Economies in the Middle East and North Africa region maintained a steady pace of business reforms in the past year, says the 15th edition of the World Bank Group’s Doing Business report, which monitors the ease of doing business for small and medium enterprises around the world.
Doing Business 2018: Reforming to Create Jobs finds that 13 of the region’s 20 economies implemented a total of 29 business reforms, bringing to a total of 292 the number of reforms implemented in the region in the past 15 years.
Djibouti earned a spot in this year’s global top 10 improvers. The country implemented five reforms in the areas of Starting a Business, Dealing with Construction Permits, Registering Property, Getting Credit and Protecting Minority Investors. Highlights of the reforms included increasing the transparency of the land administration system to make registering property easier and improving access to credit by adopting a law that creates a new credit information bureau.
Saudi Arabia, the region’s largest economy, undertook six reforms which included improving the efficiency of the land administration system to streamline the property registration process. As a result, Saudi Arabia has an efficient land registry and it takes only 1.5 days to transfer property, at no cost. In contrast, it takes more than 22 days and costs 4.2 percent of the property value on average across OECD high-income economies. Saudi Arabia also strengthened minority investor protections by increasing shareholder rights and their role in major decisions, clarifying ownership and control structures, requiring greater corporate transparency and regulating the disclosure of transactions with interested parties.
Egypt, meanwhile, strengthened minority investor protections by increasing minority shareholder rights and role in major corporate decisions. However, registering property was made more difficult by raising the cost to verify and ratify a sales contract. In Morocco, paying taxes was made easier by improving the online system for filing and paying taxes and the number of procedures to start a business were reduced. However, Morocco made registering property more expensive by increasing registration fees.
Across the region, seven reforms were carried out to improve access to credit, mostly aimed at strengthening credit information. In Iraq and Jordan, new credit registries were launched, while in Iran, reporting data on credit payments was improved. In the West Bank and Gaza, a new secured transactions law was introduced and a new collateral registry established.
Another Doing Business area in which multiple reforms were carried out in the past year was Starting a Business. Highlights of the six reforms carried out in this area included the establishment of a one-stop shop and an improved process of registering a business online in Kuwait, while in Malta the requirement for a trading license for general commercial activities was eliminated.
“While the region continues to face many daunting challenges, it is particularly reassuring to see that business reforms are being carried out in some of the most difficult environments, such as in Djibouti,” said Santiago Croci Downes, Program Manager of the Doing Business Unit.
The Middle East and North Africa region performs well in the areas of Dealing with Construction Permits, Getting Electricity, Registering Property and Paying Taxes. Obtaining an electricity connection, for example, takes on average 81 days, only 2 days more than the 79 days’ average across OECD high-income economies. Similarly, it takes 132days in the region to obtain the necessary permits to build a warehouse, compared to 154.5 days across OECD high-income economies.
The region lags in the areas of Getting Credit, despite the multiple reforms of the past year, Trading Across Borders and Resolving Insolvency. For example, the cost for complying with the documentary requirements when exporting is $244 on average in the region, compared with $35 on average in OECD high-income economies. In cases of bankruptcy, the average recovery rate in the region is 25.5 cents for each dollar, compared with 71.2 cents in OECD high-income economies.
Highlights of the region’s successes over the past 15 years include:
- Starting a Business has been the most common area of reform, with 67 reforms in the past 15 years. As a result, it takes 17 days on average to start a business in the region, compared to 43 days in 2003. This takes 8.5 days on average in OECD high-income economies. In Morocco, for example, it took 35 days to start a business 15 years ago, compared to just nine days now.
- The UAE has undertaken the largest number of reforms in the region in the past 15 years, with 33, followed by Morocco, with 31.
The full report and its datasets are available at www.doingbusiness.org