Economies in Europe and Central Asia continued an active program of reforms to improve their business climate, to create jobs and spur growth, according to the 15th-anniversary edition of the World Bank Group’s annual Doing Business report.
Serbia ranks at 43 on the ease of doing business. Released on 31st October, Doing Business 2018: Reforming to Create Jobs records 44 reforms in the region in the past year, bringing to a total of 673 the number of reforms enacted over the past 15 years.
Two of the region’s economies, Kosovo and Uzbekistan, feature among this year’s global top improvers and 13 of the region’s 24 economies are ranked in the top 50 in the Doing Business global rankings.
The reforms of the past year were carried out mainly in the areas of Registering Property (with eight reforms), Getting Credit (seven) and Protecting Minority Investors (six). For example, Georgia strengthened minority investor protections by clarifying ownership and control structures.
The Russian Federation made it easier to transfer property by reducing the time needed to apply for state registration of title transfer. Reforms in Kosovo included the adoption of new laws to strengthen resolving insolvency and improve access to credit. Uzbekistan strengthened minority investor protections by increasing corporate transparency requirements, while Lithuania made getting electricity easier by streamlining procedures and reducing connection fees.
Turkey not only strengthened access to credit by adopting a new law on secured transactions that establishes a unified collateral registry and allows out-of-court enforcement of collateral but also improved its credit reporting system by adopting a new law on personal data protection. Ukraine made dealing with construction permits easier by significantly reducing fees.
Other economies in the region that implemented reforms in the past year include Kazakhstan (three reforms), the Kyrgyz Republic (one) and Tajikistan (two). In Kazakhstan, for example, enforcing contracts was made easier by introducing additional time standards for key court events that are respected in the majority of cases.
The reform implemented in the Kyrgyz Republic strengthened access to credit through two new decrees that establish a unified and modern collateral registry and also improved its credit reporting system by adopting a new law on exchanging credit information. Tajikistan made starting a business easier by raising the revenue threshold for mandatory value added tax registration and eliminated a procedure to make registering property easier.
“The economies of Europe and Central Asia continue to demonstrate a very strong reform agenda,” said Santiago Croci Downes, Program Manager of the Doing Business Unit. “As the impact of these reforms spreads, we are likely to see a more dynamic private sector which will contribute to boosting economic growth in the region.”
The region’s top-ranked economies are Georgia (in 9th place), the Former Yugoslav Republic of Macedonia (11) and Lithuania (16).
Economies of Europe and Central Asia perform best in the Doing Business areas of Protecting Minority Investors and Registering Property. For example, it takes on average 20 days to transfer commercial property, compared with the global average of 49 days.
The region continues to underperform in Dealing with Construction Permits and Getting Electricity. It takes an average of 168 days to obtain a construction permit in the region, compared to the average of 158 days globally. And it takes an entrepreneur 114 days to get connected to the electric grid in the region, compared to the global average of 92 days.
This year, Serbia ranks at 43 on the ease of doing business, compared to 47 in last year’s report.
“If we look at Serbia and compare it with the perfect business environment, Serbia’s score went from 72.87 in Doing Business 2017 to 73.13 in Doing Business 2018,” said Stephen Ndegwa, World Bank Manager for Serbia. “This means that in the last year Serbia improved its business regulations as captured by the Doing Business indicators in absolute terms—the country is narrowing the gap with countries that have the best business environment.”
More specifically, Doing Business finds that Serbia implemented substantive changes in the local regulatory framework in the following areas in 2016/17:
- Serbia made starting a business easier by reducing the signature certification fee and increasing the efficiency of the registry, reducing the time for business registration. As a result, the cost to start a new business has dropped from 6.5 per cent to 2.3 per cent of the income per capita.
- Serbia improved the reliability of its land administration system by implementing a geographic information system.
- Serbia made enforcing contracts easier by adopting a new enforcement law that broadens and clarifies the responsibilities of enforcement agents as well as the powers of the courts during the enforcement process.
It’s important to note that Serbia is ranked 10th when it comes to dealing with construction permits in this year’s report.
“Over the past 15 years, Serbia has made significant progress in several Doing Business areas and implemented a total of 28 reforms, mainly in the area of Registering Property (with 6 reforms), Starting a Business and Resolving Insolvency (5 each). The number of reforms in Serbia over the past 15 years compares well with the global per-country average of 17 and ECA average of 28,” said Thomas Lubeck, IFC Regional Manager for Central and Southeast Europe.
“As a result, starting a new business in Serbia now takes only 5.5 days compared to 56 days 15 years ago, which is 3 days less than the average across OECD high-income economies. The time to resolve a commercial dispute through a local first-instance court in Serbia has also been significantly reduced over the past 15 years. It now takes 635 days compared to 1028 days in 2003.”
However, Serbia underperforms in the area of Getting Electricity. It takes 125 days to connect to the electricity grid, much more than the average of 79 days across OECD high-income economies.
Highlights of the successes of Europe and Central Asia over the past 15 years include:
- Starting a Business and Paying Taxes have been the most common areas of reform, with 120 and 108 reforms respectively.
- Fifteen years ago, it took an average of 43 days to register a new business in the region, compared with 10 days now. This is half the global average of 20 days. The region’s top performing economy in this respect is Georgia, where it takes two procedures and two days to register a new business, compared with nine procedures and 25 days in 2003.
- Georgia has implemented the most reforms in the past 15 years, totalling 47, followed by Kazakhstan and the Former Yugoslav Republic of Macedonia, with 41 each.
The full report and its datasets are available at www.doingbusiness.org
source: World Bank