By Shakeh Avoyan
Armenia is 44th among 181 economies by the overall ease of doing business in the country, according to the latest study by the World Bank and the International Financial Corporation.
In last year’s Doing Business report Armenia ranked 41st, but the number of evaluated economies then was 178.
“Throughout the year, Armenia reorganized its court system and overhauled the procedural code. New requirements to frontload evidence eased contract enforcement, removing one procedure and reducing the time required to resolve commercial disputes,” the report said. “Armenia also significantly reduced the cost to obtain construction permits in Yerevan by abolishing “mandatory charitable contributions” paid to obtain the right to design.”
“However, despite these steps, Armenia’s ranking in some critical areas of the business environment, such as the ease of paying taxes and trading across borders, remained very low, highlighting the importance of pursuing reforms ambitiously so as to strengthen Armenia’s competitiveness and attractiveness to investment,” mentioned Aristomene Varoudakis, Armenia Country Manager, the World Bank.
Doing Business ranks economies based on 10 indicators of business regulation. It provides a quantitative measure of regulations for starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business – as they apply to domestic small and medium-size enterprises.
Armenia’s neighbor Azerbaijan is estimated as the country with the biggest progress in reforming business regulations, as it rose from 97 to 33 in the global rankings on the ease of doing business. “The country undertook reforms in seven of the 10 areas studied by the report – speeding business startup, contract enforcement, and property registration; easing tax administration burdens and employment restrictions; and strengthening investor protections and credit information,” the report said.
“Economies need rules that are efficient, easy to use, and accessible to all who have to use them. Otherwise, businesses are trapped in the unregulated, informal economy, where they have less access to finance and hire fewer workers, and where workers lack the protection of labor law,” said Michael Klein, World Bank/IFC Vice President for Financial and Private Sector Development. “Doing Business encourages good rules, and good rules are a better basis for healthy business than “who you know”, he added.
Among the top ranked economies in the study are Singapore, New Zealand, the United States, Hong Kong (China), Denmark, the United Kingdom, Ireland, Canada and others.