Doing Business 2018: FYR Macedonia Continues to Be Among the Top Ranked Economies

Stocks and Financial Services Press Releases Wednesday November 1, 2017 10:19
Washington--1 Nov--World Bank

Washington, October 31, 2017 — Economies in Europe and Central Asia continued an active program of reforms to improve their business climate, to create jobs and spur growth, according to the 15th anniversary edition of the World Bank Group's annual Doing Business report.

Released today, Doing Business 2018: Reforming to Create Jobs records 44 reforms in the region in the past year, bringing to a total of 673 the number of reforms enacted over the past 15 years.
Two of the region's economies, Kosovo and Uzbekistan, feature among this year's global top improvers and 13 of the region's 24 economies are ranked in the top 50 in the Doing Business global rankings.

The reforms of the past year were carried out mainly in the areas of Registering Property (with eight reforms), Getting Credit (seven) and Protecting Minority Investors (six). For example, Georgia strengthened minority investor protections by clarifying ownership and control structures.

The Russian Federation made it easier to transfer property by reducing the time needed to apply for state registration of title transfer. Reforms in Kosovo included the adoption of new laws to strengthen resolving insolvency and improve access to credit. Uzbekistan strengthened minority investor protections by increasing corporate transparency requirements, while Lithuania made getting electricity easier by streamlining procedures and reducing connection fees.

Turkey not only strengthened access to credit by adopting a new law on secured transactions that establishes a unified collateral registry and allows out-of-court enforcement of collateral, but also improved its credit reporting system by adopting a new law on personal data protection. Ukraine made dealing with construction permits easier by significantly reducing fees.

Other economies in the region that implemented reforms in the past year include Kazakhstan (three reforms), the Kyrgyz Republic (one) and Tajikistan (two). In Kazakhstan, for example, enforcing contracts was made easier by introducing additional time standards for key court events that are respected in the majority of cases. The reform implemented in the Kyrgyz Republic strengthened access to credit through two new decrees that establish a unified and modern collateral registry and also improved its credit reporting system by adopting a new law on exchanging credit information. Tajikistan made starting a business easier by raising the revenue threshold for mandatory value added tax registration and eliminated a procedure to make registering property easier.

"The economies of Europe and Central Asia continue to demonstrate a very strong reform agenda," said Santiago Croci Downes, Program Manager of the Doing Business Unit. "As the impact of these reforms spreads, we are likely to see a more dynamic private sector which will contribute to boosting economic growth in the region."

The region's top ranked economies are Georgia (in 9th place), the Former Yugoslav Republic of Macedonia (11) and Lithuania (16).

Economies of Europe and Central Asia perform best in the Doing Businessareas of Protecting Minority Investors and Registering Property. For example, it takes on average 20 days to transfer commercial property, compared with the global average of 49 days.

The region continues to underperform in Dealing with Construction Permits and Getting Electricity. It takes an average of 168 days to obtain a construction permit in the region, compared to the average of 158 days globally. And it takes an entrepreneur 114 days to get connected to the electric grid in the region, compared to the global average of 92 days.

Highlights of the successes of Europe and Central Asia over the past 15 years include:
  • Starting a Business and Paying Taxes have been the most common areas of reform, with 120 and 108 reforms respectively.
  • Fifteen years ago, it took an average of 43 days to register a new business in the region, compared with 10 days now. This is half the global average of 20 days. The region's top performing economy in this respect is Georgia, where it takes two procedures and two days to register a new business, compared with nine procedures and 25 days in 2003.
  • Georgia has implemented the most reforms in the past 15 years, totaling 47, followed by Kazakhstan and the Former Yugoslav Republic of Macedonia, with 41 each.

"Despite a prolonged political crisis, the Former Yugoslav Republic of Macedonia remains one of the top ranked economies, in terms of ease of doing business," said Marco Mantovanelli, Country Manager at the World Bank Office in Skopje. "This is welcome news, but it is important that the full range of factors and policies that affect the quality of an economy's business environment and national competitiveness and are not captured by Doing Business are also addressed, in order for the country to achieve the hoped-for impact on firm productivity gains and attract more investments"

Highlights of the successes in FYR Macedonia over the past 15 years include:
  • The former Yugoslav Republic of Macedonia is the only upper-middle-income economy within the top 20 in the overall measure of the ease of doing business;
  • FYR Macedonia has carried out the second highest number of reforms (41) among the top 20;
  • The country initiated sweeping construction reforms in 2007/08, mandating the use of private engineers licensed by the Chamber of Engineers to undertake independent building plan reviews. Since then, FYR Macedonia has seen significant improvements in the efficiency of construction regulation as measured by Doing Business. The tradeoff has been an increase in regulatory cost.
The full report and its datasets are available at www.doingbusiness.org

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