Doing Business in the Arab World Dahlia Khalifa Senior Strategy Adviser Abu Dhabi November 8, 2009
Feb 24, 2016
Doing Businessin the Arab World
Dahlia KhalifaSenior Strategy Adviser
Abu DhabiNovember 8, 2009
Doing Business – Overview Launched 8 years ago. Doing Business in
the Arab World for 2nd year
Goal: to provide an objective basis for understanding and improving the regulatory environment for business.
From 5 indicator sets in 133 economies to 10 in 183 economies.
The objective: efficient regulations, accessible to all, and simple in their implementation.
Focus on regulations relevant to the life cycle of a small to medium-sized domestic business based on standardized case
DO NOT measure all aspects of the business environment.
1. Singapore 16. Finland
2. New Zealand 17. Mauritius
3. Hong Kong, China 18. Sweden
4. United States 19. Korea, Rep.
5. United Kingdom 20. Bahrain
6. Denmark 21. Switzerland
7. Ireland 22. Belgium
8. Canada 23. Malaysia
9. Australia 24. Estonia
10. Norway 25. Germany
11. Georgia 26. Lithuania
12. Thailand 27. Latvia
13. Saudi Arabia 28. Austria
14. Iceland 29. Israel
15. Japan 30. Netherlands
Top 30 on the ease of Doing Business 2010
Arab World overall performance on Doing Business 2008/09
• Saudi Arabia leads the way in the ease of doing business, followed by Bahrain.
•Top 6 economies in Arab world from GCC
•UAE and Egypt greatest jump in rankings this year, top global reformers – Egypt for 4th time
Key findings in this year’s report
Against backdrop of global financial and economic crisis, record number of reforms recorded: 287 reforms in 131 countries; 20% more than in the year before.
Focus on SMEs for job creation. Regulatory ease of starting, operating and closing a business influences how well firms can cope and adjust.
Reforms more likely in developing economies: Two-thirds of reforms in low- and lower-middle-income economies.
Rwanda first Sub-Saharan African country to become top reformer: Reforms in 7 of the 10 areas; from143 to 67 in aggregate ranking.
2 regions stand out for reform pace in 2008/9: Eastern Europe and Central Asia (sixth year in a row) and Middle East and North Africa (and Arab World)
Arab World average ranking: 103
DB Top Reformers in 2008/09
Economy Starting a business
Dealing with construction
permits
Employing workers
Registering property
Getting credit
Protecting investors
Paying taxes
Trading across borders
Enforcing contracts
Closing a business
Rwanda
Kyrgyz Republic
Macedonia FYR
Belarus
United Arab Emirates
Moldova
Colombia
Tajikistan
Egypt, Arab Rep.
Liberia
Arab world recorded a total of 38 positive reforms in 9 areas in 2008/09, 16 of 20 economies in the Arab world reformed
Percentage of countries with at least one positive reform in 2008/09
96%High Income
OECD
Eastern Europe and Central Asia
Sub-Saharan Africa
Latin America and
Caribbean
South Asia
East Asia and Pacific
Arab world– one of the leaders in the number of reforming countries
Arab World
In what topics does Arab World do the best?
Average rankings per topic 2008/09
103 95 9272
123101
6887
121105
Highest – 1
Lowest – 183
Consistent reform programs: Egypt, global top reformer for the fourth time
Egypt, global top reformer for the fourth time: Egypt moved from being ranked 116 to 106 among 183 economies on the overall ease of doing business. Egypt made business start-up less costly, simplified construction permits, expanded credit information, and created commercial courts to expedite contract dispute settlements.
Arab world performance – Ranking on the ease of Doing Business by indicator
Topic World’s top ranked 2008/09 Arab World’s top ranked 2008/09
Starting a business New Zealand Saudi Arabia (13)Egypt, Arab Rep. (24)
Dealing with construction permits Hong Kong, China Bahrain (14)United Arab Emirates (27)
Employing workers Australia Bahrain (13)Oman (21)
Registering property Saudi Arabia Saudi Arabia (1)United Arab Emirates (7)
Getting credit Malaysia Saudi Arabia (61)Egypt and U.A.E. (71)
Protecting investors New Zealand Saudi Arabia (16)Kuwait (27)
Paying taxes Maldives Qatar (2)United Arab Emirates (4)
Trading across borders Singapore United Arab Emirates (5)Saudi Arabia (23)
Enforcing contracts Luxembourg Yemen, Rep. (35)Tunisia (77)
Closing a business Japan Bahrain (26)Qatar (33)
Starting a Business in Arab World: Saudi Arabia and Egypt lead the way and 8 economies reform
Arab World Reformers in Starting a Business
Egypt, Arab. Rep.
Jordan
Lebanon
Oman
Saudi Arabia
Syrian Arab Republic
United Arab Emirates
Yemen, Rep.
Big improvements in starting a business since 2004 including in the region where average time dropped by almost half
8 Arab economies have reduced or eliminated the minimum capital requirement since 2005. 5 of these used to have among the highest such requirements in the world—up to the equivalent of $120,000. The UAE was among the economies abolishing the minimum capital requirement in 2008/09, perhaps inspired by the example of Egypt, Saudi Arabia, Tunisia and the Republic of Yemen.
Saudi Arabia eased business start up with the introduction of a new one-stop Unified Office for business start-up
Number of Procedures
Time (days) Cost (% of income p.c.)
Saudi Arabia rose from 15 to 13 on the global ease of doing business—making it the highest-ranked economy in the region—by establishing a one-stop shop for business registration and a faster process for construction permits
Dealing with Construction Permits in Arab World: Bahrain and United Arab Emirates lead the way
One-stop shops and risk-based systems popular in construction permitting
United Arab Emirates, global top reformer list for the first time
The UAE eased the process of dealing with construction permits in 2008/09 and is now ranked 2nd in the region after Bahrain 2008
2009
The United Arab Emirates moved from 47 to 33 on global ease of doing business and became one of the world’s 10 most active reformers by eliminating the minimum capital requirement, simplifying registration for new businesses, in addition to easing construction permitting and trading across borders.
Egypt eliminates most pre-approvals for construction permits
Number of Procedures
Time (days) Cost (% of income p.c.)
Getting Credit in Arab World: Bahrain has the highest coverage and Sudan the highest score on legal rights
Example of a successful reform: Morocco introduced private credit bureaus
Morocco strengthened access to credit information by introducing a private credit bureau
distributes positive and negative information
keeps credit information for more than 2 years
includes small loans on borrowers
Protecting Investors in Arab World: Saudi Arabia and Kuwait lead the way
Colombia- the road to the top 10 in Protecting Investors
•Colombia has reformed investor protections for 3 years.
•Passed a new decree which makes it easier to sue directors involved in prejudicial party transactions.
•If directors found guilty they must pay damages and disgorge the profit from the transaction.
Protecting Investors reforms in Tunisia
Rank 2009 2010
Protecting Investors Rank 143 73
Extent of disclosure index (0-10) 0 5
Extent of director liability index (0-10) 5 5
Ease of shareholder suits index (0-10) 6 6
Strength of investor protection index (0-10) 3.7 5.3
•The new provisions require approval of related party transactions by both the board of directors and a shareholders meeting
•Interested parties are no longer allowed to participate in the approval process
•Requires review of the terms of such transactions by an independent auditor
Trading across Borders in Arab World: United Arab Emirates and Saudi Arabia lead the way
After reforms United Arab Emirates leads the Arab World in Trading across Borders at #5 globally
Time to export (days)
Time to import (days)
Documents for export
5
4
Documents for import
7
5
Cost to export (USD per container)
Cost to import (USD per container)
Enforcing contracts in the Arab world: an opportunity for reform
Enforcing contracts:Top 10 and global good practices
Streamline provisions on mandatory mediation.
Increase number of mediators and court masters.
Have specialized commercial courts/chambers
Expand range of functions of court masters.
Explore enhanced use of technology in court systems.
Keep statistics on judicial performance.
• Luxembourg• Iceland• Hong Kong, China• Norway• Korea, Rep.• France• Germany• Finland• United States• New Zealand
Peer-learning and benchmarking: completed reforms motivated or informed by DB
About 270 reforms since 2004
270
Note: Reforms informed by Doing Business refers to reforms that were either supported by technical assistance or where governments indicated that the reform dialogue and process were informed by DB.
127 reforms in 2008/9
For more information visit: www.doingbusiness.org
Thank you. For more information:www.doingbusiness.org