BOGOTA, COLOMBIA, November 28, 2007
— Colombia is a top reformer globally and the regional standout on the
ease of doing business. The sixth-fastest reformer worldwide in 2006-07,
the country sped up trade, enhanced investor protections, and eased tax
burdens, according to Doing Business 2008—the fifth report in an
annual series issued by the World Bank and IFC.
This is the second time that Colombia has been a top reformer—the first
was in 2003-04. To mark the latest success, President Alvaro Uribe today
hosted a special event in Bogota to highlight the country’s reforms over
the past year. The findings of Doing Business 2008 were presented
by Michael Klein, World Bank-IFC Vice President for Financial and Private
Sector Development and IFC Chief Economist.
But the Latin America and the Caribbean region as a whole is falling further
behind other regions in the pace of regulatory reform. In 2006-07 it was
the world’s slowest-reforming region. Overall, it saw 26 positive reforms,
but also six changes that made countries less friendly to business. With
the most negative changes, Venezuela slipped farthest in the rankings.
Colombia rose nearly 15 places in the aggregate rankings on the ease of
doing business, to reach 66 out of the 178 economies surveyed in the report.
“Colombia has clearly charted a path toward reform and enhanced competitiveness,”
said Klein. “The report finds that equity returns are highest in countries
with the most reforms. Investors are looking for upside potential, and
they find it in these economies.”
Among the year’s reforms, Colombia passed a decree that strengthened investor
protections. This expanded disclosure requirements for related-party transactions
in listed companies.
Colombia also made great strides in easing trade, reducing the time it
takes to export by 10 days and the time it takes to import by 15 days.
By extending port operating hours and adopting more selective customs inspections,
it reduced the time for port and terminal handling activities by three
days. Among other results, Colombia extended operating hours at its ports,
resurfaced the roads to them, reduced port congestion by reducing the number
of free storage days, and introduced selective customs inspections of cargo.
Colombia passed a new law that instituted major changes to the tax regime.
It introduced an electronic tax filing system, cutting the average
time that businesses must spend on tax compliance each year by 188 hours,
or 41 percent. It also progressively reduced the corporate income tax rate,
from 35 to 34 percent in 2007 and to 33 percent in 2008.
“As Colombia aims at more reforms, areas to consider include simplifying
business start-ups,” noted Sylvia Solf, a coauthor of the report. Colombia
is ranked 88th globally on the ease of starting a business.
“In spite of one-stop shops, entrepreneurs still have to go through 11
procedures and 42 days before legally operating a new business. Enforcing
contracts, where Colombia is ranked 147th, is another possible
focus,” she added. On average, it takes 34 procedures and over three-and-a-half
years to settle a commercial dispute, at a cost that is close to 53 percent
of the value of the claim.
Colombia’s reform efforts have been gaining momentum due to President
Uribe’s government national policy to enhance Colombia’s competitiveness.
An intergovernmental team across several ministries, including the Ministry
of Trade, Industry, and Tourism and the Ministry of Treasury, has been
working to implement the reforms noted in Doing Business 2008, among
This reform effort in Colombia goes beyond the government. It includes
the Private Council for Competitiveness, the National Planning Department,
local chambers of commerce, and the business community. Other participating
stakeholders include academia, representatives of the different regions,
and think tanks such as Fedesarrollo and Anif.
The event in Bogota also marked the global launch of the Spanish version
of Doing Business 2008. More information can be found at http://espanol.doingbusiness.org/.
The top 10 Doing Business reformers this year are, in order, Egypt,
Croatia, Ghana, FYR Macedonia, Georgia, Colombia, Saudi Arabia, Kenya,
China, and Bulgaria. The following countries also made good strides, with
three or more reforms: Armenia, Bhutan, Burkina Faso, the Czech Republic,
Guatemala, Honduras, Mauritius, Mozambique, Portugal, Tunisia, and Uzbekistan.
Doing Business 2008 ranks 178 economies on the ease of doing business.
The top 25 in the overall rankings are Singapore, New Zealand, the United
States, Hong Kong (China), Denmark, the United Kingdom, Canada, Ireland,
Australia, Iceland, Norway, Japan, Finland, Sweden, Thailand, Switzerland,
Estonia, Georgia, Belgium, Germany, the Netherlands, Latvia, Saudi Arabia,
Malaysia, and Austria.
The top-ranked economies in Latin America and the Caribbean are Puerto
Rico (28), Chile (33), St. Lucia (34), Antigua and Barbuda (41), and Mexico
(44). The rankings are based on 10 indicators of business regulation that
track the time and cost to meet government requirements in business start-up,
operation, trade, taxation, and closure. The rankings do not reflect such
areas as macroeconomic policy, quality of infrastructure, currency volatility,
investor perceptions, or crime rates. Since 2003 Doing Business
has inspired or informed more than 113 reforms around the world.
Online Media Briefing Center:
Journalists can access the Doing Business 2008 report through the
World Bank Online Media Briefing Center at http://media.worldbank.org.
Accredited journalists who do not already have a password may request one
by completing the registration form at http://media.worldbank.org.
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 provided methodological support
and review. The data, methodology, and the names of contributors are publicly
available online at www.doingbusiness.org.