Russia made the most progress among the biggest emerging economies in implementing policies to improve its business environment, according to an annual World Bank study.
Russia ranked 92th of 189 countries, between Barbados and Serbia, in the Washington-based lender’s 2014 Doing Business Report. The 20-place jump from 112th in last year’s report was the biggest gain among the BRICS nations, which also comprise Brazil, China, India and South Africa.
President Vladimir Putin, who is facing the weakest economy since 2009, ordered the government to boost Russia’s standing in the ranking to 20th by 2018 as part of a long-term growth plan announced hours after his inauguration to a third term in May last year. The Economy Ministry, which has cut growth forecasts twice this year, projects expansion at 1.8 percent in 2013.
“All these formal improvements don’t reflect the economic reality adequately,” Natalia Orlova, chief economist at Moscow-based Alfa Bank, Russia’s biggest non-state lender, said by phone today. “The economic mood of businesses has worsened.”
Improvements in business regulation haven’t been accompanied by an acceleration in economic growth, she said.
Gross domestic product expanded 1.2 percent in the second quarter from a year earlier, the slowest pace since it pulled out of a 2009 recession. Stagnation continued in the third quarter, Deputy Economy Minister Andrey Klepach told reporters Oct. 25.
The world’s biggest energy exporter made cross-border trade easier by implementing an electronic system for submitting export and import documents and by cutting the number of physical inspections, the World Bank said in its report.
Russia showed the most improvement globally in opening up access to electricity, according to the report. Russia reduced the time needed to get a new connection to the power grid by more than 40 percent and cut the cost of doing so by almost 80 percent, the World Bank said.
The process of dealing with construction permits was improved by eliminating some requirements for project approval and reducing the time needed to 297 days from 344 days last year. That compares with 26 days in Singapore, which led the Doing Business ranking.
“Improving the investment climate is a top policy priority for the Russian authorities,” Augusto Lopez-Claros, director of Global Indicators and Analysis at World Bank, said in a statement accompanying the report. “The local entrepreneurs are seeing the results.”
South Africa, 41st in the report, fell two levels, as did India, which ranked 134th. China dropped five places to 96th. India rose 14 levels to 116th.
The study, published together with the International Finance Corp., tracked indicators such as the time it takes to start a business, submit tax returns and export or import goods, measured from June 2012 to June 2013.