This morning I spoke at an event at the Center for Strategic and International Studies (CSIS) as part of the launch of the 2014 World Bank Doing Business report. Doing Business 2014 is the 11th in a series of annual reports benchmarking the regulations that affect private sector firms, focused on regulations that impact on small and medium-size enterprises.
USAID has been a proud advocate and partner for the Doing Business report since it began, and we supported more than twenty countries in implementing the reforms documented in this year’s report – including in a majority of the top reforming countries.
Improving the business environment in our partner countries is demonstrating real impact and benefits for businesses. Numerous USAID Missions and projects around the world contributed to these reforms, benefiting millions of entrepreneurs who can now spend more of their time and money investing in their businesses—the engines of growth and employment around the world—rather than struggling to navigate a maze of unnecessary red tape.
Take the example of Iraq. 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. Now, the entire process takes just 24 days. USAID helped Iraq’s Ministry of Trade establish a one-stop shop for Iraqis to register a business, reserve a name, and fulfill capital requirements. The Chamber of Commerce created an online database to check whether a trade name is already taken.
USAID has decades of experience with commercial law and regulatory reforms, particularly from the remarkable transition to vibrant, free-market democracies that are implementing the Doing Business reform agenda across Eastern Europe. From the beginning of Doing Business, we advised top-reforming countries on legal and regulatory changes, and on the more difficult issues of implementation.
For example, USAID partnered with this year’s top reformer, Ukraine, on credit, customs, and construction permits, supporting Ukraine as it moved up 28 spots to #112. While Ukraine’s ranking remains far below that of other economically developed nations, 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.
We are working with reformers in the Government of Kosovo, the #4 reformer worldwide, on reducing capital requirement for starting a business, registration fees, and the time to register a business. Since 2010 Kosovo has reduced the number of procedures required by a third, reduced the time required by 22 days, and reduced the cost by 16%.
USAID success extends far beyond the Europe and Eurasia region. In Burundi, USAID helped with revision of the land code, supporting a national education campaign about land registration and supporting implementing ministries in the new registration process. Since 2004, the time to register property has declined by 38%. USAID provided technical assistance to streamline cargo processing times and reduce border delays in Rwanda, decreasing the time to export by 57% since 2006. In Guatemala, USAID supported online business registration, decreasing the time to register a business by 50% since 2004.
USAID is proud of our record of support for legal and regulatory reforms–but indicators only tell part of the story. As echoed by my fellow panelists, reform implementation–the key to achieving the intended development impact–remains incomplete. To transform aid recipient countries into attractive investment destinations, governments must implement and enforce broader and deeper reforms that extend beyond technical solutions and also embrace greater transparency, increased interaction between civil society and government, and improved governance–factors that are so closely correlated with economic growth.
USAID will continue our work to make it easier to do business, while also focusing on integrating increased stakeholder participation and good governance as essential components of our reform programs, as well as supporting the implementation of reforms to create conditions for sustainable economic growth.
CSIS streamed the event and tweeted highlights.