Employers welcome World Bank, Doing Business efforts to support growth, development

The International Organisation of Employers (IOE) welcomed the launch of the 2008 Doing Business report on behalf of employers worldwide at an event organized in New York by IOE member the United States Council for International Business.

“Employers congratulate the World Bank and the Doing Business team for creating a reform movement that has already begun to increase development and improve people’s lives,” said IOE President Abraham Katz. “The Doing Business reports identify the areas where reform is needed and – most importantly – provide the incentives for governments to act.”

Employers in many countries struggle under inefficient business regulations that create real barriers to growth and job creation and thus hurt economic development.

Perversely, the worst business regulations can be found in many of the countries with the lowest levels of development and the worst conditions for their people. The power of the Doing Business report is that it uses objective indicators to compare how easy or hard countries make it to do business by showing, for example, that it takes 300 days to register a business in one country, while it takes a mere 15 minutes in another.

As this year’s Doing Business report demonstrates it is often vulnerable groups such as women which are affected the most by inefficient regulations.

The Doing Business report does not promote deregulation but rather more efficient regulation. In many areas, the World Bank is actually calling for additional regulations where none exist, including registering property, protecting investors and enforcing contracts.

This is also true for the indicators related to employment, where Doing Business measures the flexibility of employment regulations and does not call for wholesale deregulation, as some have claimed. Indeed, the Doing Business indicators on employment are fully consistent with the ILO’s fundamental labour principles and rights at work and cover issues addressed in only four of the ILO’s 187 labour conventions.

For example, Georgia, the top rated country on the Ease of Employing Workers, has ratified all eight ILO conventions that constitute fundamental worker rights. While the World Bank rightly notes that every government must seek to balance labour market flexibility and job security, it also notes that many countries with slow growth have enacted very rigid labour laws.

“The World Bank should be commended for its work in the Doing Business programme,” says IOE President Abraham Katz. “The countries with the greatest need for growth and development have erected huge barriers for private sector growth, and the Doing Business reports have played a critical role in pushing for the reforms that are needed to remove these barriers.”

“It is exactly these kinds of reforms that will lead to increased job growth and higher incomes in many countries in desperate need of both,” added Katz.