Jordan ranks 78th in ease of doing business survey

By Paul Tate

AMMAN — Jordan currently ranks 78th in an annual global ranking of business-friendly economies, according to a World Bank report released on Wednesday.

The “Doing Business” report ranks 175 economies by tracking key indicators such as the time and cost to start and close a business, access to credit, acquiring licences, employing workers, paying taxes, among others.

In 2005, Jordan ranked 73, representing a slip of five places in this year’s index.

In terms of the region, Jordan ranked as the 6th easiest country in which to do business, after Israel (26), Saudi Arabia (38), Kuwait (46), Oman (55) and the UAE (77).

Among other regional countries Tunisia achieved an index of 80, followed by Lebanon (86), Yemen (98), Morocco (115), Algeria (116), West Bank and Gaza (127), Syria (130), Iraq (145), Sudan (154) and Egypt (165).

According to the report, entrepreneurs wishing to set up a business in Jordan can expect to go through 11 steps to launch a business over 18 days on average, at a cost equal to 73 per cent of gross national income (GNI) per capita.

They must also deposit at least 864.4 per cent of GNI per capita in a bank to obtain a business registration number.

The regional average is 10.3 steps, the report states.

The main areas where Jordan slipped rank in 2006 were in starting a business, access to credit and the ease of closing a business.

In only one indicator did Jordan’s ranking improve on the previous year — Trading Across Borders — while the indicators for Employing Workers and Registering Property remained unchanged, according to the report.

The Employing Workers Index examined the difficulty of hiring a new worker, rigidity of rules on expanding or contracting working hours, the non-salary costs of hiring a worker, and the difficulties and costs involved in dismissing a redundant worker.

Although the country scored 27 compared with a regional average of 35.8 in the Rigidity of Employment Index, which measures the flexibility of labour regulations, it did far less well when it came to the difficulty of firing staff.

The report states that rigid regulations make firing staff difficult, with Jordan scoring an index of 50 compared to a regional average of 32.9 and 27.4 in the industrialised nations of the Organisation for Economic Cooperation and Development (OECD).

Each index assigns values between 0 and 100, with higher values representing more rigid regulations.

In terms of the ease or difficulty of enforcing commercial contracts in Jordan, the report states that it takes 43 procedures and 342 days to enforce contracts, with the cost of enforcing contracts calculated at 16.20 per cent of debt.

In OECD countries the average number of procedures is 22.2 and the cost of enforcing contracts is 11.2 per cent of debt.

The World Bank survey ranked Singapore as the most business-friendly economy, while China was named as the best reformer in Asia over the past year.

New Zealand slipped to second place followed by the United States, Canada and Hong Kong.

Globally, China ranks 4th in terms of speed of reforms, after Georgia, Romania and Mexico.

Thursday, September 7, 2006