Governments around the world set a new record in bureaucracy busting efforts for the domestic private sector, implementing 314 business reforms over the past year, says the World Bank Group’s Doing Business 2019: Training for Reform report, released on Wednesday.
The reforms, carried out in 128 economies, benefit small and medium enterprises as well as entrepreneurs, enabling job creation and stimulating private investment. This year’s reforms surpass the previous all-time high of 290 reforms two years ago.
“The private sector is key to creating sustainable economic growth and ending poverty around the world,” said World Bank Group President Jim Yong Kim. “Fair, efficient, and transparent rules, which Doing Business promotes, are the bedrock of a vibrant economy and entrepreneurship environment. It’s critical for governments to accelerate efforts to create the conditions for private enterprise to thrive and communities to prosper.”
The report finds that reforms are taking place where they are most needed, with low-income and lower middle-income economies carrying out 172 reforms. In Sub-Saharan Africa, a record number of 40 economies implemented 107 reforms, a new best in number of reforms for a third consecutive year for the region. The Middle East and North Africa region scaled a new high with 43 reforms.
The indicator Starting a Business continued to see the most improvements, with 50 reforms this year. Enforcing Contracts and Getting Electricity saw milestone reforms, with 49 and 26, respectively.
In the World Bank Group’s annual ease of doing business rankings, the top 10 economies are New Zealand, Singapore and Denmark, which retain their first, second and third spots, respectively, for a second consecutive year, followed by Hong Kong SAR, China; Republic of Korea; Georgia; Norway; United States; United Kingdom and FYR Macedonia.
In notable changes to the top 20 ranked economies this year, the United Arab Emirates (UAE) joins the grouping for the first time, in 11th place, while Malaysia and Mauritius regain spots, in 15th and 20th places, respectively. During the past year, Malaysia implemented six reforms, Mauritius five, and the UAE four. The reforms in Mauritius included the elimination of a gender-based barrier to equalize the field between men and women in starting a business.
This year’s top 10 improvers, based on reforms undertaken, are Afghanistan, Djibouti, China, Azerbaijan, India, Togo, Kenya, Côte d’Ivoire, Turkey and Rwanda. With six reforms each, Djibouti and India are in the top 10 for a second consecutive year. Afghanistan and Turkey, top improvers for the first time, implemented record single-year reforms, with five and seven, respectively.
“The diversity among the top improvers shows that economies of all sizes and income levels, and even those in conflict can advance the business climate for domestic small and medium enterprises. Doing Business provides a road map that different governments can use to increase business confidence, innovation, and growth and reduce corruption,” said Shanta Devarajan, the World Bank’s Senior Director for Development Economics and Acting Chief Economist.
This year, Doing Business collected data on training provided to public officials and users of business and land registries. A case study in the report, which analyzes this data, finds that mandatory and annual training for relevant officials is associated with more efficient business and land registries. A second study finds that regular training for customs clearance officials and brokers results in lower border and documentary compliance times, easing the movement of goods across borders. Two other case studies focus on the benefits of accrediting electricians and training of judges.
“This year’s results clearly demonstrate government commitment in many economies, large and small, to nurture entrepreneurship and private enterprise. If the reform agendas are complemented with training programs for public officials, the impact of reforms will be further enhanced, new data show,” said Rita Ramalho, Senior Manager of the World Bank’s Global Indicators Group, which produces the report.
Since its inception in 2003, more than 3,500 business reforms have been carried out in 186 of the 190 economies Doing Business monitors.
By region, East Asia and the Pacific is home to two of the world’s top 10 Doing Business economies, Singapore and Hong Kong SAR, China. Additionally, China is one of this year’s top 10 improvers, advancing more than 30 spots to 46th place in the global rankings. The region’s economies carried out a total of 43 reforms in the past year, with a major push seen in the areas of Starting a Business and Getting Electricity.
Europe and Central Asia also hosts two of the world’s top 10 economies this year, with Georgia moving up to 6th place (from 9th last year), and FYR Macedonia edging up one spot to 10th place. The region also hosts two of this year’s top improvers, Azerbaijan and Turkey. The pace of reforms accelerated in the region, with 54 reforms implemented during the past year, compared with a revised number of 43 reforms the previous year. While reforms in the region covered all areas of Doing Business, many improvements focused on easing construction permitting and cross border trade.
A total of 25 reforms were carried out in Latin America and the Caribbean in the past year. Brazil made the most improvements, with four reforms. The bulk of the reforms in the region were aimed at improving the legal rights of borrowers and lenders with respect to secured transactions, and the process of starting a business.
Economies of the Middle East and North Africa significantly accelerated the pace of reforms in the past year, with 43 reforms, compared to 29 the previous year. This year, the region hosts an economy in the global top 20 grouping, with the United Arab Emirates’ maiden entry in 11th place and one top improver, Djibouti. However, the region continues to lag on gender-related issues, with barriers for women entrepreneurs in place in 14 economies.
In a first for South Asia, two of the region’s economies earned coveted spots in the global top improvers. India continued its reform agenda, implementing six reforms in the past year and advancing 23 spots to 77th place in the global ranking. India is now the region’s top-ranked economy. Afghanistan, with five reforms, moved up 16 spots to 167th place in the global rankings. Collectively, the region’s economies carried out 19 reforms in the past year. Many of the reforms focused on improving starting a business, access to credit, paying taxes and resolving insolvency.
Sub-Saharan Africa set a new milestone for a third consecutive year, implementing 107 reforms in the past year, up from 83 the previous year. In addition, this year also saw the highest number of economies carrying out reforms, with 40 of the region’s 48 economies implementing at least one reform, compared to the previous high of 37 economies two years ago.
The region is home to four of this year’s top 10 improvers – Togo, Kenya, Côte d’Ivoire and Rwanda. While reforms in the region were wide-ranging, many improvements focused on easing property registration and resolving insolvency.