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SINGAPORE GLOBAL No 1

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Saudi tops in ease of doing business in Mideast

Manama, October 23, 2012

 

Singapore topped the global ranking on ease of doing business for the seventh consecutive year, while Saudi Arabia stood first in the Middle East, according to a new report published by the World Bank and International Finance Corporation (IFC).
 
The Doing Business 2013: Smarter Regulations for Small and Medium-Size Enterprises report is the 10th edition of the Doing Business series. 
 
Apart from Singapore, the top 10 countries on the list included: Hong Kong SAR, China; New Zealand; the United States; Denmark; Norway; the United Kingdom; the Republic of Korea; Georgia and Australia.
 
In the Middle East, Saudi Arabia stood 22 on the global list, while the UAE took the 26th position. Qatar was at 40, Bahrain 42, Oman 47, Tunisa 50, Kuwait 82, Morocco 97, Jordan 106 and Egypt 109. 
 
Through indicators benchmarking 185 economies,  Doing Business measures and tracks changes in the regulations applying to domestic small and medium size companies in 11 areas in their life cycle. This year’s aggregate ranking on the ease of doing business is based on indicator sets that measure and benchmark regulations affecting 10 of those areas: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. 
 
In the past year 58 per cent of economies covered by  Doing Business implemented at least one institutional or regulatory reform making it easier to do business in the areas measured, and 23 undertook reforms in three or more areas. Of these 23 economies, 10 stand out as having jumped ahead the most in the relative ranking. Others in this group advanced less in the global ranking because they already ranked high. 
 
Four of the 10 economies improving the most in the ease of doing business are in Eastern Europe and Central Asia—the region that also had the largest number of regulatory reforms per economy in the past year. Four of the 10 are lower-middle income economies; of the rest, one is low income, three are upper middle income and two are high income. 
 
In 2011/12 starting a business was again the area with the most regulatory reforms. In the past eight years the start-up process received more attention from policy makers than any other area of business regulation tracked by Doing Business—through 368 reforms in 149 economies. These worldwide efforts reduced the average time to start a business from 50 days to 30 and the average cost from 89 per cent of income per capita to 31 per cent. 
 
Taking stock of the developments world over in easing regulations, the report said it is apparent that business regulatory practices have been gradually but noticeably converging toward the more efficient practices common in higher income economies.
 
"Smarter business regulation supports economic growth. Simpler business registration promotes greater entrepreneurship and firm productivity, while lower-cost registration improves formal employment opportunities. An effective regulatory environment boosts trade performance. And sound financial market infrastructure -- courts, creditor and insolvency laws, and credit 
and collateral registries -- improves access to credit," the report said. 
 
"Just as good rules are needed to allow traffic to flow in a city, they are also essential to allow business transactions to flow. Good business regulations enable the private sector to thrive and businesses to expand their transactions network. But regulations put in place to safeguard economic activity and facilitate business operations, if poorly designed, can become obstacles to doing business," the report said. 
 
Striking the right balance in business regulation can be a challenge. It becomes an even greater challenge in a changing world, where regulations must continually adapt to new realities, the report said.
 
The economies that rank highest on the ease of doing business are not those where there is no regulation—but those where  governments have managed to create rules that facilitate interactions in the marketplace without needlessly hindering the development of the private sector, it said. 
 
In essence,  Doing Business is about SMART business regulations —  Streamlined, Meaningful, Adaptable, Relevant, Transparent—not necessarily fewer regulations.
 
Economies that rank high on the ease of doing business tend to combine efficent regulatory processes with strong legal institutions that protect property and investor rights. OECD high-income economies have, by a large margin, the most business-friendly regulatory environment on both dimensions, said the report. 
 
Regions such as East Asia and the Pacific and the Middle East and North Africa have relatively efficient regulatory processes but still lag in the strength of legal institutions relevant to business regulation, it said. 
 
And for the first time in seven years, a South Asian economy—Sri Lanka—ranks among those improving the most in the ease of doing business. - TradeArabia News Service



Tags: Saudi Arabia | Bahrain | Singapore | ease of doing business |

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