Islamic Finance

World Bank’s Ease of Doing Business: OIC countries’ competitiveness drops

| 05 November, 2017 | General
 Emmy Abdul Alim
World Bank’s Ease of Doing Business: OIC countries’ competitiveness drops

55.4 percent of 56 Organisation of Islamic Cooperation (OIC) countries dropped in rankings on the World Bank’s Ease of Doing Business list published last week, pointing to poor competitiveness relative to the rest of the world, according to Salaam Gateway calculation.

The World Bank’s Ease of Doing Business list ranks 190 countries based on how easy it is to do business in them both by aggregate rank and by the 10 component indicators that measure aspects of regulation in areas such as starting a business and getting credit.

Labour market regulations are also assessed but not included in the ranking.

The list assesses 56 of the 57 OIC countries, with Turkmenistan not included and Palestine represented by West Bank and Gaza.

31 out of 56 OIC countries dropped in their ranking from the previous year but only 6 of the 31 posted lower scores, according to the report.

However, 25 of the 31 OIC countries that dropped in rankings actually improved their scores but were still pushed down the list as they were overtaken by other countries that posted higher scores.

OIC COUNTRIES RANKING ON WORLD BANK EASE OF DOING BUSINESS 2017 AND 2018

 COUNTRY

2017 RANKING

2018 RANKING

RANK CHANGE

Score change from 2017 to 2018

Malaysia

23

24

Down 1

0.96

Kazakhstan

35

36

Down 1

2.09

Albania

58

65

Down 7

0.96

Bahrain

63

66

Down 3

0.01

Morocco

68

69

Down 1

-0.03

Oman

66

71

Down 5

0.08

Kyrgyz Republic

75

77

Down 2

0.54

Tunisia

77

88

Down 11

-0.2

Uganda

115

122

Down 7

0.42

Iran, Islamic Rep.

120

124

Down 4

0.26

Guyana

124

126

Down 2

0.39

Egypt, Arab Rep.

122

128

Down 6

0.1

Lebanon

126

133

Down 7

-0.1

Maldives

135

136

Down 1

0.64

Mozambique

137

138

Down 1

0.97

Mali

141

143

Down 2

0.3

Gambia, The

145

146

Down 1

-0.01

Pakistan

144

147

Down 3

0.71

Burkina Faso

146

148

Down 2

0.2

Togo

154

156

Down 2

0.64

Comoros

153

158

Down 5

0.47

Sierra Leone

148

160

Down 12

-0.06

Suriname

158

165

Down 7

0.11

Algeria

156

166

Down 10

-0.01

Gabon

164

167

Down 3

1.33

Iraq

165

168

Down 3

0.48

Sudan

168

170

Down 2

0.17

Syrian Arab Republic

173

174

Down 1

0.08

Guinea-Bissau

172

176

Down 4

0.23

Bangladesh

176

177

Down 1

0.15

Yemen

179

186

Down 7

0.06

Data source: World Bank Ease of Doing Business Report

Another 3 OIC countries that registered lower scores retained their same ranking from last year.

OIC COUNTRIES RANKING ON WORLD BANK EASE OF DOING BUSINESS 2017 AND 2018

 COUNTRY

2017 RANKING

2018 RANKING

RANK CHANGE

Score change from 2017 to 2018

Qatar

83

83

Same

0.61

Chad

180

180

Same

-0.28

Afghanistan

183

183

Same

-1.8

Somalia

190

190

Same

-0.31

Data source: World Bank Ease of Doing Business Report

GLOBAL POSITION

Out of the 190 countries in the list, only 3 OIC countries were ranked in the top 20 percent. United Arab Emirates is in twenty-first position, followed by Malaysia (24) and Kazakhstan (36).

10 OIC countries are in the second quintile, followed by 6 in the third quintile.

The majority of OIC countries are in the fourth and the bottom-most quintile: 20 in the former and 17 in the latter.

MOST IMPROVED

4 OIC economies are among the 10 most improved across 3 or more areas, according to the World Bank.

Brunei has shown the biggest jump, improving on 8 categories and gaining 16 places on the ranking, from seventy-second to fifty-sixth this year.

Brunei’s improvements include strengthening access to credit with the adoption of a new law on secured transactions that establishes a unified legal framework for movable assets and a notice-based collateral registry.

The 3 other most improved OIC countries are Uzbekistan, Nigeria and Djibouti. All 3 improved across 5 areas each.

Uzbekistan jumped 13 places in the global ranking to seventy-four, Nigeria surged 24 places to 145 and Djibouti climbed 17 places to 154.

Uzbekistan made starting a business easier by rolling out a new platform for business registration, Nigeria improved access to credit information by guaranteeing borrowers the legal right to inspect their credit data from the credit bureau and starting to provide credit scores to financial institutions and borrowers, and Djibouti made registering property easier by increasing the transparency of the land administration system, said the World Bank.

OIC STRENGTHS AND WEAKNESSES

Among the 10 assessed indicators, OIC countries are strongest for the protection of minority investors.

10 OIC nations are in the top 20 percent of this category, equivalent to 26 percent of the top quintile.

Kazakhstan ranked first in the world followed by Malaysia on fourth. UAE, Azerbaijan and Saudi Arabia are on joint tenth.

The category measures areas such as corporate transparency, ease of shareholder suits and shareholder governance.

As a bloc, the OIC is weakest for trading across borders, which measures the time and cost associated with the logistical process of exporting and importing goods.

Only 1 OIC country, Albania, is ranked in the top 20 percent of this category, standing at number 24. This is followed by 6 OIC countries in the second 20 percent of the global ranking.

GETTING CREDIT, STARTING A BUSINESS

In the category of getting credit, which measures the legal rights of borrowers and lenders with respect to secured transactions and the reporting of credit information, 58.9 percent of the OIC countries are in the bottom 40 percent of the global ranking.

18 OIC countries are in the fourth quintile followed by 15 in the bottom 20 percent of this category.

The highest-ranked OIC country for getting credit is Brunei that is second in the world, followed by Nigeria that is sixth.

The situation is similar for the indicator, starting a business, which measures procedures, time, cost and paid-in minimum capital to start a limited liability company.

26 OIC countries are in the bottom 40 percent: 15 are in the fourth quintile, followed by 11 in the bottom 20 percent.

The highest-ranked OIC country for starting a business is Uzbekistan on eleventh position, followed by Azerbaijan in eighteenth.

REGIONAL LEADERS

The UAE and Malaysia are clear leaders in key Islamic economy regions, the Gulf Cooperation Council (GCC) and Southeast Asia, where OIC countries account for around 43 percent of the bloc’s total GDP in 2016, according to Salaam Gateway calculation of GDP data from the World Bank and the Central Bank of Kuwait.  

Malaysia was ranked higher than UAE last year, on twenty-third, but fell one place to twenty-fourth this year.

UAE overtook Malaysia this year to rank twenty-first in the world from twenty-sixth in last year’s list.

UAE was first in the world in two categories: getting electricity and paying taxes, which it shares top billing with Qatar.

Malaysia’s biggest strengths are in protecting minority investors, where it is ranked fourth globally, and it stands in eighth position for getting electricity.

How do OIC countries rank on World Bank's Ease of Doing Business 2018?

CLICK ON THE IMAGE TO VIEW THE BIGGER INFOGRAPHIC:

World Bank Ease of Doing Business 2018

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