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Belarus ranked 37th in Doing Business 2017

Ratings
17:25 | 27.10.2016 | Business-News

Belarus improved its position in Doing Business again and ranked 37th. Belarus was 44th in DB 2016; however, the methodology of 2017 was revised and Belarus appeared to be 50th last year according to the new methodology. Therefore, Belarus managed to move up by 13 positions in the rating over one year.

 

The topics of Doing Business 2016 for Belarus by components

 

Topics(1)

DB 2016 (old methodology) (2)

DB 2016 (new methodology) (3)

DB 2017 (4)

Change in Rank (comparison with an old methodology) (5=2-4)

Change in Rank (comparison with a new methodology) (6=3-4)

Starting a Business

12

30

31

-19

-1

Dealing with Construction Permits

34

25

28

+6

-3

Getting Electricity

89

74

24

+65

+50

Registering Property

7

7

5

+2

+2

Getting Credit

109

109

101

+8

+8

Protecting Minority Investors

57

62

42

+15

+20

Paying Taxes

63

95

99

-36

-4

Trading across Borders

25

30

30

-5

0

Enforcing Contracts

29

28

27

+2

+1

Resolving Insolvency

69

95

69

0

+26

Total Rating

44

50

37

+7

+13

Source: doingbusiness.org, BUSINESS NEWS calculations

 

Gender aspects were included this year in some topics of the Doing Business report. In particular, they are included in the following topics: Starting a Business, Registering Property, and Enforcing Contracts.

 

An additional Labor Market Regulation topic took the gender aspects into account last year.

 

Besides, Paying Taxes indicator was expended in the Doing Business 2017 report. It began to cover the postfiling and postpayment processes – what happens when a company has paid taxes, including a tax refund, tax audit, and administrative charge appeal.

 

As noted in the report, Belarus entered the list of the countries that reached the highest results regarding the improvement of the rating indicators. The authors mark out Brunei Darussalam, Kazakhstan, Kenya, Indonesia, Georgia, Pakistan, UAE, and Bahrein among other active countries in terms of reforming. In particular, as noted in the Doing Business 2017report, Belarus most significantly improved four topics: Getting Electricity, Registering Property, Getting Credit, and Protecting Minority Investors.

 

The greatest progress is observed by the Getting Electricity topic. Belarus improved its position by 50 lines at once and ranked 24th among 190 countries. The number of procedures over a year decreased from 7 to 4 ones, the power connection term – from 1120 to 105 days, the cost – from 296.2% to 119.3% of income per capita). As noted in the Doing Business 2017report, Belarus simplified a power connection process, having established a one-stop shop system that performs all connection services, including a project development and transmission network construction.

 

Indicators of Getting Electricity criterion in DB 2016 and DB 2017 for Belarus

 

Indicator

DB 2016

DB 2017

Procedures (number)

7

4

Time (days)

112

105

Cost (% of income per capita)

296.2

119.3

Reliability of supply and transparency of tariff index (0-8)

7.0

8.0

Source: doingbusiness.org

 

By the Protecting Minority Investors criterion, in the authors' opinion, Belarus managed to introduce legal remedies of minority investors in cases when any operations with affiliates harms the company, as well as increased the corporate transparency requirements. Therefore, all indices determining the indicator of Belarus by this criterion improved, and Belarus improved its position by 20 lines at once and ranked 42nd.

 

Indicators of Protecting Minority Investors criterion in DB 2016 and DB 2017 for Belarus

 

Indicator

DB 2016

DB 2017

Strength of minority investor protection index (0-10)

5.0

6.3

Extent of conflict of interest regulation index (0-10)

6.7

5.7

Extent of shareholder governance index (0-10)

5.8

7.0

Source: doingbusiness.org

 

Belarus improved its Getting Credit indicator by 8 lines but is still in the second hundred of this ranking. As noted by the authors, Belarus managed to improve a credit report system over a year. The credit information index and credit registry coverage values improved. However, the strength of legal rights index remained at the extremely low level, while the credit bureau coverage remained zero in the opinion the Doing Business authors. By the way, it should be noted that the National Bank significantly advanced the credit register development at the end of 2015-2016. Maybe, these changes will be taken into account in the next rating.

 

Indicators of Getting Credit criterion in DB 2016 and DB 2017 for Belarus

 

Indicator

DB 2016

DB 2017

Strength of legal rights index (0-12)

2.0

2.0

Depth of credit information index (0-8)

6.0

7.0

Credit registry coverage (% of adults)

66.9

70.1

Credit bureau coverage (% of adults)

0.0

0.0

Source: doingbusiness.org

 

Belarus managed to improve a high result by the Registering Property criterion and move from 7th place to 5th one. In the opinion of the authors of DB 2017, it became easier in Belarus to make a property over at the expense of increased transparency and reliability of the land administration system. In particular, the property registration time reduced, while the quality of the land administration index grew.

 

Indicators of Registering Property criterion in DB 2016 and DB 2017 for Belarus

 

Indicator

DB 2016

DB 2017

Procedures (number)

2

2

Time (days)

4

3

Cost (% of property value)

0.0

0.0

Quality of the land administration index (0-30)

21.5

23.5

Source: doingbusiness.org

 

Belarus improved its indicators by the Resolving Insolvency criterion. According to the new methodology, Belarus improved its position by 26 lines and ranked 69th. However, the country took this place last year before the rating methodology was revised. The time decreased twofold, the cost reduced, and the insolvency framework index grew. However, the recovery rate decreased.

 

Indicators of Resolving Insolvency criterion in DB 2016 and DB 2017 for Belarus

 

Indicator

DB 2016

DB 2017

Recovery rate (cents on the dollar)

37.3

33.1

Time (years)

3

1,5

Cost (% of estate)

22.0

20.0

Outcome (0 as piecemeal sale and 1 as going concern)

-

0

Strength of insolvency framework index (0-16)

9.0

10.0

Source: doingbusiness.org

 

Belarus improved the Enforcing Contracts criterion by one line and ranked 27th. The ranking values did not change. Therefore, the position of Belarus changed as a result of the movements of other countries.

 

Indicators of Enforcing Contracts criterion in DB 2016 and DB 2017 for Belarus

 

Indicator

DB 2016

DB 2017

Time (days)

275

275

Cost (% of claim)

23.4

23.4

Quality of judicial processes index (0-18)

9.0

9.0

Source: doingbusiness.org

 

As for the Trading across Borders criterion, Belarus did not change its position and remained in 30th place. The cost of export border and customs control became cheaper, while the cost of export document execution got up.

 

Indicators of Trading across Borders criterion in DB 2016 and DB 2017 for Belarus

 

Indicator

DB 2016

DB 2017

Time to export: Border compliance (hours)

5

5

Cost to export: Border compliance (USD)

148

108

Time to export: Documentary compliance (hours)

4

4

Cost to export: Documentary compliance (USD)

87

140

Time to import: Border compliance (hours)

1

1

Cost to import: Border compliance (USD)

0

0

Time to import: Documentary compliance (hours)

4

4

Cost to import: Documentary compliance (USD)

0

0

Source: doingbusiness.org

 

The most significant rollback in DB 2017 was observed by the Paying Taxes indicator. According to the new methodology, Belarus worsened its position by 4 lines and ranked 99th among 190 countries. The total tax rate increased to 54.8% of profit, which is an adequate indicator of worsening of Belarus' budget state and appropriate growth in tax burden on business.

 

Indicators of Paying Taxes criterion in DB 2016 and DB 2017 for Belarus

 

Indicator

DB 2016

DB 2017

Payments (number per year)

7

7

Time (hours per year)

176

176

Total tax rate (% of profit)

51.8

54.8

Source: doingbusiness.org

 

Belarus worsened its position by 3 lines and ranked 28th by the Dealing with Construction Permits criterion. At the same time, the cost and building quality control index components improved. Therefore, the position of Belarus worsened in this ranking because other countries made more progress.

 

Indicators of Dealing with Construction Permits criterion in DB 2016 and DB 2017 for Belarus

 

Indicator

DB 2016

DB 2017

Procedures (number)

16

16

Time (days)

115

115

Cost (% of warehouse value)

0.8

0.7

Building quality control index (0-15)

12.0

13.0

Source: doingbusiness.org

 

Belarus worsened its position by 1 line and ranked 31st by the Starting a Business criterion. The number of registration procedures and registration time increased. At that, the registration cost reduced. The indicators of business registration simplicity for women were included in the ranking. The values of these indicators for Belarus are similar to the general ones.

 

Indicators of Starting a Business criterion in DB 2016 and DB 2017 for Belarus

 

Indicator

DB 2016

DB 2017

Procedure (number)

3

5

Time (days)

3

5

Cost (% of income per capita)

0.9

0.6

Procedure – Women (number)

-

5

Time – Women (days)

-

5

Cost – Women (% of income per capita)

-

0.6

Paid-in min. capital (% of income per capita)

0

0

Source: doingbusiness.org

 

Only Kazakhstan took a higher position among the EEU countries in DB 2017. Kazakhstan ranked 35th and improved its position by 16 lines according to the new methodology. Armenia moved up by 5 lines and took 38th place. Russia lost four positions and ranked 40th. Kyrgyzstan got down by two lines and ranked 75th.

 

Among the neighbors of Belarus, Latvia took the highest place and ranked 14th, which is 3 lines higher than in the previous rating. Lithuania took 21st place, Poland moved up by 1 position to 24th place, and Ukraine also moved up by 1 line and took 80th place.

 

The leader of the current rating became New Zealand. Singapore, Denmark, Hong Kong, and the Republic of Korea are among five leaders. The rating outsiders became Somali, Eritrea, Libya, Venezuela, and South Sudan.

All materials published by the information and analytics agency BUSINESS NEWS intended for general information purpose and are not a public offer to buy/sell any securities, or make other investments. The data contained on doingbusinessby.com, obtained from sources the agency finds credible. At the same time the editorial and authors are not liable for damages caused by the use of presented materials. Reprinting of materials is permitted only with BUSINESS NEWS authorship attribution and link to doingbusinessby.com.