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Better business policies in Arab world suggested
Economists dwell on growth impediments
- By Ahmed A. Namatalla, Staff Reporter, Gulf News
- Published: 00:00 November 9, 2009
- Image Credit: Gulf News
Abu Dhabi: Loose contract enforcement and lack of efficient insolvency systems remain the biggest impediments to doing business in the Arab world, local and World Bank economists said on Sunday.
Despite the marked improvement in the business environments of the majority of Arab countries in the past five years, governments need to do more to incentivise small and medium-scale investment, said Nasser Saidi, chief economist at Dubai International Financial Centre.
"The focus needs to be on improving the business environment in general and expanding the private sector base," Saidi said on the sidelines of the Doing Business Forum. "With respect to bankruptcy laws, we have not seen any reforms in insolvency laws in 40 to 50 years," said Saidi.
The UAE moved up 13 places this year in the World Bank's Doing Business Report 2010 to No 33 out of 183 countries mainly because of reforms implemented in the areas of starting a business, registering property and cross-boarder trading.
In August, the country eliminated the Dh150,000 minimum capital requirement to register a limited liability company, joining five other Arab countries who have done so since 2004 and 80 countries worldwide with no such limit.
Arab governments have also focused on establishing one-stop shops for investors and eliminating bureaucratic procedures, recommendations which have been pushed for by organisations such as the International Monetary Fund and the World Bank.
"We can look at these reforms and see how they have resulted in economic growth," said Yara Salem, Private Sector Development Specialist at the World Bank Group.
She pointed to a 10 per cent increase in company registrations in Egypt and 18 per cent increase in Jordan.
In the UAE, investors are awaiting a new companies law which could allow 100 per cent ownership for foreigners in certain sectors outside the designated free zones according to statements made in September by Minister of Economy Sultan Al Mansouri.
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