|10 December, 2019

Why MENA states should strive to become more business-friendly

World Bank official spells out many economic benefits enjoyed by countries enforcing reforms

Image used for illustrative purpose. Businessmen struck a deal in Dubai.

Image used for illustrative purpose. Businessmen struck a deal in Dubai.

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Countries in the Middle East and North Africa (Mena), including the UAE, are being encouraged to continue implementing more meaningful reforms that support businesses in the private sector, in order to achieve sustainable economic growth.

Caroline Freund, global director for trade, investment and competitiveness of the World Bank Group, said on Tuesday that economies that have implemented business-friendly reforms have experienced positive impact, including increased export volumes, per capita incomes and overall economic activity.

“The effects are bigger when the overall business climate is strong because the firms can enter and take advantage of new export markets more easily,” Freund said at the opening of a high-profile event in the UAE.

The World Bank Group, along with the UAE Federal Competitiveness and Statistics Authority (FCSA), is hosting the third edition of “Doing Business Technical Deep Dive,” a Masterclass and sharing platform on the reforms listed by the World Bank Group’s Doing Business report. The event, which runs from December 10 to 13, is attended by representatives from more than 30 countries in Africa, Asia, Europe, the Middle East and Oceania.

The UAE is currently one of the 20 most entrepreneur-friendly countries, ranking 16th globally in the World Bank report and number one in the Middle East and North Africa (Mena) region. It aims to secure the top spot over the short term.

On October 24, 2019, the 2020 Doing Business report was launched to document the reforms being undertaken in countries across the Middle East and Africa. So far, states in the region have implemented 57 business-friendly reforms.

Freund said that those who want to improve in the rankings should keep in mind that the implementation of business-friendly reforms is a continuous and long-term process, and that the impact may be felt after two or three years.

She assured that studies have shown that business-friendly regulations are correlated with higher growth and lower poverty, as well as higher business and employment creation.

“In Mexico, [for example,] reforms that simplified entry regulations led to 5 per cent informal firms shifting to formal [status],” she said.

“In Columbia, reforms making bankruptcy laws more efficient significantly improved the recovery rate of viable firms. Those that stayed in were more competitive in the market,” she added.

(Writing by Cleofe Maceda; editing by Seban Scaria)

(cleofe.maceda@refinitiv.com)

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© ZAWYA 2019

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