THE Doing Business Report 2015 entitled “Going Beyond Efficiency”, the 12th annual report series published by the World Bank and International Finance Corporation, which measures the ease of doing business among 189 participating economies, has ranked Brunei Darussalam at 101st, a drop of 42 ranks from last year’s report of 59th position.
According to a press statement released by the Ease of Doing Business Steering Committee, Ministry of Industry and Primary Resources, this year’s Doing Business Report introduced several changes in methodology and scope of assessment which include adding more cities for economies with more than 100 million inhabitants, revising the ranking calculation, as well as assessing regulatory qualities among eight indicators – dealing with construction permit, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, enforcing contract and resolving insolvency.
Some of the results were reflected in this year’s report, while others will appear next year.
As the title of the Doing Business 2015 report indicates, the changes in scope and methodology introduced this year by the World Bank initiated a shift from heavy focus on the efficiency factors towards the assessment of the quality of legal infrastructure within an economy and how they promote efficiency in the delivery of services.
The significant reworking of the methodology, shifted from the ordinal system based on percentile to cardinal metric ranking system, with scoring based on the Distance To Frontier (DTF) from the Best Performers/Practice of participating economies and of the use of aggregate values of the overall DTF scoring across the 10 indicators, is now the basis of new ranking for each of the economies.
“With this revised ranking calculation, there have been several drastic and alarming changes to the ranking trends among economies which have been previously published, and Brunei Darussalam is no exception,” stated the press release, adding that the Sultanate was now ranked at 101st with a DTF score that has seen a gradual increase from 54.25 in 2007 to 61.26 in 2015.
Chairman of the Ease of Doing Business Steering Committee, Pehin Orang Kaya Seri Utama Dato Seri Setia Awang Haji Yahya bin Begawan Mudim Dato Paduka Haji Bakar, Minister of Industry and Primary Resources, said that while this is a significant setback in terms of Brunei’s overall ranking achievement, the fact is the Sultanate’s business environment is improving and moving closer to the best performer and best practice in absolute terms.
“However, the significant drop in ranking does indicate the significant gaps in regulatory quality, and rate of regulatory reform relative to the other economies,” he said.
According to Pehin Dato Seri Setia Awang Haji Yahya, this implied that Brunei’s data indicates a critical need for the country to bring forth its regulatory infrastructure into the modern era and in line with international best practice.
The minister reiterated the need for relevant policymakers and regulatory administrators to hasten the legal and regulatory reform undertaking currently taking place especially those that are part of the Stretched Target of the Ease of Doing Business Steering Committee.
“This will not only help push the improvement of the country’s future ranking, but more importantly, will enable and facilitate the efficient functioning of business and markets and significantly contributing to the implementation of the strategies outlined to achieve and fulfil Brunei Darussalam’s Vision 2035,” stated the press release.
The minister reiterated that the Ease of Doing Business Steering Committee is committed to work closely and more intensively with each of the Champion Groups and other agencies.
The Steering Committee will work closely with PENGGERAK Steering Committee to provide significant intervention and help push for speedy implementation of the reforms, he said.
He also highlighted several reforms that were recently completed and are in the pipeline that will produce favourable results and in line with the shift in methodology.
Examples of such reforms include the recently launched PBD12 by the Ministry of Development; the upcoming implementation of the Building Construction Order (BCO) and its accompanying regulations; the review and amendment of the Companies Act (Chapter 39) by the Ministry of Finance; the implementation of the Judiciary Court Management System that is expected to be operational by March 2015; and the use of the Electronic Land Management System at the Land Department which is expected to be operational next year.
The top 10 performers in this year’s Doing Business Report, in order of ranking, are Singapore, New Zealand, Hong Kong SAR, Denmark, Republic of Korea, Norway, United States, United Kingdom, Finland and Australia.
Brunei is currently ranked as the 6th Asean country behind Singapore, which holds the top ranking for seven consecutive years; Malaysia (18th); Thailand (26th); Vietnam (78th); and the Philippines (95th).