Business Climate Improves

With a record 131 economies around the globe reforming business regulation in 2008/09, according to the IFC–World Bank Doing Business 2010 report, Rwanda became the first Sub-Saharan African economy to be named “top reformer” in a World Bank study that tracks the ease of doing business in 183 countries around the world.

The ‘Doing Business 2010’ report sees Rwanda jump from 143rd to 67th place in the rankings, with Liberia also being named among the “top 10 reformers”. Other African countries noted for improving their ease of doing business rankings include Burkina Faso, Liberia, Mali, Sierra Leone, Zambia and Cape Verde.

In all, more than 70 per cent of the 183 economies covered by the report— the largest share in any year since the annual report was first published in 2004 made significant progress. And this progress came against the backdrop of a global economic crisis.

Doing Business 2010: “Reforming through Difficult Times” recorded 287 reforms between June 2008 and May 2009, up 20 per cent from the previous year. Indeed, reformers around the world focused on making it easier to start and operate businesses, strengthening property rights, and improving commercial dispute resolution and bankruptcy procedures.

It is envisaged that reforms measured by “Doing Business” could play an important role in enabling countries to recover from the economic crisis. The financial and economic crisis has become a jobs crisis in developing countries, and SME growth offers the best prospects for job creation.

“The quality of business regulation helps determine how easy it is to reorganise troubled firms to help them survive difficult times, to rebuild when demand rebounds, and to get new businesses started,” says Penelope Brook, Acting Vice-President for Financial and Private Sector Development for the World Bank Group.

Developing Economies
Set a Fast Pace
Three-quarters of low- and lower-middle-income economies reformed, accounting for two-thirds of reforms recorded by “Doing Business 2010”.

Among these, Rwanda is the star and the world’s top reformer of business regulation, making it easier to start businesses, register property, protect investors, trade across borders, and access credit. It marks the first-time a Sub-Saharan African economy is the top reformer.

This year, there were four newcomers among the global top 10 reformers: Liberia, the United Arab Emirates, Tajikistan and Moldova.

Others, aside from Rwanda, are Egypt, Belarus, the Former Yugoslav Republic of Macedonia, the Kyrgyz Republic, and Colombia. Colombia and Egypt have been top global reformers in four of the past seven years.

Regional Pace Setters
Eastern Europe and Central Asia is the fastest-reforming region for the sixth year in a row. Despite being severely affected by the global crisis, all but one of the region’s 27 economies reformed business regulation over the past year. Five of the 10 top global reformers are from the region.

In the past two years, reforms have been moving Eastward from the European Union accession countries. Albania, Belarus and the Kyrgyz Republic implemented reforms in many areas for the third year in a row. Inspired by their neighbours, Kazakhstan, Montenegro and Tajikistan continued reforms this past year.

The Middle East and North Africa has had the largest surge in reforms. Seventeen of the region’s 19 economies made reforms in 2008/09. Egypt, Jordan, Saudi Arabia, and the United Arab Emirates are leading global and regional reformers.

What Consistent Reformers Do
“Doing Business” analyses regulations affecting the life cycle of a domestic, small to medium-size firm: from business start-up and operations, to trading across borders, paying taxes, and closure.

The ease of “Doing Business” index ranks economies from one to 183. Singapore, a consistent reformer, ranks top on the ease of “Doing Business”, a position it has kept for the fourth year running. New Zealand is runner-up.

As Doing Business has tracked regulatory reforms over the past six years, some common features among successful reformers have started to emerge:

• They follow a longer-term agenda aimed at increasing the competitiveness of their firms and economy. Colombia, Egypt, Malaysia and Rwanda are all examples of economies incorporating business regulation reforms into a broader competitiveness agenda.

• They stay proactive. Singapore and Hong Kong (China) rank among the top economies on the ease of doing business and are also some of the most consistent reformers.

• They implement broad-based reforms. Over the past five years Colombia, Egypt, Georgia, the FYR Macedonia, Mauritius and Rwanda each implemented at least 19 reforms, covering eight or more of the 10 areas measured by “Doing Business”. Continued    Source: Daily Graphic - Daily Graphic