The World Bank Doing Business Report

Recently, one economic manager who, in the past, had been exceptionally ecstatic toward international financial agencies has been bursting a vein, virtually screaming bloody murder at the crash of our rankings in the World Bank Doing Business Report. 

The World Bank (WB) study ranks economies on a scale from 1 to 189, where the lower the number, the higher the ease of doing business. Potential foreign and local investors use the study as a gauge because these reflect on governance, the effective true costs of doing business, and eventual viability. According to the WB, the “high ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of a local firm. The rankings are determined by sorting the aggregate distance-to-frontier scores on 10 topics, each consisting of several indicators, giving equal weight to each topic.”

By sorting the “distance-to-frontier” scores the World Bank, in effect, measures the standard deviation of particular aspects or topics from 10 predetermined and deemed critical to doing business in any economy. Thus, the higher the deviation, the higher the number in percentile terms; consequently, the higher the rank when results are aggregated and arrayed against other economies. When analyzed, these mirror the manner economies are governed.

The report, thus, presents a global picture of relative effective and conducive governance providing investors a deeper, virtual menu of investment destinations. For instance, given our current ranking, it is far easier and more conducive to do business in the middle of the Kalahari Desert in Botswana in the African continent, and, likewise, in Nepal atop the Himalayan mountains than it is to do business in the Philippines.

Let us extrapolate into the political sphere and take this painful reality further.

As the administration standard-bearer is running on a platform of continuity and has spun an unfelt growth statistic as the offshoot of clean governance, allow us to validate where his claims lie.

Remember the higher the score, the more difficult to do business. The WB report allows us to cite specific government deficiencies and accountabilities. Among our highest are “starting a business,” “protecting minority investors,” “enforcing contracts,” and “paying taxes.”

Unfortunately, rather than address these failures, officials, true to form, whine and resort to argumentum ad hominem by discrediting the report. There are none so blind as those who refuse to see.

One, officials charge the report is inconsistent with other reports. What reports are those? The one that says we are the “darling” of investors despite being last on the list of regional foreign direct investment destinations? Note also that the resplendent GDP growth we boast off is outweighed by failures indicated by other indices, such as our unemployment rates, the Gini Coefficient, the involuntary hunger and the poverty indices.

Two, officials charge the report discounts economic-zone havens and, instead, based findings on population- and market-dense locales. They forget that the report encompasses domestic micro and small business enterprises and start-ups critical to seminal industrialization and inclusive growth. Moreover, population and market density determines economic inclusivity more than exclusive havens do.

Three, the report sourced data from the market and market players and discounted data provided by the government. Market data are apolitical primary sources. They are un-spun and un-fudged. It is a question of credibility. Would you have the World Bank source from the same officials who claim unemployment has gone down, only 6,000 perished in the Yolanda disaster, and the criminalized DAP catalyzed GDP growth?

Four, officials complain the report focuses on legislation as the principal curative response. But, of course! Palliatives, band-aid patches and placebos are not cures of choice.

Finally, officials claim the report’s methodologies recalibrate as economies develop. But, of course! Relevance is critical. Dynamic benchmarks constantly challenge and compel us to address deficiencies rather whine away like spurned silly spinsters.