By Michael Jones (michael.jones@tsiglobalconsulting.com)
The Ease of Doing Business Index (EDBI) is a list created by the World Bank to rank countries by how accessible they are to foreign businesses. A country’s high placement on the list suggests simple, minor regulations on business and strong protection for property rights, while a low placement suggests the opposite. This basic analysis is then combined with data from a diverse array of other factors to form a complete profile for a country’s business-friendliness. As a rule, the EDBI serves as a good measuring stick for whether or not you should work in a particular country. However, the placement of certain countries may surprise you.
For example, what country do you think is the easiest to do business with? The U.S.? A country in the EU? Perhaps the ever-growing China? It’s actually none of the above: according to the EDBI, Singapore is the world’s easiest country to do business with. Ranking #1 in Trading Across Borders, and either #2 or #3 in Starting a Business, Construction Permits, Getting Credit, and Protecting Investors, Singapore appears to be a Jack of all Trades, Master of All for the business world. Indeed, when one analyzes the situation, this placement makes perfect sense. Singapore has seen massive economic growth in recent years, which, combined with its authoritarian-leaning government has allowed it to take decisive action to make the country a haven for business.
Other countries may surprise you with how low they are on the EDBI. All four of the BRIC countries (Brasil, Russia, India, China) scored on the lower end of the spectrum, with India having the lowest rating of the four. This is notable due to the popular perception that these countries are growing powers with an interest in developing their international business infrastructure; the reality is very different. China has high levels of government intervention, Russia has serious problems with corruption, and both Brazil and India have protectionist policies that make it difficult for foreigners to get a foothold in their country. One should definitely be cautious before committing to these countries.
The EDBI contains a huge amount of information that can be extremely useful to anyone looking to expand their business overseas. TSI Global Consulting can help you analyze this document to determine the specific needs of your company and how they can be best met by your foreign partners. Call us at 210-757-0618 for a consultation.