Doing Business Report: An International Scorecard

Doing Business Report: An International Scorecard

By Babu Emile

Compiled by the World Bank and the IFC, the ‘Doing Business Report is a document that ranks 175 economies on the ease of doing business using annually updated quantitative indicators. It explores how governments streamline their business regulations such as reduction of the time, cost, and hassle for businesses to comply with legal and administrative requirements. This year the report ranks Singapore first on the ease of doing business. New Zealand moved to second place after two years at the top spot.

In the 2005 Doing Business Report, Rwanda was among the top 12 reformers. Rwanda was commended for eliminating a colonial-era law that allowed only one notary for the entire country and increasing them to fifty. Rwanda was also commended for decreasing its corporate income tax rate from 35 to 30 percent. A latter report indicates that the time it takes to start a business in Rwanda has become shorter but the costs and time of importing and exporting remain high.

Rwanda blames its poor performance in import and export time to her status as a landlocked country. Goods must travel by road to and from the Kenyan port of Mombasa for import or export. The country is looking at coming up with joint border clearance procedures and regional integration as long term solutions to this problem.

‘We believe that by being part of the East African Community, Comesa and the Northern-Central corridors, will enable us to create a smooth flow of goods from the ports from Mombasa or Dar es Salaam into Rwanda,’ says the Clare Akamanzi Deputy Director General of Rwanda Import and Export Promotion Authority.

The Economist has called Doing Business “a mine of useful as well as disturbing information” and “a handbook of how to put things right.” Since its launch with the 2004 edition, the Doing Business project is credited with inspiring some 48 reforms around the world. “The lesson is that what gets measured gets done,” said Caralee McLiesh, an author of the report.

However, like any other business theory, the whole story cannot be told. For example, a high ranking on the ease of doing business means that a government has created a regulatory environment conducive to operating a business, yet the rankings do not account for such other factors as the quality of infrastructure services, proximity to large markets, or law and order.

Rwanda is doing much to improve its Doing Business ranking but more importantly to improve the general business and investment climate. The Ministry of Commerce and the World Bank organized a workshop in April this year to review the Doing Business Report performance.

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