DHAKA, September 9, 2009 —According to Doing Business 2010: Reforming through Difficult Times, a record 131 of 183 economies around the globe reformed business regulation between June 2008 and May 2009. The report is seventh in a series of annual reports published by International Finance Corporation (IFC) and the World Bank. In South Asia, six out of eight economies strengthened business regulations and made them more efficient, creating more opportunities for local firms.
Bangladesh, the region’s most active reformer, simplified business start-up by implementing an online company registration system—reducing start-up time by nearly a month.
Bangladesh also reduced the corporate income tax rate from 40 percent to 37.5 percent, while increasing the capital gains tax rate from 5 percent to 15 percent. Trade was expedited by automation of customs clearance at the Chittagong port to shorten the time required to clear goods.
However, notwithstanding the reforms undertaken, the report’s findings suggest that Bangladesh needs to adopt a more strategic and institutionalized approach to regulatory reforms to keep up with an increasingly competitive global environment where other countries are reforming fast.
“Even with the success of Bangladesh’s reforms, the country has slipped by a few places in the global ranking. This is because these reforms are not aggressive enough” said Syed Akhtar Mahmood, Senior Program Manager, Bangladesh Investment Climate Fund. “To ensure that the country is retaining its competitive edge, Bangladesh needs to spread its reforms across more regulatory areas, the reforms need to be deeper and implementation needs to be faster. In this context, it is vital for Bangladesh to strengthen the Regulatory Reform Commission (RRC).”
India improved its score on the "closing a business" indicator by taking steps to ease resolution of insolvency cases—a critical area in times of crisis. Nepal lowered property transfer costs. Pakistan made it easier to start a business by introducing an e-service registration system. And Sri Lanka improved access to credit information to help expand access to finance.
“In an active year of business regulatory reform, economies in South Asia have picked up their reform pace—though there is still room for more action,” said Dahlia Khalifa, an author of the report. “Governments are paying attention to the quality of business regulation to make their economies more competitive and encourage local entrepreneurs. Making it easier to start, operate, and even close a business is always important, but especially during these difficult times.”
This year, there were 4 new reformers among the global top 10: Liberia, the United Arab Emirates, Tajikistan and Moldova. Others include Rwanda, the top global reformer, Egypt, Belarus, the Former Yugoslav Republic of Macedonia, the Kyrgyz Republic, and Colombia. Colombia and Egypt have been top global reformers in four of the past seven years.
Doing Business analyzes regulations that apply to an economy’s businesses during their life cycles, including start-up and operations, trading across borders, paying taxes, and closing a business. Doing Business does not measure all aspects of the business environment that matter to firms and investors. For example, it does not measure security, macroeconomic stability, corruption, skill level, or the strength of financial systems.