The International Finance Corporation, a World Bank Group member created to support private sector development, recently released the annual report “Doing Business 2011: Making A Difference for Entrepreneurs,” which examines the impact of regulations that affect business activity. The report covers regulatory frameworks in 183 economies, comparing them across 11 stages of business development: launching a business, obtaining construction permits, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, closing a business, accessing electricity and employing workers. The report opens by pointing to the increased emergence of microenterprises due to unemployment triggered by the recession that began in 2008. Peru remains at the top of the ranking for improvement in starting a local business, while Singapore’s online registration system, a system picked up by many Latin American markets, reportedly saves businesses approximately USD 42 million annually.
The authors also discussed areas in which regulation could improve. For example, many business regulatory frameworks in developing countries disproportionately affect the ability of women to become entrepreneurs because they often lack legal title to property that could be used as collateral for business loans. The reliability and availability of electricity to microentrepreneurs was also cited as a vital factor in an enterprise’s survival and in need of improvement. Also addressed are the needs to establish or improve minimum wage levels, paid annual leave and maximum number of working days [1].
About the International Finance Corporation (IFC): A member of the World Bank Group, the International Finance Corporation (IFC) offers loan and debt securities, equity investments, advisory services and technical assistance intended to alleviate poverty and promote open and competitive markets in developing countries. The IFC has 182 member countries that collectively determine its policies, and approve investments. In fiscal year 2009, IFC’s new investments totaled USD 14.5 billion.
By Diana Baide, Research Assistant
[1] International Finance Corporation. “Doing Business 2011: Making A Difference for Entrepreneurs”
http://www.doingbusiness.org/~/media/fpdkm/doing%20business/documents/annual-reports/english/db11-fullreport.pdf
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