Thursday, September 10, 2009

Egypt jumps 10 places in ‘Doing Business’ report

By Theodore May / Daily News Egypt / First Published: September 10, 2009

Egypt jumped from 116 to 106 in the World Bank-IFC “Doing Business 2010 Report,” leaving it still firmly in the bottom half of the list.

The International Finance Corporation (IFC), the private sector arm of the World Bank, announced this week the findings of its Doing Business 2010 report, intended to illustrate the ease of doing business with each of 183 countries.

Organizers emphasized that after Central and Eastern Europe, the Middle East was the most reform-minded region, with many countries registering improvements in the rankings.

But while the IFC focused on improvement, the fact remains that the Middle East has once again posted dismal numbers in absolute terms.

“Economies in the Middle East and North Africa are reforming at an impressive rate, and in sustained and comprehensive ways that highlight insights gained from other reformers,” said Dahlia Khalifa, senior private sector development specialist for the IFC, who announced the results to Egyptian government officials and members of the media via satellite from Washington.

While Egypt made strides, its overall ranking leaves something to be desired.

Determining the overall ranking were a number of sub-categories, in which each country was evaluated.

Egypt did especially well with regard to starting a business, for which it was ranked 24. The country earned the 29th slot for trading across borders.

On the flipside, the country was ranked 148 in enforcing contracts and 156 in dealing with construction permits — putting it near the bottom of the list.

IFC officials did cite several changes that allowed Egypt to bolster its standing on the list. For one, it reduced the number of procedures it takes to start a business from 28 to 25. Cutting back on Egypt’s often unwieldy bureaucratic system, they said, was a key to success.

The country has also reduced the waiting time for a license from 285 days to 225.

The Gulf states ranked ahead of the rest. Saudi Arabia topped the list, coming in at 13. Bahrain followed at 20, and the UAE landed at 33.

More troubling, though, were that a number of the less developed countries also passed Egypt on the list. Yemen earned the 99th spot, seven ahead of Egypt, and Oman ranked 65.

Jordan also beat Egypt by several slots.

The results for Egypt were mixed — a healthy leap in the rankings offset by a still poor overall showing.

Egypt’s improvement, said Khalifa, had little to do with the economic crisis, during which Egypt has persevered better than most countries.

“Most of the results of this study were because of programs of reforms that had been around for years, not just because of the economic crisis,” she said.

IFC personnel were quick to note that the survey weighs not only the reforms implemented by government but also seeks to evaluate the implementation of the reforms. They also pointed out that the report did not take into account corruption, which can have a major impact on the ease of doing business in a country.

The IFC introduced a new category for ease of doing business: infrastructure. While the new measurement will be implemented next year, it’s likely to affect the dynamics of the list since many countries are overhauling their infrastructure in the face of the economic crisis.

Despite the economic turmoil of the past year, the survey does little to measure a country’s economic resilience, a factor which could significantly impact ease of doing business.

Even though Egypt fared far better in the crisis than many more developed countries, there isn’t much in the survey to reflect this since the rankings are based heavily on government regulatory reform.