The news that the World Bank has suspended the publication of its global ease of doing business index, the popular Doing Business list, went completely under the radar and with the silence of the Serbian authorities, although the publication of the list every October is accompanied by intensive media promotion of the government.
This should not be surprising, because the Serbian authorities have been serving this index for years as proof of improving the business environment, and now the objectivity of the index in ranking countries by business conditions is being questioned.
Although Serbia is not explicitly mentioned as a country whose progress is suspected, galloping rankings and positioning among the top 50 in the world open space for questioning whether, after a revision of data in the World Bank, Serbia will be investigated together with the so-called Russia China, Saudi Arabia and Uzbekistan.
Namely, these countries, just like Serbia, have noticed big jumps on the list, so it is suspected that the legal framework for the company’s operations has improved just as much.
China, for example, was among the ten business environments that improved the fastest in 2020, so it climbed from 46th place to 31st and thus overtook France.
Serbia now occupies the 44th position among 190 ranked countries on the global index of ease of doing business, and in the category of obtaining construction permits, it is on the 9th position.
“The decision to pause the release of the new rank is a bit unexpected, although there has been criticism of this index before,” Svetozar Tanaskovic, assistant professor at the Faculty of Economics in Belgrade, told Nova ekonomija.
He points out that when interpreting this decision of the World Bank, one should keep in mind the political background and the changed relations between America and China. China is the third strongest voting power in the World Bank, and the United States is the first, and the directors of the World Bank come from that country.
As he explains, the index measures changes in the regulatory framework, what is defined on paper by law, but there is no way to measure whether it is applied in practice, which is why there is often a problem to explain the good positioning of some countries.
“If you know in advance what is being measured, and if you have a clear methodology, and this index is completely transparent, then it is very clear what you need to do in a very short time to, say, facilitate the electronic issuance of documents or building permits. In practice, it does not mean that every company will have the same treatment on the market,” Tanaskovic points out.
According to Tanaskovic, the decision to pause the index is related to irregularities in the World Bank itself.
It is stated that it is possible that certain countries were better positioned due to political pressures or certain interests of investors.
“The question is where they saw the problem, whether on the spot when the data was collected or later at the World Bank itself when it was processed. As for Serbia, the question is how deep the audit will go. Or will it focus on a couple of countries or there will be a change in the methodology (for calculating the index, that will take into account other indicators that will change the position of all countries, not just Serbia,” he said.
According to some critics, the World Bank report encourages corruption, which is not reflected in the index.
Building permits are an ideal example, in the vast majority of cases, some companies obtain building permits before the legally prescribed time, which brings numerous points in the ease of doing business index, Nova Ekonomija reports.
