The World Bank came out with its annual Doing Business report.
Basically the report identifies key issues vital to doing business in a country.
Doing Business measures and tracks changes in the regulations applying to domestic companies in 11 areas in their life cycle. A fundamental premise of Doing Business is that economic activity requires good rules that are transparent and accessible to all. Such regulations should be efficient, striking a balance between safeguarding some important aspects of the business environment and avoiding distortions that impose unreasonable costs on businesses. Where business regulation is burdensome and competition limited, success depends more on whom you know than on what you can do. But where regulations are relatively easy to comply with and accessible to all who need to use them, anyone with talent and a good idea should be able to start and grow a business in the formal sector.
The top five economies that are the BEST for doing business are:
- Hong Kong
- New Zealand
- United States
One quick thing about this: The rhetoric from some political circles that the US is no longer a good place to do business is blown away by this report. Note that the United States is right up near the top.
It would be nice to see this report work its way into the current political debate. (Well, one can always hope.)
What drew my attention to this report was an entry in the Beyond BRICs blog from the Financial Times.
The World Bank report shows just how difficult it is to set up and run a company in the BRICs. (Brazil, Russia, India and China)
- Brazil dropped 6 points in the rankings from 120 to 126 out of 183 economies.
- China slid from 87 to 91.
- India and Russia did better. India moved to #132 from #139 and Russia from #124 to 120.
And Brazil fell because of its laws on trade and tax collection among others.
The bottom line is that despite all the hype of the BRICs being the wave of the future, they are all WAY behind not only the United States but most of Europe and large portions of Latin America and Asia.
For all the doomsayers and complainers of U.S. tax and business policy, this report shows clearly that the United States remains one of the best places to set up and run a business.
This report is another example of how an international issue can be linked to local issues. It just takes a few minutes for a journalist to follow up on the report and match up its findings with the political rhetoric.