DOING BUSINESS 2008: Eastern Europe Overtakes East Asia on Ease of Doing Business;

Contacts:

Warsaw:  Jacek Wojciechowicz  (+48 22) 520 8000

e-mail: jwojciechowicz@worldbank.org

Washington:  Miriam Van Dyck  (1-202) 458-2931

e-mail mvandyck@worldbank.org

DOING BUSINESS 2008: Eastern Europe Overtakes East Asia on Ease of Doing Business;

but Poland ranks 74th behind all new EU Member Countries

WARSAW, December 12, 2007 – The World Bank and IFC presented the key findings of Doing Business 2008 to senior Polish officials today. Poland ranks 74th out of 178 countries on the overall ease of doing business, ahead of countries such as Russia (106) and Greece (100), but behind Ireland (8), Germany (20), Spain (38) and the Czech Republic (56). It has the lowest ranking among the new member countries of the EU.

The report praises Poland for its reforms in reducing the cost for registering property and making it easier to enforce contracts. But it finds that Poland’s performance across the indicators is uneven. The country ranks 33rd globally on the strength of investor protections but 156th on the ease of dealing with licenses. Poland’s overall ranking dropped six places from last year. The report also finds that other countries in the same range of rankings reformed more than Poland in 2006/07.

As a region, Eastern Europe and the former Soviet Union surpassed East Asia on the ease of doing business. Several of the region’s countries have even surpassed many economies of Western Europe on this score as the result of the implemented reforms. Croatia is the region’s top reformer and along with three other countries in the region – FYI FYR Macedonia, Georgia and Bulgaria – it also ranks among the top 10 reformers in the world.

“Results show that as governments ease regulations for doing business, more entrepreneurs go into business; and this is especially evident in Eastern Europe,” said Simeon Djankov, the lead author of the report. “Eastern Europe has witnessed a boom in new business entry that rivals the rapid growth in East Asia in the past.”

According to the authors of the report, the potential areas for reforms to improve the ease of doing business in Poland in the short term include:

1.                  Starting a business: eliminate the minimum capital requirement.

2.                  Dealing with licenses: speeding up the approval process of building permits.

3.                  Paying taxes: expanding online tax payments.

These reforms are either administrative in nature or can be accomplished quickly through targeted governmental action. They can have a large impact on the business climate in Poland by eliminating the red tape that hinders businesses. Such “quick wins” could also create an environment in which the medium-term, deeper reforms are more likely to succeed.

“If Poland were to implement the reforms suggested in the “Doing Business” Report, it could see a significant improvement in its overall ranking, as experienced by Georgia and Croatia” added Djankov.

Doing Business 2008 ranks 178 economies on the ease of doing business based on 10 indicators of business regulation. The top-ranked countries in Eastern Europe and Central Asia are Estonia (17), Georgia (18), Latvia (22), Lithuania (26), Slovakia (32), Armenia (39), Hungary (45), Bulgaria (46), and Romania (48).

The rankings track indicators of the time and cost to meet government requirements in business startup, operation, trade, taxation, and closure. They do not track variables such as macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions, or crime rates. Since 2003 Doing Business has inspired or informed over 113 reforms around the world.

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.

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