Doing Business in the Arab World

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Doing Businessin the Arab World
Dahlia Khalifa Senior Strategy Adviser
Abu Dhabi November 8, 2009
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Doing Business Overview

• Launched 8 years ago. Doing Business in the Arab
  World for 2nd year
• Goal to provide an objective basis for
  understanding and improving the regulatory
  environment for business.
• From 5 indicator sets in 133 economies to 10 in
  183 economies.
• The objective efficient regulations, accessible
  to all, and simple in their implementation.
• Focus on regulations relevant to the life cycle
  of a small to medium-sized domestic business
  based on standardized case
• DO NOT measure all aspects of the business
  environment.

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Top 30 on the ease of Doing Business 2010
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Arab World overall performance on Doing Business
2008/09

• Saudi Arabia leads the way in the ease of doing
  business, followed by Bahrain.
• Top 6 economies in Arab world from GCC
• UAE and Egypt greatest jump in rankings this
  year, top global reformers Egypt for 4th time

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Key findings in this years report

• Against backdrop of global financial and economic
  crisis, record number of reforms recorded 287
  reforms in 131 countries 20 more than in the
  year before.
• Focus on SMEs for job creation. Regulatory ease
  of starting, operating and closing a business
  influences how well firms can cope and adjust.
• Reforms more likely in developing economies
  Two-thirds of reforms in low- and
  lower-middle-income economies.
• Rwanda first Sub-Saharan African country to
  become top reformer Reforms in 7 of the 10
  areas from143 to 67 in aggregate ranking.
• 2 regions stand out for reform pace in 2008/9
  Eastern Europe and Central Asia (sixth year in a
  row) and Middle East and North Africa (and Arab
  World)

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Arab World average ranking 103
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DB Top Reformers in 2008/09
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Arab world recorded a total of 38 positive
reforms in 9 areas in 2008/09, 16 of 20
economies in the Arab world reformed
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Percentage of countries with at least one
positive reform in 2008/09
Arab world one of the leaders in the number of
reforming countries
96
High Income OECD
Eastern Europe and Central Asia
Arab World
South Asia
Latin America and Caribbean
East Asia and Pacific
Sub-Saharan Africa
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In what topics does Arab World do the best?
Average rankings per topic 2008/09
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Consistent reform programs Egypt, global top
reformer for the fourth time
Egypt, global top reformer for the fourth time
Egypt moved from being ranked 116 to 106 among
183 economies on the overall ease of doing
business. Egypt made business start-up less
costly, simplified construction permits, expanded
credit information, and created commercial courts
to expedite contract dispute settlements.
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Arab world performance Ranking on the ease of
Doing Business by indicator
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Starting a Business in Arab World Saudi Arabia
and Egypt lead the way and 8 economies reform
Arab World Reformers in Starting a Business

• Egypt, Arab. Rep.
• Jordan
• Lebanon
• Oman
• Saudi Arabia
• Syrian Arab Republic
• United Arab Emirates
• Yemen, Rep.

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Big improvements in starting a business since
2004 including in the region where average time
dropped by almost half
8 Arab economies have reduced or eliminated the
minimum capital requirement since 2005. 5 of
these used to have among the highest such
requirements in the worldup to the equivalent of
120,000. The UAE was among the economies
abolishing the minimum capital requirement in
2008/09, perhaps inspired by the example of
Egypt, Saudi Arabia, Tunisia and the Republic of
Yemen.
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Saudi Arabia eased business start up with the
introduction of a new one-stop Unified Office for
business start-up
Cost ( of income p.c.)
Number of Procedures
Time (days)
Saudi Arabia rose from 15 to 13 on the global
ease of doing businessmaking it the
highest-ranked economy in the regionby
establishing a one-stop shop for business
registration and a faster process for
construction permits
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Dealing with Construction Permits in Arab World
Bahrain and United Arab Emirates lead the way
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One-stop shops and risk-based systems popular in
construction permitting
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United Arab Emirates, global top reformer list
for the first time
The UAE eased the process of dealing with
construction permits in 2008/09 and is now ranked
2nd in the region after Bahrain
2008
2009
Time (in days)
The United Arab Emirates moved from 47 to 33 on
global ease of doing business and became one of
the worlds 10 most active reformers by
eliminating the minimum capital requirement,
simplifying registration for new businesses, in
addition to easing construction permitting and
trading across borders.
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Egypt eliminates most pre-approvals for
construction permits
Cost ( of income p.c.)
Number of Procedures
Time (days)
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Getting Credit in Arab World Bahrain has the
highest coverage and Sudan the highest score on
legal rights
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Example of a successful reform Morocco
introduced private credit bureaus

• Morocco strengthened access to credit information
  by introducing a private credit bureau
• distributes positive and negative information
• keeps credit information for more than 2 years
• includes small loans on borrowers

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Protecting Investors in Arab World Saudi Arabia
and Kuwait lead the way
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Colombia- the road to the top 10 in Protecting
Investors

• Colombia has reformed investor protections for 3
  years.
• Passed a new decree which makes it easier to sue
  directors involved in prejudicial party
  transactions.
• If directors found guilty they must pay damages
  and disgorge the profit from the transaction.

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Protecting Investors reforms in Tunisia

• The new provisions require approval of related
  party transactions by both the board of directors
  and a shareholders meeting
• Interested parties are no longer allowed to
  participate in the approval process
• Requires review of the terms of such transactions
  by an independent auditor

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Trading across Borders in Arab World United Arab
Emirates and Saudi Arabia lead the way
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After reforms United Arab Emirates leads the Arab
World in Trading across Borders at 5 globally
Cost to export (USD per container)
Cost to import (USD per container)
Time to export (days)
Time to import (days)
Documents for export
Documents for import
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5
5
4
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Enforcing contracts in the Arab world an
opportunity for reform
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Enforcing contracts Top 10 and global good
practices

• Streamline provisions on mandatory mediation.
• Increase number of mediators and court masters.
• Have specialized commercial courts/chambers
• Expand range of functions of court masters.
• Explore enhanced use of technology in court
  systems.
• Keep statistics on judicial performance.

• Luxembourg
• Iceland
• Hong Kong, China
• Norway
• Korea, Rep.
• France
• Germany
• Finland
• United States
• New Zealand

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Peer-learning and benchmarking completed reforms
motivated or informed by DB
About 270 reforms since 2004
127 reforms in 2008/9
270
Note Reforms informed by Doing Business refers
to reforms that were either supported by
technical assistance or where governments
indicated that the reform dialogue and process
were informed by DB.
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For more information visit www.doingbusiness.org
Thank you. For more informationwww.doingbusines
s.org