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Four Arab Countries Among World’s Top 10 Business Climate Improvers

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Economies in the Middle East and North Africa region implemented the most reforms on record to ease doing business for domestic small and medium-sized enterprises and hosted four of the countries that improved the most world-wide, according to the World Bank Group’s Doing Business 2020 study.

Economies of the region put in place 57 business regulatory reforms in the 12 months to May1, up from 43 during the previous 12-month period covered by the study. Thirteen of the region’s 20 economies carried out reforms and the region’s average ease of doing business score improved by 1.8.          

Economies of the Gulf region have been particularly active, implementing 35 business-climate-improving measures in the past year.

This year, the region hosts four of the world’s top 10 improvers: Saudi Arabia, Jordan, Bahrain, and Kuwait. These countries account for almost half of the region’s reforms. The United Arab Emirates remained the strongest performer overall in the region, placing 16th (out of 190) on the ease of doing business rankings.

“It is a year of records for economies in the Middle East and North Africa, and we are committed to continuing our support to all countries in the region ” said Ferid Belhaj, World Bank Regional Vice President for the Middle East and North Africa.The next generation of reforms should focus on transparency, fair competition and good governance to make MENA open for business and attract investments needed to create jobs for youth and women.”

Jordan joins the top reformers for the first time – with three reforms. The economy strengthened access to credit by introducing a new secured transactions law, amending the insolvency law and launching a unified, modern and notice-based collateral registry, among other measures.

Bahrain, with nine reforms, led both the region and the world in number of reforms implemented. The country recently introduced a new bankruptcy law, strengthened the rights of minority shareholders and revamped the process of obtaining building permits through a new online platform. Enforcing contracts was also made easier by creating a specialized commercial court, establishing time standards for key court events and allowing electronic service of the summons.

Saudi Arabia, this year’s top improver (based on the increase in its overall ease of doing business score), carried out a record of eight reforms in the past year. It established a one-stop shop for company incorporation and eliminated the requirement for married women to provide additional documentation when applying for a national identity card. It also made importing and exporting faster by enhancing the electronic trade single window, enabling risk-based inspections, launching an online platform for certification of imported goods, and upgrading infrastructure at Jeddah Port. Other reforms led to improving access to credit, strengthening minority investor protections and facilitating the resolution of insolvency.

Kuwait also earned a spot in the top 10 improvers for the first time with seven reforms. Building permitting was streamlined by integrating additional authorities into the electronic permitting platform and enhancing inter-agency communication. The country also made trading across borders easier by enhancing the customs risk management system and implementing a new electronic clearance system.

Morocco carried out six reforms: strengthening minority investor protections; reducing the corporate income tax rate; and introducing e-payment of port fees. The United Arab Emirates, Egypt, and Oman implemented four reforms each. All three strengthened the rights of minority investors, streamlined business registration processes and made it easier for businesses to import and export goods.

Collectively, the region’s economies focused their reforms on getting electricity and protecting minority investors, with 40% of the countries in the region reforming in these areas (eight reforms in each).

Overall, the region performs the best in the areas of paying taxes, getting electricity, and dealing with construction permits. Obtaining a building permit takes on average 124 days, 28 days less than among OECD high-income economies. Similarly, entrepreneurs in the region need to complete 16.5 payments on average to comply with their fiscal requirement compared to 23 globally. Bahrain is the best performer globally in tax compliance time, requiring just 22.5 hours per year to file and pay taxes.

However, some economies in the region still fall short. Libya has not implemented any reforms since the inception of Doing Business, while Iraq has improved on only four indicators. Lebanon has made one reform to improve its business climate in the last five years and seven reforms since the first launch of the Doing Business study in 2003. It ranks 143rd globally, and especially underperforms in the areas of starting a business and dealing with construction permits.

Getting credit in the Middle East and North Africa remains harder than anywhere else in the world, partly due to insufficient protections for lenders and borrowers in collateral and bankruptcy laws. The region also underperforms in the areas of trading across borders and resolving insolvency. The cost of complying with border requirements for exporting averages $442 and takes 53 hours, three and four times more than the averages among OECD high-income economies. In bankruptcy, the average recovery rate in the region is 27 cents on the dollar, compared with 70 cents in OECD high-income ones.

Doing Business finds that barriers against women are still widespread in the Middle East and North Africa, with 13 of the region’s economies imposing additional procedures for female entrepreneurs to start a business.

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Finance

Uzbekistan and World Bank to Expand Strategic Partnership

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Photo credit: Press Service of the President of Uzbekistan.

Anna, Bjerde, World Bank Vice President for Europe and Central Asia, visited Uzbekistan from September 29 to October 2, 2022, as part of a broader trip to Central Asia. Ms. Bjerde met with President Shavkat Mirziyoyev, as well as senior government officials, and beneficiaries of a World Bank-funded project that is helping improve rural infrastructure in Uzbekistan.

During her meeting with President Mirziyoyev, Ms. Bjerde discussed the results of 30 years of partnership between Uzbekistan and the World Bank, an anniversary which was celebrated in September this year. President Mirziyoyev and Ms. Bjerde noted in particular the achievements of the stepped-up World Bank financial and advisory support to help Uzbekistan implement transformative economic and social reforms since 2017, and they agreed to expand strategic bilateral cooperation across several economic and social spheres.

Ms. Bjerde also held talks with senior Uzbek government officials, including Deputy Prime Minister and Minister of Economic Development and Poverty Reduction Jamshid Kuchkarov, Deputy Prime Minister and Minister of Investments and Foreign Trade Jamshid Khodjaev, Minister of Finance Timur Ishmetov, Chairman of the Board of the Central Bank Mamarizo Nurmuratov, and Director General of the Agency for Strategic Reforms Shukhrat Vafaev.

In her meetings with counterparts, Ms. Bjerde discussed the implementation of the recently launched Country Partnership Framework (CPF) for Uzbekistan for the next five years. The CPF supports the authorities in developing the private sector to create new jobs and reduce poverty, improving human capital, building a green and sustainable economy, closing gender gaps, and creating conditions for wider citizen engagement. The CPF is aligned with the Development Strategy of the New Uzbekistan for 2022-26 and will help the authorities achieve the country’s ambitious development goals.

Ms. Bjerde and counterparts also discussed the progress of the Government’s reforms and World Bank support to reforming and privatizing state-owned enterprises and banks, modernizing agriculture, energy, financial and other strategic sectors, improving education, healthcare, and social protection services, developing transport connectivity, improving rural and urban infrastructure, empowering women, and improving the business and investment climate. Discussions were also held around the upcoming Country Climate and Development Report that the World Bank is preparing for Uzbekistan.

“We welcome that, despite the ongoing global shocks and crises, Uzbekistan’s path for reforms and development impact for its citizens through an inclusive and sustainable market economy transition remains the top priority for the Government,” said Anna Bjerde. “As we celebrate the 30th anniversary of the partnership with Uzbekistan, the World Bank looks forward to supporting the authorities reach their ambitious development goals through implementing the Country Partnership Framework which outlines our financial and advisory support for the reform agenda and priority development projects in the years to come.”

During her stay in Uzbekistan, Ms. Bjerde also visited Saroy village, located in the Jizzakh Region, and met with local residents, students, parents, and teachers. Saroy is one of 306 remote villages in five regions of the country benefiting from a rural infrastructure development project, which is being implemented by the Government with financial support from the World Bank and the Asian Infrastructure Investment Bank.

The project directly involves local communities through a participatory process to identify their infrastructure needs. In over 175 villages, residents have already produced community development plans, which will receive funding to implement sub-projects, such as the upgrading or construction of drinking water, gas, and electricity supply systems, roads, schools, and other basic infrastructure and services.

The residents of Saroy village voted for the rehabilitation of the local school that had been built decades ago and did not meet public building codes and standards. During their meeting with Ms. Bjerde, they presented the community’s experience in developing and supervising the implementation of a sub-project that completely rebuilt and expanded the school’s facilities. The school is now able to accommodate more students from Saroy and neighboring villages and is better equipped to ensure student learning.

The World Bank’s country program in Uzbekistan is among the top three largest in the Europe and Central Asia region. As of October 1, 2022, it consisted of 27 projects, with net commitments totaling around $4.76 billion.

These projects provide support in critical areas, such as macroeconomic reforms and the modernization of agriculture, water resource management, water supply and sanitation, energy, transport, health, education, social protection, urban and rural infrastructure, national innovation, tax administration, statistical and financial systems, etc. They also help in the mitigation of the health, social, and economic implications of the COVID-19 pandemic, as well as build resilience from the impacts of climate change.

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Egypt: US$ 400 Million Project will Help to Improve and Decarbonize Logistics

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World Bank approved a US$400 million development financing agreement to enhance the performance of the logistics and transportation sectors in Egypt and to support the shift towards low-carbon transportation along the Alexandria–the 6th of October–Greater Cairo Area (GCA) railway corridor.

Egypt’s rail system is one of the most extensive in Africa, with a generally heavier focus on its passenger services, and three freight trains per direction per day in the GCA with the rest dedicated to passenger trains. 

The Cairo Alexandria Trade Logistics Development Project will implement a railway bypass to the congested GCA. The bypass will provide freight trains between the Alexandria Sea Port and the newly constructed 6th of October Dry Port, with an alternative route to the west of Greater Cairo. The operational bypass will also allow 15 container trains per day by 2030, and as demand increases, 50 trains by 2060 to this dry port. Additional freight trains will flow between the Alexandria Port, Upper Egypt, and the Red Sea.  

The transportation sector is the second largest contributor to Egypt’s greenhouse gas (GHG) emissions after energy—contributing approximately 19 percent. Transporting containers and other freight by train has a lower carbon footprint than by road. The Bank estimates the project will reduce greenhouse gas emissions by 965,000 tons over 30 years.   

The project also supports advancing the government’s reform effort to improve the railway sector’s performance and promote private sector participation by creating Egypt’s Infrastructure Access Charging regime. This charging regime is similar to a toll on roads or airport fees. Private investors can operate their trains on the tracks of the Egypt National Railways Authority for a fee, hence boosting this authority’s finances. 

The Government of Egypt is committed to SDG 13: Climate Action by designing and implementing mitigation projects that establish an advanced, sustainable and clean transportation network, while also decreasing carbon footprint. Sustainable transport projects, many of which are carried out in cooperation with Egypt’s development partners and private sector, carry much significance in terms of driving the country’s economic growth and empowering Egyptian citizens across the country, connecting bigger cities and business districts, and providing more job opportunities. The Cairo Alexandria Trade Logistics Development Project will support national efforts to transition to lower carbon transportation and ensure the safe and fast delivery of people and goods; a key element in our growing economy,” said Dr. Rania A. Al-Mashat, Egypt’s Minister of International Cooperation.

The project will also encourage female labor force participation by supporting the professional development of female employees as well as the availability of childcare.  

The project will upgrade the track and signaling on four segments –including a greenfield one– between Alexandria, the 6th of October City, and the GCA to achieve an operational railway bypass to the GCA. This railway bypass will increase capacity particularly for freight trains while decongesting the Greater Cairo Area where demand for passenger trains is high.  

Reforming the transportation and logistics sectors is vital to Egypt’s competitiveness and economic development,” said Lieutenant General Kamel El Wazir, Egypt’s Minister of Transportation. “This new project introduces several improvements in those vital sectors. The improvements are aligned with Egypt’s pressing development priorities, which include decarbonization, trade facilitation, private sector participation, and gender balance in the workplace. Increasing the number of containers moved by rail from zero to 184,000 per year is one of the project’s key objectives. This flow of containers is primarily between the Alexandria Sea Port and the 6th of October Dry Port, both privately operated and railway oriented.”

The project will support Egypt’s integration into global value chains and its efforts to become a regional trading hub. This project will significantly contribute to Egypt’s 2050 Climate Change plan, given the expected reductions in greenhouse gas emissions.

This operation is part of a wider set of efforts dedicated to offering timely and comprehensive support to Egypt’s economic development and climate change plans,” said Marina Wes, World Bank Country Director for Egypt, Yemen, and Djibouti. “We hope that through supporting more job creation, including for women, a cleaner environment, and providing safer mobility, the operation will contribute towards a brighter and more prosperous future for all Egyptians.” 

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Fight against human trafficking must be strengthened in Ethiopia

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A group of internally displaced people due to the Tigray conflict gather in a site in Ethiopia's Afar region, Ethiopia. © UNHCR/Alessandro Pasta

Throughout Ethiopia’s Tigray, Afar and Amhar regions, women and girls are becoming increasingly vulnerable to abduction and sex trafficking as they flee ongoing armed conflict, a group of UN-appointed independent human rights experts warned on Monday.

The protracted conflict in the three northern regions have heightened risks of trafficking for sexual exploitation as a form of sexual violence in conflict, the experts said in a statement.

“We are alarmed by reports of refugee and internally displaced women and girls in the Tigray, Afar, and Amhara regions being abducted while attempting to move to safer places,” they said.

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“We are concerned at the risks of trafficking, in particular for purposes of sexual exploitation, including sexual slavery.” 

Women and children in crosshairs

Amidst abductions and displacement, the UN experts raised serious concerns over Eritrean refugee women and children being at particular risk of sex trafficking.

“Urgent action is needed to prevent trafficking, especially for purposes of sexual exploitation, and to ensure assistance and protection of all victims, without discrimination on grounds of race or ethnicity, nationality, disability, age or gender,” they said.  

Meanwhile, the hundreds of children who have been separated from their families, especially in the Tigray region, are particularly vulnerable, warned the independent experts.

“The continuing lack of humanitarian access to the region is a major concern,” the experts continued, urging immediate national, bilateral and multilateral measures to prevent all forms of trafficking of children and to ensure their protection.

Identifying victims

They added that sufficient measures were not being taken to identify victims of trafficking, or support their recovery in ways that fully takes account of the extreme trauma being suffered.

“The failure to provide accountability for these serious human rights violations and grave crimes creates a climate of impunity, allows trafficking in persons to persist and perpetrators to go free,” underscored the six UN experts.

They urged all relevant stakeholders to ensure that victims of trafficking can adequately access medical assistance, including sexual and reproductive healthcare services and psychological support.

The experts said they had made their concerns known to both the Governments of Ethiopia and neighbouring Eritrea.

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