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Gruevski doesn’t read the “Economist”: The poorest countries make the fastest progress on the “Doing Business” list

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The Prime Minister Nikola Gruevski at a press conference called the world banks report “Doing Business”, “a new and essential success for the country” and said it “confirms that we are leaders in doing business in the region, in Europe and worldwide.” According to him, the success of Macedonia in the report is “due to the implementation of reforms for improving working conditions in the private sector, improving the business climate, living standards, and creating jobs”.

Contrary to the statements made by the Prime Minister, a month ago, the prestigious weekly “The Economist” made some serious remarks regarding the ranking of countries in the report “Doing Business”, expressing concern over some of its shortcomings, i.e. many countries high on the list, or have made a speedy rise of the list “Doing Business”, are essentially – poor.

The gap between the ranking of the list of “Doing Business” and the average income is very large, such as in Macedonia, or, for example, Rwanda, wrote the weekly.

For comparison, here’s another one of the Prime Ministers statements and analysis of “The Economist”:

What Gruevski said about “Doing Business”:

What the “Economist” wrote about “Doing Business”:

The ranking of Macedonia as 12th place  in the report “Doing Business” (Doing Business) is a new and important success for the country,  said Prime Minister Nikola Gruevski.He noted that due to the good business climate and unrestrained conditions for doing business, the report ranked Macedonia 6th place for doing business, where competition is the most developed in countries across Europe.- This confirms that we are leaders in the region, in Europe and worldwide. We are in front established economies and developed countries. Before the 24 EU member countries and ahead of countries in the region. The high ranking is the result of hard work – said Gruevski.

By comparison, he noted that the list 10 years ago we were 94th place, and today’s success is due to the implementation of reforms to improve working conditions in the private sector, to improve the business climate, standard of living,  and the creation of jobs.

Gruevski said the Government was working hard to build modern institutions, adopting modern legislation, reducing bureaucracy and simplifying procedures.

– Macedonia is the second country after New Zealand where it is easiest to open a company. For two hours, with one procedure an it does not require capital or a notarization of documents – he added.

The Prime Minister spoke about reduced rates of VAT in many services, retention and low taxes even during the economic crisis.

– Before tax was 43.5 percent of profits earned, now that rate is four times lower. This way more more liquid assets remain  for companies that know how better to use the country to their benefit – said Gruevski.

According to the Prime Minister the procedures for import and export, are also easier, and it is the result of the continuous reforms in customs, cheaper customs services, and shorten customs procedures.

The Prime Minister stressed that the certification comes from the relevant institution that has had direct cooperation with domestic companies, consultants and institutions that measured the situation on the ground.

The report, concluded the Prime Minister, is a good sign for investors who consider the list relevant when making investment decisions.

Respected international weekly “The Economist” based in London, with a weekly circulation of 1.5 million copies on the seven continents, gave serious remarks regarding the system of  the ranking of countries in the report “Doing Business” (Doing Business) by the World Bank, expressing concern about some of its shortcomings.In fact, most countries high on the list of “Doing Business”, are essentially – poor.

When being in a favourable position on the list, these countries find it easier to apply for foreign investment or some sort of aid, which, if it becomes objective policy of the government, it is not a reliable way of guiding the national economy.

Furthermore, as “The Economist” states, the list does not take into account important elements of the business climate, such as security, corruption, size of the market, financial stability, infrastructure and knowledge.

According to “Doing Business” Macedonia is among the top ranked countries of doing business with ease, improving the ranking of 31st place last year (calculated according to its new methodology) in the last report, released on October 29, 2014.

“Indicators for measuring” on the list are incomplete. The weakness of the report, according to “The Economist” is that it is not based on surveys of businesses. Instead it looks at what is required by a county’s laws and regulations and tries to measure objectively how much time and effort it would take for a typical company to abide by them.
Poor countries tend to have more rules, but many of them can not be bothered to enforce them. And just passing regulations and legislation in accordance with Europe, is usually the main criteria for ranking states in the Worlds Banks’s “Doing Business” report.

“Such findings suggest that wherever strict rules are enforced by a weak state, connected firms find ways to step around the red tape.” reports the “Economist”.

The gap between the ranking of the list of “Doing Business” and the average income is very large, as in Macedonia, or, for example, Rwanda.

Rwanda is ranked ten places from Italy, despite being one of the poorest countries.

 

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