Global crisis led to record number of reforms: World Bank
The global economic crisis has encouraged a rash of government reforms that should make it easier to start, run and close businesses around the world, according to a World Bank report.business Updated: Sep 09, 2009 11:56 IST
The global economic crisis has encouraged a rash of government reforms that should make it easier to start, run and close businesses around the world, according to a World Bank report released on Tuesday night.
The annual "Doing Business" survey recorded more regulatory business reforms in more countries than any time since the report began in 2004. In total, 287 reforms were adopted in 131 countries from June 2008 to May 2009.
With governments desperate to spur new jobs around the world, "it really makes sense to have a lot of these reforms happening now", Sylvia Solf, programme manager for the report, told DPA.
"It wasn't quite a normal year for businesses and governments around the world," Solf said.
The first global recession since World War II has pushed businesses across many sectors into bankruptcy as consumer demand and global trade have dried up.
Developing countries have led the reform effort, and the focus has so far been on relatively simple administrative reforms, such as reducing red-tape for small and mid-sized businesses - the engines of most economies around the world.
That should be just the start. Most countries are still battling to emerge from recession and have yet to adopt significant reforms to help businesses better survive the next downturn.
Solf said many countries are only beginning to consider the kinds of major reforms of bankruptcy and court laws that have been spurred by similar regional downturns in the past, like the 1997 Asian financial crisis.
"It's too soon to see whether these kinds of reforms will happen or not," Solf said. "We see some signs, but it will be interesting to see whether this crisis is really gonna trigger something similar as (1997) did in Asia."
Singapore was rated the best country to do business for the fourth year in a row, followed by New Zealand, Hong Kong, the US and Britain.
The World Bank report rates how easy it is for businesses to operate in countries. It did not look at the kind of financial-sector reforms that have dominated global talks since the collapse of investment bank Lehman Brothers last year.
Yet some of the most significant business reforms occurred in regions that have been hardest hit by the current crisis. Eastern Europe and Central Asia have led the charge as many of their banks and businesses have been pushed into bankruptcy by the financial turmoil, the World Bank found.
Other countries that have adopted significant reforms over the year included Egypt, Colombia, the United Arab Emirates, Rwanda and Belarus.