U.S. Supports Governments Reforming Their Business Climate

U.S. Supports Governments Reforming Their Business Climate

Washington, 4 November 2013 — The U.S. Agency for International Development (USAID) says it partnered with a majority of the top-performing countries identified in a World Bank report as having successfully implemented reforms to create a legal and regulatory environment attractive to entrepreneurship and investment.

On October 29, the World Bank Group released Doing Business 2014: Understanding Regulations for Small and Medium-Size Enterprises. Doing Business 2014 is the 11th in a series of annual reports benchmarking the regulations that affect private-sector companies, in particular small and medium-size enterprises. The report presents quantitative indicators on 11 areas of business regulation for 189 economies.

The U.S. agency said it used its decades of experience in supporting creation of legal and regulatory environments conducive to entrepreneurship and investment to help a majority of top reforming countries in the 2014 report. “Improving the business environment in our partner countries is demonstrating real impact and benefits for businesses,” USAID said on its website. “Numerous USAID missions and projects around the world contributed to these reforms, benefitting millions of entrepreneurs who can now spend more of their time and money investing in their businesses — the engines of growth around the world — rather than complying with unnecessary red tape.”

In Ukraine, overall the top reformer, USAID assistance helped streamline business registration, including launching effective “one-stop” permitting centers throughout the country to make life more predictable and efficient for businesses. USAID supported reforms to streamline the property-registration process in partnership with the Ministry of Justice, smoothing the transition to a new property-registration system and electronic land records.

USAID also supported the new State Registration Service of Ukraine in implementing new registration procedures and helping citizens understand the new system. USAID assistance to improve the ease of dealing with construction permits helped Ukraine move from the 183rd position to 41st place in the report, “reflecting a major improvement in real estate ownership rights registration and the development of a permit system,” USAID said. Ukraine has decreased the time to acquire a construction permit by 86 percent since 2006, with the most dramatic decline from 2013 to 2014, the agency added.

“While Ukraine’s ranking remains far below that of other economically developed nations,” USAID said in a press release, “and the country still faces major issues in terms of its business climate — especially in protection of investors’ rights and contract enforcement — this year’s progress demonstrated that putting political will behind reform can yield results.”

Other highlights include:

• In Kosovo, USAID supported the government in reducing constraints to starting a business, including reducing the capital requirement for starting a limited liability company, business registration fees and the time needed to register a business. USAID supported reforms designed to streamline the issuance of construction permits, and also helped introduce notaries to Kosovo. These actions have simplified the process of land registration. Since 2010, the number of procedures required to start a business in Kosovo have been reduced by one-third, decreasing costs by 16 percent, USAID said.

• USAID provided technical assistance to streamline cargo-processing times and reduce border delays in Rwanda, which facilitates efficient cross-border trade in the landlocked country. The time to export out of Rwanda has decreased by 57 percent since 2006, USAID said.

• In Guatemala, USAID helped establish one-stop online business registration. This was highlighted as one of the top reforms for the country, which came in among the top 10 reformers of 2014. The time to register a business has fallen by 50 percent since 2004.

• In the Philippines, USAID supports the National Competitiveness Council, which addresses ease of doing business issues. USAID also continues to partner with the government to improve construction permits and land registration. Since 2004, the Philippines has reduced the cost of acquiring a construction permit by 53 percent and reduced the time required by eight days, according to USAID.

• As the implementer of the Millennium Challenge Corporation’s Threshold program, USAID supported Liberia in streamlining the business-registration process. Since 2007, the time to register a business has fallen by 93 percent, from an average of 68 days to 4.5 days.

• USAID’s programs have encouraged El Salvador to reduce the number of documents required to import and export out of the country. Time to export has fallen by 41 percent since 2006.

• In Iraq, it used to take three months to start a new business. Entrepreneurs had to make separate trips to the provincial Chamber of Commerce, federal Chamber of Commerce and a bank. It took days just to determine whether a company name was already in use, USAID said. Now, the entire process takes just 24 days. USAID supported Iraq’s Ministry of Trade in establishing a one-stop shop for Iraqis to more efficiently register new businesses. There, companies can reserve a company name and fulfill capital requirements. Building off of this success, the government of Iraq, in partnership with USAID, is reviewing all the laws and policies related to business and commerce to simplify regulations and improve the environment for private-sector development.

The 2014 report (PDF, 3.1MB) is available on the World Bank website.

ENDS

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