Doing Business’ Dozen Year Dichotomy
Low-income economies rose more in regulatory efficiency and quality rankings than advanced ones over the 12 years since the World Bank’s Doing Business publication was launched, according to the 2016 compilation just released. By region Europe and Central Asia led, followed by Sub-Sahara Africa and MENA, with the last stagnating since 2010 from Arab Spring tumult. By area enterprise startup saw the greatest reforms, while credit access came in second and was typically realized with major legal and infrastructure overhaul. Contract enforcement was the laggard as it involves the “complicated task” of court modernization. Georgia and Rwanda were the country stars over the period, accompanied by a 65 percent per capita income jump in the former as new insolvency and securities laws were introduced along with a one-stop investor shop for building approvals and electricity hookup. Rwanda’s signature feats were in property registration with tax and on-line improvements, and in central credit information and scoring for banks and microfinance providers. Colombia was Latin America’s top performer with strides in electronic tax payment and collateral practice; its perfect legal rights index score is matched by only two other countries. Egypt’s Middle East gains came almost entirely before 2009 with lower minimal capital requirements and retailer inclusion in the national credit bureau. In Asia China was the winner over the longer timespan, but India has promoted regulatory changes the past five years and especially since the Modi government took office in 2014. VAT filing was simplified in 2010, and new Companies Act amendments facilitate launch through faster and easier application and reporting. Construction procedures have been slashed through a “single window,” and overlapping inspections reduced for power connection. In the OECD Poland has been the standout with better judicial system functioning and bankruptcy statutes.
In 2014-15 over 120 of the 190 economies tracked managed at least one reform. Of the leading ten half were African, including Kenya and Uganda. Costa Rica and Jamaica surged as smaller regional states and Cyprus and Kazakhstan were surprise showings under deep banking crises. In the overall top 20 ranking Lithuania and the Former Yugoslav Republic of Macedonia entered, with Asia dominating the first 10 through Singapore, Hong Kong and Korea. Their placement tends to correlate with World Economic Forum competitiveness and Transparency International corruption results, the review noted. It added that efficiency and quality are usually linked as in Greece’s “vicious cycle” land administration approach. Real estate transfer takes three weeks, maps and statistics are absent, and transactions which collapse based on bad information are uncompensated. Dispute resolution is the longest in Europe, over 4 years, with only Guinea-Bissau, Suriname and Afghanistan beyond that duration in the Doing Business findings. Most of that period is the wait for an initial hearing, and in insolvency questions claimant may only recover one-third of value. Case management has improved there from a low base, and a wave may soon be unleashed under the EU rescue’s bank recapitalization, which must tackle the 50 percent NPL ratio and lift the mortgage foreclosure ban in place during the political chaos of the Syriza party’s leadership transition. Reflecting investor amicability the stock market was at the bottom of the MSCI Index with a 50 percent loss through October, as it reverted to the emerging status of a dozen years ago.
