Friday, April 4, 2008

Doing Business in Small Islands

Interesting post from World Bank's Doing Business blog;

In Mauritius, it takes only 7 days. Mauritius, the best performing SIDS economy, ranks 27th on the ease of doing business, while Guinea Bissau is at 176 out of 178 countries.

The government that took office in July 2005 embarked on a bold economic reform program aimed at moving Mauritius from reliance on trade preferences to global competitiveness. Over the last two years Mauritius has reformed in 7 of the 10 areas Doing Business measures—one of the most dedicated government reform efforts that the project has seen worldwide. Out of 18 reforms affecting business regulations in SIDS introduced between April 2006 and June 2007, 6 were implemented by Mauritius.

Reforms pays off. Over the past two years, Mauritius's economy has enjoyed a steady increase in the annual growth rate – from 2.2% in 2005 to 5.4% in 2007. This is consistent with Doing Business research finding - a hypothetical improvement on all aspects of the Doing Business indicators to reach the level of the top quartile of countries is associated with an estimated 1.4 to 2.2 percentage points in annual economic growth. This is after controlling for other factors, such as income, government expenditure, investment, education, inflation, conflict, and geographic regions.

Reforms are also associated with faster job creation. In Mauritius, overall the unemployment rate dropped by 1.1% from 9.6% in 2005 to 8.5% in 2007. Doing Business research also shows that women and young workers benefit the most from reforms. Mauritius is no exception. Female unemployment was reduced by 2% from 16.4% in 2005 to 14.4% in 2007.

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