The recent “Doing Business 2017” offers mixed results for the six Gulf economies, with only the UAE, Bahrain and Oman registering improvements in their rankings. The economies are ranked on numerous variables deemed vital to attract and retaining businesses.
The UAE is ranked 26th internationally, considerably ahead of other Gulf, Arab and Muslim countries. In fact, it is ahead of many EU countries, including Netherlands, France and Spain.
This year’s report was particularly pleased with the enhanced transparency in business dealings in the UAE. It notes increased minority investor protection by increasing both their rights and role in key corporate decisions. Likewise, the report acknowledges greater transparency with Land Registry processing.
Bahrain is ranked 63rd, having advanced by two notches and the report notes the drive for making exports easier via improving infrastructure and streamlining the flow on the King Fahad causeway linking Bahrain with Saudi Arabia. The link serves as a lifeline for Bahrain’s economy through the movement of people and goods. Many Saudi nationals pass into Bahrain during weekends and special holidays like Haj.
The credit for enhancing the infrastructure partly reflects the amount of aid coming from other Gulf countries. In 2011, four of them agreed to provide $10 billion in aid over a span of 10 years. Officials at the Economic Development Board in Bahrain have lately acknowledged a rise in the level of aid.
For instance, the UAE is providing the majority of funds to upgrade Bahrain’s airport, while Kuwait is financing development of road networks and construction of bridges. The UAE and Saudi Arabia are helping with funding for housing projects.
The authorities in Bahrain are doing the right thing by focusing on developing business incubators. The push for entrepreneurship is exceptionally timely in the environment of low oil prices and the difficulty associated with new hirings in the public sector.
Oman recorded an improvement by four notches to the 66th position, and the sultanate is credited for reducing the time needed for border and documentary compliance by setting up a single online window for clearances. The other GCC countries are noted for assuming many positive steps, with Qatar getting a plus for doing away with paid-in minimum capital requirements for limited liability companies.
Saudi Arabia receives a commendation for reducing time needed to notarise articles of association for firms.
Even Kuwait, with the lowest ranking in the GCC, is acknowledged for making use of technology with regards to exports and imports. The law allows for introducing electronic links and exchange of information among different agencies.
The report factors in variables such as the ease of starting a business, obtaining construction permits, getting power connections, registering a property, obtaining credit, protecting investors, paying taxes and the ease of trading across borders. Also considered were how contracts are enforced and insolvency issues resolved. The 14th edition of the report has added gender into the components, focusing on barriers for doing business facing women versus men. Some 190 economies are ranked in the latest report.
New Zealand and Somalia are the best and worst performers, respectively.
The writer is a Member of Parliament in Bahrain.