Laos has dropped in an international ranking of places to do business, despite making some progress in improving the legal framework for entrepreneurs.
The International Finance Corporation (IFC) and the World Bank released the Doing Business Report 2012 this week, showing that Laos is now ranked 165th out of 183 countries that facilitated business operations this year, dropping from 163rd last year.
According to a press release from the IFC and World Bank, Laos has made some progress in 2010/2011 in improving the legal framework for entrepreneurs, but new regulations have yet to be implemented and are therefore not reflected in the Doing Business indicators.
Last year’s rankings have been back-calculated to account for the addition of new indicators such as ‘Getting Electricity’, data corrections and methodology changes in existing indicators in order to provide a meaningful comparison with this year’s rankings, according to the press release.
“Laos has initiated reforms to support business entry and operations,” said Aimilios Chatzinikolaou, IFC’s Head of Office in Vientiane.
“Now, more attention needs to be paid to implementation so that these reforms can generate the positive impact they were designed to have for businesses and the economy as a whole.”
The Doing Business 2012, themed Doing Business in a More Transparent World, assesses regulations affecting domestic firms in 183 economies and ranks them in 10 areas of business regulation, such as starting a business, resolving insolvency, and trading across borders.
This year, the rankings on ease of doing business have expanded to include an indicator on ‘getting electricity’. The report finds that getting an electrical connection is most efficient in Iceland, Germany, Taiwan, Hong Kong and Singapore.
The annual report also finds that across the globe Singapore and Hong Kong provide the friendliest regulatory environments for local entrepreneurs. Within East Asia and the Pacific region, China advanced the most in making its regulatory environment more business-friendly over the past six years.
Fourteen of East Asia and the Pacific’s 24 economies improved business regulations in the past year. The Solomon Islands, Tonga, Vanuatu, and Malaysia improved in three or more of the areas measured by the report.
Malaysia rose five places in the global ranking, to 18, by implementing regulatory reforms including a new one-stop shop for start-ups, computerisation of commercial courts, and improved insolvency proceedings. Brunei Darussalam’s rank climbed to 83, partly because the country made it easier for businesses to get an electrical connection.
Over the past six years, a new measure shows that 22 economies in East Asia and the Pacific have made their regulatory environment more business-friendly.
“Making business regulation more transparent and efficient increases opportunities for economic growth,” said Augusto Lopez-Claros, Director of Global Indicators and Analysis for the World Bank Group. “In East Asia and the Pacific, businesses have benefited from the region’s broad and sustained regulatory reforms.”
