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kbhaopichitr@worldbank.org Doing Business 2009: East Asia Gains Momentum in Regulatory Reform—China and Thailand Make Key Improvements, Singapore Tops Global Rankings
WASHINGTON, D.C., September 10, 2008—East Asia and the Pacific had the greatest momentum among regions in reforming business regulations this year, according to Doing Business 2009 —the sixth in an annual series of reports published by IFC and the World Bank. The new report identifies 26 reforms between June 2007 and June 2008 that make it easier to do business in 24 economies across the region.
Among the world’s large emerging markets, China led with reforms that make it easier to obtain credit, pay taxes, and enforce contracts. The region’s other top economies in reforming business regulations include Thailand, Cambodia, and Malaysia. Improvements made it easier to pay taxes, start a business, trade across borders, and register property. These countries also took steps to protect investors, improve bankruptcy procedures, and strengthen the legal rights of creditors and borrowers. Cambodia’s new secured transactions law made it the world’s leading economy in easing access to credit.
Thailand led other reformers in the region with improvements in four areas - Registering Property, Protecting Investors, Paying Taxes, and Trading across Borders. As a result, the country moved up to 13th in the Doing Business ranking. It made paying taxes easier by reducing some fees and facilitating online filing and payments. In addition, it now exempts companies with taxable income not exceeding 1.2 million baht from corporate income tax and applies concessionary 25 percent rates for newly listed companies.
Amendments to the Thai Securities and Exchange Act strengthened minority shareholder rights. Directors now have greater duties with respect to transactions between interested parties. If held liable for using the company’s assets for their own benefit, they will have to pay damages, disgorge profits, and pay fines—and may even go to jail.
Provisional reductions of the property transfer fee and specific business tax have lowered the cost to transfer property from 6.3 percent of the property value to 1.13 percent. A new internet-based customs clearance system reduced the number of documents that must be submitted in hard copy from 9 to 3 for imports and from seven to four for exports. Measuring 10 Indicators Doing Business ranks economies based on 10 indicators of business regulation that track the time and cost to meet government requirements in starting and operating a business, trading across borders, paying taxes, and closing a business. The rankings do not reflect such areas as macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions, or crime rates.
Singapore leads the global rankings on the overall regulatory ease of doing business for a third consecutive year. New Zeland is runner-up, and the United States third. Hong Kong (China) retains fourth place, while Thailand advanced to 13 and Malaysia to 20.
“Countries in the region are clearly committed to reform agendas,” said Dahlia Khalifa, a coauthor of the report. “Regardless of their stage of economic development, they are recognizing the role that regulatory reform can play in staying competitive while boosting entrepreneurship and job creation,” she added.
Among regions, Eastern Europe and Central Asia led the world in reforms for a fifth consecutive year. And the trend is moving eastward as newcomers join the list of economies making the most reforms. The top 10 are, in order, Azerbaijan, Albania, the Kyrgyz Republic, Belarus, Senegal, Burkina Faso, Botswana, Colombia, the Dominican Republic, and Egypt.
“Economies need rules that are efficient, easy to use, and accessible to all who have to use them. Otherwise, businesses get trapped in the unregulated, informal economy, where they have less access to finance and hire fewer workers, and where workers lack the protection of labor law,” said Michael Klein, World Bank/IFC Vice President for Financial and Private Sector Development. “Doing Business encourages good rules, and good rules are a better basis for healthy business than ‘who you know," he added.
Doing Business 2009 ranks 181 economies on the overall ease of doing business. The top 25 are, in order, Singapore, New Zealand, the United States, Hong Kong (China), Denmark, the United Kingdom, Ireland, Canada, Australia, Norway, Iceland, Japan, Thailand, Finland, Georgia, Saudi Arabia, Sweden, Bahrain, Belgium, Malaysia, Switzerland, Estonia, Korea, Mauritius, and Germany. To download full report, please visit www.doingbusiness.org |
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