"Doing Business in Mongolia's strengthening economy" - News.MN

"Doing Business in Mongolia’s strengthening economy”

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Old News! Published on: 2017.11.01

"Doing Business in Mongolia’s strengthening economy”

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Governments in 119 economies carried out 264 business reforms in the past year to create jobs, attract investment and become more competitive, says the World Bank Group’s latest Doing Business 2018: Reforming to Create Jobs report, which monitors the ease of doing business for small and medium enterprises around the world.

Developing countries carried out 206 reforms, accounting for 78 percent of the total reforms, with Sub-Saharan Africa implementing 83 reforms and South Asia implementing a record 20 reforms. A large number of reforms centered on improving access to credit and registering a new business, with 38 reforms each, as well as facilitating cross border trade, with 33 reforms.

Business reforms continued at speed in East Asia and Pacific, with regional economies adopting 45 reforms during the past year. The region is home to two of the world’s top 10 ranked economies, Singapore and Hong Kong SAR, China, and two of this year’s top 10 improvers, Brunei Darussalam (for a second consecutive year) and Thailand.

Mongolia implemented substantive reforms to boost SME financing through Secured Transactions Reform project. Access to finance is a challenge faced by many Mongolian SMEs, which struggle to obtain bank loans as they do not own land or buildings that banks generally seek as collateral.

To address this issue, the International Finance Corporation (IFC), a member of the World Bank Group, and the Ministry of Justice have partnered with the Bank of Mongolia, Mongolia Bankers’ Association, and other stakeholders since 2013 to help reform the country’s secured transactions system to unlock affordable financing for SMEs. As part of the reform, a web-based pledge-notice registry was launched in February 2017, enabling creditors to search for existing interests on movable assets that they intend to use as collateral and to file security interest on their approved collaterals. In addition, the IFC-supported Law on Tangible and Intangible Movable Property Pledge went into effect on March 1, 2017. The new law, along with the registry, allows SMEs to offer moveable assets such as accounts receivable, inventory, livestock, equipment, and future income as collateral to banks – a major move to improve access to finance for SMEs. The system also reduces the need for paper documents and notifies creation of pledge-rights to existing and prospective lenders.

To date, around 90,000 pledge-notices have been registered, 38 percent of which is equipment, 24 percent is livestock, 5.4 percent is account receivables, and 2.0 percent is vehicles. Women account for 24 percent of the total borrowers.

“We are very encouraged to see the strong early results from this project” said Tuyen D. Nguyen, IFC Resident Representative in Mongolia. “Mobilizing movable collateral to boost access to finance, especially for MSMEs, can play a significant role in Mongolia’s sustainable economic recovery and job creation.”

In its annual ease of doing business rankings, New Zealand, Singapore and Denmark retained their first, second and third spots, respectively, followed by Republic of Korea; Hong Kong SAR, China; United States; United Kingdom; Norway; Georgia; and Sweden.

This year’s top 10 improvers, based on reforms undertaken, are Brunei Darussalam; Thailand; Malawi; Kosovo; India; Uzbekistan; Zambia; Nigeria; Djibouti; and El Salvador. For the first time, the group of top 10 improvers includes economies of all income levels and sizes, with half being top improvers for the first time – El Salvador, India, Malawi, Nigeria, and Thailand.

The report also monitors hurdles faced specifically by women in the areas of Starting a Business, Registering Property and Enforcing Contracts. This year’s report records a welcome reform by the Democratic Republic of Congo, which eliminated the requirement for women to obtain their husband’s permission to register a business. However, 36 economies continue to place obstacles for women entrepreneurs, with 22 economies imposing additional steps for married women to start a business and 14 limiting women’s ability to own, use and transfer property.

This year’s report includes two case studies on transparency, which analyze data from business registries and land administrations and find that economies with more transparent and accessible information have lower levels of corruption and bribery. A third case study on private sector participation in formulating construction regulation finds that such rules exhibited higher costs and a propensity for conflicts of interest. A fourth case study highlights three successful insolvency reforms in France, Slovenia and Thailand, and lessons that are transferable to other economies.

 

The full report and its datasets are available at www.doingbusiness.org

 

Rankings Data for East Asia and Pacific Economy

Rank

(1–190)

Distance to frontier score (0–100)

# Reforms

DB2018

DB2017

DB2018

DB2017

DB2018

Brunei Darussalam

56

64.77

70.60

6

8

Cambodia

135

54.24

54.47

1

0

China

78

64.89

65.29

2

2

Fiji

101

60.70

60.74

2

0

Hong Kong SAR, China

5

83.15

83.44

2

1

Indonesia

72

64.22

66.47

7

7

Kiribati

157

49.05

48.74

0

0

Lao PDR

141

52.58

53.01

2

0

Malaysia

24

77.47

78.43

2

3

Marshall Islands

149

51.42

51.45

0

0

Micronesia, Fed. Sts.

155

48.98

48.99

0

0

Mongolia

62

67.76

69.03

1

1

Myanmar

171

43.91

44.21

2

2

Palau

130

55.12

55.58

0

1

Papua New Guinea

109

58.87

59.04

2

0

Philippines

113

58.32

58.74

2

2

Samoa

87

61.83

63.89

0

1

Singapore

2

84.53

84.57

3

2

Solomon Islands

116

58.14

58.13

1

0

Taiwan, China

15

79.66

80.07

0

2

Thailand

26

71.76

77.44

3

8

Timor-Leste

178

40.69

40.62

0

0

Tonga

89

62.93

63.43

0

0

Vanuatu

90

63.06

63.08

4

0

Vietnam

68

65.08

67.93

3

5

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