A report with the countries which investors should and should not avoid was released earlier today by World Bank, leaving the Greek side with a sense of discomfiture, as the country was named as the worst for investments in Europe. The “Doing Business” report is the 12th in a series of annual reports measuring the regulations that enhance business activity and those that constrain it. It presents quantitative indicators on business regulations and the protection of property rights that can be compared across 189 economies – from Afghanistan to Zimbabwe – and over time.
As the Economist underlined, the report’s most interesting data – on the time it takes to settle a dispute or wind up a company – sheds light on the lacklustre business investment in Europe’s periphery since the financial crisis. Countries where it is quick and easy to enforce contracts or wrap up failing firms are usually more attractive to investors than places with lethargic legal systems. In Greece and Slovenia, hit hard by the financial crisis, it takes much longer than countries such as France and Germany, whose economies have generally performed better.
According to the report, the situation in Greece was worsen over the last few years, as it now takes more than four years to enforce a contract, up around 20 months from 2010. The only bright spot is that there may be a lot more business for Greek lawyers in the near future.
Greece is ranked 61st out of 189 countries at ease of doing business, 31st at enforcing a contract, 29th at resolving insolvency, 29th at trading across borders as well as registering property. On the flip side, it is ranked 20th in starting a business, ranking higher than Luxemburg or Switzerland.
The list was once again lead by Singapore, while Eritrea remains stuck in last place. At the same time, Ukraine, which is in the middle of a conflict since last March with Russian-backed separatists, leapt up the rankings, partly because some of the data capturing improved administrative practices was collected before hostilities flared.