Small and well-run Singapore, New Zealand and Hong Kong are the world’s easiest places to run a business, while global giants China, Brazil and India remain far down the list, according to the World Bank.
The three Pacific economies led the bank’s annual Doing Business report, released yesterday, which focuses on where businesses are best helped and least hindered by government.
The top 10 was filled out by Denmark, South Korea, Norway, the US, Britain, Finland and Australia, mostly the same developed economies as in previous years.
Taiwan placed 19th in the rankings, down one notch from a year earlier, the report said, adding that the nation has made obtaining electricity easier by eliminating site inspections and has improved access to credit information after starting to include data from utility companies in credit reports.
The report said Taiwan has also made paying taxes easier for companies, by introducing an electronic system for paying the vehicle license tax.
However, the report, despite revisions to its methodology after upsetting China in past years, left emerging market giants far down the list, fast growth and success in drawing investment notwithstanding.
China ranked 90th out of 189 countries and territories, barely improved from 93 a year ago; Brazil is 120th, also up three places; and India was ranked at 142, two spots worse than before.
All three ranked lower than troubled economies and difficult investment environments like Russia and Greece. However, that only underscored the admittedly narrow focus of the survey, in terms of assessing a country’s success.
“Doing Business measures a slender segment of the complex organism that any modern economy is,” World Bank chief economist Kaushik Basu said in a foreword to the report. “An economy can do poorly on Doing Business indicators, but do well in macroeconomic policy or social welfare interventions.”
The scores measure the operating environment for a business, including how easy it is to start a company, to transfer a property or resolve a commercial dispute; the time and cost of clearing imports and exports through a port; how easy is it to get an electricity connection and other issues that face business owners in any country.
By those measures, Singapore was, as in recent past years, on top with a score of 88.27 and New Zealand close behind with 86.91.
The top 30 countries all had more than 74 points, while the bottom five, with isolated and authoritarian east African pariah Eritrea at the very end, all scored below 40.
The contrast between the best and worst underscored why Singapore is highly praised and successful. Entrepreneurs in the Southeast Asian nation need just two-and-a-half days to open a business, 31 days to get electric power and four days and US$440 to import a container.
Meanwhile, in Eritrea, a similar businessman would need on average 84 days to start a company and 59 days to get electricity, while importing goods takes 59 days and US$2,000 per container.
Basu said that the survey is not a measure of the level of government intervention in an economy.
“A significant number of the top 30 economies in the ease of doing business ranking come from a tradition where government has had quite a prominent presence in the economy,” he said. “The top-performing economies ... are therefore not those with no regulation, but those in which governments have managed to create rules that facilitate interactions in the marketplace without needlessly hindering the development of the private sector.”
“Ultimately, Doing Business is about smart regulations that only a well-functioning state can provide,” Basu said. “The secret of success is to have the essential rules and regulations in place — but more importantly to have a good system of clearing decisions quickly and predictably, so that small and ordinary businesses do not feel harassed.”
Additional reporting by CNA
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