World Bank: Singapore best country for business, Nigeria ranked 170th

Wednesday, October 29, 2014 4:52 am

Singapore

Small and well-run Singapore, New Zealand and Hong Kong are the world’s easiest places to run a business, while global giants China, Brazil and India remain far down the list, according the World Bank.

Three small but hot Pacific economies led the Bank’s annual “Doing Business” report, released Wednesday, which focuses on where businesses are best helped and least hindered by government.

The top 10 was filled out by Denmark, South Korea, Norway, the United States, Britain, Finland and Australia, mostly the same developed economies as in previous years.

Nigeria, Africa’s biggest economy is ranked 170th out of the 189 nations surveyed. It was a slight improvement over the score for 2014, when it was ranked 175th. In starting a business, Nigeria ranked 129th, a slight improvement over last year’s score at 138th. In getting construction permits, Nigeria is ranked 171st, getting electricity 187th, registering property 185th,paying taxes 179th, enforcing contracts 140th. Nigeria’s generally improved rating was helped by improvements in accessing credit, where it jumped 73 places from 125th last year to 52nd globally.

South Africa, in contrast is ranked 43rd, sliding down six places over its position last year, when it was ranked 37th globally. Ghana is also ranked 70th, 100 places ahead of Nigeria. Mauritius, the island African nation is ranked 28th in the world.

(Here is a link to the summary report on Nigeria and Lagos: http://www.doingbusiness.org/data/exploreeconomies/nigeria/

But the report, despite revisions to its methodology after upsetting China in past years, left emerging market giants far down the list, fast growth and success in drawing investment notwithstanding.

China ranked 90th out of 189 countries and territories, barely improved from 93 a year ago; Brazil is 120th, also up three places; and India was ranked at 142, two spots worse than before.

All three ranked lower than troubled economies and difficult investment environments like Russia and Greece.

Watch the video summary here:

But that only underscored the admittedly narrow focus of the survey, in terms of assessing a country’s success.

“‘Doing Business’ measures a slender segment of the complex organism that any modern economy is,” admitted World Bank chief economist Kaushik Basu in a forward to the report.

“An economy can do poorly on ‘Doing Business’ indicators but do well in macroeconomic policy or social welfare interventions.”

The scores measure the operating environment for a business, including how easy it is to start a company, to transfer a property or resolve a commercial dispute; the time and cost of clearing imports and exports through a port; how easy is it to get an electricity connection, and other issues that face business owners in any country.

– Smart regulations –

By those measures, Singapore was, as in recent past years, on top with a score of 88.27, and New Zealand close behind with 86.91.

The top 30 countries all had more than 74 points, while the bottom five, with isolated and authoritarian East African pariah Eritrea at the very end, all scored below 40.

The contrast between the best and worst underscored why Singapore is highly praised and successful.

Entrepreneurs in the Southeast Asian island nation need just 2.5 days to open a business, 31 days to get electric power and four days and $440 to import a container.

Meanwhile in Eritrea, a similar businessman would need on average 84 days to start a company and 59 days to get electricity, while importing goods takes 59 days and $2,000 per container.

Basu stressed that the survey is not a measure of the level of government intervention in an economy.

“A significant number of the top 30 economies in the ease of doing business ranking come from a tradition where government has had quite a prominent presence in the economy,” he noted.

“The top-performing economies… are therefore not those with no regulation but those in which governments have managed to create rules that facilitate interactions in the marketplace without needlessly hindering the development of the private sector.”

“Ultimately, ‘Doing Business’ is about smart regulations that only a well-functioning state can provide.”

“The secret of success is to have the essential rules and regulations in place — but more importantly to have a good system of clearing decisions quickly and predictably, so that small and ordinary businesses do not feel harassed.”

The 10 economies that have improved the most since the previous year are Tajikistan, Benin, Togo, Côte d’Ivoire, Senegal, Trinidad and Tobago, the Democratic Republic of Congo, Azerbaijan, Ireland, and the United Arab Emirates.

Sub-Saharan African countries had the highest number of regulatory reforms — 75 of 230 around the world — while emerging Europe and Central Asia had the highest percentage of improving countries. Progress was uneven in the Middle East and North Africa, with conflict-affected Syria near the bottom. South Asia saw the lowest number of reforms.

While 80% of countries in the study improved their business regulations last year, only about one-third moved up in the rankings. However, the gap between the best- and worst-performing countries continues to narrow as countries improve their business climates, said Rita Ramalho, manager of the Doing Business Project.

“It’s easier to do business this year than it was last year, than it was two years ago or 10 years ago,” she said. “We see that the economies that score the lowest are reforming more intensely, so they are converging toward the economies that do the best.”

Best

1: Singapore

2: New Zealand

3: Hong Kong

4: Denmark

5: South Korea

6: Norway

7: United States

8: Britain

9: Finland

10: Australia

Worst