Iran’s business environment improved in the fourth quarter of the last fiscal year (Dec. 21, 2020-March 20), Iran Chamber of Commerce, Industries, Mines and Agriculture reported.
Iran’s National Business Environment Index stood at 5.80 in Q4 of last fiscal year to register a 0.13 percentage point or 2.19% decline compared with the preceding quarter and a 0.25 percentage point or 4.13% decrease compared with the corresponding quarter of the year before, the chamber said in a report published on its website.
The index calculated by ICCIMA measures business friendliness of Iran’s economy, with 10 indicating the worst grade. In other words, the decline in the index is indicative of an improving business environment.
Iran’s National Business Environment Index stood at 5.93 in Q3 of the last fiscal year (Sept. 22-Dec. 20, 2020) and 6.05 in Q4 of fiscal 2019-20.
“Unpredictability and fluctuations of the prices of raw materials and products”, “uncertainties about policies, rules, regulations and business formalities” and “difficulties associated with getting credit from banks” were the most undesirable factors affecting Iran’s business environment during the period under review, according to the findings of the 18th round of this report.
The chamber also measures the index for each of the 31 Iranian provinces. The report names Kurdestan, Kerman and Chaharmahal-Bakhtiari as the provinces with the least favorable business environments and Semnan, Markazi and East Azarbaijan as the best.
The average real production capacity of economic enterprises participating in this survey stood at 42.72% in Q4, indicating an increase of two percentage points compared with the preceding quarter.
The impact of Covid-19 disease on business environment in Q4 was measured to be 6.3 points.
The agriculture sector had the worst business environment in Q4 with 5.92 points followed by services (5.87) and industry (5.60).
As for 21 fields of business, the worst three business environments were posted for “other activities in services”, “professional, scientific and technical activities” and “administrative and support services” and the top tier included “finance and insurance”, “mining” and “industrial production”.
Enterprises with 200 and more employees had the best business environment with the score of 5.54 while those with six to 10 employees had the worst business environment with the score of 5.84.
Businesses operating for six to 10 years indicated the worst business environment (5.87) while those operating for less than two years had the best business environment (5.49).
The ICCIMA index is fashioned after World Bank’s “Ease of Doing Business” index, a valued tool for countries seeking to measure costs of doing business.
In August 2020, the World Bank Group issued a statement noting that irregularities were reported regarding changes to the data used in the report. The World Bank said it had found some data irregularities in the Doing Business 2018 and Doing Business 2020 reports.
“A number of irregularities have been reported regarding changes to the data in the Doing Business 2018 and Doing Business 2020 reports, published in October 2017 and 2019. The changes in the data were inconsistent with the Doing Business methodology," it said.
The Doing Business report 2020, published in October 2019, captured 294 regulatory reforms implemented between May 2018 and May 2019.
A Wall Street Journal report stated that the data of China, Azerbaijan, the UAE and Saudi Arabia have been inappropriately altered.
The World Bank added that the board of executive directors have been briefed on the situation, as have the authorities of the countries that were affected by the data irregularities. The publication of the Doing Business report will be paused until assessments are conducted by the bank.
According to Doing Business 2020 published in October 2019, Iran’s ease of doing business ranking improved by one place to stand at 127th among 190 world economies.
The report shows the country’s distance to frontier score saw a decline of 0.1 percentage point, from last year’s 58.6 to 58.5 in the new report.
New Zealand topped the list of 190 countries in the ease of doing business with a score of 86.8, followed by Singapore with 86.2 and Hong Kong with 85.3, while Somalia was in last place with a score of 20.
