Press Release: Montenegro in Doing Business 2011 – the Most Extensive Reforms in the Region

The World Bank has published the Doing Business Report 2011 (Report on Ease of Doing Business), which comprises 183 economies. Out of 183 economies, 119 have implemented the total of 236 reforms, mainly implemented in the areas of starting a business, paying taxes, trading across borders and registering property. The highest number of reforms was implemented by the East European and Central Asia countries; however this number is significantly lower than the in previous years.

General picture of the number of implemented reforms is indicating that in the period June 2009 - May 2010, countries were not fully committed to reforms of business regulations. Lithuania has implemented the highest number of reforms – 5 in total, seven countries have implemented 4 reforms, 21 countries have implemented 3 reforms, 30 countries have implemented 2 reforms, 56 countries have implemented 1 reform, while 64 countries have failed to implement a single reform.

 

The Doing Business top 10 lists of countries has not significantly changed compared to last year's Doing Business Report, except the new ranking positions of Canada, Ireland and Norway from 7^th to 9th position. Singapore is still the leader on the list.

 

Out from the top 10 list of countries, 5 countries have failed to implement any reform, such as following: Singapore, United States of America (USA), Norway, Ireland and Australia. Hong Kong, Denmark, Canada and United Kingdom implemented two and New Zealand one reform.

 

The term "top 10 reformers" no longer exists, but it gives an overview of 10 countries that improved the most in reference to the Ease of  Doing Business, and the top list for this year includes Kazakhstan, Rwanda, Peru, Vietnam, Cape Verde, Tajikistan, Zambia, Hungary, Grenada and Brunei. Out from these 10 countries, only 3 have implemented 4 reforms such as the following: Kazakhstan, Peru and Hungary, while other countries have implemented 3 reforms.

 

The calculation of the Ease of Doing Business for this year, for the first time does not include the indicator of hiring workers, which resulted in ranking deterioration of many countries covered by this Report. The authors have explained that the intention behind this change was to improve the indicator, primarily in the area of the minimum level of protection of workers in accordance with Conventions of International Labor Organization (ILO).

 

As a pilot indicator 2011DB presented in its Annex the Getting connection to electricity. The indicator includes procedures, time and costs that the owner of a warehouse in the industrial zone which is the largest business center in the state and has 1,300 m2, to implement in order to gain access to the electricity grid. This indicator is not included in the calculation of a global scale.

 

Montenegro in Doing Business 2011 – the Most Extensive Reforms in the Region

 

Montenegro was ranked 66^th on the list of 183 countries, being among the top 70 countries in the world on the ease of doing business, unlike last year when it was ranked 71. According to the Report, Montenegro implemented 3 reforms, ranking it among 21 countries that have made most extensive reforms, and only 8 countries have implemented higher number of reforms than our country. Furthermore, Montenegro is also the only country in the region to implement three reforms, indicating that it succeeded in implementing the most extensive reforms in the region. Ranking of Montenegro is a correction to a downward position in relation to the Report of 2010, when it was ranked 65^th. Change in methodology, or the absence of the employment of workers indicator, based on which Montenegro had very good indicators, reflected the ranking of Montenegro in the Report.

 

Reforms were identified in 3 indicators: starting a business, paying taxes and trading across borders. In the area of starting a business Montenegro improved its ranking by 34 positions, and it was ranked 51^st. In this area, activities aimed at consolidation of registration of companies and issuance of the statistical number with the Central Registry of the Commercial Court and unified taxpayers and contributions registration with the Tax Administration. In the area of trading across borders, Montenegro improved its ranking from 47^th to 34^th place in this year's Report, mainly due to the abolition of the obligation to supply confirmation of payment of terminal fees on import and export goods. Montenegro has advanced improved its ranking in reference to the paying taxes, from 145^th to 139^th. The progress was achieved by abolishing monthly prepayment of corporate profit tax and reducing the contributions rate charged to employer.

 

Montenegro has improved its position with the indicator: registering property and getting credit. In the area of registering property, our country improved its ranking by 15 places than the last year, being ranked 116^th - one procedures less for registering property and shorter registration period. It has been estimated the increase in the volume of credit registry coverage, in terms of size of population covered by the register, thus it obtained the highest rating of regulations relating to the rights and obligations of contracting parties to the credit agreement, resulting in the improvement of the ranking by 11 positions, from 43^rd to 32^nd.

 

In the area of issuing construction permits, Montenegro was ranked 161, enforcing contracts 135, protecting investors 28 position.

 

Countries in the region were ranked in the following manner: Macedonia was ranked 38, Slovenia 42, Bulgaria 51, Romania 56, Albania 82, Croatia 84, Serbia 89, Bosnia and Herzegovina 110, and Kosovo 119.

 

PR UNIT

MINISTRY OF FINANCE