BUSINESS

Yemen Improves in 2009 Rankings

BY FAISAL DAREM

128…that is the number of places Yemen advanced in the Starting a Business Indicator global rankings published in the Doing Business 2009 Report, the sixth annual series of reports published by the International Finance Corporation (IFC) and the World Bank. Yemen jumped from 178th place last year to 50th. In the category of starting a business, Yemen was a top reformer because of the bold economic reforms it launched last year; abolishing its minimum capital requirement—the second largest in the world at $15,225—and activating a one-stop shop for investors, in addition to reducing the cost of business startup from 269% of income per capita to about 93%. These and other reforms reduced the number of procedures to start a business from 12 to 7 and the average length of the process from 63 to 13 days.

According to the report, Yemen is now ranked 98th overall in terms of business production having jumped 25 places from last year’s 123rd ranking because of its efforts related to easing procedures of business start-up, applying single-window systems for investments, and amending several laws to facilitate the investment climate.

Yemen was a top reformer because of the bold economic reforms it launched last year; abolishing its minimum capital requirement—the second largest in the world at $15,225—and activating a one-stop shop for investors, in addition to reducing the cost of business startup from 269% of income per capita to about 93%.

Abdul-Kareem Al Arhabi, Deputy Prime Minister for Economic Affairs and Minister of Planning and International Cooperation, said that the remarkable progress in the investment environment in Yemen reflected the bold reforms and performance of the government. He added that the international indicators of the World Bank have showed that Yemen has realized positive results both at the economic and investment levels.

Al Arhabi said that Yemen’s jump in the rankings especially in the field of business start-ups illustrates a great achievement towards improving Yemen’s reputation worldwide, and will be instrumental in attracting further foreign investment in the country.

Dr. Yahya Al Mutawakil, the Minister of Industry and Trade, confirmed that the government, in cooperation with donors, implemented a number of projects aimed at reducing the time and cost required to start a business in Yemen, and to encourage new business for local and foreign investors. He said, “These projects have contributed to improving the business environment and investment climate in general in a framework of the government’s plans to develop the economic structure and modernize its management.”

He added, “Several projects were implemented by the Ministry of Industry and Trade such as the automation of procedures for company’s registration, agencies and branches of foreign companies. Improving trade projects and facilitating procedures for starting businesses as well as applying a single-window system for investments reflected positively on the business environment in Yemen to offer easier and faster procedures for commercial society.” The ministry reduced required procedures of starting commercial business from 12 to a three procedures and through a single-window system.

Al Mutawakil has reviewed the amendments of some articles in laws and legislation prepared by the ministry that contributed to the rise in rankings such as amending the Limited Companies Law which abolishes the minimum requirement of capital as a condition for the establishment of limited companies. He said that this amendment was a step in the right direction to improve the business environment in Yemen, which was viewed from the outside world as one of the most difficult regions in the world to set up commercial activities. This amendment to remove restrictions and obstacles that were adversely affecting and negatively portraying the classification of Yemen as an unattractive environment for investment will better facilitate business in Yemen.

He was also quick to point out an additional amendment which was related to commercial law. “We amended article number 28 which now allows for non-Yemenis to practice commercial business and trade without the need for a Yemeni partner, which would encourage Arab and foreign investment and business to set up companies in the trade sector on their own.”

In terms of Middle East and North Africa countries, the Doing Business 2009 report points out that these countries continue to ease the regulatory burden of doing business. For a third time, Egypt is one of the top 10 economies that reformed their business regulations, while both Saudi Arabia and Bahrain rank among the top 25 worldwide on the ease of doing business. In two-thirds of the region’s economies, the report records 27 reforms between June 2007 and June 2008 that make it easier to do business.

Egypt, which was the world’s top reformer of business regulations last year, continued to lead, with improvements in six of the 10 areas the report covers. Egypt advanced 11 places in the global rankings on the ease of doing business. The region’s other leaders in reforming regulations are Saudi Arabia and Tunisia, each initiating reforms that made it easier to do business in four areas.