Doing Business’ Toted Training Seals
The World Bank’s 15th annual version of its popular Doing Business scorecard, examining entrepreneurial conditions in a dozen areas, hailed a record 315 reforms the past year, one third from Africa, as basic startup time and cost has been halved the past decade. The ten most improved among the 190 countries included China, India and Turkey, as well as conflict-torn Afghanistan and Cote d’Ivoire. The Bank pointed to government official training in poorer economies as a major catalyst for improving on the ground private sector satisfaction as measured in tens of thousands of individual interviews. It intends that the human capital index unveiled at the October Bali meetings will serve as a comparable social indicator standard. In finance the credit access, minority shareholder protection, contract enforcement and insolvency resolution breakdowns are paramount, with the caveat that broader economic performance and political risk factors are unincorporated. Taxes, labor markets, property and construction registration, and electricity available are other considerations in the mix, with better regulation correlated with higher productivity and growth in numerous academic studies. Developing nations Mauritius, UAE, and Malaysia are in the leading 20 ranked, along with more advanced Asian members Hong Kong, Taiwan, Korea and Singapore. Africa’s risers benefited from commercial law harmonization under the 17-state OHADA code, which introduced alternative dispute settlement. China focused on administrative, utility connection and payment process innovations; India automated customs documentation and streamlined approvals. Azerbaijan established a new credit bureau, and Turkey’s banks now share more detailed risk data. Kenya and Rwanda accelerated land titles and tax collection, and Brazil facilitated auto dealings with Argentina as the BRICS together added 20 points. However even with civil servant instruction gains will be limited without popular communication, the publication noted, as it recommended an information strategy to accompany changes.
The UAE unified its collateral registry, and Afghanistan granted secured creditors priority in bankruptcy. Qatar allowed consumers to challenge credit scores, and Indonesia added utilities to the shared network. The Philippines issued audit rules for stock exchange-listed companies; Tunisia required disclosure of related-party transactions; and Kenya made directors liable for self-dealing offenses. Morocco approved debtor-in-possession financing, and Pakistan reorganization options in lieu of previous liquidation. Public procurement procedures will be examined in the next edition, but wider infrastructure and regulatory cost-benefit analysis will remain outside its purview. The Bank has other series on governance and policy and institutional themes, and Europe has started sub-national readings which often show large disparities, although informal business is not surveyed. A multi-tier review process is in place internally to ensure results integrity and verification, as methodology questions seem to be set aside following China’s complaints as standing gained. An estimated 70 countries have formed specific interagency and public-private sector Doing Business committees, and the results are used in the World Economic Forum and other competitiveness indices. Future research seeks to explore the foreign direct investment impact of targeted action, and the Bank’s IFC arm may deepen understanding of capital markets good practice as part of data and information compilation and project support under the “3.0” model to further train the fund manager community about its merits.
