World Bank headquarters in Washington (Photo: AP)
Egypt dropped back one place in the Doing Business 2014 report issued recently by the World Bank, ranking 128th out of 189 listed countries worldwide.
The report judges countries on 10 indices, such as ease of opening a business or paying taxes, and assigns each country a rank.
Hany Genena, chief economist at Pharos Holdings, told Ahram Online that the transitional period has contributed to the decline, as the report’s data was collected after June 2013.
“Egypt’s interim government has a problem in the decision-making process, which delays a lot of investment,” Genena said. “Its good that Egypt fell only one place.”
Genena pointed out that the failure of the merger between Egypt’s largest investment bank, EFG-Hermes, and Qatari investment bank QInvest in May was a very negative sign for the doing business environment.
“The real problem in the failure of the joint venture between the Egyptian and the Qatari giants is not to get the approval of the Egyptian Financial Supervisory Authority (EFSA),” he added.
EFSA at the time cited lack of experience on the Qatari side as the main reason for refusing the merger.
Egypt also declined six places (down to 50th out of 189) in starting a business, one of the main criteria of the overall index.
According to the report, Egypt ranks 12th among Middle East and North Africa region (MENA) countries in the ease of doing business, while the United Arab of Emirates, Saudi Arabia, Bahrain and Oman top the regional list.
The World Bank index considers Egypt’s increase in corporate taxes a reform making it more difficult to do business. Egypt’s corporate tax rates were amended mid-2011, when the tax rate on incomes higher than LE10 million was raised from 20 to 25 per cent.
Despite the overall drop in ranking, the Arab world’s most populous country witnessed a slight improvement of 0.13 points in the Distance To Frontier (DTF) index, recording 56.3 points.
DTF shows the distance of each economy to the "frontier," or highest performance observed on each of index areas of interest.
For the global ranking, Ukraine was the country that has improved the most over the past year, while Rwanda was most improved since 2005.
Singapore retained its No.1 spot in overall rankings for the eighth straight year, followed by Hong Kong, New Zealand and the United States.