Rather than create more attractive business climates to spur souring growth prospects, many of the world’s largest economies may actually be making it more difficult to start and run a company.
Almost half of the Group of 20 largest economies have fallen in the World Bank’sannual “Doing Business” rankings, including emerging markets such as China,Turkey, South Africa and Brazil that most need economic overhauls to revive growth prospects.
The World Bank’s flagship report on the best and worst places to start and operate a business in 189 economies around the globe underscores the inability of many governments to make needed policy changes.
Global growth is settling into a long period of anemic expansion as large emerging markets—the world’s most powerful engines since the global financial crisis—sputter and big advanced economies remain stuck in low gear. Those troubles are rippling out across the globe, jeopardizing prospects for rich and poor countries alike. G-20 nations have vowed to restructure their economies to make them more competitive and attractive to investment, but have so far failed to deliver on their promises.
Ballooning government debt levels and central banks that have stretched the frontiers of monetary policy are leaving authorities with little ammunition to jumpstart growth.
“Today, the pressure is on economies because the other drivers of growth are not doing well,” said Kaushik Basu, the World Bank’s chief economist, in an interview. “So a lot depends on the ease of doing business….There is a much greater need to work on this than before.”
The rankings of the 189 economies can be a boon or humiliation to countries around the world seeking to attract more investment. They’re based on a raft of indicators that gauge the business climate, including paying taxes, registering property, permitting and contract enforcement. Over the last two years, the bank has been updating its metrics, including trying to better measure the quality of regulations.
The top 10—the most business-friendly countries—were largely unchanged from last year, with Singapore holding its No. 1 ranking and the U.S. still in the No. 7 spot.Eritrea, Libya, South Sudan and Venezuela were ranked the worst countries to try and run a business, respectively. Costa Rica, Brunei, Kenya and Uzbekistan recorded the largest gains. Albania, Rwanda, Gabon and Kiribati were among those that fell the furthest in the list.
Source from: The Wall Street Journal Menu