Georgia's Position in Doing Business 2020

In the Doing Business (DB) 2020 report of the World Bank (WB) Georgia took 7th place out of 190 countries, raking among the world’s top countries. Although, compared to the same report of last year, its score has worsened by one position, the overall score has improved.

In DB 2020, Georgia has 83.7 points while in the 2019 report it had 83.28. In the ranking, Georgia is ahead of such countries as Great Britain, Norway, Sweden, Germany, Lithuania and others.

Doing Business covers 12 areas of business regulation. Ten of these areas (starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency) are included in the Ease of Doing Business score and Ease of Doing Business ranking. DB also measures regulation on employing workers and contracting with the government, which are not included in the Ease of Doing Business score or ranking.

Georgia's scores in each category are as follows:

1. Starting a business: 2

2. Dealing with construction permits: 21

3. Getting electricity: 42

4. Registering property: 5

5. Getting credit: 15

6. Protecting minority investors: 7

7. Paying taxes: 14

8. Trading across borders: 45

9. Enforcing contracts: 12

10. Resolving insolvency: 64

DB 2020 reads that it takes only one day in Georgia to pay a company registration fee, register the company with the Entrepreneurial Register, obtain an identification number and certificate of state and tax registration, and register for VAT (value added tax).

Economic expert Giorgi Tsutskiridze says that despite the fact Georgia’s position has worsened by one point, none of its indicators in any category have reduced.

“Georgia has improved scores in the top 10 indicators in every direction, and it is ranked in the top ten among 190 countries in the world in terms of three main indicators that largely determine investment attractiveness,” he said.

The expert also noted that in October of this year, three important ratings were published in which Georgia's economic performance was positively assessed: World Bank released another study of World Governance Indicators, which ranked Georgia among the best states in Europe in terms of corruption control. Then the leading rating company Standard & Poor’s (S&P) upgraded Georgia’s sovereign credit ratings to BB, with a stable outlook. The continuation of this positive trend is an improved position in the World Bank's Doing Business 2020 ranking, according to which, Georgia is still the leader among the 23 countries of Europe and Central Asia.

Tsutskiridze said advancement in the World Bank's rating indicators confirm international estimates that Georgia is one of the most successful reformers in the world.

"At the same time, the ongoing systemic reforms in the country give good prospects that the international position of the country will increase further in the coming years, which will positively impact on increased investment flows, employment and economic growth as a whole," the expert said.

Beka Liluashvili, the Prime Minister's Adviser on Economic Affairs, assessed Georgia's position in Doing Business, noting that this is an indicator that the business environment in the country has been developing steadily in recent years. He said that the government wants to improve Georgia’s position in the DB rating.

“Any decision regarding the business environment and its regulation is important to establish a consensus between the state, the business and the employee's human rights defender, which will positively impact the business environment overall,” he explained.

Meanwhile, BDO Managing Partner Zurab Lalazashvili believes that Georgia’s positions in Doing Business increases investors’ interest towards Georgia, but specific investment decisions depend on other factors. According to him, the rating is important, though it is limited and only responds to specific tasks.

“It does not include important factors such as availability of jobs in the labor market, a stable and predictable environment, efficiency of the court, as well as issues regarding the education system,” he added.

Lalazashvili noted that it is very important for Georgia to be in the top ten, but adds that it should not only be focusing on a specific rating, but on building a sustainable economy in general.

Earlier, Natia Turnava, the Minister of Economy and Sustainable Development, noted Georgia had reached a historic high in the DB rating.

“Georgia is in top position among 23 countries of Europe and Central Asia. The rating shows that the country continues to make progress and improve its scores,” she added.

Doing Business 2020 is the 17th in a series of annual studies measuring the regulations that enhance business activity and those that constrain it. The rating captures 294 regulatory reforms implemented between May 2018 and May 2019 and shows that worldwide, 115 economies made it easier to do business.

By Tea Mariamidze

Image source: allbusines.com