Brunei’s WB business ranking can rise sharply
BANDAR SERI BEGAWAN
BRUNEI can climb 33 notches up the World Bank's "Ease of Doing Business" global scorechart next year if it undertakes simple reforms, said a representative from International Finance Corporation (IFC).
These changes essentially involve doing away with "unnecessary" procedures for businessmen setting up shop or operating ventures in the sultanate, IFC representative Sylvia Solf said yesterday during an event organised to present the report's latest findings.
For Brunei to effectively diversify its economy away from the oil and gas sector, reforms are needed in the procedures to encourage locals and foreigners to establish business in the sultanate, World Bank and IFC representatives said.
It is important that Brunei is able to facilitate business growth by ensuring regulations are conducive to the growth of business.
Brunei Darussalam was ranked 78th out of 178 countries the Bank's scorechart on doing business. The ranking was based on the different stages of operating a business, including dealing with licences, obtaining credit and employing workers.
"Research has shown that economies with fewer restrictions on business activities and better political and governmental institutions generally grow faster than others," said Dato Paduka Hj Mohd Hamid Hj Mohd Jaafar, permanent secretary at the Ministry of Industry and Primary Resources.
It requires 32 procedures to build a warehouse in Brunei. In this regard, Brunei is preceded by fast growing economies, such as Vietnam, ranked at 63, and Thailand at number 12.
In other top economies with fewer procedures, one department becomes the interface for other departments, hence, simplifying the procedure flow chart and cutting out the need to repeatedly re-enter the same information for various departments.
Another barrier consistently considered as a challenge for businesses is access to credit.
The sultanate was ranked at 97 in terms of obtaining credit for businesses. China, one of the year's top reformers, fared 13 ranks better, with the United Kingdom as the top ranked economy in this division.
When entrepreneurs produce a business plan, the first few hurdles they face are the procedures required to incorporate and register a new firm. For Bruneian entrepreneurs, it takes approximately 116 days and 18 procedures before being able to operate a business. It was ranked 117th.
The good news, said World Bank representative Justin Yap, is that Brunei would find its problem areas relatively easy to reform.
IFC's Solf suggests that Brunei could drastically improve its rankings next year if it cuts down "unnecessary" procedures and forms should be free of cost and available online.
Brunei was among the best ranked for its labour regulations. Ranked at fourth, this indicates a less rigid employment index, ease of hiring employees, and flexibility of employment contracts.
"Our participation in this global effort has enabled us to gain access to world class suggestions on priority areas for reforming the business regulatory environment in the country," Dato Hj Mohd Hamid said.
The Brunei Times