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The recently published Doing Business Report 2017 of the World Bank, has generally undergone some methodological changes over that of last year, to better reflect the business climate in the countries covered by the classification.  Labelled Equal Opportunity for all, these include notably indicators such as tax procedures before and after declaration and equal opportunity facilitation.

As per The Times of India Economic Times the definition of Ease of doing business is an index published by the World Bank. It is an aggregate figure that includes different parameters which define the ease of doing business in a country.  It is computed by aggregating the distance to frontier scores of different economies. The distance to frontier score uses the ‘regulatory best practices’ for doing business as the parameter and benchmark economies according to that parameter.

For each of the indicators that form a part of the statistic ‘Ease of doing business,’ a distance to frontier score is computed and all the scores are aggregated. The aggregated score becomes the Ease of doing business index.

Indicators for which distance to frontier is computed include construction permits, registration, getting credit, tax payment mechanism etc. Countries are ranked as per the index.

Amongst the Middle East and North African countries, fifteen out of the 20 economies have implemented at least a reform facilitating Business Environmental Climate last year. The largest number of reforms implemented by the economies of the region focused on the simplification of the Business Creation (with 9 reforms) followed by the improvement of cross-border trade facilitation.

Thanks to sustained reform efforts, Morocco is 68th overall and Tunisia 77th out of 190.  Algeria came at 156th but as for Morocco and Tunisia, it nevertheless has improved its absolute score.

The full report and data relating to the MENA region are available at  Doing Business 2017 Equal Opportunity for all – Regional Profile 2017 – MENA. From Washington, USA October 26th, 2016 TradeArabia produced this account of the report with a particular on the countries of the GCCs.  Here it is reproduced for its clear and unambiguous treatment of the report.

UAE tops in ease of doing business in MENA  

The United Arab Emirates (UAE) is the Middle East and North Africa (MENA) region’s top ranked economy in ease of doing business, with a global ranking of 26, followed by Bahrain (63) and Oman (66), finds the World Bank Group’s annual report.

Based on reforms undertaken, the UAE and Bahrain are also among the global top 10 improvers.

The pace of business reforms in MENA accelerated considerably in the past year, despite conflict and turmoil in the region, finds the report.

In its global country rankings of business efficiency, Doing Business 2017 awarded its coveted top spot to New Zealand, Singapore ranks second, followed by Denmark; Hong Kong SAR, China; Republic of Korea; Norway; United Kingdom; United States; Sweden; and Former Yugoslav Republic of Macedonia.

Released yesterday (October 25), “Doing Business 2017: Equal Opportunity for All” finds that 15 of the Mena region’s 20 economies implemented a total of 35 reforms to facilitate the ease of doing business. This is a significant increase from the annual average of 19 reforms during the past five years.

“The acceleration of business reform activity in the Middle East and North Africa is noteworthy, considering the severity of challenges faced by many governments in the region,” said Rita Ramalho, manager of the Doing Business project. “It is particularly encouraging to see economies in the region carry out reforms in the area of Getting Credit, which remains harder in the Middle East and North Africa than anywhere else in the world.”

Taking steps to strengthen the credit reporting system, Morocco, for example, began providing credit scores to help banks and other financial institutions assess the creditworthiness of borrowers. However, getting credit remains a major obstacle for entrepreneurs in the region as collateral regimes are highly restrictive.

The region also performs poorly in the area of Starting a Business. For example, starting a business in the region costs 26 percent of income per capita on average, compared with 3 percent in OECD high-income economies. However, economies in the Middle East and North Africa region are taking steps to improve the process for start- ups and, in the past year, nine economies carried out reforms in the area of Starting a Business.

For the first time, the report includes a gender dimension in three indicators: Starting a Business, Registering Property and Enforcing Contracts. The report finds that the Middle East and North Africa fares poorly on the new gender measures, with 70 percent of the region’s economies imposing more regulatory hurdles for women entrepreneurs than men. For instance, in Saudi Arabia, three extra procedures are required for married women to start and operate a business. One requirement in Saudi Arabia is that married women must hire a man to manage the business.

The report also features an expanded Paying Taxes indicator, which now covers post-filing processes, such as tax audits and tax refunds. The economies of the Middle East and North Africa generally perform well in these new areas. A notable exception is Lebanon, where compliance time for a VAT refund is considerably high, taking 45 hours.

Bahrain implemented reforms in the areas of Starting a Business, Getting Credit and Trading Across Borders. It made the start-up process easier for entrepreneurs by drastically reducing the minimum capital requirement from 190 percent of income per capita to 3 percent. Bahrain also improved access to credit information by legally guaranteeing borrowers’ right to inspect their own data, and made exporting easier by improving infrastructure and streamlining procedures at the King Fahad Causeway.

Morocco and the UAE undertook five reforms each during the past year. Morocco made Starting a Business easier by introducing an online platform to reserve a company name and reducing registration fees. And it strengthened minority investor protections by clarifying ownership and control structures and by requiring greater corporate transparency.

The UAE implemented risk-based inspections during construction, thereby joining the 13 other economies in the world implementing this best-practice feature. The UAE also made it easier to start a business by streamlining name reservation and articles of association notarization and merging registration procedures.

Globally, a record 137 economies around the world adopted key reforms that make it easier to start and operate small and medium-sized businesses, the report said.

The new report finds that developing countries carried out more than 75 percent of the 283 reforms in the past year, with Sub-Saharan Africa accounting for over one-quarter of all reforms.

The report cites research that demonstrates that better performance in Doing Business is, on average, associated with lower levels of income inequality, thereby reducing poverty and boosting shared prosperity.

“Simple rules that are easy to follow are a sign that a government treats its citizens with respect. They yield direct economic benefits – more entrepreneurship; more market opportunities for women; more adherence to the rule of law,” said Paul Romer, World Bank Chief Economist and Senior Vice President. “But we should also remember that being treated with respect is something that people value for its own sake and that a government that fails to treat its citizens this way will lose its ability to lead.”

Doing Business data points to continued successes in the ease of doing business worldwide, as governments increasingly take up key business reforms. Starting a new business now takes an average of 21 days worldwide, compared with 46 days 10 years ago. Paying taxes in the Philippines involved 48 payments 10 years ago, compared to 28 now and in Rwanda, the time to register a property transfer has dropped from 370 days a decade ago to 12 days now. –

TradeArabia News Service

 

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