Russian Competitiveness Trails Pakistan, Palau, World Bank Says
Russia, which President Vladimir Putin wants to vault into the ranks of the world’s five largest economies, was rated in the bottom half of the World Bank’s annual competitiveness study, lagging behind Pakistan and Palau.
Russia placed 112th of 185 countries in the Washington- based lender’s 2013 Doing Business report. Its ranking improved from 120 last year, besting Brazil and India at 130 and 132, respectively. The study, now in its 10th year and published together with the International Finance Corp., tracks indicators such as the time it takes to start a business, submit tax returns and export or import goods.
The world’s biggest energy exporter held the penultimate 184th rank in the “getting electricity” component and its construction permits took 344 days to complete, compared with 26 days in Singapore, placing it at 178th, according to the World Bank. Russia jumped 41 notches in “paying taxes” and retreated on “protecting investors” and “getting credit.”
Putin, who returned to the Kremlin for his third term in May, wants to raise Russia’s standing in the survey to 20th in 2018 and boost investment in the economy to 27 percent of gross domestic product by 2018 from 21 percent last year. In the run- up to the March 4 presidential vote, he established the Agency for Strategic Initiatives to prepare roadmaps for improving regulations.
A better business climate is needed to win an upgrade of Russia’s credit rating, Standard & Poor’s said last week. Russia is rated BBB at S&P, the second-lowest investment grade and level with Bulgaria and Lithuania.
“Russia eased the administrative burden of taxes for firms by simplifying compliance procedures for value-added tax and by promoting the use of tax accounting software and electronic service,” the World Bank said.
Over the past year, the number of required tax payments was cut from nine to seven annually in Russia, which also reduced procedures and time necessary to start a business, according to the report.
“Other countries are moving faster,” Andrey Nikitin, general director of the Agency for Strategic Initiatives, said in an e-mailed comment. “We must be uncompromising in our attitude to ourselves.”
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