Doing Business’ Plodding Placement Proliferation

The World Bank’s 2017 Doing Business reference again added new components to its dozen ground level regulatory, credit and infrastructure themes, with a focus on post-tax filing and gender treatment as it also compiled original public procurement data. Women’s startup, enforcement and registration difficulties resulted in reduced private sector employment, and better country performance particularly on insolvency translates into lower income inequality. The 185 economies covered have enacted 3000 changes the past dozen years since publication launch, and Europe-Central Asia has been the top regional reformers, with Georgia, Latvia, Lithuania and Yugoslav Republic of Macedonia in the 30 ranking leaders overall dominated by wealthy OECD members. The past year had 275 improvements, mainly in launch processes, and Brunei, Kenya, Belarus, Kazakhstan and Indonesia showed the most progress. Major cities within countries have started to compete for superiority, as with Mumbai and Delhi in India, where the Modi government’s “fast pace” was lauded. The capital’s utility has streamlined power connection and automated tax payment, and new bankruptcy and court procedures were introduced. African officials often form dedicated units to raise marks, and Rwanda has stood out with a wide-ranging menu to help achieve low-middle-income status by end-decade. Efforts have gone cross-regional as with APEC’s medium-term action plan for Asian and Latin American signatories. In Mexico and Colombia subnational benchmarking is routine for dozens of provinces and states. Georgia was again a major gainer with customs breakthroughs, and Bahrain and the UAE have advanced on credit information and construction permits even as the Gulf has traditionally lagged on these issues. Secured transaction laws and collateral registries are increasingly common and credit reporting has extended beyond banks to wider commercial use within privacy limits. Twenty countries strengthened minority shareholder rights, and Morocco and Vietnam expanded transparency criteria while Sri Lanka barred conflict of interest and insider dealing. In Africa 17 French-speaking states adopted the OHADA liquidation framework, and Thailand adapted its reorganization code to meet small and midsize company needs.

Frontier markets with banking cleanup challenges, such as Tunisia which renewed its IMF program with a 4-year $3 billion facility. The financial-heavy stock exchange was flat on the MSCI Index through October despite recapitalization of two large public banks and new legislation. Private credit has sputtered with the NPL ratio above 15 percent, forcing borrowers to rely on direct central bank lines. Capital adequacy is reported at 12 percent, but tourism which accounts for one-quarter of problem portfolios, remains subdued on meager 1-2 percent GDP growth. Small companies have scant access despite the recent removal of interest rate caps and consolidation of hundreds of microfinance providers into several dozen. Security and social spending to address overlapping terror, refugee and unemployment threats have undercut efforts to restrain debt/GDP at 50 percent, but fiscal strategy contemplates civil service and fuel subsidy cutbacks. The current account deficit at 8 percent must also be reined in under the Fund arrangement, with reserve coverage now four months’ imports with bilateral and multilateral infusions. The central bank has refrained from intervention as capital account restrictions are gradually relaxed in preparation for a big end-November investment conference previously postponed with political shakeups and headline violence. Municipal elections approach in early 2017, after another Jasmine revolution anniversary with financial sector flowering signs still remote.

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