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Mongolia has laid the groundwork for significant reform

September 9, 2009


Doing Business 2010: Indonesia is the Most Active Business Regulatory Reformer in East Asia and the Pacific and Mongolia has laid the groundwork for significant reform

Washington, D.C., September 9, 2009—In a record year for regulatory reform worldwide, most economies in East Asia and the Pacific strengthened business regulations, making them more efficient to help increase opportunities for local firms. Three economies from the region—in order, Singapore, New Zealand, and Hong Kong (China)—led the world in ease of doing business.

Between June 2008 and May 2009 a record 131 of 183 economies around the globe reformed business regulation, according to Doing Business 2010: Reforming through Difficult Times, the seventh in a series of annual reports published by IFC and the World Bank. In East Asia and the Pacific 17 of 24 economies made reforms against the backdrop of the global economic crisis.

As a result of its reforms, Indonesia—the region’s most active reformer—moved up to 122 from 129 on the global ease of doing business rankings. Indonesia cut the time required to start a business by 16 days and the time to transfer a property by 17 days. The country also strengthened disclosure requirements for related-party transactions to protect investors.

Singapore, a consistent reformer, is the top-ranked economy on the ease of doing business for the fourth year in a row, with New Zealand as runner-up. Singapore introduced online and computer-based services to ease business start-up, construction permits, and property transfers.
Hong Kong (China) held its number three position in the global rankings by creating a one-stop shop to expedite the process for obtaining construction permits and by easing business start-up and property transfer procedures. Thailand also eased business start-up and ranks twelfth globally on the ease of doing business.

“Business regulation can affect how well small and midsize firms cope with the crisis and seize opportunities when recovery begins,” said Penelope Brook, Acting Vice President for Financial and Private Sector Development at the World Bank Group. “The quality of business regulation helps determine how easy it is for troubled firms to survive difficult times, how fast local entrepreneurs will start investing again and how quickly new business can get started.”

Mongolia’s position fell to 60, with no significant reforms recorded. However, the Government of Mongolia has taken steps to improve the business environment, which could lead to higher rankings in 2011. According to a recent review by the World Bank, Mongolia has the potential to be a top performer in starting a business, protecting investors, and registering property.

“The drop in rankings does not reflect a worsening business environmen.” said Arshad Sayed, the World Bank’s Country Manager for Mongolia. “It reflects the fact that other countries have reformed faster. Now that the presidential elections and government reorganization is completed, Mongolia is better positioned to reform more broadly and deeply to improve its business environment.”

Reform efforts in Mongolia are being coordinated by the Consultative Council on Investment Climate and Private Sector Development in Mongolia, which promotes discussions between government and business to improve the business environment. The Council is taking the lead on working with the World Bank’s Doing Business team and is developing a work plan based on their recommendations for improving the business environment.

Kh.Amarsaikhan, the Head of the Council’s Secretariat, is optimistic about Mongolia’s prospects. “In the past year, Mongolia has laid the groundwork for significant reform, which will improve the business environment and be reflected in next year’s Doing Business indicators.” he said.

Doing Business analyzes regulations that apply to an economy’s businesses during their life cycles, including start-up and operations, trading across borders, paying taxes, and closing a business. Doing Business does not measure all aspects of the business environment that matter to firms and investors. For example, it does not measure security, macroeconomic stability, corruption, skill level, or the strength of financial systems.

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The World Bank Group is one of the world’s largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world.

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