Armenia climbs to 35th in 2016 Doing Business Report

Armenia is among the top performers in Europe and Central Asia (ECA) – as it ranks 35 out of 189 economies compared to 38 in the previous year in the 2016 Doing Business Report released by the World Bank.

Armenia’s neighbors in the region are ranked as follows: Georgia – 24th, Turkey – 55th, Azerbaijan – 63rd, Iran – 118th.

Armenia’s partners in the Eurasian Economic Union Russia and Belarus are placed 51st and 44th respectively, Kazakhstan is 41st, Kyrgyzstan is 67th.

Armenia’s improvement in the ranking is largely attributable to the three reforms it implemented in the areas of Dealing with Construction Permits (DwCP), Trading across Borders and Enforcing Contracts

Armenia is among the 26 economies at the global level that implemented 3 or more reforms. That’s only 14% of economies worldwide

Armenia made a jump of nearly two points in its DTF score from DB15 to DB16. To put things in perspective, the average improvement in DTF score in ECA economies was less than 1.

Armenia made dealing with construction permits easier by exempting lower risk projects from requirements for approval of the architectural drawings by an independent expert and for technical supervision of the construction.

Armenia reduced the time and cost for documentary and border compliance for trade with the Russian Federation by joining the Eurasian Economic Union.

As a result, the time for import border compliance was reduced from approximately 50 hours to 3 hours. The ranking for Armenia on the indicator has also improved from 58 to 29.

Armenia made enforcing contracts easier through a new law requiring that cases be assigned to judges randomly, and through a fully automated system, in courts throughout the country.

Armenia sets some of best practices worldwide in Starting a Business (rank of 5 out of 189 economies), and registering property (14).

On Starting a Business, it takes only 3 days for an entrepreneur in Yerevan to incorporate – the same time as in Denmark.

On Registering Property, it takes only 7 days to register a property transfer compared to 48 days on average at the global level

There are areas for improvement in Armenia, notably in the areas of Getting Electricity (rank of 99) and Resolving Insolvency (rank of 71).

On Getting Electricity, for instance, it takes 180 days to obtain a new connection. In contrast, it takes an average of 119 days in ECA economies.

This year’s Doing Business report completes a two-year effort to expand benchmarks that measure the quality of regulation, as well as efficiency of the business regulatory framework, in order to better capture realities on the ground. For example, in addition to the steps, time and cost to build a warehouse, the Dealing with Construction Permits indicator, through its Building Quality Control index, assesses whether safety mechanisms are in place. In this area, Armenia underperforms compared to the region when it comes to good practices in construction regulation, quality controls and safety mechanisms.

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