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The Doing Business rating is not the cure-all for the Russian economy. Actual achievement of desired results is the key

This year’s Gaidar Forum program included a plenary discussion entitled “Doing business in Russia 2.0”, which focused on the improvement of conditions for doing business in Russia as well as the significance of the World Bank’s Doing Business rating for the Russian economy.

It was remarked that the World Bank’s rating was an instrument for measuring conditions for doing business in various countries, i.e. it had an established methodology and assessment system aiming to reflect reality with maximum accuracy. As any other system, the rating has advantages and defects. According to Augusto Lopez Claros, the Director of Global Indicators and Analysis at the World Bank Group, all ratings are relative. “One can try to improve the quality of the business environment using rating criteria, but achieve quite different results. Because other countries will have prevailed in something else”, commented Augusto Lopez Claros. Speaking about Russia’s rating position, Mr. Lopez Claros emphasized that it is showing good results. “Authorities need to keep analyzing advanced experiences of the world’s most competitive economies and try to implement best practices. Simplification of formal procedures through the introduction of the “one stop shop” principle and reduction of the tax burden can gradually change relations with business”, he says.

Augusto Lopez Claros noted that the rating needed to be reformed, specifically, that the possibility of “country coverage expansion” was being considered. The level of development can be cardinally different among regions, but only one is evaluated and this affects the position of the entire country. Also, following the initiative of one of the countries, the rating will now asses power supply reliability, other than just accessibility.

In his turn, Russian Federation’s Deputy Minister of Economic Development Sergei Beliakov remarked that the Doing Business rating not only had business and reputational significance for Russia, but also served as a motivator in the legislative sphere. “When proposing legislation, the state evaluates and measures possible effects together with business. Today, business is an indicator of the state’s efficiency. We established the Agency for Strategic Initiatives, created the Entrepreneurial Initiative platform, we're developing roadmaps that are administered not by state officials, but by entrepreneurs”, said Mr. Beliakov.

It was emphasized that business was not guided by ratings alone. Investment decisions are based primarily on opportunities. “One should not become hostage to ratings. There will always be some sort of an economic race going on, and it is progress and results that are really important. Russia has a single development concept, its own set of rules based on a single strategy, so things are only starting for it”, commented Zoran Vuchinich, Coca-Cola President in Russia, the Ukraine and Belarus. 

Heads of regions shared their experiences of interacting with business. Kaluga Region’s Governor Anatoly Artamonov stressed the importance of formal processes centralization for acceleration of project implementation. “The region has established a system of development institutions that deal with specific business objectives – from consulting to infrastructural support”, he said.

 

 

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