Inert and Bureaucratic Trade Regimes and High Falsification Problems are blocking the Business Field Reforms in the CIS

Twenty four regulation reforms – in nine of the CIS economies – have reduced the time, cost and hassle of business people for the satisfaction of the judicial and administrative demands, according to a new report of the World Bank and the International Finance Corporation (IFC) Doing Business (business environment). According to the report, Georgia was the number one reformer in the CIS and leads in the world ranking of the first ten reformatory countries in the field of easiness by which businesses are set up in the period 2005-2006, registering progress in six of the ten fields studied in the report. Armenia was also mentioned as a worthy reformatory country in four of the reforms. Within the CIS, 8 countries – Armenia, Azerbaijan, Belarus, Kazakhstan, the Kyrgyz Republic, the R. Moldova, Russia and Ukraine – have implemented at least one reform regarding the unfolding of business activity, the lowering of the fiscal burden etc. Tajikistan has not registered any reforms. Uzbekistan, on the contrary, has complicated the unfolding of actions. The Business environment 2007 report also devised a ranking based on the easiness by which enterprises undertake their businesses in 175 economies – 20 more than in last year’s report. Georgia rose spectacularly in the ranking, climbing 75 places this year. Kazakhstan climbed approximately 20 places in the ranking. The top countries from the region are Armenia (34), Georgia (37) and Kazakhstan (62). Tajikistan (133) and Uzbekistan (147) have registered the lowest rankings in the region. Russia is in the middle of this list, on the 96th place, the Ukraine and Belarus go head in head – on the 128th and 129th positions respectively. According to the report, the R. Moldova limited the number of necessary authorisations for the unfolding of commercial or business activities from 400 to 128, to be followed by a guillotine at a government level toward the useless licensing demands. It has also limited the corporative income tax rate from 20 per cent in 2004 to 18 percent in 2005 and 15 percent in 2006. The report notices the remaining obstacles left in the region especially as the inert and bureaucratic trade regimes and the big and complex fiscal systems. The most popular reform in 2005-2006 was the improvement of the regulations regarding the setting up of new businesses. The second popular reform was the limiting of the fiscal measures and of the complicated procedures for tax payments.