NZ ranks top in ease of doing business
NEW Zealand continues to set the bar in terms of ease of doing business, but we still have some way to go to improve our international competitiveness, according to recently released global business rankings.
New Zealand has again grabbed top spot in the latest World Bank’s rankings of ease of doing business, relegating Singapore to second place for the fourth year in succession.
Hong Kong, Denmark and Korea rounded out the top five of 190 global economies included in the latest World Bank Doing Business 2020 report.
New Zealand scores top in several business regulatory areas, in terms of the amount of time and cost to start a business, as well as accessibility to credit.
World Bank group president David Malpass said on a global basis, developing economies were catching up in ease of doing business, but the gap ‘‘remains wide’’.
‘‘An entrepreneur in a lowincome economy typically spends around 50% of the country’s per capita income to launch a company, compared with just 4.2% for an entrepreneur in a highincome economy.’’
It also takes nearly six times as long on average to start a business in the economies ranked in the bottom 50 as in the top 20, he said.
The report notes that economies that score well in Doing Business tend to benefit from higher levels of entrepreneurial activity, providing better employment opportunities, higher government tax levels and improved personal incomes.
However, New Zealand comes in well down the list — at 19th (2018: 18th) of 141 countries — in the World Economic Forum’s (WEF) latest Global Competitiveness Report.
The report, considered a litmus paper of global drivers of productivity and longterm economic prospects, lists Singapore as the world’s most competitive economy in 2019, overtaking the US which falls to second place, Hong Kong, the Netherlands and Switzerland.
The WEF report uses 12 key indicators as measures of economic productivity, in this case, institutions, infrastructure, ICT adoption, macroeconomic stability, health, skills, product market, labour market, the financial system, market size, business dynamism and innovation capability.
New Zealand, while scoring highly in areas such as macroeconomic stability (1st) and institutions (3rd), rates down the list on infrastructure (46th), innovation capacity (27th) and health (34th).
Otago Chamber of Commerce chief executive Dougal McGowan said the report showed areas requiring focus on a national and regional scale.
‘‘The macroeconomic score was positive, though was in line with 33 countries all at the same level. Of more concern, however, are our rankings across health, infrastructure and innovation capacity,’’ he said.
‘‘These have been priorities identified by past and current governments as being essential to the country’s future, yet we are slipping further behind in exactly those areas.’’
Otago Southland Employers’ Association CEO Virginia
Nicholls said the ‘‘modest’’ rankings drop was due to issues including property rights, the burden of government regulation, IP protection and ability to hire labour.
‘‘This index across our region highlights many strengths of the economy and business environment, but also underlines the requirement for more infrastructure investment and less unnecessary regulation.’’
She added that the tourism industry, for example, would like to see other ways to fund local government infrastructure for tourism.