The World Bank has released its 2014 Ease of Doing Business rankings. Russia was among the most improved economies 2012-13 (moving up nineteen positions to 92nd from 111th last year) and was one of the top-three countries as far as the scope of reforms was concerned.
The biggest progress was in the ‘getting electricity’ category, where Russia surged from 188th (last but one) to 117th, reflecting faster (162 vs. 281 days) and cheaper (USD 37,000 vs. USD 164,000) procedures. There was also a marked improvement in the ‘registering property’ category: up from 46th to 17th.
On the negative side, Russia edged down slightly in the ‘getting credit’, ‘protecting investors’, and ‘resolving insolvency’ components.
For the first time since 2008, Russia managed to hit the top hundred of the World Bank’s Doing Business rankings. Encouragingly, Russia improved the most in 2012/13 (the period when the results are tracked by a Doing Business team), along with Ukraine and Rwanda, surpassing MinEconomy’s interim target (100th).
Such results could be attributed to the government's efforts in implementing the roadmaps designed by ASI to improve investment climate. This is crucial for boosting the economy's investment intensity (the investment to GDP ratio from 20% at present to 25% in 2015 and 27% in 2018), which is essential for buttressing medium-term growth potential.
However, while the 92th position is a welcome development and positive sentiment wise, if the 50th position coveted for 2015 (and 20th for 2018) are to be attained, the pace of the reforms will have to accelerate in coming years – especially given active improvement in other countries. While there is still some scope to improve rankings by cutting red tape (particularly as regards to dealing with construction permits), looking forward, the cornerstone might be better corporate governance and more efficient enforcement of the law.