Gains for most EU aspirants on World Bank "2016 Doing Business" ranking but Albania plummets

Gains for most EU aspirants on World Bank
By bne IntelliNews October 28, 2015

Both Serbia and Kosovo advanced substantially on the World Bank’s “2016 Doing Business” report, while Macedonia was the top ranked country in the entire Central and Eastern Europe/Commonwealth of Independent States (CEE/CIS) region.

The latest survey released by the World Bank on October 27 highlights the efforts of several aspiring EU member states to improve their business environments and attract investment, so moving up the index which measures how conducive the regulatory environment is to the launch and operation of a business.

However, performances were mixed. Albania was 29 places lower than on the World Bank's 2015 report, which used a somewhat different methodology. Comparing the two years using the 2016 methodology, Albania was a staggering 35 places lower after falling to the bottom of the index in the obtaining construction permits category.

Difficulty obtaining construction permits was a common theme across the Southeast Europe region, where overall scores were dragged down by a poor performance in this category in almost every country. Along with Albania, both Bosnia & Herzegovina and Moldova scored extremely poorly in this category.

The exception was Macedonia, where under Prime Minister Nikola Gruevski the government has consistently worked to improve operating conditions for businesses, as shown by its meteoric rise on the index.

Skopje’s focus is on attracting foreign investment and helping local export-oriented companies to grow in a bid to boost growth and tackle high levels of unemployment. The country continued its rise to 12th on the global index in this year’s ranking despite the deep political crisis. As a result, Macedonia retained the top spot in CEE/CIS despite reforms in 90% of economies in the region.

“It is commendable that almost every single economy in Europe and Central Asia implemented at least one reform in the last year to improve the business environment,” said Rita Ramalho, manager of the Doing Business project, in an October 27 statement. “The political commitment and hard work involved in implementing these reforms has allowed the region’s economies to break into top performers on most of the indicators measured by the report.”

Serbia climbed to 59th place in this year's report from 68th last year (using this year’s methodology). Compared to the 2015 ranking of 91st, it made an even steeper improvement. This is good news for Prime Minister Aleksandar Vucic’s government, which hopes to attract more foreign investment to help speed the economic recovery. It follows substantial improvements in the dealing with construction permits category.

Kosovo, which signed its Stabilisation and Association Agreement (SAA) with the EU on October 27, rose to 66th place on the index of 189 countries. Again, the improved ranking reflects the Kosovan government’s efforts to improve the business climate in the country and to attract more foreign direct investment.

At the other end of the scale, Albania fell to 97th place, mainly because of changes in the dealing with construction permits category, where Albania fell to 189th – the last place on the index. This was a result of the Albanian government’s 2014 decision to suspend issuing construction permits after local governments allowed numerous construction projects to go ahead in breach of urban planning laws. However, Albania was also close to the bottom of the index in the paying taxes and getting electricity categories.

The will to reform in the region’s existing EU member states was less evident than in most of the would-be members. Using the 2016 methodology, while Slovenia which rose to 29th place on the index, Bulgaria and Croatia both dropped slightly and Romania remained in 38th place. 

However, Romania shot from 65th place to first overall in the ease of conducting trade across borders category. It is now the global leader with zero cost for documentary compliance and only one hour of paperwork for either exports or imports. Getting credit also became particularly easy in Romania, which rose to seventh place in this category.