(MENAFN - Arab News) The World Bank's 10th annual Doing Business report was released this week. Policymakers and business executives around the world are taking advantage of this milestone to celebrate the enormous impact this publication has had on the world. By providing straightforward and reliable information on business regulations, the Doing Business project has contributed to the removal of barriers and restrictions to doing business in countless countries.
Nowhere has this impact been felt more strongly than here in Saudi Arabia, where tireless campaigning by proponents of business reform has yielded exceptional results, including a rapid increase in foreign and domestic investment and new business formation. Indicative of this success is the rise of Saudi Arabia in various international rankings and reports published by the World Bank, the World Economic Forum and the UN to name a few.
Indeed in the Doing Business Report, Saudi Arabia has managed to distinguish itself as the only G-20 country, apart from China, to be named as one of the top 30 fastest-reforming countries in this year's report. It has achieved an astounding number of business-friendly reforms in the period since 2005 and increased its ranking by 45 places during that time.
Most importantly, the new report continues to indicate that Saudi Arabia is the easiest place to do business in the GCC, and that Saudi Arabia provides the best environment for entrepreneurs in MENA.
Many of the reforms that led to this success have been directly the result of previous reports and a concerted effort to tackle the challenges they identified.
Through its meticulously researched and highly detailed reports, Doing Business has been a key input into modern Saudi policymaking and regulatory reform.
However, the journey isn't complete, as competitiveness improvement is a continual effort.
Despite remarkable progress over the past decade, Saudi Arabia dropped this year on the overall rankings, the report's composite index of all reform areas, decreasing to 22nd place from 12th place last year.
This provides an opportunity for a renewed focus on regulatory reform, for several of the reasons outlined below, which requires us to accelerate our pace of reform if we are to maintain our current leadership position.
Although this year's drop is largely because Saudi Arabia is in the process of setting up a new, modernized system for registering businesses, which is only partially implemented (involving a number of temporary procedural delays), it should still be interpreted as a powerful wake-up call for reformers around the country, specifically along three main fronts.
First, a greater emphasis on local and international investors.
Further improvement of our business environment is needed to ensure sustainable economic growth, prosperity and job creation - not just success on the rankings.
These reforms must translate into real on the ground improvements felt by all investors. The best source for guidance will always be the real-life investors who are on the ground working here day-in and day-out.
We must enhance and expand our current efforts to reach out to both local and international investors and address their top concerns whether or not they are also captured by the World Bank.Of course, the Doing Business report will always inform a large portion of our reform agenda, but the dynamic challenges of the day mean we have to broaden our scope.
Second, the alignment of pro-business reform efforts with national economic goals.
The Doing Business report offers a lot more to reform-minded countries than just identifying potential reforms.
It also provides a wealth of ideas and examples from other countries on innovative ways to improve and simplify regulations and make it easier to do business.
In order to benefit from these, we must continue to build and enhance inter-governmental coordination at both national and regional levels to help foster value adding investments that spur job creation for Saudi nationals.
For example, where the government has outlined a vision for the future in key sectors or laid out targeted plans in areas like education or health, key stakeholders should seek to strengthen existing and identify new areas of collaboration to enhance alignment and coordination of efforts. By improving the business environment in strategic sectors that are central to the economic ambitions of the Kingdom, we will maximize our impact.
It will also help nurture partnerships and collaboration across the government.
Third, a renewed focus on the basics.
SAGIA remains committed to its efforts working with key government and regional stakeholder in support of the vision of His Majesty, Custodian of the Two Holy Mosques, King Abdullah bin Abdul-Aziz, and serving as a champion for improving the investment environment with the objective of driving economic prosperity, spurring job creation and enabling diversification.
The new report shows that areas like starting a business, enforcing contracts and insolvency laws still require continued focus to maintain our competitive edge in the global marketplace.
Still other areas, like access to credit and investor protection have fallen prey to the rapidly accelerating pace of reform in other countries, such as Malaysia, Australia and Georgia, which are following in Saudi Arabia's footsteps with major reform programs of their own. When that happens, Saudi Arabia sees drops in its ranking despite constant or improved performance from the previous year - that is, after all, the fundamental logic of competitiveness.
Government and business leaders in Saudi Arabia must seize this opportunity to re-energize our commitment to providing a competitive and differentiated investment environment that is attractive to foreign and domestic investors alike.
It is only through going back to the basics of enabling value adding investments and supporting the emergence of competitive sectors that we will be able to maintain such a leadership position.
- Abdullatif A. Al-Othman serves as the governor of the Saudi Arabian General Investment Authority.
This article is exclusive to Arab News.