The Gulf Cooperation Council (GCC) economies achieved mixed results in the recently published Doing Business 2012. The gap among countries in the region is exceptionally large, as exemplified by ranking numbers of 12 and 67 for Saudi Arabia and Kuwait respectively. Other selected results include number 33 for the UAE, 36 for Qatar, 38 for Bahrain and 49 for Oman.
The ninth such report is a co-publication of the World Bank and the International Finance Corporation. The report stands out by offering quantitative comparisons on business regulation and the protection of property rights in 183 economies with regard to smaller companies in domestic markets.
Reviewed economies, which fairly represent the global economy, are ranked on results achieved in ten areas, namely starting a business, access to credit, paying taxes, resolving insolvency, registering property, trading across borders, dealing with construction permits, protecting investors, enforcing contracts and getting electricity.
Leading position
Saudi Arabia lost two notches in its ranking but maintained a leading position worldwide, ahead of Canada, Germany and Japan to name a few. It is probably fair to partially link this outstanding performance to the kingdom's membership of the World Trade Organisation since 2005.
To this effect, Saudi Arabia has modified laws on foreign investment to allow firms from other countries the right to own majority stakes in companies in the kingdom.
The law also allows foreign banks to operate as locally incorporated joint stock companies or as branches of international financial institutions, in turn benefiting the cause of competition and extended services.
Certainly, the link between ease of doing business and the ability to attract foreign direct investment cannot be overlooked. According to the World Investment Report 2011, issued by the United Nations Conference on Trade and Development (Unctad), Saudi Arabia attracted $28.1 billion (Dh103.2 billion) worth of foreign direct investment (FDI) in 2010. With FDI of $8.1 billion, Qatar ranked a distant second among GCC countries with regard to the ability of attracting investments.
Turning to the rest of the GCC, Oman and Kuwait made the biggest stride by advancing four notches each, with the UAE and Qatar going up two notches. Bahrain suffered a drop of five notches, the worst among the GCC states.
The report gives deserved credit for those GCC countries carrying out reforms. In particular, Oman managed to score on reforms in three areas, followed by the UAE and Qatar in two areas and then Saudi Arabia in a single area. Bahrain and Kuwait could not carry out reforms in any of ten variables used in the report. Interestingly enough, the report gives credit to the UAE in the areas of starting a business and getting credit. The measure of merging requirements to file company documents between two governmental entities, namely the Department of Econ-omic Development and the Dubai Chamber of Commerce and Industry, helped in this.
Federal credit bureau
This may not look a material change, but it means a great deal for small investors that are cost-conscious. Also, the setting up of a federal credit bureau is noted for helping improving credit information.
Undoubtedly, GCC countries are capable of streamlining their ranking in a report that tells so much about doing business across the world.
The latest report shows clearly that several regional countries, notably Oman, the UAE and Qatar, have succeeded in carrying out recognised reform measures. The other GCC countries need to try harder.
The writer is a Member of Parliament in Bahrain.
