Good News From The Financial Crisis

Here's a rare bright spot as a result of the global financial crisis. The World Bank's Doing Business Report, which tracks how easy or hard it is to start new businesses in various countries around the world, is just out today, and more countries than ever are slashing red tape around starting businesses. Even as governments are getting more heavy handed in regulating banks and financial institutions, they are lighting things up for entrepreneurs – government reforms aimed at making it easier to start a company are up 20 percent this year, the highest jump since the survey started in 2004.

What's interesting is that poor countries have taken the lead – Eastern Europe, Central Asia, and Africa are cutting the time and money involved in starting new businesses most quickly, in large part because they've been hit hardest by the financial crisis. "For developing countries, this is a jobs crisis that effects their real economy – their policy moves are all about trying to create new jobs," notes Neil Gregory, one of the World Bank directors who worked on the project. Even the Middle East and North Africa, areas traditionally reluctant to liberalize, are encouraging more business-friendly reform thanks to the collapse in oil prices from their high in the summer of 2008.

Will the tide turn once the good times are back? Unlikely, say World Bank experts – once countries start down the path of red tape cutting, there's usually little impetus for them to reverse laws, since the job growth tends to lead to new jobs and thus new tax revenue. Good news for bureaucrats everywhere.

Good News From The Financial Crisis | News
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