WB reveals publication date of first business climate study report

Just over a year after discontinuing the controversial ease of doing business series, the World Bank is planning to launch a new system to gauge the business climate of various countries. The first report of the new “Business Enabling Environment” (BEE) project will be released in April 2024, Report informs referring to The Financial Express.

The ease of doing business series was stopped in September 2021.

The new BEE report, however, will have limited coverage of only 40-50 countries in its first edition, a Washington-based spokesperson of the World Bank told FE. “The second report will add a similar number of countries, as will the third report, reaching 120-150 countries going forward,” she said.

The World Bank’s last Doing Business Report 2020 had ranked as many as 190 economies, based on their performance in about a dozen indicators. “The gradual increase in country coverage (in the new report) will be accompanied by refinements in the methodology, consistent with improvements in a new measurement project,” said the spokesperson.

The multilateral body undertook a “robust stakeholder consultation process” on a pre-concept note for the BEE in February-March 2022. This is ostensibly due to the controversy around the earlier system that somewhat dented the credibility of the Bank’s ranking of countries on ease of doing business. It received over 2,000 comments from 410 feedback providers, including donor and client governments, civil society, private sector entities and the academic community, the spokesperson said.

“We developed a concept note for the new report, based on this feedback and previous evaluations of the DB (doing business) report, including internal audits, the External Panel Review and the IEG (independent evaluation group) report,” she added.

Subsequently, this concept note went through the Bank-wide review and management clearance between April and June this year. “It was discussed with the World Bank Governing Board of Executive Directors. Meanwhile, the team is incorporating feedback and refining the measurement methodology to prepare for testing it in late Fall (through November) 2022. We plan to begin data collection (for the new BEE report) starting in early 2023,” the spokesperson said.

The new series is also much broader in scope in providing a quantitative assessment of the business environment for private sector development rather than just for a representative small and medium firm. The focus is on the regulatory framework and public service provision at the microeconomic level, using not only de jure information on laws and regulations but also de facto measurements reflecting practical implementation. The Enterprise Surveys database will prove highly useful in this regard. According to the pre-concept paper, how these indicators will be grouped to provide aggregate scores by economy or topic is yet to be decided.

Azerbaijan has become one of the four countries, because of which the World Bank decided to stop further issuance of the Doing Business report. Moreover, if in the case of China and Saudi Arabia, the ratings were overestimated, Azerbaijan’s rating turned out to be underestimated due to the biased attitude of the authors of the reports for 2018 and 2020, reads the WB statement.

An ‘internal audit’ of the data for Azerbaijan confirmed the accuracy of the vast majority of the reforms in the report. Nevertheless, the reforms were ‘frozen’ on three points or not taken into account in the final version of Doing Business 2020. The changes lowered Azerbaijan’s rating by almost two points, eventually removing the country from the list of those who showed the best performance in improving business and investment climate.

The methodology was also amended at the last minute with a focus on ‘protecting minority investors’ (PMI), further hurting Azerbaijan’s valuation, on par with a number of other countries, the statement said.