Southeast Asian laggards move up in Doing Business rankings
HONG KONG -- Myanmar, Vietnam and Brunei are among economies in the Asia-Pacific region that are making the most strides in improving the ease of doing business, according to the latest World Bank rankings.
The region hosts four of the world's top five business-friendly economies, according to the World Bank's Doing Business 2016 Report, which covers 189 economies worldwide. Singapore ranks top for the 10th consecutive year, and is followed by New Zealand, Denmark, South Korea and Hong Kong. Australia comes in at 13 and Malaysia does not do too shabby, making the top 20 with its 18th placing.
While developed countries continue to dominate the top rankings, emerging economies, especially in Asia, are catching up as they implement reforms.
"Asia seems to be a head of the game in terms of reform," said Vivek Pathak, director of East Asia and Pacific Department at International Finance Corp., a private sector lending arm of the World Bank. "The [region's] gap is closing, which I think is a positive sign."
Explaining its methodology, the World Bank said top ranked economies tend to have good rules that allow for efficiency and transparency in business, while protecting the public interest.
Brunei made the biggest leap in rankings, moving up to 84 from last year's 105. This has placed the small but oil-rich country on par with China, the world's second largest economy. The average time required to start a business in Brunei fell significantly to 14 days, down from 104 days last year, thanks to efforts made to simplify incorporation procedures.
China simplified its tax code, saving companies time and money, although its overall ranking failed to improve substantially from last year.
Myanmar remains at the back of the class with a ranking of 167, but that is up from 177. The World Bank noted that the country made more progress than any other in one key ease-of-doing-business criteria: making it easier to start a business by removing the minimum capital requirement for companies.
Cambodia was one of the few countries that improved the reliability of its power supply system, which helped it move six points up the ranks to 127. Indonesia made paying taxes easier for companies in some cities with the launch of an online system for paying social security contributions.
Vietnam has improved its ranking to 90 and boasts more economic reforms than any other in the region -- a total of five, followed by four in Hong Kong and three in Indonesia. For example, Vietnam shortened the time needed to register a company to 20 days, and it now guarantees borrowers' rights to inspect their credit data.
"Vietnam really wins the game this year," said Charles Schneider, senior operations officer at the World Bank. "It's the number one reformer in the region ... Its interest in global trade, for example, the Trans-Pacific Partnership, is another trade agenda. Other economies can start looking at way."
Vietnam is of the 12 parties to the U.S.-backed trade pact that was reached this month, but has yet to be ratified.
Not all of the region's laggards made progress this year. India, while much improved from a decade ago, is still near the back of the pack with a ranking of 130. The Philippines ranks 103, a plunge from 97 last year, despite efforts to cut red tape, including an initiative to expedite the process of issuing an employer registration number.
The World Bank's Doing Business report has been launched since 2003 to track bureaucratic systems of countries and their costs to running businesses.
Five indicators were added to this year's report as new benchmarks to measure quality as well as efficiency of regulations being implemented. They include dealing with construction permits, getting electricity, enforcing contracts, registering property and trading across borders.
On registering property, it takes 74 days on average for an entrepreneur in East Asia and the Pacific to transfer a property, compared to 48 days globally.