Lanka loses reforms race!
Wednesday 30th October 2013
- Despite four key improvements Sri Lanka dips in the latest Ease of Doing Business Index to 85 from 81 as other nations go on top gear
- Latest performance deals setback for Government which hoped country would climb up to 70th position and catapult to within top 30 by 2016
- SL retains status as best for business and top improver in South Asia
- Some analysts express reservations over the markings of the Index as countries that overtook Sri Lanka did lesser number of reforms
The race for reforms to make doing business easier saw a pick up globally last year but Sri Lanka yesterday found its concerted effort wasn’t good enough to make a significant headway as several others did better.
According to the latest World Bank Group’s 2014 Ease of Doing Business Index, out of 189 countries Sri Lanka was ranked 85th, down from 81st in the previous year. This decline was despite Sri Lanka improving on four business reforms.
“Sri Lanka is the top improver in the region since 2009,” the World Bank’s private sector financing arm International Finance Corporation (IFC) said adding “Overall, Sri Lanka’s position declines four places on the global ranking list for ease of doing business due to improvements in other countries and adjustments in the global data.”
Sri Lanka made it easier to get construction permits by eliminating the need to obtain tax clearances and by reducing building permit fees. Getting new electrical connections was made easier by improving the utility’s internal workflow and reducing time required to process new applications.
Sri Lanka made it easier for companies to pay taxes by introducing an electronic filing system for social security
contributions. Finally, trading across borders became more efficient due to a newly introduced electronic payment system for port services.
Government zeal
Sri Lanka’s decline according to analysts is a setback to Government’s zeal to climb up in the rankings. Encouraged by the significant rise in 2013 to 81 from 89 in 2012 in addition to being world’s second best improved country, a concerted effort was made by the Ministry of Economic Development led by Basil Rajapaksa and the Central Bank with President Mahinda Rajapaksa giving leadership.
According to the latest World Bank Group’s 2014 Ease of Doing Business Index, out of 189 countries Sri Lanka was ranked 85th, down from 81st in the previous year. This decline was despite Sri Lanka improving on four business reforms.
“Sri Lanka is the top improver in the region since 2009,” the World Bank’s private sector financing arm International Finance Corporation (IFC) said adding “Overall, Sri Lanka’s position declines four places on the global ranking list for ease of doing business due to improvements in other countries and adjustments in the global data.”
Sri Lanka made it easier to get construction permits by eliminating the need to obtain tax clearances and by reducing building permit fees. Getting new electrical connections was made easier by improving the utility’s internal workflow and reducing time required to process new applications.
Sri Lanka made it easier for companies to pay taxes by introducing an electronic filing system for social security
contributions. Finally, trading across borders became more efficient due to a newly introduced electronic payment system for port services.Government zeal
Sri Lanka’s decline according to analysts is a setback to Government’s zeal to climb up in the rankings. Encouraged by the significant rise in 2013 to 81 from 89 in 2012 in addition to being world’s second best improved country, a concerted effort was made by the Ministry of Economic Development led by Basil Rajapaksa and the Central Bank with President Mahinda Rajapaksa giving leadership.
The Government was hopeful efforts that went in would result Sri Lanka moving up to 70th position in the 2014 rankings and set a goal of reaching the top 30 by 2016.
Whilst some officials are likely to take heart from the fact that four reforms were made and Sri Lanka still remains above 2012 level, some analysts questioned the markings of the Index especially in the context that Sri Lanka did four reforms each in the past two years and yet lagged behind.
Among countries which overtook Sri Lanka were Moldova (three reforms and ranked 78 in 2014 versus 83 in 2013) Guatemala (three reforms and ranked 79 in 2014 versus 93 in 2012), and Zambia (one reform and ranked 83 in 2014 versus 94 in 2012) after being ranked lower than Sri Lanka in 2013.
Singapore tops the global ranking on the ease of doing business. Joining it on the list of the top 10 economies with the most business-friendly regulations are Hong Kong SAR, China, New Zealand, the United States, Denmark, Malaysia, the Republic of Korea, Georgia, Norway, and the United Kingdom. In South Asia, Maldives and Nepal trailed Sri Lanka.
Whilst some officials are likely to take heart from the fact that four reforms were made and Sri Lanka still remains above 2012 level, some analysts questioned the markings of the Index especially in the context that Sri Lanka did four reforms each in the past two years and yet lagged behind.
Among countries which overtook Sri Lanka were Moldova (three reforms and ranked 78 in 2014 versus 83 in 2013) Guatemala (three reforms and ranked 79 in 2014 versus 93 in 2012), and Zambia (one reform and ranked 83 in 2014 versus 94 in 2012) after being ranked lower than Sri Lanka in 2013.
Singapore tops the global ranking on the ease of doing business. Joining it on the list of the top 10 economies with the most business-friendly regulations are Hong Kong SAR, China, New Zealand, the United States, Denmark, Malaysia, the Republic of Korea, Georgia, Norway, and the United Kingdom. In South Asia, Maldives and Nepal trailed Sri Lanka.
Stepped up pace
Nevertheless the World Bank said governments around the world significantly stepped up their pace of improving business regulations in 114 economies last year, an 18% jump from the previous year, laying the groundwork for local entrepreneurs to expand their work.
The 2014 report titled “Understanding Regulations for Small and Medium-Size Enterprises” is the 11th in the annual series on the ease of doing business and it documented 238 business regulatory reforms worldwide last year.
“A better business climate that enables entrepreneurs to build their businesses and reinvest in their communities is key to local and global economic growth,” said World Bank Group President Jim Yong Kim.
“Doing Business shows that economies with better business regulations are more likely to empower local entrepreneurs to create more jobs; another step in the right direction toward ending extreme poverty by 2030,” Kim added.
“The economies with the most costly and complex procedures and the weakest institutions are gradually adopting some of the regulatory practices seen in the better performers and this is leading to a process of catching up across many of the dimensions captured by the Doing Business indicators,” World Bank Group, Director Global Indicators and Analysis Augusto Lopez-Claros added.
The 2014 report titled “Understanding Regulations for Small and Medium-Size Enterprises” is the 11th in the annual series on the ease of doing business and it documented 238 business regulatory reforms worldwide last year.
“A better business climate that enables entrepreneurs to build their businesses and reinvest in their communities is key to local and global economic growth,” said World Bank Group President Jim Yong Kim.
“Doing Business shows that economies with better business regulations are more likely to empower local entrepreneurs to create more jobs; another step in the right direction toward ending extreme poverty by 2030,” Kim added.
“The economies with the most costly and complex procedures and the weakest institutions are gradually adopting some of the regulatory practices seen in the better performers and this is leading to a process of catching up across many of the dimensions captured by the Doing Business indicators,” World Bank Group, Director Global Indicators and Analysis Augusto Lopez-Claros added.
Regional champions
Since 2005, the report finds, some economies have emerged as regional champions in regulatory reform efforts, for example China for the East Asia and the Pacific region, Colombia for Latin America and the Caribbean, Rwanda for Sub-Saharan Africa and Poland for OECD high-income economies.
The 2014 report focused on In addition to the global rankings, every year Doing Business reports the economies that have improved the most on the indicators since the previous year. The 10 economies topping that list this year are (in order of improvement) Ukraine, Rwanda, the Russian Federation, the Philippines, Kosovo, Djibouti, Côte d’Ivoire, Burundi, the former Yugoslav Republic of Macedonia, and Guatemala.
Yet challenges persist; five of this year’s top improvers, Burundi, Côte d’Ivoire, Djibouti, the Philippines, and Ukraine are still in the bottom half of the global ranking on the ease of doing business.
The 2014 report focused on In addition to the global rankings, every year Doing Business reports the economies that have improved the most on the indicators since the previous year. The 10 economies topping that list this year are (in order of improvement) Ukraine, Rwanda, the Russian Federation, the Philippines, Kosovo, Djibouti, Côte d’Ivoire, Burundi, the former Yugoslav Republic of Macedonia, and Guatemala.
Yet challenges persist; five of this year’s top improvers, Burundi, Côte d’Ivoire, Djibouti, the Philippines, and Ukraine are still in the bottom half of the global ranking on the ease of doing business.
