When the global crisis hit, we were concerned that policymakers would be distracted by the financial turbulence or take their eye off the ball. But evidently, this has not happened, said Neil Gregory, acting director of global indicators and analysis at the World Bank.
The report ranks 183 economies on key aspects of business regulation for domestic firms. It notes a silver lining in eastern Europes financial crash, with governments, particularly in the Baltics, taking measures to reform their insolvency regimes. Thanks to better corporate re-organization procedures for firms facing liquidity or solvency issues, the more viable firms have institutional support to continue operating in the event of difficulties, the report notes.
But the most reform-minded region over the past year has been east Asia and the Pacific. Eighteen of the 24 economies in the region including Indonesia, Malaysia and Vietnam have taken efforts to ease business start-up regulations, permits and property registration for small and medium-size enterprises. The macro-economic importance of boosting the operating environment for domestic firms has shot up over the past year, Gregory noted. At a time when Asia faces the challenge of increasing domestic consumption, it is heartening that business reforms are gathering pace, he said.
India is also one of the 40 most-improved economies for domestic business in the past year, the report notes. Since 2005, India has implemented 18 business regulation reforms in seven areas, principally by leveraging its technological capacity to improve business registration procedures.
Gregory pointed out that technological innovations in developing economies have provided the biggest impetus for reforms this year, from the introduction of electronic filing for taxes, an electronic collateral registry to online submission of customs forms and payments.
Globally, high-income members of the Organization for Economic Co-Operation and Development offer the easiest operating environment for domestic firms while Sub-Saharan Africa and South Asia are the most inhospitable. For the fifth year running, Singapore leads the rankings, followed by Hong Kong, New Zealand, the United Kingdom, and the United States.