From Singapore to Eritrea, Here Are the Best and Worst Countries to Do Business In

From Singapore to Eritrea, Here Are the Best and Worst Countries to Do Business In

Singapore tops World Bank ratings. Founding father and prime minister 1965-1990 Lee Kuan Yew, who died last month aged 91, deserves credit for his role in Singapore's economic success.
Singapore tops World Bank ratings. Founding father and prime minister from 1965-1990, Lee Kuan Yew, who died last month aged 91, deserves credit for his role in Singapore’s economic success.

Every year, the World Bank evaluates countries on a variety of factors regarding the day-to-day economic functions that influence whether entrepreneurs and businesses can prosper there, and the result is a ranked list of how “easy” it is to do business in 189 countries. The list is one any business thinking of expanding internationally should consult, because some of the rankings may be surprising.

A wave of global economic improvement is apparent. Of the 189 countries on the list, only 38 didn’t improve their scores versus last year. But that’s not to say there’s no hope for countries that aren’t highly ranked; 123 implemented at least one reform in the 11 measured areas. Sub-Saharan Africa accounted for the largest number of regulatory reforms, according to the report. Eight of the 11 economies with more than 100 million people reformed at least one measured area. Only 18 of the 34 economies with a population of less than 1 million did so.

Here are the countries that made the top 10 in the 2015 rankings:

  1. Singapore
  2. New Zealand
  3. Hong Kong
  4. Denmark
  5. South Korea
  6. Norway
  7. United States
  8. United Kingdom
  9. Finland
  10. Australia

The U.S. has fallen three places from the previous year’s list—but this may simply be due to improvements in other countries. Malaysia, which ranked No. 6 last year, fell off the top 10 (it was No. 18 this year). Georgia also left the top 10 this year, falling from No. 8 last year to 15. Moving up were Finland, which was No. 12 last year, and Australia, which was No. 11 last year.

Another interesting fact is that of the four European countries in the top ten, only one (Finland) has joined the Eurozone. The other three (Denmark, Norway, and the United Kingdom) have all explicitly rejected either the euro as a currency, or membership in the European Union. It would seem that instead of being a force for simplifying and promoting doing business, the European Union is in danger of being just the reverse—an additional layer of bureaucracy that complicates business life. (Note that the report is far too diplomatic to say anything so blunt in its 331 pages; this is our interpretation.)

The bottom 10 names on the list contained many usual suspects as well:

  1. Haiti
  2. Angola
  3. Venezuela
  4. Afghanistan
  5. Congo
  6. Chad
  7. South Sudan
  8. Central African Republic
  9. Libya
  10. Eritrea

Escaping the bottom 10 this year were Myanmar, which was 182 last year (it’s 177 this year), and Guinea-Bissau, which was 180 last year (179 this year). New entrants were Haiti (No. 177 last year), Angola (No. 180 last year) and Afghanistan (164 last year).

The World Bank highlights many countries that are working hard to be up-and-comers:

Measure Most improved country
Ease of starting a business Timor-Leste
Dealing with construction permits Croatia
Getting electricity Solomon Islands
Registering property Greece
Paying taxes Romania
Trading across borders Myanmar
Getting credit Colombia; Jamaica
Protecting minority investors United Arab Emirates
Enforcing contracts Kosovo
Resolving insolvency Mozambique

Aside from its usefulness as a tool for evaluating expansion opportunities, the World Bank list also offers some insight into what it takes to grow an economy successfully.

“A significant number of the top 30 economies in the ease of doing business ranking come from a tradition where government has had quite a prominent presence in the economy,” the report said. “The secret of success is to have the essential rules and regulations in place — but more importantly to have a good system of clearing decisions quickly and predictably, so that small and ordinary businesses do not feel harassed.”