Doing Business Report: New Record Set as 314 Reforms Introduced to Improve Business Climate Around the World

WASHINGTON, October 31, 2018 – 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 today.

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 11^th place, while Malaysia and Mauritius regain spots, in 15^th and 20^th 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 46^th 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 6^th place (from 9^th last year), and FYR Macedonia edging up one spot to 10^th 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 11^th 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 77^th place in the global ranking. India is now the region’s top-ranked economy. Afghanistan, with five reforms, moved up 16 spots to 167^th 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.

https://youtu.be/NvwOzxR2lf0

India Improves Rank by 23 Positions in Ease of Doing Business

India at 77 Rank in World Bank’s Doing Business Report

31 OCT 2018 6:30PM by PIB NEW  DELHI INDIA

The World Bank released its latest Doing Business Report(DBR, 2019) todayin New Delhi. India has recorded a jump of 23 positions against its rank of 100 in 2017 to be placed now at 77^thrank among 190 countries assessed by the World Bank. India’sleap of23 ranks in the Ease of Doing Business ranking is significant considering that last year India had improved its rank by 30 places, a rare feat for any large and diverse country of the size of India. As a result of continued efforts by the Government, India has improved its rank by 53 positions in last two years and 65positions in last four years.

The Doing Business assessment provides objective measures of business regulations and their enforcement across 190 economies on ten parameters affecting a business through its life cycle. The DBR ranks countries on the basis of Distance to Frontier (DTF), a score that shows the gap of aneconomy to the global best practice. This year, India’s DTF score improved to 67.23 from 60.76 in the previous year.

India has improved its rank in 6 out of 10 indicators and has moved closer to international best practices (Distance to Frontier score) on 7 out of the 10 indicators. But, the most dramatic improvements have been registered in the indicators related to ‘Construction Permits’ and ‘Trading across Borders’. In grant of construction permits, India’s rank improved from 181 in 2017 to 52in 2018, an improvement of 129 ranks in a single year. In ‘Trading across Borders’, India’s rank improved by 66 positions moving from 146 in 2017 to 80in 2018. The changes in six indicators where India improved its rank are as follows:

The important features of India’s performance this year are:

• The World Bank has recognized India as one of the top improvers for the year.
• This is the second consecutive year for which India has been recognized as one of the top improvers.
• India is the first BRICS and South Asian country to be recognized as top improvers in consecutive years.
• India has recorded the highest improvement in two years by any large country since 2011 in the Doing business assessment by improving its rank by 53 positions.
• As a result of continued performance, India is now placed at first position among South Asian countries as against 6th in 2014.

Indicatorwise highlights of India’s performance are:

1. Construction Permits –

1. Procedures reduced from 37 to 20 in Mumbai and from 24 to 16 in Delhi
2. Time reduced from 128.5 to 99 days in Mumbai and from 157.5 to 91 days in Delhi
3. Building quality control index improved from 12 to 14 in Mumbai and 11 to 14 in Delhi
4. Cost of obtaining construction permits reduced from 23.2 percent to 5.4 percent
5. DTF score improved from 38.80 to 73.81

1. Trading Across Borders –

1. Changes in time and cost are as follows:

1. Robust Risk Management System has reduced inspections significantly
2. e-Sanchit allows traders to file all documents electronically
3. Time and cost to export reduced through the introduction of electronic self-sealing of container at the factory

1. Starting a Business –
   1. 1. 1. Procedures reduced from 11 to 10 in Delhi and 12 to 10 in Mumbai
         2. Time reduced from 30 to 16 days in Delhi and 29.5 to 17 days in Mumbai
         3. PAN, TAN, DIN now merged with SPICe making it a single form for company incorporation
         4. No requirement of inspection for registration under Shops & Establishment in Mumbai
         5. Distance to Frontier improved from 75.40 to 80.96

1. Access to Credit

1. Rank improved from 29 to 22
2. DTF improved from 75 to 80
3. Strength of legal rights index improved from 8 to 9
4. Secured creditors will now be repaid first during business liquidation hence given priority over other claims

1. Access to Electricity

1. Procedures reduced from 5 to 3 in Delhi and 5 to 4 in Mumbai
2. DTF improved from 85.21 to 89.15

Improvement have taken place due to the commitment of the Government to carry out comprehensive and complex reforms, supported by the bureaucracy which has changed its mindset from a regulator to a facilitator. The Government has undertaken an extensive exercise of stakeholder consultations to understand challenges of the industry, government process re-engineering to provide simplified and streamlined processes to create a more conducive business environment in the country. As a result of continued efforts, India’s rank has improved as follows:

Year

The eight indicators in which India has improved its rank over last four years:

Implementation of reforms required coordination within various Ministries and government agencies:

1. 1. DIPP prepared reform action plan based on global best practices, with support of World Bank’s expert team
   2. Identification of nodal Departments and constitution of Task Force for each indicator. DIPP sensitizing Departments and worked with them for reform implementation
   3. Development of a Communication Plan for Dissemination of reforms to users and other stakeholders, to generate awareness and receive feedback.
      1. DIPP engaged expert agencies to receive regular industry feedback on reforms
      2. Consulted stakeholders frequently to understand the gaps in reform implementation
      3. Created WhatsApp groups to share reforms and address concerns of users
      4. Conducted focused group discussions and one-to-one meetings with users
      5. Ran twitter Polls and conducted live Twitter chat sessions to gauge user perception
   4. Identified corrective measures based on feedback received
   5. Regular review of reforms and removing bottlenecks in implementation
   6. Indian delegation visited World Bank multiple times to explain the reforms implemented and understand areas for improvement