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doing business

WTO’s Trade Facilitation Agreement and Doing Business reforms: Are they related and how?

Inés Zabalbeita Múgica's picture

Small differences in the time and cost to trade can determine whether or not a country participates in global value chains. In this respect, the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA), which came into force on February 22, 2017, is a landmark achievement given its comprehensive coverage of the issues around cutting red tape and promoting efficiency and transparency, as well as the fact that it is the first multilateral agreement since the establishment of the WTO in 1995.  Coincidentally, the Trading Across Borders (TAB) indicator of Doing Business measures the efficiency of national regulations in trade facilitation and keeps track of relevant reforms, allowing us to analyze how the provisions of the TFA are related to the reform efforts of governments around the world.

Wrong criticisms of Doing Business

Shanta Devarajan's picture

While I welcome criticism and comments on the Doing Business (DB) report—or any other data and research product of the World Bank, for that matter—I find Justin Sandefur’s and Divyanshi Wadhwa’s (SW) recent blog posts on DB in Chile and India neither enlightening nor useful. 

How did starting a business become easier than ever?

Frederic Meunier's picture

With more jobs and competitiveness in mind, many economies worldwide have simplified their business start-up rules and regulations over recent years. Since the first Doing Business report was launched 15 years ago in 2003, a total of 626 national reforms that reduced the time and the costs of starting a business were recorded globally.

Weekly wire: The global forum

Roxanne Bauer's picture
These are some of the views and reports relevant to our readers that caught our attention this week.
 

Doing Business 2018 : Reforming to Create Jobs
World Bank Development Economics

Fifteen in a series of annual reports comparing business regulation in 190 economies, Doing Business 2018 measures aspects of regulation affecting 10 areas of everyday business activity: • Starting a business • Dealing with construction permits • Getting electricity • Registering property • Getting credit • Protecting minority investors • Paying taxes • Trading across borders • Enforcing contracts • Resolving insolvency These areas are included in the distance to frontier score and ease of doing business ranking. Doing Business also measures features of labor market regulation, which is not included in these two measures. The report updates all indicators as of June 1, 2017, ranks economies on their overall “ease of doing business”, and analyzes reforms to business regulation – identifying which economies are strengthening their business environment the most. Doing Business illustrates how reforms in business regulations are being used to analyze economic outcomes for domestic entrepreneurs and for the wider economy. It is a flagship product produced in partnership by the World Bank Group that garners worldwide attention on regulatory barriers to entrepreneurship. More than 137 economies have used the Doing Business indicators to shape reform agendas and monitor improvements on the ground. In addition, the Doing Business data has generated over 2,182 articles in peer-reviewed academic journals since its inception.
 
Navigating the digital future: The disruption of capital projects
McKinsey & Company

Productivity in the construction sector has stagnated for decades, with the average capital project reaching completion 20 months behind schedule and 80 percent over budget. Some overruns result from increased project complexity and scale, but another factor also looms large: all stakeholders in the capital-projects ecosystem—project owners, contractors, and subcontractors—have resisted adopting digital tools and platforms. These include advanced analytics, automation, robotics, 5-D building information modeling (BIM), and online document-management or data-collection systems. Meanwhile, companies in sectors ranging from government to manufacturing have significantly reduced costs and schedules by aggressively pursuing digital solutions.

Doing Business and Central Asia – After 15 years, how much reform?

Stefka Slavova's picture


This year, the annual Doing Business Report – by far the most anticipated and cited World Bank publication – celebrates its 15th year. Starting in 2003, the fledgling report, which covers about 130 countries, has grown into its teens garnering admiration and criticism in equal measure. Some absolutely love it, while others argue that its flaws outweigh its strong points.

Regardless, nobody can deny that the Doing Business report has been a major catalyst for reforms across the world – 3,200 reforms of business regulation have been counted to date, spurred by the Report and carried out in line with the methodology of its indicators.

Trade facilitation reform in Sri Lanka can drive a change in culture

Marcus Bartley Johns's picture

Two years ago, we started counting how many Sri Lankan agencies were involved in trade facilitation processes such as issuing permits and managing the movement of goods in and out of the country.  We counted at least 22 agencies in this assessment, and today, the Department of Commerce estimates that number at least 34 agencies are involved in issuing permits or publishing regulations that affect trade.
 
We know trade is critical to Sri Lanka’s future and that there are strong links between trade, economic growth and poverty reduction.

However, the trading community reports a lack of transparency, confusion around rules and regulations, poor coordination between various ministries and a dearth of critical infrastructure—you can see why trade has suffered in Sri Lanka.

 

When the World Bank evaluates a country’s performance in critical rankings like Doing Business, the ease of trading across borders is one of the benchmarks we consider. In this, and in other lists like the Logistics Performance Index, Sri Lanka is underperforming compared with its potential. Here, the average trade transaction involves over 30 different parties with different objectives, incentives, competence and constituencies they answer to, and up to 200 data elements, many of which are repeated multiple times. This environment constrains the growth of Sri Lanka’s private sector, especially SMEs.  
 
But now for the good news. By ratifying the World Trade Organisation Trade Facilitation Agreement, Sri Lanka has signalled its determination to intensify reform efforts.

Learning from our global benchmarking reports: A day in Singapore

Paramita Dasgupta's picture

Global benchmarking reports are great conversation starters. Here in Singapore, a nation defined by its drive for excellence, these benchmarking reports are held as evidence of the country’s development success.  From topping the global education index PISA, the Global Competitiveness Index, and the Leading Maritime Capitals of the World Report, Singapore takes great pride in being first, in Asia if not globally.  
 
An important global ranking for Singapore is the Doing Business survey, a ranking the island nation topped for many years, indicating the ease with which business can be done in the little red dot.

Thailand steps up reforms to make doing business easier

Ulrich Zachau's picture

A Thai business owner in Chiang Mai might open a small resort serving local people as well as tourists. It would probably take him about two months to set up his business after finding the location, staff and getting the company registered. He would find it reasonably easy to start his business.    

At the same time, a foreign investor living in Vietnam and considering whether to invest 3 million baht in Thailand to start a restaurant might have a different experience. She would likely find the process a bit complex and challenging. Most websites with the relevant information are written in Thai, the paperwork involved in registering a company can be pretty daunting for foreigners, and getting work permits and a business license can take longer than expected.

Private sector engagement is key to success on gender equity

Anabel Gonzalez's picture

Photo: Visual News Associates / The World Bank

As we celebrate International Women’s Day, if there is one concept to keep in mind above all others, it’s that gender equity is vital 24-7-365, and not just as a once-a-year observance.

You have heard the argument before and you will hear it again: Economies cannot reach their full potential if half the population is systematically blocked from full participation. This fundamental idea motivates the World Bank Group as it redoubles its efforts to address gaps in gender equality.

Our deepening work to close key gender gaps shows that the issues go far beyond economic inequity. Barriers to women’s full economic participation also impose moral, emotional and at times even physical costs.

We see this in the laws that prevent wives from making autonomous decisions about their careers. We see it in instances of violence against women in the workplace. We see this when harassment occurs at rural border crossings where women traders can encounter threats, and worse, from border guards.

In developing and developed countries alike, women face obstacles to starting and managing a business, to accessing finance, to earning equal pay for equal work, and to owning land or other assets. Many countries maintain laws and regulations that advantage men while discriminating against women, often relegating them to the status of a legal minor.

As Emeritus Professor Linda Scott of Oxford University’s Saïd Business School told us recently, “Women are economically disadvantaged in every country on the planet” and “women’s economic exclusion imposes a significant drag on world economies and societies.”

A key part of the Bank Group’s gender effort revolves around the importance of leveraging the private sector to ensure that reform goes beyond policy statements and creates real economic benefits for women and men. The Bank Group’s Trade & Competitiveness Global Practice (T&C) has developed an approach to gender equity that focuses on expanding market opportunities, enabling private initiative, and developing dynamic economies.

The work we are doing recognizes the entrenched nature of the obstacles to fuller economic empowerment for women. Achieving results at scale will require sustained commitment. But we also understand the importance of realizing near-term progress to catalyze change, and we recognize how interventions in particular countries can show the way forward elsewhere.

The concept is simple: Good results generate more good results.

Things to do with Trade and Competitiveness Data… thank you API

Alberto Sanchez Rodelgo's picture

Who are Spain's neighbors? Is Canada closer to Spain than Portugal? What about Estonia or Greece? The answer? Depends on the data you are looking at!

Earlier this week I crunched data based on a selected list of indicators from the new Open Trade and Competitiveness platform from the World Bank (TCdata360) and found some interesting trends[1]. In 2009 Spain was closer to economies like Estonia, Belgium, France and Canada while 6 years later in 2015, Spain's closest neighbors were Greece and Portugal. How and when did this shift happen?

Other trends I spotted using the same data? It seems the Sub-Saharan region ranks the lowest in Ease of Doing Business, that in 2007 Israel held the record for R&D expenditure as % of GDP, while in the same year Malta topped FDI net inflows as % GDP, and that the largest annual GDP growth in the last 20 years occurred in Equatorial Guinea in 1997.

Figure 1: Dots represent values for an economy at a given point in time for years 1996 to 2016 overlaying their box-plot distributions. Colors correspond to geographical regions.


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