Egypt, Saudi best business reformers

Egypt and Saudi Arabia have been praised as leading reformers in the world in 2006/7 for doing business more easily, said the World Bank and its private arm the International Finance Corporation (IFC) as part of an annual series published on Wednesday.

Egypt was the world's top reformer, reporting improvements in five of the ten areas surveyed in the fifth annual report ‘Doing Business 2008' whilst Saudi Arabia became the seventh-fastest reformer globally with reforms in three areas.

"The report finds that equity returns are highest in countries that are reforming the most," said Michael Klein, World Bank/IFC Vice President for Financial and Private Sector Development. "Investors are looking for upside potential, and they find it in economies that are reforming--regardless of their starting point."

The World Bank said Egypt's reforms have been deep, from cutting minimum capital required to start a business, from 50,000 Egyptian pounds to just 1,000 and halved the time and cost of start-up. It also reduced fees for registering property from 3 percent of the property value to a low, fixed amount.

Bureaucracy, which Egypt has long be criticised for, has been eased in the construction industry by facilitating for builders to get permits more easily. New one-stop shops for traders at Egyptian ports have also been opened, cutting the time to import by seven days and the time to export by five. A new private credit bureau has also been established which will make it easier for borrowers to get credit.

Saudi Arabia efforts for reform have also been noted, including the elimination of minimum capital requirement of 1,057% of income per capita - previously the highest capital requirement in the world - and reducing the days needed for company start-up from 39 to 15.

The kingdom has also launched a commercial credit bureau and accelerated trade by reducing the number of documents required for importing. It has also cut the time needed for handling at ports and terminals by two days for both imports and exports.

Jordan and Kuwait perform

Other top reformers in the Middle East included Jordan and Kuwait. Jordan has improved services at its one-stop shop for business start-up, combining company, tax, and chamber of commerce registration. This has cut the procedures to start a business from 11 to 10, and the time involved from 18 days to 14.

Kuwait, on the other hand, has set up an automated system in all government agencies responsible for issuing technical approvals for new utility connections. It has also expanded the range of information collected by the country's private credit bureau.

But other countries in the Gulf and Middle East have further challenges to go in terms of making it easier to do business.

"While the business environment is improving worldwide, entrepreneurs in the Middle East still face major challenges," noted Simeon Djankov, lead author of the report.

"These are in such areas as minority shareholder protections, court efficiency, and insolvency procedures and laws."

In the case of investor protections, the World Bank cited that the in the ease of shareholder suits, Iran scores zero out of 10, while Morocco scores 1 and the United Arab Emirates 2.

In Lebanon, resolving a commercial dispute in the courts takes 721 days on average, and in the United Arab Emirates the process involves 50 procedures from the moment the plaintiff files a lawsuit in court until the moment of payment.

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