The World Bank Group comprises of five distinct international organisations that provide loans to countries in the developing stages. The Bank is headquartered in Washington, D.C. comprising of 189 member states and the current President of the World Bank Group is Jim Yong Kim. Following are the five distinct organizations of the Group:
1. International Bank for Reconstruction and Development (IBRD)
2. International Development Association (IDA)
3. International Finance Corporation (IFC)
4. Multilateral Investment Guarantee Agency (MIGA)
5. International Centre for Settlement of Investment Disputes (ICSID)
The World Bank Group took an initiative to launch a project that catered to measuring the business regulatory framework in various economies around the world, with an aim to map the performances of individual countries in its distinctive indicators. This project was designed to identify problems in doing business and to help poor performing countries in developing strategies that can enhance investment by improving their regulatory processes.
The World Bank Group launched its ‘Doing Business project’ in 2002, with the aim of providing measures of business regulations, along with enforcing them in selected cities , across 189 economies at subnational and regional levels. The Doing Business project caters to domestic small and medium-size companies, measuring the regulations applicable on SMEs.
The World Bank Group methodology is to gather and analyze quantitative data and through this complex data, the Group compares various economies, encouraging them to compete towards efficient regulation, along with offering measurable benchmarks for reform.
As the focus of the Doing Business project is to comprehensively cover the business regulation and reform in various cities, the World Bank Group forms a detailed report providing the data on the ease of Doing Business, with each country’s rank, in addition to recommending reforms to improve performance in selected topics. The report gives an opportunity to governments of various countries to compare the performance of their selected cities with others, analysing their rank out of 189 Doing Business ranked economies.
The current reports cover 11 distinct indicator sets from 189 economies and the indicators are as follows:
1. Starting a business
2. Dealing with construction permits
3. Getting electricity
4. Registering property
5. Getting credit
6. Protecting minority investors
7. Paying taxes
8. Trading across borders
9. Enforcing contracts
10. Resolving insolvency
11. Labor market regulation
The ranking takes into account the scenario in every country’s largest business city, except for 11 economies which have a population of more than 100 million. These 11 economies include Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States.
In these countries Doing Business project collected data for their second largest business cities respectively as well. This project has been extremely beneficial for governments, academics, practitioners and reviewers across the globe.
A recent effort has been made by the Government of Punjab in collaboration with the World Bank Group to improve its rankings through the “Punjab Investment Climate Project”. This project will prove to be extremely beneficial in the long run as more enterprises will be attracted to register with the Government in the wake of China Pakistan Economic Corridor.
This is a continuous series , that aims to explain Pakistan’s rankings in the future posts. The next article will explain the 1st indicator.
About the Contributor:
Khurram Khan is a Research Analyst at Perspective and E&Y. He’s an MSc Student at University College London, UK.