WASHINGTON, Oct 29 – Malaysia is ahead of countries such as Taiwan, Switzerland, Austria, United Arab Emirates, Thailand, The Netherlands, Japan, France, China and India – rising two notches to 18th – according to the World Bank Doing Business Report 2015. The Top 5 Asia countries ranked in the latest report are Singapore (1), Hong Kong, China (3), South Korea (5), Malaysia (18) and Taiwan (19).
Tajikistan made the greatest strides in business-friendly reforms in the past year, part of an overall trend of improving business regulations across Eastern Europe and Central Asia, the World Bank said in the report released yesterday. However, the business climate worsened most in Serbia compared with its performance last year, the bank said in its latest “Doing Business” report.
The eastern European country is going through painful fiscal austerity after huge floods devastated the economy. Singapore remained the world’s easiest place to do business for the ninth year in a row, followed by New Zealand and Hong Kong, the bank said in a report that ranks 189 countries on 10 criteria tied to the business climate, such as ease of opening a business, paying taxes or getting electricity.
In general, 85% of countries in Eastern Europe and Central Asia have made it easier to do business in the past year, compared with only half of countries in South Asia or Latin America. Augusto Lopez-Claros, director of the World Bank’s global indicators, said European countries dealing with high debt burdens may seek to create more private sector jobs and boost their growth potential through business-friendly reforms, he said.
Ireland, for example, was among the top 10 most-improved economies on its ease of doing business this year, after ending its EU/IMF bailout. Since their inception in 2005, the World Bank’s business rankings have come to carry a huge weight with governments eager to attract private enterprise and trumpet commitment to reforms. The report is the bank’s most-downloaded publication.
But an independent panel set up by the World Bank found last year that the development institution should stop producing headline rankings because they may be misleading. Non-profit groups also criticised the methodology for promoting less regulation, which could hurt the poorest. “If the bank is unable or unwilling to take the reform of the (report) seriously, they should drop the entire exercise,” said Tiago Stichelmans, analyst at the European Network on Debt and Development, which comprises 47 non-governmental groups.
To address the critiques, the World Bank for the first time this year included measures that show how far each country is from the best performers, or the “frontier,” to enable governments to better judge progress from year to year. For example, the Philippines dropped nine places in the rankings this year. But the country’s overall business climate stayed constant; other governments simply made greater strides in improving their business rules, raising their rank.
The bank is also changing some of the indicators to consider qualitative measures, such as how well laws are designed. Ultimately, the “Doing Business” rankings cannot capture everything that contributes to an economy’s success, but they throw a light on one key measure, Kaushik Basu, the World Bank’s chief economist, said in a foreword to the report. “Life is a many-splendoured thing, and the ‘Doing Business’ report tries to capture one aspect of the good life.”