Last month, the World Bank and International Financial Corporation (IFC) presented their annual report - Doing Business 2008. According to this report, the most significant business reforms have been conducted in the countries of Eastern Europe and the former Soviet Union as well as in countries with emerging economies such as China and India.
Worldwide Trends. Doing Business 2008 is the fifth in a series of annual reports investigating regulations that enhance business activity. 178 economies are ranked on indicators as the most conducive to the operation of business. The data for all sets of indicators in the report is benchmarked to July 2007. This research is based on measurements of regulations affecting 10 areas of everyday business:
- starting a business,
- dealing with licenses,
- employing workers,
- registering property,
- getting credit,
- protecting investors,
- paying taxes,
- trading across borders,
- enforcing contracts and
- closing a business.
- Such factors as macroeconomic policy, quality of business infrastructure, exchange rate variations, investors' opinions and the crime rate are also taken into consideration.
Singapore is #1 on the ease of doing business in the ranking for the second consecutive year. Besides Singapore, the top ten world leaders include New Zealand, USA, Hong Kong, Denmark, Great Britain, Canada, Ireland, Austria and Island.
Among post-Soviet countries, the highest places on the Doing Business ranking are occupied by Estonia (17th position), Georgia (18th position), Latvia (22nd), Lithuania (26th), Russia (105) and Ukraine (139th position)
Egypt is the top reformer of the year, improving in 5 of the 10 areas studied by Doing Business.
Along with Egypt, the top ten leading reformers include Croatia, Ghana, FYR, Georgia, Columbia, Saudi Arabia, Kenya, China and Bulgaria. These countries have simplified new business registration procedures, ensured property rights, strengthened protection of investors, and increased access to loans. India, Indonesia, Turkey and Vietnam are also reforming with increasing speed.
On the whole, two hundred reforms -in 98 economies-were introduced between April 2006 and June 2007, 59 of which (52 positive and 7 negative) were conducted in Eastern Europe and Central Asia. As a result, Eastern European countries surpassed East Asia in the ease of doing business. Several of the region's countries have gone even further, surpassing many Western European economies.
79% of economies that have introduced at least one positive reform in 2006-2007 are in Eastern Europe and Central Asia. Easing the regulatory burden has caused a boom in new businesses.
For instance, Georgia now has 15 registered businesses per 100 people (same as Malaysia). The Czech Republic and Slovakia have 13 (same as Singapore). Estonia and Poland have 12 (same as Hong Kong, China).
One more key conclusion of the report is that the economies, which introduce the most significant reforms, have the highest profitability of the share capital.
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