Belarus Needs Reforms, Not Their Semblance, IFC

05.11.2010 13:46

The head of the International Finance Corporation Craig Bell said that the latest report "Doing Business", according to which Belarus ranks 68th out of 183 countries, signals the need for greater reforms in the country. According to the expert, Belarus needs specific reforms, not their semblance.

However, Craig Bell stresses that although the report of the IFC is a highly respected figure for potential investors, the strategy of international organizations is based on other indicators and factors in making investment decisions.

«IFC strategy does not depend on the place of Belarus in the rankings. We’ve always recommend the Government of Belarus to carry out economic reforms that can improve the investment climate in the country and contribute to the growth of foreign investments into the Belarusian economy. The report «Doing Business» is only one aspect of measuring the investment climate, rather than its complete picture,» the expert said.

According to the IFC head, the Belarusian authorities give priority attention to this rating, aiming at the top 30 of countries with the most attractive conditions for business. However, according to Craig Bell, the progress of Belarus is «fairly modest,» BEL.BIZ.

«I believe that the ambitions on the top 30 deserve praise. I do not agree with the progress being insignificant. If we compare the figures of the last year, all but one show that Belarus either has kept its place in the world rankings, or has improved it. Besides, the report of this year has excluded one of the indicators («manpower»), in which Belarus has taken a pretty good position in the ranking — 32nd,» the IFC expert said.

Belarus Has a Chance to Get into the Top 30 Rating, Bell

Craig Bell is convinced that the country can get into the top 30 rating of corporation, if the Belarusian government keeps on conducting serious reforms. «This requires huge work,» the expert said.

According to Craig Bell, the improvement in the rating, including such indicators as the «Taxation», «Loans», «International Trade», «Liquidation of companies» will depend on the intensity of the reforms. Belarus has already succeeded in these indicators this year. «The place has not improved; the gap has just been reduced. Maybe it’s not the best analogy, but … Let’s imagine a marathon involving 183 athletes, and the Belarusian runner 30 minutes lagged behind the penultimate one last year, but this year — only 10minutes,» the expert said.

Craig Bell also says that work on the reforms is underway, which will help to improve the «Credit» (89th place this year) and «Protecting Investors» (93rd place) indicators of Belarus.

«Last week IFC staff conducted a video conference with the participation of 16 government representatives, the Central Bank, Ministries of Economy and Justice. We, in particular, discuss an action plan to improve the security of transactions, which, in turn, directly affects the indicator «Loans»,» the IFC head said.

A Number of Indicators Not to Let Belarus Improve its Rating, Bell

«Considering the ambitious plans of the Government of Belarus, the results of the report may cause some disappointment. But they underscore the need for broader reforms. A number of indicators won’t let Belarus improve its rating significantly, and therefore there’s the need to work on other, perhaps, more sophisticated indicators. I hope and believe that further reforms will continue,» the expert said.

Referring to the methodology of calculation of IFC rating, the head of the corporation explained that the information is gathered from various sources. «Most information is provided for studies by the specialists of such areas as accounting and legal firms. It depends on the specific target,» Craig Bell said.

«The Government also provides information on IFC ongoing reforms, and we distribute it to our colleagues. However, we have no influence on how information is collected, it is not subjective but objective process, certain methodology is developed for each indicator,» the expert said. He also stresses that the methodology of calculation of each indicator is based on objectivity.

According to Telegraf, the World Bank has released the seventh annual report «Doing Business 2011», prepared by the IFC information. According to a study, Belarus ranks 68th out of 183 countries and has lost four positions in the ranking this year. International experts have not detected any improvement of Belarus in the sphere of taxation. According to this indicator, the country is still in the last 183rd place in the world.

Ministry of Taxes and Dues of Belarus did not agree with the methodology of the World Bank and the IFC in its annual report «Doing Business». In August 2010 the Belarusian Economy Ministry predicted the country would rise ten points up in the ranking of «Doing Business 2011».