Moldova drops 15 positions in a world ranking on ease of doing business

According to the recent report Doing Business 2007, launched by the World Bank and International Finance Corporation, Moldova’s overall global standing on the ease of doing business has declined substantially this year, slipping from 88th to 103rd. According to a press release of the World Bank’s Office in Moldova, among the regulatory reform actions implemented by Moldova during the last two years, are included, starting in January 2006, the number of business permits and licenses was reduced from 400 to 128, corporate income tax was reduced from 20 to 18%, and will be further reduced to 15% starting in January 2007. A reforming step was Introducing a new information system for custom service resulted in the reduction of average time for custom clearance procedures from 500 to 70 minutes due to the implementation of the informational system ASYCUDA. At the same time, the report, the report makes it clear that further reforms are needed to make Moldova’s economy more competitive and more attractive for local and foreign investors. The improvements noted by the report in some of the areas were not sufficient to maintain Moldova’s overall rating at a time when other countries, many of whom are Moldova’s competitors in seeking to attract investment, undertake faster reforms. The areas that stand out as requiring most improvement include: • Further streamlining of administrative procedures, where particular attention should be given to obtaining licenses and permits for construction, which requires compliance with 34 procedures and takes 158 days as measured by the report (presently ranked as 119 in the report); • Improving flexibility of labor regulations; • Facilitating trading across borders; • Facilitating access to credit by introducing credit information systems to enable Moldovan companies make use of their reputation collateral. Doing Business 2007 ranks 175 economies on the ease of doing business—covering 20 more economies than last year’s report. The list of global top ten reformers includes, in this order, Georgia, Romania, Mexico, China, Peru, France, Croatia, Guatemala, Ghana, and Tanzania. Within the CIS, Armenia, Azerbaijan, Belarus, Kazakhstan, the Kyrgyz Republic, Moldova, Russia, and Ukraine each implemented at least one reform. Tajikistan had no reforms. Uzbekistan made it harder to do business. The Doing Business rankings are based on the qualitative and quantitative assessment of the following ten indicators: starting a business, dealing with licenses (predominantly construction permits), hiring and firing, registering property, getting credit, protecting investors, trading across borders, paying taxes, enforcing contracts, and closing a business. The rankings do not reflect other variables such as macroeconomic policy, quality of infrastructure, currency volatility, inspections, investor perceptions, or crime rates.