WASHINGTON, D.C., September 10, 2008—Regulatory reforms are gaining momentum worldwide, reaching record numbers this year, according to Doing Business 2009—the sixth in an annual series of reports published by IFC and the World Bank. Latin America is part of this trend; the new report identifies 30 reforms to business regulation across half the region’s countries between June 2007 and June 2008.
Colombia is a global leader in reforming business regulations for the second year in a row - and the top Latin America regional reformer. With improvements in five areas covered by the report, it rises to 53 in the global rankings on the ease of doing business. The Dominican Republic joins the top 10 economies in reforming business regulation for the first time this year, with gains in four of the 10 areas the report studied, including broad tax reforms. The Bahamas, covered for the first time by the report, makes its debut at 55 in the global rankings.
The region’s countries continue to be active reformers of business regulation. From Mexico to Panama, countries made it easier to start a business, register property, pay taxes, and conduct trade across borders. El Salvador made significant reforms in starting a business and facilitating trade, while Honduras made key reforms for facilitating trade and paying taxes. Ecuador streamlined the trade process by improving port infrastructure, while Uruguay abolished its minimum capital requirement to incorporate a company and made improvements in tax and trade regulations. The Dominican Republic’s success reflects a positive trend across the Caribbean: Antigua and Barbuda, Haiti, Jamaica, and St. Vincent and the Grenadines also implemented reforms that make it easier to do business.
“Countries in Latin America and the Caribbean are increasingly committed to reform agendas, and Colombia and El Salvador are key examples,” said Sylvia Solf, lead author of the report. “The region’s most popular area for regulatory reform continues to be facilitating trade, followed by changes that make it easier to start a business,” she added.
Doing Business ranks countries 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.
Among regions, Eastern Europe and Central Asia led in reforms of business regulation for a fifth consecutive year, with more than 90 percent of its countries making improvements. 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.
Singapore leads the global rankings on the overall regulatory ease of doing business for a third consecutive year. New Zealand is runner-up, and the United States third. The highest-ranking economies in Latin America and the Caribbean are St. Lucia at 34, Puerto Rico at 35, and Chile at 40.
“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.