At a time when major reforms are happening across the Middle East, Bahrain has been placed among the top 10 most-improved economies in the world in the World Bank’s Doing Business 2020 report. Here’s everything you need to know about the Kingdom’s improved ranking.
What is the Doing Business 2020 report?
Launched in 2002 by the World Bank, the annual Doing Business report offers an insight into regulatory environments for businesses around the world. Using data from thousands of professionals, researchers assess 190 countries based on the number of economic programs and positive legislative changes in key areas before assigning a score to each. The index has been cited in thousands of academic papers, with related studies published in the world’s leading peer-reviewed academic journals.
How did Bahrain perform in the World Bank rankings?
Bahrain’s ranking increased 19 places to 43rd, driven by a comprehensive reform program making it easier to do business in nine of the 10 report areas – whether for startups like Rain or behemoths like Amazon Web Services. This ranking jump made Bahrain the 4th most improved economy in the world. Perhaps most impressively, the Kingdom also became the number one country for the number of business reforms established in 2019, with 15 reforms under its belt in this year alone.
What were the reasons behind Bahrain’s high ranking?
According to the World Bank, the Kingdom has implemented a comprehensive reform program, making it easier to do business in nine of the 10 areas of the Doing Business Report. Highlights included Bahrain’s landmark bankruptcy law , which offers firms the chance to file for reorganisation and protects creditors during an automatic stay in proceedings. Meanwhile, judges specifically praised the Kingdom’s introduction of dedicated venues for the resolution of commercial disputes and strong digitisation across industries, championing its investments in online business resources. In line with the tenets of Economic Vision 2030, connectivity to the wider region was highlighted as another of Bahrain’s strengths, with new scanners deployed at the King Fahd Causeway alongside differentiated lanes for border crossing. Bahrain’s full list of reforms in the year to May 1 2019 includes:
- Streamlining the process of construction permitting through a new online platform (“Benayat”) and by delegating the application review process to licensed engineering firms.
- Investing in digitisation and transparency of information and improved electrical grid inspection and installation processes.
- Streamlining the property registration administrative process and improved the quality of the land administration system.
- Strengthening access to credit by giving secured creditors absolute priority during insolvency proceedings. During reorganisation proceedings, creditors are also now subject to an automatic stay that is limited in time with clear grounds for relief.
- Implementing a platform for electronic payment of social insurance contributions.
- Strengthening the protections of minority investors by clarifying ownership and control structures.
- Facilitating export of goods by deploying new scanners.
- Creating a specialised commercial court, establishing time standards for key court events and introducing electronic service of summonses.
- Introducing a reorganisation procedure, allowed debtors to initiate reorganisation, adding provisions on post-commencement financing and improving voting arrangements.
How are these reforms affecting Bahrain’s economy?
Although the ranking is an achievement in its own right, it is also a reflection of many years of hard work that has ultimately contributed to substantial economic growth. Foreign direct investment (FDI) grew to $1515 million in 2018 – at a substantial increase from $65 million in 2015. Adding to that, in 2018 Bahrain recorded an annual real GDP growth rate of 2.2 per cent as well as 3 percent growth in non-oil sectors.
Who judges the World Bank rankings?
Doing Business 2020 was compiled using data from more than 15,000 professionals on regulations affecting small domestic firms within the 190 tracked economies . These contributors are experts in their fields who routinely work within these regulatory frameworks. The majority of these are drawn from the legal profession including lawyers, judges, or notaries, while credit bureau officials and business leaders are also asked to provide data in relevant indicator areas.
How can I find out more?
To see Bahrain’s full Doing Business 2020 report, including comprehensive details of our reform program, click here. To find out more about how Bahrain’s business environment may be right for you, click here.