CAIRO: While Egypt emerged as the world’s top reformer in the World Bank’s recent report, Assuit surprisingly surfaced as the Egyptian city with the least-time consuming business processes.
“Even if laws and regulations are the same across Egyptian districts and governorates, the time it takes to meet all the legal requirements can vary widely across locations, finds the Doing Business in Egypt 2008 report.
“This is the case with property registration. It takes 33 days in Assiut but 159 days on the outskirts of Alexandria to register property. The process is most time-consuming in Cairo, where entrepreneurs have to wait over six months.
Construction licenses, however, demonstrate the biggest differences in municipal requirements. “In Assiut, construction permits require 19 procedures and 109 days; in Cairo, 28 procedures and 249 days; and in Alexandria, 30 procedures and 207 days.
The report studies how Egypt’s improving business climate extends to its governorates. It measures ways in which government regulations enhance/restrain business activity at the sub-national level. The report focuses on three business indicators (starting a business, dealing with licenses, and property registration) measured across three governorates in Alexandria, Assiut and Cairo.
“As Egypt today is the [world’s] top reformer, Minister of Investment Mahmoud Mohieldin asked us to see what that means inside cities . and how each governorate is working on reform, explained Frank Sader, senior operations manager at the International Finance Corporation (IFC), the private arm of the World Bank.
“It is clear that Assuit has less administration requirement . because it also has less business activities compared to Alexandria and Egypt, he added.
The report is the first of its kind to examine business procedures in Egypt on a sub-national level. Similar reports examined sub-national business climates in countries including Morocco, Mexico, Brazil, and India. “We are doing it in a relatively sizeable number of countries where you have large cities, stated Sader.
The report began with these three cities, as they constitute major economic activities across the north and south of the country as well as in Upper Egypt. The World Bank is currently looking into launching a second sub-national business report next year in Egypt that will include five indicators and more governorates.
“Reforms really depend not only on the capital, but also on reform efforts on the sub-national level – on governmental level, Sader pointed out. “In order to get more business done in their cities, governors have to make it easier for investors to [start up] their businesses.
According to the report, state- and city-level performances are becoming increasingly important in a globalized world, where specific locations, rather than countries, compete for investment – Alexandria versus Shanghai, rather than Egypt versus China.
Payoffs from reform can be huge. Higher rankings on the ease of doing business are associated with growth, additional jobs, and a smaller informal sector. “Creating jobs is a priority for any government. More business-friendly regulations create opportunities and more equitable growth. Egyptian governorates would benefit greatly from new enterprises and jobs, which can come with more business-friendly regulations, said Mierta Capaul, lead author of Doing Business in Egypt 2008.
The report finds that Egypt’s governorates and districts can learn from each other by adopting good regulations and practices that exist elsewhere in the country. “When you carry out these reports, you find out that you don’t have to look far to implement reform in your city. You can copy experiences from any particular city and exercise it on a national level, Sader said.
Simple administrative reforms, the report continues, can make the country’s governorates more competitive nationally and globally. “For example, if Cairo were to adopt Assiut’s speedy property registration processes, the time to register property would drop from 193 to 33 days, just slightly longer than in Austria or Chile. Cutting the time to deal with licenses to the level of Assiut also would make builders in other cities competitive with builders in Singapore, reads the report.
“Reaction by all three governors was to immediately see what else they could do as reform efforts in their cities, Sader added. “It is encouraging to see that in Egypt the government is very reform oriented, and that reforms don’t just stop at Cairo, but they keep going at a national level and extend to other governorates.
