World Bank to review Doing Business reports for past 4 years after admitting flaws

The World Bank Doing Business Report came under scrutiny over the weekend following claims and admission by the bank’s top officials of compromised methodology. The bank’s chief economist, Paul Romer, on Friday admitted that the annual publication had often revised methodologies which could have been unfair and misleading. The changes in methodology could have impacted on the performance of some countries negatively, casting doubts on the report’s credibility. Romer said that the Bank intends to correct and republish the rankings for the past four years. However, in a statement, the Bank said that it is their intention to treat all countries equally in their research and the annual rankings are not designed with a single country in mind. “We treat all countries equally in our research, and the Doing Business indicators and methodology are designed with no single country in mind so that the overall business climate can be improved,” the statement read in part. The Bank maintained that, in the 15 years of the report, there had been a number of internal and external reviews all intended to refine and strengthen its methodology. The annual report focuses on ten main areas that affect business including, the ease of starting a business, obtaining construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency. Rwanda has previously raised concerns with the report over what the government termed as ‘changing the goal post after a match’. In such instances, the methodology had been adjusted or changed without adequate prior communication. The report has been used as an investment promotion reference by multiple countries as they seek to attract foreign direct investment and governments keen to identify weaknesses within their policies. Rwandan stakeholders, including government and private sector, say that the report has been instrumental in guiding doing business reforms. Rwanda Development Board chief executive Clare Akamanzi told The New Times yesterday that, despite its limitations in coverage of business environments, it has been instrumental in influencing reforms. “Rwanda has often found the report important in guiding our successful business environment reforms. We have also been cognisant of its limitations as it doesn’t cover everything needed in a business environment. Nonetheless, what it covers has been immensely insightful,”Akamanzi said. However, she said that the allegations that the methodology was at times compromised are serious and call for investigation, clarification and explanation. “Whether the methodology was influenced is a serious allegation for the World Bank to investigate, clarify and explain,” she said. Members of the local private sector also say that, over the years, the report has been instrumental in identifying aspects that require improvement to better the business environment. The Private Sector Federation Chairperson, Benjamin Gasamagera, told The New Times that, despite the controversy, the report remains critical in improving the local business environment. Cautioning against discrediting the report entirely over mild controversies, Gasamagera said it remains an important reference point among the business community and to governments. He said that the annual releases have also played a significant role in showcasing advancements by Rwanda in improving the business environment which has, in turn, driven up investments. “Such reports and publications cannot always please everybody. However, you cannot take away the fact that the report has been important in improving business conditions. It has been key in identifying some areas, where the business community was facing difficulties for the government to address,” Gasamagera said. Because of its role in advocating for necessary areas to roll out policy changes, he said, the publication has become a common reference point for business people across the world. “Though there might be a few areas where not everyone will agree with the report, it has been a basis for progress over the years,” Gasamagera added. In last year’s report, released in October, Rwanda was ranked second in Africa after Mauritius and first in the East African Community region in ease of doing business. Globally, Rwanda was ranked 41 out of 190 countries. Rwanda is aiming at rolling out 15 new doing business reforms across various aspects before May this year. The new reforms cover aspects such as getting a construction permit, getting electricity, and paying taxes, among others. editorial@newtimes.co.rw

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World Bank to review Doing Business reports for past 4 years after admitting flaws