The Malta Independent 21 November 2018, Wednesday

TMID Editorial: World Bank Ease of Doing Business rankings - Is Malta’s competitiveness stagnating?

Thursday, 1 November 2018, 10:53 Last update: about 20 days ago

Today's front page story which reports that Malta is the most difficult country in the whole of the European Union in which to do business does not make for pretty reading.

This comes as Malta is in the throes of the yearly debates over a budget cooked up by a government that prides itself on its pro-business attitude.

The World Bank, however, has once again labelled Malta as not only the least business-friendly country in the EU, but it also placed Malta in a global 84th place on a global level in terms of its business friendliness.

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The main sore points about doing business in Malta, according to the World Bank's authoritative study, remain in the areas of registering property, but on the other hand Malta performed best in terms of construction.  This will come as no surprise to those who argue the economy is being artificially buttressed by the construction industry.

Not only are the findings somewhat more than concerning from the point of view of local businesses, but the authoritative annual report is also used by countless corporations and business when taking the very delicate decision about expanding overseas.

The Ease of Doing Business report sheds light on how easy or difficult it is for a local entrepreneur to open and run a business when complying with relevant regulations. It measures and tracks changes in regulations affecting areas in the life cycle of a business and out of the economies of 190 countries analysed by the World Bank in terms of the ease of doing business in them, Malta is ranked rather dismally. Greece, in a better 72nd, was the second-most difficult place in which to do business in Europe. Denmark, in global third place, was the EU's easiest.

There are myriad accounts from businesses about such difficulties which cannot be denied, nor can the government deny that such hurdles exist.  Just ask anyone who has applied for credit or for any of the necessities for opening and running a business.

In fact, since 2016 Malta made some improvements in the areas of starting a business and of getting credit.  In terms of the red tape involved in starting a business, the World Bank had observed in past editions how Malta made starting a business easier by offering automatic registration with the Inland Revenue Department following the receipt of the company registration number.  As for access to credit, the World Bank has in the past pointed out that Malta improved access to credit information by launching a new credit registry.

There were no such positive accolades this year, merely that construction has become easier, which leads to questions about where, exactly, is the economy going and whether the end destination is really a dead end.

As such - and although its rankings have not improved very much over the last year, with no movement in terms of its EU-wide ranking - the government appears to be taking some tangible action.

Much more action along such line, however, will be needed if Malta's competitiveness levels are to compete with its main competitors - its EU counterparts.


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