Doing Business 2013 Annual Report - Turkey Findings

November 2, 2012

Turkey remains ranked 71st among 185 countries, same as last year, in the World Bank Group’s Ease of Doing Business rankings. While this ranking is the exact same as last year’s, the previous year’s ranking was out of 183 economies in the report rather than 185 in this year’s report. The lack of improvement in ranking means that other economies were reforming as least as much to result in the lack of movement in Turkey’s ranking.

The 2013 report highlights the progress that Turkey has made to improve its investment climate. In particular, it notes that Turkey made getting a construction permit less costly, more efficient and reduced, by four, the number of procedures required. It also reflects that Turkey made enforcing contracts a less costly, in that it now costs approximately 24.9 percent of the value of the claim to enforce a contract while it cost 27.9 percent in last year’s report.

The 2013 report nevertheless also sheds light on policy areas where reforms in Turkey remain important and where progress has been more limited, particularly when compared with other emerging market economies. Specifically, Turkish businesses continue to face serious constraints in resolving insolvency. For example, exiting the market takes longer (3.3 years) and yields lower recovery rates (23.6 cents on the dollar) than in many comparator countries. In addition, while there have been improvements in the procedures required to get a construction permit to build a warehouse, Turkey still ranks 142 out of 185 economies, with respect to this procedure.

The Government of Turkey remains committed to the process of addressing business environment constraints to firms' growth and job creation. The WB is working with the Turkish authorities to improve Turkey's business climate and improve the country's competitiveness in line with the objectives of the new CPS approved in March 2012.

Doing Business 2013 is the tenth in a series of annual reports issued by the World Bank Group assessing the role of regulatory frameworks in enhancing or constraining business activity. The report highlights the importance of a strong private sector business environment for helping generate economic growth and jobs. The main objectives of Doing Business are to provide international benchmarking as a service to policymakers and private sector stakeholders alike, to motivate and inform the design of reforms, contribute to the theory and experts’ and practitioners’ understanding of private sector development, and to enrich international initiatives on development effectiveness.

The Doing Business report provides a quantitative measure of the impact of regulations, based indicators in 10 key areas: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency. Performance against these indicators serves to rank countries on the basis of the quality of their regulatory environment and to identify top reformers over the last year. The Doing Business 2012 report also presents data on employing workers, but does not present rankings of economies on the employing workers indicators or include the indicators in the aggregate ranking on the ease of doing business.