Pace of business climate reforms slows in East Asia and Pacific region

The number of reforms in the region fell by ten over the 12-month period to May 1 and reforms were implemented in fewer than half of its economies (12 out of 25). Even so, five East Asia and Pacific economies are among the top 25 global performers, including Singapore (2nd), Hong Kong SAR, China (3rd); Malaysia (12th); Taiwan, China (15th); and Thailand (21st). China is among the top 10 improvers for a second consecutive year.

“The reform impetus in the East Asia and Pacific region continues, with significant improvements made by some economies, such as China,” said Rita Ramalho, Senior Manager of the World Bank’s Global Indicators Group, which produces the study. “Sustained progress is key to improving the domestic business climate and enabling private enterprises.”

With eight reforms, China improved regulation in most areas measured by Doing Business and implemented the most reforms in the region. Beijing simplified requirements for low-risk construction and streamlined processes to obtain water and drainage connections, cutting the wait for all required permits by 44 days. Construction is also now safer due to stricter qualification requirements for professionals in charge of technical inspections.

Authorities improved the application process for connecting a new warehouse to the electrical grid and made electricity fees more transparent. China helped small and medium-sized enterprises access international markets by implementing advance cargo declaration, upgrading port infrastructure, optimizing customs administration, and publishing fee schedules.

Indonesia and Myanmar carried out five reforms each – most involving the use of information and communication technologies. For instance, Indonesia introduced an online filing and payment system for major taxes and an electronic case management system for judges. Further, authorities enhanced online processing of export customs declarations, reducing border compliance time for exporting by seven hours. 

Myanmar strengthened construction quality control, improved water and sanitation infrastructure and made the building permitting process more efficient, advancing the country to 46th place on the dealing with construction permits indicator. In addition, Myanmar started publishing performance measurement reports to ease contract enforcement and introduced an online platform for company registration.

With three reforms in the past year, the Philippines continued its reform momentum. Among other changes, the Philippines eliminated the minimum capital requirement for domestic firms. The country also streamlined the process for obtaining an occupancy certificate.

Brunei Darussalam, Lao People’s Democratic Republic, Papua New Guinea and Vietnam each carried out two reforms. Brunei Darussalam started publishing reports measuring the performance of the Bandar Seri Begawan Intermediate Court.

Among other initiatives, Lao PDR made getting electricity easier by deploying an automated Supervisory Control and Data Acquisition (SCADA) system for outage monitoring and service restoration. Vietnam upgraded the information technology infrastructure used by the General Department of Taxation, making the process of paying taxes easier for entrepreneurs.

Overall, the region’s economies focused reform efforts on improvements in the areas of dealing with construction permits and starting a business with seven and five reforms, respectively.

The region’s economies perform well in the areas of getting credit, getting electricity, and dealing with construction permits. Connecting a newly built warehouse to the electrical grid takes 63 days in the region, almost 12 days fewer than the average among OECD high-income economies. Likewise, getting a construction permit in the region takes 20 days fewer than among OECD high-income economies. 

At the same time, the region still underperforms in several areas, such as contract enforcement, where there is need for more widespread adoption of international best practices including alternative dispute resolution systems and the creation of specialized commercial courts.

Resolving a commercial dispute through a local first-instance court costs on average 47.2% of the claim value, more than twice the average of 21.5% among OECD high-income economies.