Mongolia Moves up in WorldBank Ease of Doing Business Ranking

Mongolia is continuing its positive run in world indices and rankings with the release of the WorldBank’s “Ease of Doing Business” ranking, moving from 88 to 76.

This comes on the heels of an Economist prediction that Mongolia’s economy will have the fastest growing GDP again in 2013.

In November, Mongolia moved up 26 spots in Transparency International’s Corruption Perception Index. Next up: Freedom House’s “Freedom in the World Index” on January 16.

Now, Mongolia in the “Ease of Doing Business” ranking.

Mongolia is ranked 76th now, compared to its 2012 ranking of 88.

The rise appears to be mainly driven by a huge jump in the ranking of the ease of starting a business in Mongolia which is now ranked at 39th in this category. Credit is also seen to be more easily available (jump of 14 ranks) while the other subindicators are roughly stable.

Business regulation in general and in the specific areas covered by the Easy of Doing Business ranking is not a topic that I follow in any specific detail beyond more macro questions of mining policy and mining regulation, so I can’t offer any specific insights on what might be driving this rise in rankings.

Mongolia’s lowest ranking comes in the “trading across borders” category. This “measures the time and cost (excluding tariffs) associated with exporting and importing a standardized cargo of goods by sea transport”. I suspect that Mongolia is hurt by its landlocked status in this regard. When looking at the ranking on this factor alone, of the bottom 25 countries 18 are landlocked (Laos, Ethiopia, Zimbabwe, Malawi, Azerbaijan, Nepal, Bhutan, Burkina Faso, Kyrgyzstan, Mongolia, Niger, Burundi, Afghanistan, Chad, Central African Republic, Kazakhstan, Tajikistan, Uzbekistan). It thus seems that there’s very little that policy in Mongolia might address to effect this ranking.

Comparisons

The “Doing Business” allows for the easy comparison of countries included in the ranking. In the “lower middle income” category, Mongolia ranks 7th, behind Georgia , Armenia, some Pacific Islands, and Ghana.

Among small population countries, Mongolia comes in 25th.

In the East Asia & Pacific category, Mongolia is ranked 9th behind Singapore, Hong Kong, Malaysia, Taiwan, Thailand, Samoa, Fiji and Tonga.

There’s no post-state socialist category, but the countries ranked ahead of Mongolia in this grouping would be Georgia (9th overall), Estonia (21), Macedonia (23), Latvia (25), Lithuania (27), Armenia (32), Slovenia (35), Slovakia (46), Kazakhstan (49), Montenegro (51), Hungary (54), Poland (55), Belarus (58), Czech republic (65), Azerbaijan (67), Kyrgyzstan (70), Romania (72).

Methods

The index is constructed out of 10 sub-rankings of 185 economies. The overall index is the simple average of percentile rankings in the 10 sub-rankings.

The sub-rankings focus on:

  1. starting a business
  2. dealing with construction permits
  3. getting electricity
  4. registering property
  5. getting credit
  6. protecting investors
  7. paying taxes
  8. trading across borders
  9. enforcing contracts
  10. resolving insolvency

For an explanation of the methodology see the “Doing Business” website.

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One Response to Mongolia Moves up in WorldBank Ease of Doing Business Ranking

  1. Pingback: Mongolia Moves up in WorldBank Ease of Doing Business Ranking « Emerging Frontiers Blog

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