World Bank on 27 October 2015 released Doing Business 2016 report. The 2016 report titled, Measuring Regulatory Quality and Efficiency says that more than 60 percent of World’s Economies improved their business rules in 2015.
The report ranked Singapore as first on ease of doing business while Eritrea has been ranked last at 189th position.
India showing the largest improvement in the South Asia region jumped 12 places to reach 130th rank on the ease of doing business. In the Doing Business 2015 report, India was ranked 142nd. It said that the improvement in two indicators, 'starting a business and getting electricity' pushed India up the ladder.
Highlights of the report
• Top ten economies in the list with the most business-friendly regulatory environments includes Singapore (1), New Zealand (2); Denmark (3); Republic of Korea (4); Hong Kong SAR, China (5); United Kingdom (6); United States (7); Sweden (8); Norway (9); and Finland (10).
• The world’s top 10 improvers, that is, economies that implemented at least three reforms during the year May 2014 to June 2015 and moved up the rankings scale, are Costa Rica, Uganda, Kenya, Cyprus, Mauritania, Uzbekistan, Kazakhstan, Jamaica, Senegal, and Benin.
• Entrepreneurs in 122 economies saw improvements in regulatory framework
• Developing economies quickened the pace of their business reforms during the last 12 months to make it easier for local businesses to start and operate.
• 85 developing economies implemented 169 business reforms during the period May 2014 to June 2015, compared with 154 reforms in the period May 2013 to June 2014.
• High-income economies carried out an additional 62 reforms, bringing the total for the period May 2014 to June 2015 to 231 reforms in 122 economies around the world.
• Majority of new reforms during the period May 2014 to June 2015 were designed to improve the efficiency of regulations, by reducing their cost and complexity, with the largest number of improvements made in the area of Starting a Business, which measures how long it takes to obtain a permit for starting a business and its associated processing costs.
• Out of total 45 economies, 33 were developing economies that undertook reforms to make it easier for entrepreneurs to start a business. For example, India improved the process by eliminating the minimum capital requirement and business operations certificates, which needed at least five days wait for entrepreneurs. Kenya also made business incorporation easier by simplifying pre-registration procedures, reducing the time to incorporate by four days.
• Efforts to strengthen legal institutions and frameworks were less common, with 66 reforms implemented in 53 economies during the year May 2014 to June 2015. The largest number of such reforms was carried out in the area of Getting Credit, with 32 improvements, of which nearly half were undertaken in Sub-Saharan Africa.
Doing Business Regions Wise
• Sub-Saharan Africa region: It accounted for about 30 percent of the improved global regulatory reforms and half of the world’s top 10 improvers. Multiple reforms were also implemented n Côte d’Ivoire, Madagascar, Niger, Togo and Rwanda. The region’s highest ranked economy is Mauritius, which has a global ranking of 32.
• Europe and Central Asia region: It was also a major reformer during the period May 2014 to June 2015, with Cyprus, Uzbekistan and Kazakhstan, amongst the world’s top 10 improvers. The region had both the largest share of economies implementing at least one reform and the largest average number of regulatory reforms per economy.
• South Asia region: The report highlights that six of the eight economies of the region implemented a total of nine reforms, the second largest share of any region after Europe and Central Asia. Economies that implemented several reforms included India, Bhutan and Sri Lanka. The region’s highest ranked economy is Bhutan, which has a global ranking of 71.
• East Asia and the Pacific region: Reform activity in the region continued. The report says that with more than half of the region’s 25 economies implemented a total of 27 reforms in the year May 2014 to June 2015. The region hosts four of the top five ranked economies in the world, including Singapore, the world’s top ranked economy.
• Middle East and North Africa region: The report says that reform activity picked slightly n with 21 reforms implemented in 11 of the region’s 20 economies. Economies that undertook more than one reform included the United Arab Emirates (UAE), Morocco, Tunisia and Algeria. UAE is the region’s highest ranked economy, with a global ranking of 31.
• Latin America and the Caribbean region: the report says that the region had the smallest share of reforms, with less than half of the region’s 32 economies undertaking a total of 24 reforms. Costa Rica and Jamaica were among the world’s top 10 improvers. Mexico is the region’s highest ranked economy, with a global ranking of 38.
World Bank (WB) Doing Business 2016 report
The WB Doing Business Ranking started in 2002 reviewed business regulations and their enforcement across 189 countries. It ranked the 189 economies on their ease of doing business from 1 to 189.
A high ease of doing business ranking means the regulatory environment, that is, the regulatory and bureaucratic systems of nations, is more conducive to the starting and operation of a local firm. The rankings were determined by sorting the aggregate distance to frontier scores on 10 topics, each consisting of several indicators, giving equal weight to each topic. The rankings for all economies are benchmarked to June 2015.
Doing Business data for the past 12 years shows that in 2003, it took an average of 51 days worldwide to start a new business. This has now been more than halved to 20 days.
Now get latest Current Affairs on mobile, Download # 1 Current Affairs App