The World Bank and the International Finance Corporation listed Greece and Serbia among the top 10 reformers in their joint annual business report.
By Svetla Dimitrova, Andy Dabilis and Ivana Jovanovic for Southeast European Times -- 02/11/12
A new report shows that reforms required by austerity measures have improved the business climate in Greece. [AFP]
Greece and Serbia are among the 10 global economies to have improved most on the ease of doing business over the past 12 months, according to a survey published jointly by the World Bank and the International Finance Corporation.
Each of the countries in that group, led by Poland, undertook at least three institutional or regulatory reforms that allowed them to jump ahead the most in the relative ranking of the Doing Business 2013 report, the 10th annual edition in this series.
The 282-page study, released October 23rd, includes an analysis of 185 world economies, up from 183 last year. The surveyed countries are ranked on the basis of their performance in 10 areas, including starting a business, dealing with construction permits, getting electricity, registering property, paying taxes, trading across borders, getting credit, protecting investors, enforcing contracts and resolving insolvency.
Greece, which took the 100th position in the previous report, is now ranked 78th after implementing reforms to reduce the amount of time needed to obtain construction permits, protecting investors and resolving insolvency.
The introduction of measures requiring greater disclosure also allowed the country to jump 38 places year-on-year to 117th in the rankings for investor protections. In addition, it climbed seven slots to 50th on resolving insolvency thanks to a new prebankruptcy rehabilitation procedure aimed at enhancing the rescue of distressed companies, the report's authors explained.
"[D]riven in part by its economic crisis," Greece improved "its regulatory environment at a greater pace in the past year than in any of the previous six," they said.
Positive signs emerging from Greece don't always register though because of the overwhelming effect of a five-year recession, worsened by austerity measures, that have put nearly 2 million people out of work, closed 68,000 businesses and is shrinking the economy by 7 percent.
"We are creating the conditions for simplifying doing business in Greece but we're in a deep recession and it's difficult," Aggelos Tsakanikas, head of research for the Athens-based Foundation for Economic and Industrial Research, told SETimes.
Greece, Cyprus, Kosovo, Montenegro and Serbia saw their rankings improve from last year. [World Bank]
Haralambos Tsardanidis, head of the Institute of International Economic Relations in Athens, told SETimes that, "There are encouraging signs, and reducing the wait (for licenses) will help the competitiveness of the Greek economy but this doesn't mean that foreign investments are coming to Greece, because of the political situation."
He said that many Greek businesses have moved to Bulgaria, while Coca Cola Hellenic -- Greece's biggest company -- is moving its headquarters to Switzerland. Dairy company Fage, a home-grown business, is shifting to Luxembourg.
Serbia was listed right behind Greece as the world's ninth biggest improver on the ease of doing business over the past 12 months. Moving up six slots in the overall global rankings, it is now placed 86th, behind Moldova (83rd), Croatia (84th) and Albania (85th), but ahead of Kosovo (98th) and Bosnia and Herzegovina (BiH), which dropped one place to the 126th in the report.
"Serbia strengthened its insolvency process by introducing private bailiffs, prohibiting appeals of the court's decision on the proposal for enforcement, expediting service of process and adopting a public electronic registry for injunctions," the authors wrote in the report. "The new private bailiff system also increased efficiency in enforcing contracts."
But the Balkan country made its biggest jump in the area of starting a business by eliminating the paid-in minimum capital requirement, climbing 50 slots to 42nd. It also improved its global rankings for enforcing contracts and resolving insolvency, taking the 103rd position in both areas.
Serbia's lowest rankings this year are for dealing with construction permits (179th) and paying taxes (149th).
Dragoljub Rajic of the Serbian Association of Employers noted however that the country has recently taken a number of measures, including "the most serious reform in the area of VAT."
"A series of regulations abolishing a total of 130 different taxes, fees and other charges that had to be paid by the industry and some of them by citizens entered into force on October 1st," he told SETimes.
The effect of those and other recent changes is yet to felt as some of them will be implemented January 1st.