It's easier to do business in Rwanda than Luxembourg
(CS) Luxembourg has dropped four places in the global “Doing Business” ranking for small and medium-sized enterprises by the World Bank and the International Finance Corporation, now ranking 60th out of 189 countries in the study.
While this places the Grand Duchy within the top third of countries ranked by “ease of doing business”, the country was placed significantly lower in several areas of the study.
For example, Luxembourg was placed 103rd when it comes to starting a new business, a ranking which seems to echo repeated calls by the business community to cut administrative red tape, which was only recently nominated as a top priority for the next government in the Luxembourg Business Compass.
The Grand Duchy also ranked rather poorly in the area of getting credit (170), but did considerably better in taxes (15) and trading across borders (41).
No positive reforms in Luxembourg
The “Doing Business” report tracks and analyses changes applying to SMEs operating in the largest business city of each economy in the study in ten different areas, from starting a business, getting construction permits, getting credit, protecting investors and paying taxes to resolving insolvency.
“The economies ranking highest on the ease of doing business therefore are not those with no regulation but those whose governments have managed to create a regulatory system that facilitates interactions in the marketplace and protects important public interests without unnecessarily hindering the development of the private sector,” the report says.
Noticeable in the Luxembourg country file is that no major reforms to make it easier to do business were registered in any of the areas assessed in the study; however, there were also no reforms making it more difficult to do business.
At the top of the ranking are Singapore, Hong Kong, New Zealand, the US and Denmark, while the Democratic Republic of Congo, South Sudan, Libya, the Central African Republic and Chad make up the bottom five.
Luxembourg is ranked behind Brunei and just ahead of Samoa.
Rwanda and Ukraine most improved economies
Several countries climbed in the rankings, mainly because of reform efforts, with Rwanda ranked 32 thanks to reforms and improvements in eight of ten areas assessed in the study.
Together with Ukraine (112) it was among the most improved economies in the study.
Some 10,000 experts were polled by the World Bank and the International Finance Corporation, which forms part of the World Bank Group, for the study.
Last year, the “Doing Business” report sent shockwaves through China, which was ranked only 91 in the 2012 edition. Chinese deputy director at the World Bank Bin Han said that the report threatened the reputation of the World Bank and that it had failed to take into account reforms undertaken to promote SMEs.
This year, China dropped even further in the ranking to 96th place, while the study added four countries – Libya, Myanmar, San Marino and South Sudan.
To access the full report visit doingbusiness.org