Dubai Chamber brands WB report inaccurate

DUBAI — The Dubai Chamber of Commerce and Industry has branded as inaccurate a report by the World Bank Group ranking the UAE 68th on the ease of doing business out of 178 nations worldwide, saying that the country has a different business environment than many others.

By Jose Franco

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Published: Tue 15 Apr 2008, 9:46 AM

Last updated: Sun 5 Apr 2015, 11:39 AM

"The UAE is not a typical business environment and, therefore, the sample used in constructing the Index does not accurately reflect the true structure of the economy and the true ease of doing business in the UAE," Dubai Chamber said in the first subject of its Economic Bulletin for this month.

In the Gulf region, the UAE trailed Saudi Arabia, Kuwait and Oman in 'Ease of Doing Business Index 2008', a World Bank survey measuring the time involved in and the number of procedures required in establishing a business in a given country.

The survey also used as a yardstick the regulations affecting 10 stages of a business's lifecycle, including starting a business, dealing with licences, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.

Saudi Arabia made improvements on the ease of starting a business, getting credit and cross-border trading, according to Dubai Chamber's 'The Ease of Doing Business in the UAE', quoting the World Bank report.

Dubai Chamber said the report erred in using only Emirati citizens and Dubai residents in the sample for the UAE ranking, thus excluding some 80 per cent of the country's population and the differences within the other emirates. The report also ignored companies operating through free zones, whose tenants make up the bulk of foreign direct investments (FDI) in the UAE.

The two other factors that led to inaccuracies in the World Bank report are the exclusion of family-owned businesses and those engaged in trading. Dubai Chamber said that 75 per cent of the UAE businesses are into trading.

The World Bank report does not, therefore, represent the true structure of the UAE's business environment. "This limits the usefulness of the Index...as it does not provide a realistic indication of the ease of doing business to external investors," Dubai Chamber said.

It stressed, however, that the Index is useful for the UAE to improve on the efficiency of doing business and further encourage entrepreneurship. It said that policymakers may also use the Index to identify bottlenecks in the process of putting up a business.

Starting a business, getting credit, protecting investors, enforcing contracts and closing a business are the bottlenecks in the UAE, according to the Index. The country also lacks effective credit bureaus and is weak in the bankruptcy process, having low recovery rates from insolvent firms.

The Index also noted the UAE's requirement of a minimum paid-in capital in order to start a business, a policy absent in any member countries of the European Union and the Organisation for Economic Co-operation and Development. OECD is an organisation of 30 democratic countries adhering to a free market economy.

Dubai Chamber said that simplifying procedures and providing one-stop-shops and facilities online for entrepreneurs would help the UAE improve its ranking.

Singapore topped the Index for the second consecutive year, followed by New Zealand, the US, Hong Kong (China) and Denmark.



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