The FINANCIAL -- Tbilisi. Economies in Europe and Central Asia (ECA) continued an active program of reforms to improve their business climate, to create jobs and spur growth, according to the 15th anniversary edition of the World Bank Group’s annual Doing Business report.
Released on October 31, Doing Business 2018: Reforming to Create Jobs records 44 reforms in the region in the past year, bringing to a total of 673 the number of reforms enacted over the past 15 years. The region’s top ranked economies are Georgia (in 9th place), the Former Yugoslav Republic of Macedonia (11th place) and Lithuania (16th place).
In the ECA region, the reforms of the past year were carried out mainly in the areas of Registering Property (with eight reforms), Getting Credit (seven reforms) and Protecting Minority Investors (six reforms). For example, Georgia, strengthened minority investor protections by clarifying ownership and control structures.
Doing Business finds that Georgia implemented substantive changes in the local regulatory framework in the following areas in 2016-17:
Getting electricity was made more affordable, by reducing connection costs for new customers.
Protections for minority investors were strengthened. This was achieved by making it easier to sue directors in cases of prejudicial transactions between interested parties, by increasing shareholder rights and their role in major corporate decisions, and by clarifying ownership and control structures.
Resolving insolvency was made easier, by making insolvency proceedings more accessible for debtors and creditors, by improving provisions on the treatment of contracts during insolvency, and by granting creditors greater participation in important decisions during the proceedings.
“With tangible reforms implemented in three key areas this year – making electricity more affordable, strengthening minority investor protections, and making resolving insolvency easier – Georgia continues to be a top reformer in the Europe and Central Asia region, and is poised to accelerate inclusive and sustainable growth,” said Mercy Tembon, World Bank Regional Director for the South Caucasus. “We commend the Government of Georgia for this remarkable achievement and encourage them to maintain this momentum.”
“According to the World Bank Group's Doing Business 2018 report, Georgia has improved its performance by 7 positions over the past year, and has moved from 16th to 9th place. It should be noted that the Doing Business rating encompasses 190 countries, and Georgia is among the leading 10, which objectively reflects the results of the economic reforms of the Georgian Government," said Giorgi Gakharia, Minister of Economy and Sustainable Development of Georgia. "Today, we can proudly say that we are developing and moving in the right direction – Georgia has become the regional leader, where the phrase 'ease of doing business' is realistic and accurately reflects the business climate in our country. The Doing Business report is one of the most prestigious rating systems, and seeing Georgia among its top 10 countries is a great incentive for international business circles to direct their vectors and investments towards Georgia.”
Economies in the ECA region perform best in the Doing Business areas of Protecting Minority Investors and Registering Property. For example, it takes on average 20 days to transfer commercial property, compared with the global average of 49 days.
The region continues to aim for improvement in Dealing with Construction Permits and Getting Electricity. It takes 10 days longer to obtain a construction permit in the region, compared to the average of 158 days globally. And it takes an entrepreneur 114 days to get connected to the electricity grid in the region, compared to the global average of 92 days.
Highlights of success in Europe and Central Asia over the past 15 years:
Starting a Business and Paying Taxes have been the most common areas of reform, with 120 and 108 reforms respectively.
Fifteen years ago, it took an average of 43 days to register a new business in the region, compared with 10 days now. This is half the global average of 20 days. The region’s top performing economy in this respect is Georgia, where it takes two procedures and two days to register a new business, compared with nine procedures and 25 days in 2003.
Georgia has implemented the most reforms in the past 15 years, totaling 47, followed by Kazakhstan and the Former Yugoslav Republic of Macedonia, with 41 each.