reforms.
In Middle East and North Africa, Saudi Arabia remained the regional leader with a global ease of doing business ranking of 12. Qatar implemented its first reforms since 2005 and climbed to 36 on the global scorecard by improving its credit information system. The United Arab Emirates further streamlined the requirements for business start-up, and improved its ranking to 33.
In South Asia Sri Lanka rose nine places in the global ranking to 89, partly by strengthening investor protections and reducing taxes on business. India, the region’s second top performer in the global survey, climbed seven places to 132. Recently implemented mandatory electronic filing and payment for value-added tax made paying taxes easier for Indian firms.
Among the region’s economies, the low- and lower-middle-income economies of Afghanistan, Bhutan, India, and Nepal also improved business regulations for local firms. Bhutan, rising four places to 142, recently launched a public credit registry and streamlined business start-up while Afghanistan, ranked 160, made it easier for local businesses to get an electrical connection.
About the Doing Business report series
Doing Business analyzes regulations that apply to an economy’s businesses during their life cycle, including start-up and operations, trading across borders, paying taxes, and resolving insolvency. The aggregate ease of doing business rankings are based on 10 indicators and cover 183 economies.
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