Economy, Domestic Economy

Improving Business Environment Key to Economic Progress

Improving Business Environment Key to Economic ProgressImproving Business Environment Key to Economic Progress

In today’s globalized world, making trade between economies easier is becoming increasingly important. Excessive document requirements, burdensome customs procedures, inefficient port operations and inadequate infrastructure all lead to extra costs and delays for exporters and importers alike, stifling trade potential.

Multiple import and export procedure and documents are acting as a barrier to Iran’s trade with other countries. Although, over the past years, administrators have been trying to ease trade by removing unnecessary steps and speeding up the procedures through online application platforms, there are still multiple steps that make the whole process too complex and time taking.

Iran was ranked as the 148th economy in terms of ‘Ease of Trading Across Borders’ in the World Bank’s ranking of 189 countries in its report ‘Doing Business 2015, Going Beyond Efficiency’. Iran’s ranking stood at 155 last year, indicating 7 step improvements.

This indicator measures the time and cost (excluding tariffs and the time and cost of sea transport) associated with exporting and importing a standard shipment of goods by sea transport, as well as the number of documents necessary to complete the transaction.

According to the World Bank Group’s Doing Business Report, exporting a standard container of goods in Iran requires 7 documents, takes 25 days and costs $1,350. Importing the same container of goods requires 11 documents, takes 37 days and costs $1,555.

Adopting deregulatory measures in foreign trade and creating a financial discipline system in macroeconomics are some areas where President Hassan Rouhani’s administration has devoted particular attention to since assuming office in August 2013, in an attempt to improve trade relations between Iran and other countries in the region and the world over.

 Ease of Doing Business With Iran

Iran was ranked as the 130th economy in the ranking of 189 countries on the overall ease of doing business in the World Bank’s report. Iran’s ranking in 2014 stood at 132, indicating a slight improvement in the country’s regulatory improvement.

Doing Business is an annual report released by the World Bank, measuring the regulations that enhance business activity and those that constrain it. The first 10 countries in World Bank’s latest Doing Business ranking are; Singapore, New Zealand, Hong Kong, Denmark, South Korea, Norway, United States, Finland, England and Australia.

Doing Business provides an aggregate ranking on the ease of doing business based on indicator sets that measure and benchmark regulations applying to domestic small to medium-size businesses through their life cycle. Economies are ranked from 1 to 189 by the ease of doing business ranking.

Doing Business 2015 measures regulations affecting 10 areas of the life of a business, including: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures labor market regulation.

The ranking on the ease of doing business, and the underlying indicators, do not measure all aspects of the business environment that matter to firms and investors or that affect the competitiveness of the economy. Still, a high ranking does mean that the government has created a regulatory environment conducive to operating a business.