UAE tops Mena in pursuing credit information, says World Bank report

The UAE has topped the Middle East and North Africa region in pursuing reforms in credit information, owing primarily to its initiative to set up a private credit bureau, World Bank said in its report Doing Business 2009.

The UAE was ranked 46th in ease of doing business category. The UAE was also ranked fourth in the countries easiest to pay taxes just after Maldives, Qatar and Hong Kong. According to the report, economies that rank high on the ease of paying taxes tend to have lower and less complex business taxes. They also have simple administrative processes for paying the taxes and filing tax returns.

The Middle East and North Africa has continued its upward trend in the Doing Business 2009 report, with two-thirds of its economies reforming.

Research shows that introducing a credit registry is associated with an increase of 4.2 percentage points in firms' reliance on credit. By introducing registries, it increases repayment rate because borrowers become less willing to default since defaults can prevent future loans.

Where taxes are high and commensurate gains seem low, many businesses simply choose to stay informal. In addition, the country also ranks fourth in the lowest tax rate nest to Vanuatu, Maldives and Qatar and ranks number one among the countries, which makes paying taxes easy.

The UAE ranks sixth in terms of who makes exporting easy and also ranks sixth on the cheapest rate of imports. The report is the sixth in a series of annual reports investigating the regulations that enhance business activity and those that constrain it. It presents quantitative indicators on business regulations and the protection of property rights across 181 economies.

In particular, it measures regulations affecting 10 stages of the life of a business such as starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.

Although the rankings do not tell the whole story about an economy's business environment – as it does not account for macroeconomic conditions, infrastructure, workforce skills or security – improvement in an economy's ranking does indicate that its government is creating a regulatory environment more conducive to operating a business.

The World Bank recognised a number of recent reforms, which enabled Saudi Arabia to reach the top 20. Improvements to business and property registration procedures made it easier and less costly to start a business and register real estate deeds. Protection of public company investors was enhanced with a series of new laws from the Capital Market Authority and the Ministry of Commerce and Industry.

Port fees were cut by 50 per cent, making it more affordable to trade across borders. Also, strict deadlines were placed on bankruptcy procedures, helping to expedite court proceedings and better protect creditors.

Moving six points up to the 16th place is Saudi Arabia, which now leads the GCC pack, followed by Bahrain which is one point below last year's level to 18th place. The report also ranks Saudi Arabia and Bahrain ahead of advanced economies such as Germany, Netherlands, Austria and France.

In a statement sent to Emirates Business last night, Amr Al Dabbagh, Governor of the Saudi Arabian General Investment Authority (SAGIA) and Chairman of the National Competitiveness Center (NCC), said few obstacles remain for local and foreign investors in Saudi Arabia today.

"We welcome all companies to take part in our growth, to take advantage of the wide range of investment opportunities in the Kingdom," he added.

The Kingdom has demonstrated notable improvements in the rankings over the last four years, leaping from the 67th position in 2004, to 38th in 2006 and to its current position in the top 20.

Al Dabbagh says King Abdullah has been the country's strongest advocate for modernising the Saudi business environment by enacting a new foreign investment law, establishing the Saudi Arabian General Investment Authority (SAGIA), privatising public companies, and achieving membership in the WTO.

For the fifth year in a row Eastern Europe and Central Asia led the world in doing business reforms.

Twenty-six of the region's 28 economies implemented a total of 69 reforms. Since 2004 Doing Business has been tracking reforms.

Nearly 1,000 reforms with an impact on these indicators have been captured and Eastern Europe and Central Asia has accounted for a third of them.

For example, four of its economies – Georgia, Estonia, Lithuania and Latvia – are among the top 30 in the overall ranking.

"Reforms in the region are moving eastward as four new comers join the top 10 list of reformers: Azerbaijan, Albania, the Kyrgyz Republic and Belarus," the report said adding that economies in the Eastern Europe and Central Asian region once again dominate the list of top Doing Business reformers in 2007/2008.

Worldwide, 113 economies implemented 239 reforms making it easier to do business between June 2007 and June 2008, the most number of reforms recorded in a single year since the Doing Business project started.

Singapore continues to rank at the top on the ease of doing business, followed by New Zealand, the United States and Hong Kong. Countries in the top 10 of last year's report remained untouched except for Australia and Norway, which swapped the 9th and 10th place.

Denmark, the UK, Ireland, Japan and Canada rank fourth to eighth place.

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