Saudi Arabia carried out a record number of business reforms in the past year, earning the country a spot in this year’s top 10 global business climate improvers, according to the World Bank Group’s Doing Business 2020 report.
Saudi Arabia implemented reforms in eight Doing Business areas, its busiest activity since the launch of the study. The country placed 62nd globally in ease of doing business rankings with an overall score of 71.6 out of 100.
“Saudi Arabia’s impressive reforms in doing business this year show its commitment to fulfilling a main pillar of its National Vision 2030: a thriving economy,” said Issam Abousleiman, World Bank Regional Director of the Gulf Cooperation Council (GCC). “Easing the business climate for local entrepreneurs to thrive as well as foreign investors to work in the Kingdom shows a forward path to creating more jobs for Saudi youth and women, and creating sustainable, inclusive growth.”
Saudi Arabia made the greatest strides in the area of starting a business. It now costs only 5.4% of income per capita for an entrepreneur to start a business, which is lower than the Middle East and North Africa regional average of 16.7%. Saudi Arabia has made substantial reductions over time to minimum capital requirements, cutting them from a cost of over 1,000% of income per capita in 2004 to zero.
Thanks to a reform improving the protection of minority investors, Saudi Arabia now ranks third globally on this indicator and performs as well as New Zealand and Singapore, the two easiest places to do business in the world. The country also performs well in the areas of registering property, where it ranks 19th, and dealing with construction permits, where it sits 28th. With the aid of a new online platform, local businesses need 100 days to obtain all required permits and authorizations to build a warehouse, at a cost of 1.9% of the warehouse value, half the regional average of 4.4%. Similarly, it takes 1.5 days to register property transfers in Saudi Arabia, faster than all but two countries in the world, Georgia and Qatar. Saudi Arabia is also the only economy in the region where this process is entirely free.
Additionally, the new reforms in the area of getting electricity, make it almost twice as fast for a business to obtain a permanent electricity connection in Saudi Arabia than it was a year ago. In addition, the process can be done in only two procedures, making it one of only six economies around the world where it can be done in so few steps.
The eight business area reforms made in Saudi Arabia according to the World Bank’s Doing Business 2020 study:
Starting a business became easier as Saudi Arabia established a one-stop shop that merged several pre- and post-registration procedures. The Kingdom also eliminated a requirement for married women to provide additional documents when applying for a national identity card.
Getting construction permits was made easier thanks to a new online platform and enabling civil defense approval after the issuance of a building permit.
Getting electricity: Saudi Arabia streamlined connection and meter installation, using a geographic information system to review new electrical connection requests and eliminate certificates of completion.
Getting credit: Saudi Arabia strengthened access to credit with the introduction of a secured transactions law and a new insolvency law.
Protecting Minority Investors: Saudi Arabia strengthened minority investor protections by increasing access to evidence at trial.
Trading across borders: Saudi Arabia made importing and exporting faster by enhancing an electronic trade single window, enabling risk-based inspections, launching an online platform for certification of imported goods, and upgrading infrastructure at Jeddah Port.
Enforcing contracts became easier with the publication of court performance measurement reports and information on the progress of cases.
Resolving insolvency was made easier in the Kingdom thanks to a new reorganization procedure allowing debtors to initiate restructuring of firms, improving voting arrangements in reorganization, improving the continuation of businesses and the treatment of contracts during insolvency proceedings, allowing post-commencement credit, and increasing the participation of creditors in the insolvency proceedings.
No pathway to reach the Paris Agreement’s 1.5˚C goal without the G20
“The world urgently needs a clear and unambiguous commitment to the 1.5 degree goal of the Paris Agreement from all G20 nations”, António Guterres said on Sunday after the Group failed to agree on the wording of key climate change commitments during their recent Ministerial Meeting on Environment, Climate and Energy.
“There is no pathway to this goal without the leadership of the G20. This signal is desperately needed by the billions of people already on the frontlines of the climate crisis and by markets, investors and industry who require certainty that a net zero climate resilient future is inevitable”, the Secretary General urged in a statement.
The UN chief reminded that science indicates that to meet that ‘ambitious, yet achievable goal’, the world must achieve carbon neutrality before 2050 and cut dangerous greenhouse gas emissions by 45 % by 2030 from 2010 levels. “But we are way off track”, he warned.
The world needs the G20 to deliver
With less than 100 days left before the 2021 United Nations Climate Conference COP 26, a pivotal meeting that will be held in Glasgow at the end of October, António Guterres urged all G20 and other leaders to commit to net zero by mid-century, present more ambitious 2030 national climate plans and deliver on concrete policies and actions aligned with a net zero future.
These include no new coal after 2021, phasing out fossil fuel subsidies and agreeing to a minimum international carbon pricing floor as proposed by the International Monetary Fund (IMF).
“The G7 and other developed countries must also deliver on a credible solidarity package of support for developing countries including meeting the US$100 billion goal, increasing adaptation and resilience support to at least 50% of total climate finance and getting public and multilateral development banks to significantly align their climate portfolios to meet the needs of developing countries”, he highlighted.
The UN Chief informed that he intends to use the opportunity of the upcoming UN General Assembly high-level session to bring leaders together to reach a political understanding on these critical elements of the ‘package’ needed for Glasgow.
A setback for Glasgow
The G20 ministers, which met in Naples, Italy on July 23-25, couldn’t agree to a common language on two disputed issues related to phasing out coal and the 1.5-degree goal, which now will have to be discussed at the G20 summit in Rome in October, just one day before the COP 26 starts.
Economic Recovery Plans Essential to Delivering Inclusive and Green Growth
EU member states must ensure careful and efficient implementation of economic recovery plans that support inclusion and growth to bounce back from the worst impacts of the COVID-19 pandemic, says a new World Bank report.
The World Bank’s latest EU Regular Economic Report – entitledInclusive Growth at a Crossroads – finds that the unprecedented and exceptional policy response of governments and EU institutions has cushioned the worst impacts on employment and income. However, the pandemic has exposed and exacerbated deep-seated inequalities, halting progress in multiple areas including gender equality and income convergence across the EU member states. A further three to five million people in the EU today are estimated to be ‘at risk of poverty,’ based on national thresholds benchmarked before the crisis.
The report highlights that effective recovery programs can reinforce progress on the green and digital transitions underway across the region. With the crisis continuing to unfold, government support schemes and the rollout of vaccines in a timely manner will remain essential to bolstering the resilience of firms, workers, and households. Given the longevity of the crisis and the impact on the most vulnerable, many governments have opted to extend the duration of support throughout 2021.
“A green, digital and inclusive transition is possible if economic policy is increasingly geared towards reforms and investment in education, health and sustainable infrastructure,” said Gallina A. Vincelette, Director for the European Union Countries at the World Bank.
With an output contraction of 6.1 percent in 2020, the COVID-19 pandemic has triggered the sharpest peacetime recession in the EU. Governments will need to ensure targeted and active labor market policies are in place to support an inclusive recovery. The report highlights that special attention should be given to already vulnerable workers such as youth, the self-employed, and those in informal employment. These groups are more likely to face employment adjustments during the crisis and may face longer spells of unemployment or periods outside the labor force.
Women have been disproportionately impacted by work disruptions during the pandemic, particularly in the sectors facing the worst effects of the crisis. This was also highlighted in the 2020 Regular Economic Report produced by the World Bank, which found that at least one in five women will face difficulty returning to work compared to one in ten men. It has been harder for women to resume work due to the sectors and occupations that they are working in and because of the additional care burdens that have fallen disproportionately on their shoulders – a manifestation of increasing inequities in home environments.
“As recovery takes hold, it will be important for carefully targeted and coordinated policy support to continue to mitigate the impact of the crisis, with measures increasingly targeted towards vulnerable households and viable firms. Policy makers will also need to strike a balance between helping those that need it most, while enhancing the productivity of the economy and keeping debt at manageable levels,” added Vincelette.
World Bank’s Regional Action in Europe and Central Asia
To date, the World Bank has committed more than $1.7 billion to help emerging economies in Europe and Central Asia mitigate the impacts of COVID-19. Since April 2020, around $866 million has been approved through new emergency response (MPA/Vaccines) projects. In addition, up to $904 million is being reallocated, used, or made available from existing projects and lending, including additional financing, to help countries with their COVID-19 response.
The World Bank’s Global Economic Prospects suggests that growth will be strong but uneven in 2021. The global economy is set to expand 5.6 percent—its strongest post-recession pace in 80 years. The recovery largely reflects sharp rebounds in some major economies.
COVAX and World Bank to Accelerate Vaccine Access for Developing Countries
COVAX and the World Bank will accelerate COVID-19 vaccine supply for developing countries through a new financing mechanism that builds on Gavi’s newly designed AMC cost-sharing arrangement. This allows AMC countries to purchase doses beyond the fully donor-subsidized doses they are already receiving from COVAX.
COVAX will now be able to make advance purchases from vaccine manufacturers based on aggregated demand across countries, using financing from the World Bank and other multilateral development banks. Participating developing countries will have greater visibility of available vaccines, quantities available, and future delivery schedules, enabling them to secure doses earlier, and prepare and implement vaccination plans more effectively.
“This important and timely financing mechanism, made possible now by the World Bank and Gavi teaming up on the AMC cost-sharing arrangement, will allow COVAX to unlock additional doses for low- and middle-income countries,” said Dr. Seth Berkley, CEO, Gavi, the Vaccine Alliance. “As we move beyond initial targets and work to support countries’ efforts to protect increasingly large portions of their populations, World Bank financing will help us advance further towards our goal of bringing COVID-19 under control.”
The scalable mechanism brings together COVAX’s ability to negotiate advance purchase agreements with vaccine manufacturers with the World Bank’s ability to provide predictable financing to countries for vaccine purchase, deployment and broader health systems investments. The new mechanism will mitigate risks and uncertainties in country demand and financing ability.
“Accessing vaccines remains the single greatest challenge that developing countries face in protecting their people from the health, social, and economic impacts of the COVID-19 pandemic,” said World Bank Group President David Malpass. “This mechanism will enable new supplies and allow countries to speed up the purchase of vaccines. It will also provide transparency about vaccine availability, prices, and delivery schedules. This is crucial information as governments implement their vaccination plans.”
Countries with approved World Bank vaccine projects that confirm the purchase of additional doses through COVAX will agree with COVAX on the number of doses of a specific vaccine as well as related windows of delivery. On receiving a request from the country, the World Bank will provide COVAX a payment confirmation, allowing COVAX to make advance purchases of large amounts of vaccine doses with manufacturers at competitive prices.
Under the cost-sharing arrangement for AMC countries (92 low- and middle-income countries), COVAX plans to make available up to 430 million additional doses, or enough to fully vaccinate 250 million people, for delivery between late 2021 and mid-2022. There will be several supply offerings where countries will have the opportunity to select and commit to procuring specific vaccines that align with their preferences.
COVAX is co-led by the Coalition for Epidemic Preparedness Innovations (CEPI), Gavi, the Vaccine Alliance and the World Health Organization (WHO). The World Bank and COVAX will work in partnership with UNICEF and the PAHO Revolving Fund as key implementing partners to ensure safe vaccine delivery and supply of materials such as syringes, safety boxes and other items essential for vaccination campaigns.
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