The Middle East’s Brazen Business Undoing

The World Bank hailed thousands of regulatory reforms carried out across developing regions as its Doing Business ranking marked a decade, while regretting “slow momentum” in the Middle East and North Africa post-Arab spring. It described older firms and managers on average stifling innovation and new business creation, and deep mistrust between companies and officials amid festering corruption. Governance and transparency structures lag with the area’s average score in the list’s bottom half at 98. In Egypt no “visible improvements” occurred the past four years, as neighboring countries showed the least headway in the latest annual review since the publication began. In contrast, troubled Southern Europe undergoing its own transition achieved major changes prodded by bilateral and multilateral adjustment programs. Greece was among the leading ten gainers in 2011-12; Italy eased electricity connection; Portugal simplified construction approval and Spain revised bankruptcy law and customs procedures. Eastern Europe along with Central Asia advanced most for the period. Poland was a standout in insolvency and property registration overhaul, including record digitization, and introduced a new commercial contract code. Serbia’s enforcement system added bailiffs and electronic entry, while Mongolia and Uzbekistan established personal credit information access. Kazakhstan and Ukraine reduced the capital requirements for incorporation, while Georgia solidified its position as the top performer since 2005, with a half-dozen measure despite hard-fought elections which could magnify the trend with a billionaire executive becoming prime minister. It opened one-stop trade clearance posts and modernized collateral and secured transactions treatment. In Africa, Rwanda too continued to punch above its economic weight as one-third of all business facilitation strides have come from the continent in recent years. Administrative steps have dominated with legal strengthening a more arduous and elusive target. The top 10 friendliest locations overall are mainly OECD, but also feature Hong Kong and South Korea. Two of the BRICs, China and India, are among the 50 greatest improvers, with the former enacting a series of updated laws and the latter focusing on rule streamlining.

In Latin America, where the original work was pioneered by Peruvian economist Hernando De Soto with time and motion studies for company startups, Colombia has been a champion, but in the past year it was outstripped by Costa Rica’s achievements. Tax payments and sanitary certifications were reorganized and borrowers can now inspect their personal data. The hemisphere also includes global laggard Venezuela, where cost and complexity continue to “undermine property rights and investor protections,” in the view of hundreds of firms and analysts on the ground involved in the evaluation. Despite the micro-economic critique, President Chavez upon handily beating the opposition by 10 percent for re-election unveiled a future budget outline not contemplating practical or policy shifts in his own enraged entrepreneurial vision.