CAIRO: Among the world’s economies, Egypt jumped 5 places in reforming business regulations from 99 in 2010 to 94 in 2011, according to Doing Business 2011: Making a Difference for Entrepreneurs, released last week by IFC and the World Bank.
According to the report, the improvement in Egypt’s rankings was a result of reforms making it easier to start a business, mainly by reducing startup costs and improving trading across borders by introducing an electronic system for submitting export and import documents.
Worldwide, more than half the regulatory changes recorded in the past year eased business start-up, trade and the payment of taxes. Many of the improvements involve new technologies. "New technology underpins regulatory best practice around the world," said Janamitra Devan, Vice President for Financial and Private Sector Development for the World Bank Group. "Technology makes compliance easier, less costly, and more transparent."
However, Egypt remains relatively low in the rankings with regards to significant regulatory areas. Egypt ranks 154th out of 183 economies in “Dealing with Construction Permits”, 136th in the ease of “Paying Taxes”, 143rd in “Enforcing Contracts” and 131st in “Closing a Business”.
The report emphasized the importance of reforms in dealing with permits as this may be a source of safety and transparency concerns.
“By some estimates 60–80 percent of building projects in developing economies are undertaken without the proper permits and approvals. In the Philippines 57 percent of new construction is considered illegal. In Egypt this share might reach 90 percent,” the report said.
While ranking 8th out of 18 countries overall in the Middle East and North Africa (MENA) Region, Egypt ranks 17th in “Dealing with Construction Permits” where only the Palestinian Occupied Territories have a lower rating.
Egypt also ranks 16th out of 18 MENA economies in the areas of “Paying Taxes” and “Enforcing Contracts”. In both areas, the rankings for this year comparing to 2010 remain unchanged.
For the fifth year running, Singapore leads in the ease of doing business, followed by Hong Kong SAR China, New Zealand, the United Kingdom, and the United States. Among the top 25 economies, 18 made things even easier over the past year.
According to the report, in the past five years, about 85 percent of the world’s economies have made it easier for local entrepreneurs to operate, through 1,511 improvements to business regulation. Doing Business 2011 pioneers a new measure showing how much business regulation has changed in 174 economies since 2005.
China and India are among the top 40 most-improved economies. Among the top 30 most improved economies, a third are from Sub-Saharan Africa.
"Governments worldwide have been consistently taking steps to empower local entrepreneurs," said Neil Gregory, Acting Director of Global Indicators and Analysis, World Bank Group. "The economies most affected by the financial crisis — especially in Eastern Europe — have been targeting regulatory reforms over the past year to make it easier for small and medium-size enterprises to recover and to create jobs."
