WASHINGTON, October 31, 2018 – Economies in the Middle East and North Africa region carried out a record number of reforms to improve the ease of doing business for domestic small and medium enterprises, says the World Bank Group’s Doing Business 2019: Training for Reform report, released today.
A total of 43 business reforms were implemented in the region during the past year, compared with 29 the previous year. Fourteen of the region’s 20 economies carried out reforms that help create jobs and stimulate private enterprise.
This year, the region hosts an economy in the global top 20 grouping, with the United Arab Emirates’ maiden entry, in 11th place. The region also hosts one of the top 10 improvers – Djibouti, which receives this distinction for a second consecutive year.
With six reforms during the past year, Djibouti leads the region in reform-count. Highlights of the reforms included creating a one-stop shop to make business start-ups easier; making property transfer less costly by reducing the registration fees and digitizing its land registry; and improving access to credit by broadening the scope of assets that can be used as collateral. Other reforms in Djibouti covered strengthening protections for minority investors, resolving insolvency and contract enforcement.
Egypt carried out five reforms in the past year, the highest number in a decade. It made starting a business easier by establishing a one-stop shop and strengthened minority investors protections by increasing corporate transparency. Other reforms included improving access to credit and making it easier to pay taxes and resolve insolvency.
The United Arab Emirates (UAE) carried out four reforms, which included the elimination of all fees for industrial and commercial electricity connections and improving online registration for new businesses. The UAE also strengthened access to credit and made registering property easier by increasing the transparency of the land administration system.
Jordan, Morocco, Saudi Arabia and Tunisia also implemented four reforms each during the past year. Reforms in Morocco and Tunisia included making business registration easier. Jordan’s reforms included making contract enforcement easier and Saudi Arabia made Trading Across Borders easier, among other improvements.
Collectively, the region’s economies focused their reform efforts in the past year on improvements in the areas of Starting a Business and Protecting Minority Investors, with seven reforms in each area.
“The significant acceleration in the pace of reforms in the Middle East and North Africa is an encouraging demonstration of countries’ commitment to nurture entrepreneurship and enable private enterprise. Going forward, policy makers should focus on adopting global best practices in areas where they are most needed,” said Santiago Croci Downes, Program Manager of the Doing Business Unit.
Doing Business includes gender dimensions in three indicators: Starting a Business, Registering Property and Enforcing Contracts. It finds that barriers against women are widespread in the Middle East and North Africa, with 14 of the region’s economies imposing additional procedures for female entrepreneurs.
The region performs best in the areas of Getting Electricity, Registering Property and Paying Taxes. Obtaining an electricity connection, for example, takes on average 72 days, which is five days less than the 77-day average in OECD high-income economies. The best-performing regional economy in this area is the UAE, where it takes only 10 days to obtain an electricity connection. Similarly, the average time to transfer property in the region is 30 days, compared to 20 days in OECD high-income. Saudi Arabia and the UAE are the region’s best performers in this area, with just 1.5 days needed to transfer property in each economy.
However, Getting Credit is harder in the Middle East and North Africa than anywhere else in the world, partly due to insufficient protections for lenders and borrowers in collateral and bankruptcy laws.
The region also underperforms in the areas of Trading Across Borders and Resolving Insolvency. For example, the cost for complying with the border requirements for exporting is $442 on average and it takes 58 hours, compared with $139 and 12.5 hours on average in OECD high-income economies. And, in cases of bankruptcy, the average recovery rate in the region is 26 cents to the dollar, compared with 70 cents in OECD high-income economies.
Since Doing Business began in 2003, Starting a Business has seen the most reforms in the Middle East and North Africa. As a result, the average time to start a business in the region has more than halved to 21 days, from 47 days in 2003, and the cost has also been halved to 22 percent income per capita, from 59 percent in 2003.
This year, Doing Business collected data on training provided to both public officials and users of business and land registries. A case study in the report, which analyzes this data, finds that mandatory and annual training for relevant officials is associated with higher business land registry efficiency. A second study, on enforcing contracts and resolving insolvency, examines the education and training of judges worldwide. It features the UAE, where training has been a central part of the UAE’s strategy to modernize its judiciary and has been instrumental in the successful creation of specialized commercial courts, the introduction of electronic case management systems and the implementation of a new insolvency regime. Two other case studies focus on the benefits of accrediting electricians and training customs clearance officials.
The full report and its datasets are available at www.doingbusiness.org