Washington, D.C., April 13, 2007—
Today the World Bank Group and the U.S. Agency for International Development
honor Zurab Nogaideli, Prime Minister of Georgia, as top business environment
reformer of the year. The Prime Minister has led reforms which have catapulted
Georgia from a ranking of 112 to 37th place in the World Bank Group’s
2007 global rankings on the regulatory ease of doing business.
Other reformers honored for initiating and implementing reforms are:
- Agustín Carstens, Secretary of Finance,
- Mahmoud Mohieldin, Minister of Investment,
- Hugo Eduardo Beteta Méndez-Ruiz, Minister
of Finance, Guatemala
- Donald Kaberuka, President of the African
Development Bank and former Minister of Finance, Rwanda
- Vincent Van Quickenborne, Secretary
of State for Regulatory Simplification, Belgium
- Charles Mutalemwa, Permanent Secretary,
Ministry of Planning, Tanzania
To celebrate the success of these reform efforts, the World Bank Group
and USAID are establishing an annual Reformers’ Club event to honor the
top reformers worldwide. The reformers celebrated today are the initial
inductees into the club.
“Today we recognize global champions of reform, leaders who have fostered
a better environment for entrepreneurs in their countries. The members
of this Reformers’ Club have demonstrated that straightforward measures
can be a catalyst for more jobs, a stronger private sector, and higher
economic growth,” said Paul Wolfowitz, President of the World Bank Group.
“USAID is honored to be a cosponsor of the inaugural Reformers' Club,”
said Randall L. Tobias, Director of U.S. Foreign Assistance and USAID Administrator.
“Our goal is to recognize leaders who have the vision and courage
to undertake the often difficult reforms necessary to create a vibrant
private sector that is not constrained by excessive regulatory burdens.”
According to Doing Business 2007: How to Reform, a recent report
by the World Bank and IFC, the World Bank Group’s private sector arm,
in 2005-2006, some 213 regulatory reforms in 112 economies reduced the
time, cost, and hassle for businesses to comply with legal and administrative
requirements. Doing Business presents annually updated quantitative
indicators on business regulations and the protection of property rights.
The data can be compared across 175 countries.
Creating new jobs is the best way to reduce poverty, and reforms that make
it easier to do business help achieve that goal. In Georgia, the top Doing
Business reformer of the year, 85,000 new jobs were created in the private
sector during 2006 alone. In Guatemala, another top reformer, reforms in
property registration resulted in a 40 percent increase in the construction
of private housing. Rwanda and Tanzania, the top reformers in Africa, have
grown at 6 and 6.5 percent a year, respectively, since 2000.
"Africa is speeding the pace of reform, with Rwanda and Tanzania showing
the way, and this is a very positive development,” said Michael Klein,
World Bank/IFC Vice President for Financial and Private Sector Development
and IFC Chief Economist. "Big improvements are possible. Africa still
has the most complex business regulations in the world. But if an African
country adopts the region's best practices in the 10 areas covered by Doing
Business, it would rank 11th globally. African countries would greatly
benefit from new enterprises and jobs, which can come with a more business-friendly
Some examples of improvements in the business environment that the top
reformers have made possible:
- In 2005-2006, Georgia reduced the minimum
capital required to start a new business from 2,000 to 200 lari ($85).
Business registrations rose by 55 percent. Reforms in customs and the border
police simplified border procedures. Where it took 54 days to meet all
the administrative requirements to export in 2004, it now takes 13. Georgia
also amended its procedural code for the courts, introducing specialized
commercial sections and reforming the appeals process. The time to resolve
simple commercial disputes fell from 375 days to 285.
- Mexico, the top reformer in the Americas
over the last year, strengthened investor protections with a new securities
law that increases the protection of small shareholders. It also cut the
time to start a business from 58 days to 27 and lowered corporate income
taxes from 33 percent in 2004 to 30 percent in 2005 and 29 percent in 2006.
- Egypt reformed its company start-up
and tax administration procedures. It cut registration fees for new businesses,
reducing the cost by 40 percent, and implemented a flat 20 percent corporate
income tax rate. In 2007, Egypt reduced the minimum capital requirement
from 50,000 pounds to 1,000 and the time to start a business by 12 days.
- Guatemala launched a fast-track business
registration service and set time limits on obtaining building permits.
Electronic property registration reduced delays by a month.
- Rwanda introduced a specialized commercial
division in the high court and increased the number of authorized notaries
from one to over 50. As a result, the time to register a new business fell
from 21 days to 16 days. Rwanda also decreased its corporate income tax
rate from 35 to 30 percent.
- Tanzania reduced the cost to register
new businesses by 40 percent. Customs clearance times dropped from 51 to
39 days for imports and from 30 to 24 days for exports. Tanzania also cut
fees associated with transferring property by 3 percent and revised its
company law to better protect small investors.
- Belgium has developed the European Union’s
most innovative communication program for cutting red tape. One result
is a reduction in the days to start a business, from 56 in 2003 to less
than a week now. The government has established a Cutting Red Tape Brigade
that solicits complaints from businesses and helps resolve them.
The Doing Business project is based on the efforts of more than 5,000 local
experts – business consultants, lawyers, accountants, government officials,
and leading academics around the world, who provide methodological support
and review. The data, methodology, and the names of contributors are publicly
available online at www.doingbusiness.org.
For more information or media queries, please contact:
IFC/WB: Cynthia Case, E-mail: CCase@ifc.org;
Tel: (office) 202 473-6287 (cell) 202 494-3465;
Grace Sorensen, E-mail: email@example.com;
Tel: (office) 202 473-7088 (cell) 703 967-3950
USAID: David Snider, E-mail: firstname.lastname@example.org;
For more information on the event visit www.reformersclub.org.