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The Doing Business 2008 Advisory Workshop was organised to promote dialogue between the UAE and the World Bank on the results of the Doing Business 2008 report, which ranked it 68th among 178 countries, despite progress in the country’s economic performance and its high ranking as a draw for foreign investments.
Thomas Moullier, International Finance Corporation programme manager for the Middle East and North Africa, reviewed the outcome of methodology adopted in the report.
“The UAE ranked 68 in the overall Doing Business 2008 report but its rank varied in survey’s topics. UAE is ranked 158 in the Starting Business indicator, while it ranked very high, at the fourth place, in the Paying Taxes indicator.”
The UAE rose in 2008 in Registering Property and held the eighth place, but its position declined in other areas such as Getting Credit, retreating to the 115th spot and it held 107th for Protecting Investors. Also in Enforcing Contracts, the UAE ranked 114th and in Closing a Business, it ranked 139.
Moullier said the same methodologies and indicators were applied to all countries.
“I understand that there is some anger about these rankings but the great thing about UAE officials is their keenness to discuss different opinions and initiate dialogue to reach progress.”
On the other side, Abdullah Saleh, undersecretary of the Ministry of Economy, expressed his concern that the report gauged Doing Business in the largest city of the country, despite the fact that the UAE has a federal government and procedures and regulations differ from one emirate to another.
The UAE needs more co-operation between the federal government and local authorities to realise transparency about data and information and achieve harmony among procedures and regulations for doing business, he said.
Naser Al Saidi, executive director of Hawkama, cited several concerns about indicators adopted in the report.
“There are contradictions between the IFC Doing Business report and other reports issued by the World Bank. The UAE is ranked the first among Middle Eastern countries in the World Bank’s competitiveness report. It also ranked first among regional countries in the Control of Corruption indicator. The UAE attracted $19 billion in foreign investments last year, compared to China, which drew $60bn. If we compare economics of the UAE and China we will notice the massive development achieved by the UAE. There are major contradictions in the assessment of macroeconomic performance and microeconomic aspects in the Doing Business report. The UAE’s rank is low while it is attracting huge international investments.”
Al Saidi said the report was based on performance in local economy in which monopolies are the main driver of business activities.
“The UAE has a large number of free zones which have been the major attractions of foreign investments and new businesses. Free zones have their own regulations, procedures and laws that are based on international standards. The Dubai International Financial Centre, for example, could attract more than 550 foreign companies in less than four years. Free zones are the main drivers of economic activities and the report ignored this fact. We have another contradiction in the type of companies as the report was based on the opening of limited liability companies, while more than 80 per cent of UAE firms are family-owned.”
Responding to the criticism, Dahlia Khalifa, senior strategy adviser of the Doing Business report, said the UAE became a more difficult place to operate for many small and medium enterprises.
“SMEs wanting to form a limited liability company face challenges in the length of time, the number of procedures and the high minimum capital requirements.”
In response, Al Saidi highlighted the UAE’s strong desire to promote SME.
Faisal Jumaa Bel Houl, founder and managing partner of Ithmar Capital, also disagreed with the Doing Business report’s outcome regarding hardships for small and medium businesses.
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