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Croatia Continues to Make Improvements in Business Regulatory Reforms, Says Latest Doing Business Report

October 27, 2015

WASHINGTON, October 27, 2015 – Over 90 percent of economies in the Europe and Central Asia region implemented reforms to improve their business climate during the past year, finds the World Bank Group’s annual ease of doing business measurement.

Doing Business 2016: Measuring Regulatory Quality and Efficiency, released today, records 58 reforms implemented in 23 of the region’s 25 economies.

Kazakhstan, with a global ranking of 41, implemented the most reforms in the world, with seven improvements to its business regulations during the past year, followed by Russia (ranked 51) and Cyprus (47), which implemented five reforms each.

Notable improvements in Kazakhstan included the elimination of a number of superfluous bureaucratic impediments in several areas, including Starting a Business, Registering Property, and Enforcing Contracts. Russia ranks in the world’s top 10 for Registering Property and gets a perfect score for reliability of electricity supply and transparency of electricity tariffs. Cyprus, meanwhile, made substantial improvements on resolving insolvency.

The reforms implemented in Europe and Central Asia accounted for 25 percent of the 231 reforms implemented worldwide during the past year. The region also boasted three of the world’s top 10 improvers, i.e. countries that implemented at least three reforms and moved up on the global rankings scale, with Cyprus, Kazakhstan, and Uzbekistan.

“It is commendable that almost every single economy in Europe and Central Asia implemented at least one reform in the last year to improve the business environment,” said Rita Ramalho, Manager of the Doing Business project. “The political commitment and hard work involved in implementing these reforms has allowed the region’s economies to break into top performers on most of the indicators measured by the report.”

Croatia, with a global ranking of 40, has made it easier to enforce contracts and judgements by introducing an electronic system to handle public sales of movable assets and by streamlining the enforcement process as a whole. In particular, Croatia scores particularly well on the new quality of judicial administration index, where it obtains the maximum possible score on the sub-index analyzing the local court structures (5 out of 5 points) indicating, among others, that the economy has dedicated systems in place to solve commercial cases and small claims. Croatia is also one of only 6 economies that score 5.5 out of 6 points on the new sub-index examining the use of case management techniques. In the Registering Property indicator, Croatia’s ranking improved due to the introduction of the new quality of land administration index, where Croatia ranks at the top quartile of economies. In the Dealing with Construction Permits indicator, Croatia introduced the new building quality control index and scored 12 out of 15 possible points  Croatia does particularly well on quality of building regulations, quality control during and after construction and in professional certification requirements.

“We are encouraged to see the progress made by the authorities in making it easier for investors and entrepreneurs to do business in Croatia. Such efforts need to be sustained and deepened in the years to come. Speedier implementation of these regulatory reforms will not only improve the investment climate and stimulate job creation but it will also accelerate the economic recovery by attracting private sector investments,” said Carlos Piñerúa, World Bank Country Manager for Croatia.

This year’s Doing Business report completes a two-year effort to expand benchmarks that measure the quality of regulation, as well as efficiency of the business regulatory framework, in order to better reflect the reality of business operations on the ground. On the five indicators that saw changes in this report – Dealing with Construction Permits, Getting Electricity, Enforcing Contracts, Registering Property and Trading Across Borders – Europe and Central Asia has performed well and this has positively impacted the global rankings of many of the region’s economies.

The region stands out, globally, on the Registering Property indicator. The cost of registering property is the lowest globally – at an average of 2.6 percent of the property value. And, as in the high-income Organization for Economic Cooperation and Development (OECD) economies, it only takes 22 days to register property in the Europe and Central Asia region – the lowest time globally.

One of the biggest struggles for the region is the time it takes to get connected to the electrical grid. On average, this takes 119 days, compared to the average of 78 days in the OECD economies. But the region performs well on quality of electricity supply, with few outages and disruptions.

The region also does not perform well on the Dealing with Construction Permits indicator, with excessive time-consuming procedures involved. In Tajikistan, for example, it takes 27 procedures and 242 days to complete all requirements for obtaining a construction permit. But the region performs well on the quality benchmarks for construction. For instance, a post-construction final inspection is required by law in all economies of the Europe and Central Asia region.

FYR Macedonia is the region’s highest ranking economy, with global ranking of 12 out 189 economies from around the world. The country excels in several areas of ease of doing business and also undertook reforms in the past year. For example, FYR Macedonia further simplified the process of starting a business by introducing compulsory online registration. As a result, the country is now the second best performer globally in the area of Starting a Business.

Lithuania and Latvia are the second and third highest ranking economies in the region, with a global ranking of 20 and 22, respectively.

The full report and accompanying datasets are available at https://www.doingbusiness.org/

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