Doing Business: Not Just About the Numbers

Doing Business, the annual report that ranks countries and cities on their business regulations, is not just about numbers. It is the culmination of a long journey by many governments to undertake important reforms to their investment climates. The work on the ground that makes these rankings possible happens long before the report is released - across sectors, in institutions supporting the business environment, in firms whose productivity helps economies increase growth and further development, and in global communities that work together to increase competitiveness and the wealth of all people.

This year's report, Doing Business 2017: Equal Opportunity for All, released on October 25 ranks 190 countries and awards the top spots for business efficiency to New Zealand; Singapore; Denmark; Hong Kong SAR; China; Republic of Korea; Norway; the United Kingdom; the United States; Sweden; and the Former Yugoslav Republic of Macedonia.

The countries covered by the report range from tiny island states to those with the world's largest populations.

In many of these countries - large and small - the World Bank Group, led by staff in its Trade & Competitiveness Global Practice, works directly with governments to build stronger, more resilient and inclusive economies through improvements to the business environment. For example, seven of the top ten reforming countries in Doing Business 2017--Belarus, Georgia, Indonesia, Kazakhstan, Kenya, Pakistan, and Serbia--improved their business environments with the help of T&C advisory projects. All told, Doing Business recorded 283 reforms around the world in the past year; 121 of those, or 43 percent, were achieved with T&C's help.

The core objective of our work is to support governments as they improve regulations that impact areas like starting a business, getting access to credit, protecting investors and obtaining construction permits. In a number of these we work closely with our colleagues in other areas of the World Bank Group, practices such as Finance & Markets. The results we look for include reducing the cost and time involved in starting a business and easing uncertainty for businesses and investors.

Much of this work is done hand in hand with policy-makers, often at the request of the countries themselves. Over 80 countries have turned to the Bank Group for support over the past 8 years, and improvements being seen in this Doing Business report are the results of the implementation of broad reform programs going back several year.

For instance, Albania was recognized this year for its moratorium on the issuance of construction permits - often an arduous and expensive process for businesses in the construction sector. But the engagement started over two years ago responding to a request by the Ministry of Economic Development. The initial technical assistance laid the groundwork for a Competitiveness project and a follow-on advisory agreement. The program supported not only a new law on territorial planning, the decision on lifting the moratorium on issuing permits, and the implementation of an electronic platform for permits, but also the removal of barriers to foreign direct investment and advice on improving competitiveness and attracting investments in certain agribusiness (or horticulture) value chains.

In Belarus, we are collaborating with the country's Customs agency to reduce trade costs for exporters and importers. A study initiated by the Bank Group in 2015 examined cargo crossing at three border points in Belarus and identified opportunities to improve physical infrastructure, customs risk management systems, and relevant business processes. Taking cues from this study, our team in Europe and Central Asia is now working with Belarus Customs on improving aspects of the country's risk management, including post-customs control, and inter-agency information sharing.

And in Kenya, support from the Bank Group's Investment Climate Program 2 led to the enactment of four landmark business climate laws in 2015. The Special Economic Zones (SEZ) Act; the Companies Act 2015; the Insolvency Act 2015; and the Business Registration Act 2015. These laws have the potential to empower the private sector to grow, thrive and contribute to the country's economic growth.

The SEZ law, for instance, arises from demands by the private sector to enable them to invest in various zones in the country and, just like the Business Registration Act 2015, it allows for the establishment of an autonomous agency to guide and regulate business corporations.

The Companies Act introduces provisions in the country's old Companies Act that deal with the use of lawyers in companies, introduces standard articles of association to the business registration that makes registration easier, enables corporate governance rules to be better enforced and enhances liabilities for directors who do not deal correctly with company assets. Today, Kenya is a global success story and led Sub-Saharan African countries on this year's Doing Business list of reformers.

Brand new in this year's report: whether business regulations in the countries measured provide women and men the same opportunities and protections. In many countries they still don't. In some countries women's testimonies have less value in court. In 23 economies women need additional authorizations to engage in business. The Trade & Competitiveness Global Practice has been working with governments and women's associations in several countries to increase awareness of women's rights and decrease gender discrimination in regulations. In Cote d'Ivoire and Togo legislation was changed to address legal impediments to women's economic participation. In Sierra Leone, we have been working to abolish discriminatory provisions particularly in the mining sector.

Something else is different this year. While five or six years ago, many of the top improvers were smaller countries such as Rwanda or Colombia, increasingly large emerging markets are taking on a reform agenda and approaching the Bank Group for support. This year, Indonesia and Pakistan were recognized for implementing reform programs spanning more than three areas of regulation with substantial movement towards global best practice. India continued on the reform path it started two years ago under the leadership of Prime Minister Narendra Modi, facilitating trade by launching the trade portal ICEGATE, streamlining bureaucratic requirements, and introducing commercial divisions at the courts. It also continues to work on the implementation of a new insolvency code and the introduction of a goods and services tax. Brazil also introduced reforms to facilitate trade and commercial dispute resolution, and Russia improved its construction permits regime. These countries are increasingly recognizing the importance of business regulation in improving the competitiveness of their economies. This is evident by the high level attention given to coordination mechanisms in charge of doing business reforms which are often chaired by presidents or prime ministers. For example, Nigeria just created a Presidential Council to oversee an ease of doing business reform program, and the Philippines made easing doing business one of its top three priorities.

Between 2015 and 2016, with support from our partners in the Facility for Investment Climate Advisory Services, the Trade & Competitiveness global practice helped bring about 76 investment climate reforms in 41 countries. In the last five years, countries have achieved a total of 341 reforms. Nearly three out of four reforms were in the world's poorest countries; two-thirds were in Sub-Saharan Africa; and one-third were in states affected by fragility and conflict.

We know that both the business environment (the regulatory environment that governs the cost of doing business) and firm-specific factors (entrepreneurship, skills, access to credit and markets) impact businesses; and that having a healthy, vibrant, barrier-free business ecosystem is critical to economic development.

The Doing Business report continues to be a benchmarking tool for governments around the world and a driver for broad competitiveness reform programs. The Trade & Competitiveness Global Practice of the World Bank Group will continue to use this data and other analytical tools to engage in long-term partnerships with countries who want to enable private initiative and boost economic growth for all of their citizens.