Doing Business 2009: Regulatory Reform Hits Record Levels

2009 report tracks ease of doing business in 181 economies; reforms recorded in 113 economies Economies need good rules for business Reforms are typically nested in a broader, sustained approach to improving competitiveness

Ida is a Gambian entrepreneur who wants to sell her land to expand her manufacturing business. She has an interested buyer, but transferring property in the Gambia requires ministerial consent and can take up to a year. The Gambia is one of the 12 countries in the world where government approval is required for such economic transactions. Others are Lesotho, Madagascar, Nigeria, Papua New Guinea, Senegal, Solomon Islands, Tanzania, Tonga, Uganda, and Zambia.

Simplifying procedures to register property encourages investment and gives entrepreneurs like Ida, better access to credit to grow their businesses and create jobs.

Twenty-four countries made it easier to register property this past year, according to Doing Business 2009, a joint IFC-World Bank publication, which tracks 10 stages in the life cycle of a business, ranks countries on their regulatory ease of doing business, and identifies the fastest reformers.

Registering property is one of the 239 reforms the report tracked in 113 countries between June 2007 and June 2008.

Creating opportunity to grow

Azerbaijan is this year's top reformer, with the most regulatory reforms, according to the report.

The country set up a one-stop shop for business startup in January, halving the time, cost, and number of steps required to start a business. As a result, business registrations increased by 40 percent in the first six months of its operation.

Transferring property now takes 11 days, as opposed to 61 days it took before, thanks to a unified property registry for land and real estate transactions. Taxpayers can also fill out and pay taxes online, saving on average more than 500 hours a year in dealing with paperwork.

Almost all countries in Eastern Europe and Central Asia have made reforms, making it the leader among regions with most regulatory reforms. Three other countries in the region — Albania, Kyrgyz Republic, and Belarus — are also among this year's top 10 reformers.

Reforms in Africa

Sub-Saharan Africa has had a record year for regulatory reforms that make it easier to do business, with 28 countries completing 58 reforms.

Botswana, Burkina Faso, and Senegal are among the world's top 10 reformers. Senegal, the region's leading reformer, reduced business startup time from 58 days to eight, when it streamlined business registration and merged seven startup procedures into one.

This resulted in an 80 percent increase in new business registrations in the first 10 months after the reform.

In other countries, such as Botswana and Namibia, entrepreneurs now benefit from computerized registration systems.

Economies need good rules for business

Doing Business ranks economies based on 10 indicators of business regulation that record the time and cost to meet government requirements in starting and operating a business, trading across borders, paying taxes, and closing a business. This year's report ranked 181 economies and reported on reforms in 113 of those economies. The rankings do not reflect such areas as macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions, or crime rates.

"Economies need rules that are efficient, easy to use, and accessible to all who use them. Otherwise, businesses are trapped in the unregulated, informal economy, where they have less access to finance and hire fewer workers and where workers lack the protection of labor law," said Michael Klein, World Bank/IFC Vice President for Financial and Private Sector Development.

"Doing Business encourages good rules, and good rules are a better basis for healthy business than who you know," he added.

Five years of Doing Business reforms

Doing Business has captured nearly 1,000 reforms since 2004, when it started tracking reforms designed to make easier to do business by measuring their impact on 10 indicator sets.

These reforms are typically nested in a broader, sustained approach to improving competitiveness. The key to regulatory reform — and its benefits — is commitment.

Economies that have demonstrated this kind of commitment can serve as examples to others. As Egypt's Minister of Investment, Dr. Mahmoud Mohieldin, explains, "It's no exaggeration when I say I checked the top 10 in every Doing Business indicator and we just asked them, 'What did you do?' If there is any advantage to starting late in anything, it's that you can learn from others."

Egypt has been one of the top 10 reformers three times in the last four years.

For more information, go to www.doingbusiness.org. or contact:

Rebecca Ong
Phone: (202) 458-0434
E-mail: rong@worldbank.org