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How easy was it to do business in the Muslim World in 2006?
According to the World Bank’s Doing Business 2007 reports it was relatively easier to do business in many countries of the Muslim World than in China and India – two of the fastest growing economies in the world today.
In 2006, only four countries (Djibouti, Togo, Uganda, and Uzbekistan) of the 51 OIC countries in the ranking made it harder to do business than in 2005. |
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The other 47 took steps to improve the way business is done in 2006 by strategically choosing their fights in tackling the variety of factors which make up a proper business environment.
The Criteria
The World Bank’s ranking focuses on how governments address 10 key processes which factor into doing business from start to finish.
These are:
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Starting a Business |
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Protecting Investors |
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Dealing with Licenses |
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Paying Taxes |
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Employing Workers |
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Trading Across Borders |
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Registering Property |
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Enforcing Contracts |
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Getting Credit |
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Closing a Business |
How did the Muslim Countries do?
The World Bank’s ranking did not include Bahrain, Brunei, Libya, Qatar, Somalia, and Turkmenistan. Of the other 51 countries included here’s the good news… 24 countries in the Muslim World did better or saw no change to their position in the ranking. Among these the greatest number of positive reformers were in Africa. The bad news… the other 27 countries slide in the ranking. Malaysia maintained its leadership of the ranking by staying in the number 25 spot. See the table below for a quick reference to the rankings.
| The common perception is that governments are slow to reform.
Interestingly though, the World Bank’s reports highlight the fact that among top reforming economies in the past 3 years, almost 85% of reforms took place in the first 15 months of a new government.
In other words new elected or re-elected governments can push through reform packages when their terms begin. In the words of one reformer: “Reform is like repairing a car with the engine running—there is no time to strategize.”
Adopting an attitude of a “blitz” – as the World Bank refers to it – involves four steps to successful reform which are:
- Start simple and consider administrative reforms that don’t need legislative changes.
- Cut unnecessary procedures, reducing the number of bureaucrats entrepreneurs interact with.
- Introduce standard application forms and publish as much regulatory information as possible.
- And remember: many of the frustrations for businesses come from how regulations are administered. The internet alleviates these frustrations without changing the spirit of the regulation.
Of these steps, the first is highly relevant to reform minded governments. The message is not to think of reform as synonymous with legislation. Reform can simply be administrative in nature – hire better workers, improve efficiency, and decentralize the decision making process so that government departments and ministries can make such changes independently.
Pakistan’s (ranked 74 in 2006) reforms in the customs clearance process were highlighted by the World Bank. Importers can now file cargo declarations before goods arrive at port. |
'Doing Business' Ranking of OIC* Member States
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OIC
Rank |
Global
Rank |
Country |
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25 |
Malaysia |
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38 |
Saudi Arabia |
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46 |
Kuwait |
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53 |
Maldives |
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55 |
Oman |
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63 |
Kazakhstan |
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74 |
Pakistan |
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77 |
United Arab Emirates |
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78 |
Jordan |
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80 |
Tunisia |
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86 |
Lebanon |
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88 |
Bangladesh |
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90 |
Kygyz Republic |
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91 |
Turkey |
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98 |
Yemen |
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99 |
Azerbaijan |
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107 |
Uganda |
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108 |
Nigeria |
19 |
113 |
Gambia |
20 |
115 |
Morocco |
21 |
116 |
Algeria |
22 |
119 |
Iran |
23 |
120 |
Albiania |
24 |
122 |
Suriname |
25 |
127 |
West Bank / Gaza |
26 |
130 |
Syria |
27 |
132 |
Gabon |
28 |
133 |
Tajikistan |
29 |
135 |
Indonesia |
30 |
136 |
Guyana |
Source: 2007 Doing Business 2007: How to Reform Report - The World Bank
*OIC (Organization of Islamic Conference) |
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The qualitative difference? - Now it takes 19 days to import goods — from the sales contract to the arrival of the goods at the warehouse. In 2004 it took 39 days. Other successful reformers introduced new technologies to save time and increase efficiencies without necessarily going through a legislative process.
What do the rankings tell us?
While you review the rankings keep in mind that the indicators used in the report only reflect business regulations. They do not reflect a country’s access to or proximity to large markets, the state of infrastructure services, “the security of property from theft and looting, the transparency of government procurement, macroeconomic conditions or the underlying strength of institutions.”
However, as the report points out “a high ranking on the ease of doing business means that the government has created a regulatory environment conducive to operating a business."
When you see improvements on the indicators in the report these often indicate broader reforms to laws and institutions which have effect that go beyond administrative procedures and the time and cost to comply with business regulations. |
