Jordan made the biggest progress among Middle Eastern nations in improving its investment climate last year, but still maintains along with other nations in the Middle East and North Africa some of the largest capital requirements for startup businesses anywhere in the world, according to a new report from the World Bank Group.
Doing Business in 2005: Removing Obstacles to Growth, a report cosponsored by the World Bank and International Finance Corporation, found that investment climate reforms can help create job opportunities for women and young people, encourage businesses to move into the formal economy, and promote growth.
According to a press release on the new findings, between 2003 and 2004, for instance, Morocco posted an increase of 21 percent in new business registrations after simplifying its entry procedures.
Jordan cut the time it takes to register a new business by about nine weeks and is one of the few nations that gives regulators an incentive to maximize the value recovered for creditors when a business must close. Yet, the Jordanian government still requires a new business to have minimum capital equivalent to 11 times the nation’s average per capita income. In Saudi Arabia and Yemen, the minimum capital requirement is 15 times average income; in Syria, the requirement is 50 times average income.
As mentioned, Jordan improved the process for starting a new business the most, by reducing the number of procedures from 14 to 11 and the number of days from 98 to 36.
Algeria, Morocco, and Yemen also reduced the number of days needed to open a business. Saudi Arabia reformed its public credit registry, nearly doubling the number of borrowers with information available at the registry.
Of the 58 countries that reformed business regulation or strengthened the protection of property rights in the last year, only seven were in the Middle East. In addition, just two nations in the region, Tunisia and Israel, ranked in the top quartile of the countries surveyed on the ease of doing business. Both countries improved further last year. Tunisia improved the recovery rate in bankruptcy and increased the coverage of borrowers in its public credit registry. Israel established a new procedure for debt recovery in the courts, which takes less than seven months. Previously, it took a year for creditors to collect overdue debt. (menareport.com)
© 2004 Mena Report (www.menareport.com)
