Ease of Doing Business improves in Ukraine but other countries improve faster

November 4, 2010

Kyiv, Ukraine, November 4, 2010— In the past year, Ukraine carried out three regulatory reforms aimed at making it easier to start a business, deal with construction permits and also eased tax compliance, according to Doing Business 2011: Making a Difference for Entrepreneurs, the eighth in a series of annual reports published by IFC and the World Bank.

As the result Ukraine moved up two places in the rankings on the ease of doing business—to 145 among 183 economies. By comparison, Kazakhstan which improved business regulation for local entrepreneurs the most in the past year, moved up 15 places in the rankings on the ease of doing business—to 59.

Ukraine eased business start-up by substantially reducing the minimum capital requirement. It cut 9 out of 31 procedures to obtain construction permits and it eased tax compliance by continuing the implementation of voluntary electronic filing for VAT returns.

“Reforms are taking place in Ukraine, but not at a pace sufficient to allow Ukraine to advance vis-à-vis the other economies with whom it is competing for investment and markets”, - said Martin Raiser, World Bank Country Director for Ukraine, Belarus and Moldova. “The reform agenda is well known, but its implementation needs to be accelerated and policy actions need to be more consistent. A deepened deregulation and reform effort to ease entry and exit, make it simpler to pay taxes, and abolish redundant regulations and standards could send a powerful signal to domestic and foreign investors.”

In the past five years about 85 percent of the world’s economies have made it easier for local entrepreneurs to operate, through 1,511 improvements to business regulation. Doing Business 2011 pioneers a new measure showing how much business regulation has changed in 174 economies since 2005. By this measure, Georgia has been the most active worldwide in reforming business regulation.

For eight consecutive years, Eastern Europe and Central Asia has been the most active region in improving business regulation for domestic firms. In the past many changes were driven by the prospect of joining the European Union. More recently, the financial crisis has triggered new activity. This past year 21 of 25 economies improved business regulation for local firms.

This year’s list of the 10 most-improved economies includes Kazakhstan, Rwanda (a consistent reformer of business regulation), Cape Verde, and Zambia—as well as Peru, Vietnam, Tajikistan, Hungary, Grenada, and Brunei Darussalam.

Globally, doing business remains easiest in the high-income economies of the Organisation for Economic Co-Operation and Development and most difficult in Sub-Saharan Africa and South Asia. But developing economies are increasingly active. In the past year, 66 percent reformed business regulation, up from 34 percent six years earlier.
The report ranks 183 economies on key aspects of business regulation for domestic firms.

About the Doing Business report series
Doing Business analyzes regulations that apply to an economy’s businesses during their life cycle, 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. Its findings have stimulated policy debates in more than 80 economies and enabled a growing body of research on how firm-level regulation relates to economic outcomes across economies.

About the World Bank Group
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.

Media Contacts
In Kyiv
Victor Zablotskyi
Tel : (+38044)4906671