Washington, D.C., October 29, 2013—A new World Bank Group report finds that the pace of regulatory reform in Europe and Central Asia remains strong, with 19 economies implementing 65 reforms to improve business regulation in the past year.
Doing Business 2014: Understanding Regulations for Small and Medium-Size Enterprises shows that efforts to strengthen legal institutions and reduce the complexity and cost of regulatory processes have paid off for entrepreneurs in Europe and Central Asia. The region has overtaken East Asia and the Pacific as the second most business-friendly after the high-income economies in the Organization for Economic Co-operation and Development (OECD).
The report finds that since 2009, 92 percent of economies in Europe and Central Asia have improved their process for starting a business, a higher share than in any other region. Thanks to these efforts, today it is the easiest region for business entry, ahead of the OECD high-income economies. In response to the financial crisis, 73 percent of the region’s economies reformed insolvency proceedings over the same period, and 85 percent made it easier to pay taxes.
“Joining the European Union (EU) in 2004 was a great motivator for some economies in the region,” said Augusto Lopez-Claros, Director, Global Indicators and Analysis, World Bank Group. “Our report finds that these economies have continued on a path of comprehensive and ambitious economic and institutional reform even after EU entry, ensuring that they could compete with their more developed high-income partners. Beyond that, the report finds that there is encouraging news across Europe and Central Asia. Of the 20 economies narrowing the gap with better business regulatory practices the most since 2009, nine are in the region: Armenia, Belarus, Georgia, Kosovo, the former Yugoslav Republic of Macedonia, Moldova, Poland, the Russian Federation, and Ukraine.”
This year’s report ranks Belarus 63 out of the 189 economies reviewed. Belarus made starting a business easier by reducing the registration fees and eliminating the requirement for an initial capital deposit at a bank before registration. It made getting electricity easier by speeding up the process of issuing technical specifications and excavation permits and by reducing the time needed to connect to the electricity network. In addition, Belarus made transferring property easier by introducing a fast-track procedure for property registration. Finally, Belarus improved its insolvency process through a new insolvency law that, among other things, changes the appointment process for insolvency administrators and encourages the sale of assets in insolvency. The law also improves regulation of the liability of shareholders and directors of the insolvent company.
“Despite improvements in the procedures measured by the Doing Business, persistent weaknesses remain in regulatory environment for business operation, particularly for private small and medium-size enterprises in Belarus,” noted Qimiao Fan, World Bank Country Director for Belarus, Moldova and Ukraine. “Given the dominance of state-owned enterprises, Belarus’ private sector and especially small and medium-size enterprises remain a small part of the economy relative to their regional peers. The World Bank Group stands ready to assist the country and share international practice to facilitate private sector development.”
Singapore tops the global ranking on the ease of doing business. Joining it on the list of the top 10 economies with the most business-friendly regulations are Hong Kong SAR, China; New Zealand; the United States; Denmark; Malaysia; the Republic of Korea; Georgia; Norway; and the United Kingdom.
In addition to the global rankings, every year Doing Business reports the economies that have improved the most on the indicators since the previous year. The 10 economies topping that list this year are (in order of improvement) Ukraine, Rwanda, the Russian Federation, the Philippines, Kosovo, Djibouti, Côte d’Ivoire, Burundi, the former Yugoslav Republic of Macedonia, and Guatemala. Yet challenges persist: five of this year’s top improvers—Burundi, Côte d’Ivoire, Djibouti, the Philippines, and Ukraine—are still in the bottom half of the global ranking on the ease of doing business.