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International trade is the great leveller, bringing together nations of differing cultures and political persuasions. And with each passing year, it’s getting easier to do business across the world even although significant problems do still remain. However, countries as politically disparate as the United Arab Emirates, Saudi Arabia and Israel, for example, have more in common in terms of commerce and regulatory reform than perhaps many across the Middle East would like to believe.
This is good news for the entrepreneur, investor and business owners looking to start up or expand operations overseas. But whether macro-scale improvements are truly appreciated or are interpreted in a more positive light is extremely hard to gauge. Understandably, it might be difficult to do so when embroiled in the minutiae and day-to-day vagaries associated with business banking, documentary credits, shipping guarantees and all of the other necessary facets of international trade.
Nevertheless, optimism grows, evident in the annual Doing Business 2014 report produced by the World Bank and the International Finance Corporation, the investment, advisory, and asset management services arm of the World Bank Group. It’s the 11th in the series of annual reports which benchmark regulations affecting private-sector firms in no less than 189 economies, particularly with regard to small and medium-size enterprises.
Sri Mulyani Indrawati, Managing Director, World Bank Group, says in the report’s preface, “We have been excited to see a global convergence toward good practices in business regulations. The data show that economies in all regions of the world and of all income levels have made important strides in improving the quality of the rules underpinning private sector activity. This year the findings have been even more encouraging – low-income economies have improved their business regulations at twice the rate that high-income economies have.”
Such developments, he adds, support the twin World Bank Group goals of ending extreme poverty and boosting shared prosperity. The Doing Business reports help mobilise policy makers to reduce the cost and complexity of government procedures and to improve the quality of institutions. Such change serves the underprivileged the most.
In this year’s report, the United Arab Emirates (UAE) is the best-placed country regionally, coming in at 23rd in global terms, followed by Saudi Arabia in 26th place and Israel in 35th place. Singapore is top of the ease of doing business rankings followed by Hong Kong and New Zealand. The United States is placed 4th while the United Kingdom is listed in 10th place.
The Doing Business report measures a string of indicators, tracking changes in regulations applying to domestic small and medium-size companies operating in the largest city of each economy. The 10 areas covered in the business life cycle include: starting a business, dealing with construction permits, getting electricity, registering property, obtaining credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. The aggregate ranking on the ease of doing business is based on these indicators.
The report also documents regulations on employing workers, but these are not included in the aggregate ranking. In addition, Doing Business also documents good practices around the world to provide insights into how governments have improved the regulatory environment in the past in the areas that it measures. Links to the full report and its subsets are available here.