Doing Business in Russia 2012 – an IFC and World Bank Report

In his opening address at the St. Petersburg International Economic Forum (SPIEF), President Putin repeated his call to transform the Russian economy and boost its ranking in the World Bank's “Doing Business”survey. The president has previously expressed the urgency to improve Russia’s ranking from 120th in 2011 to 50th by 2015 and 20th in 2018.

On 21 June at the St. Petersburg International Economic Forum, the International Financial Corporation (IFC) and The World Bank released a new sub-national report comparing business regulations affecting domestic firms in 30 cities across Russia. 

Doing Business in Russia 2012 called out a variety of good practices in the 30 cities it analyzed. St. Petersburg, for example, ranks at the top of the starting a business indicator after reforms enabled the creation of “one-stop shops;” locations to complete all business start-up formalities. After registering one-stop shops, entrepreneurs can either pick up in person the necessary certificates from the medical, social security and pension funds, as well as the statistics office, or wait for them by mail.

The report also found that property registration in Russia is easy and inexpensive, and that starting a business takes on average 9 procedures, 23 days and costs 2.3 percent of income per capita in the 30 cities studied. This places Russia among the 30-most affordable economies worldwide to start a business.
 
The sub-national report compared findings with previous indicators from 2009 and found that some consistent high performers stayed at the top of rankings. Kazan, for example, remained a top performer in the areas of starting a business and registering property. Irktutsk remained in the top third of cities measured for starting a business and dealing with construction permits, ranking tenth on the newly-measured getting electricity indicator.

The report noted that despite good practices, challenges remain in doing business in Russia. Firms across Russia continue to face inefficient, lengthy and high-cost procedures, especially in dealing with construction permits and getting electricity. It was also recommended that inspections and approvals be further streamlined in many cities to enable a more business-friendly environment.

“Cities in Russia have a lot to gain from adopting good practices that are working elsewhere in the country and reform-minded local governments can use the World Bank Group’s Doing Business indicators to motivate and sustain reform efforts,” said Augusto Lopez-Claros, Director, World Bank Group.