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Since its launch, the World Bank Doing Business report has undoubtedly became an important measure with economic and political consequences. On the economic side, the Doing Business report has become one of the important indicators for companies choosing countries to invest. On the political side, this has become an index on which countries compete, and against which success of governments is measured.
There is no doubt that Doing Business indicators can be improved, fine-tuned, their scope expanded to more areas which have stake in “ease of doing business”. We have highlighted this in the report, prepared together with UTAMU on the value of Doing Business reports in shaping policy making and some recommendations on further improvement.
However, there is also no doubt that Doing Business reports structure otherwise very vague field of “business environment” into a set of indicators which can be acted upon and influenced. When these indicators are recognized by political establishment and public as relevant, it creates powerful momentum for change.
This was witnessed first-hand in Lithuania by NRD Companies consultants that were at the forefront of economic reforms which aimed at improving the competitiveness of the country.
Hit by Global financial crisis Lithuania lost almost 15 per cent of GDP in 2009. That year bold fiscal austerity measures were taken, equivalent to almost 12 per cent of GDP. Newly appointed Government put in place a plan to stimulate the economy. One of the goals was to put Lithuania, at that time No.28, among the first 15 countries ranked in the Doing Business report, by specifying areas and measures needed to be taken. That was a very ambitious goal.
However, during the economic downturn it allowed the Government to signal its commitment nationally and internationally to facilitate the business environment, to regain competitiveness, to search for paths out of the recession. This allowed the society in large, the business community and media to monitor and evaluate the results. Based on this goal the government implemented a number of reforms and these definitely contributed to the resulting growth in the country. Doing Business report became a permanent media topic and was published and discussed with attention comparable to GDP figures.
It is important to note that the subsequent Government, though not so focused on business environment, kept Doing Business report indicators in its priority agenda as society remained strongly aware of them. This would have not been the case if clear-cut indicators and countries’ rankings were not available.
At NRD Companies we consult and assist governments in implementing the reforms that help countries improve their WB Doing Business rankings.