Ease of Doing Business Index – Tunisia
A conversation with Tunisia’s Wiem Zarrouk, Advisor to the Minister of Development, Investment and International Cooperation.
The World Bank’s Ease of Doing Business Index has become the go-to index for insight into the ease by which business can be done in a given country. Emerging markets vie for improved rankings that demonstrate to global investors that their business environments are on an upwards trajectory.
Last year, Tunisia was identified as one of the economies improving most across three or more Doing Business measures. The country jumped eight positions compared to the previous year, ranking 80th in 2019. This year, its rank has improved further, to 78, with outstanding performance in ease of starting a business and dealing with construction permits, ranking 19 and 32 in the world respectively.
We sat down with Wiem Zarrouk to discuss Tunisia’s initiatives to improve the business environment and the country’s aspiration to break into the world’s top 50. Wiem is an Advisor to the Minister of Development, Investment and International Cooperation and leads on the country’s efforts to improve its Doing Business ranking.
ES: Tunisia’s rank in the Doing Business Index improved for the second consecutive year, following six years of decline. What changed?
WZ: From 2010-2017 Tunisia’s ranking had been worsening. In 2017 it then became a governmental priority, led by the Minister of Development, Investment and International Cooperation, Zied Ladhari.
A three-year action plan was then established, with short, medium and long term measures and a clear objective: to break into the top 50 worldwide.
We requested expertise from International Financial Institutions, including the World Bank, IFC, EU and USAID. For each of the 10 indicators, we set up a dedicated Task Force including representatives of the private and public sectors.
A short term action plan with 50 impactful regulatory measures
In year one we identified 50 impactful regulatory and administrative measures that allowed Tunisia to climb up 8 spots in Doing Business 2019 (released October 2018).
This reversal in our trajectory was welcomed by stakeholders from both the public and private sectors. We demonstrated our ability to design, pass and implement reforms. Appetite for reform subsequently grew. This led to another improvement in our rankings this year.
ES: You mentioned appetite for reforms in the context of the Doing Business Index. How has this linked with wider governmental reform efforts? Which reforms have been particularly pivotal?
WZ: In early 2019, we extended the reform scope beyond the Doing Business Index and worked on deeper economic reforms with the same participative approach.
In addition to administrative reforms, we prepared a cross-cutting law; a law on Improving the Investment Climate which acts as a “corrective patch” to our legal framework, bringing several improvements to various laws in relation to investment and business climate. Through this new legislation, we amended four codes and 19 different laws to tackle issues identified through extensive public-private consultations over a six month period.
The cross-cutting law unclogs multiple bottlenecks and streamlines procedures and has the potential to boost investment and improve Tunisia’s rating. One of the major impactful measures of this law is the adoption of the “Once Only” principle in relation to public administration. Now, the administration may not request documents which are already in its possession or emanating from its services or the services of other public entities.
This law was adopted by parliament on April 23, 2019 but was published on June 2019, beyond World Bank deadlines for this year’s report. Consequently, it will be taken into account in next year’s rankings.
The law will improve Doing Business scores in three areas:
- Starting a Business: Removing a minimum capital requirement
- Protecting Minority Investors: strengthening minority investor rights and improving corporate governance for listed companies.
- Resolving Insolvency: Allowing courts the opportunity to directly declare a company bankrupt (if its conditions are fulfilled),without having to go through recovery proceedings
ES: There certainly has been solid progress, which is being noticed by global investors. What has been driving this change and how much of a cross-governmental effort has it been?
WZ: These achievements are thanks to the strong political will of the Minister of Development, Investment and International Cooperation. Clear-cut objectives with quantified indicators were fixed. Clear governance structures around reform have been established, and A leadership committee was established. This committee is headed by an advisor to the Minister and is in charge overseeing progress against each measure, with regular reports sent to the Minister and the Council of Ministers. More than 12 Ministries and 15 public agencies have been involved. Synergy and collaboration with the private sector was crucial in achieving progress so far – and will remain so.
ES: It sounds like Tunisia is keen for its rise to continue. What’s next?
WZ: In short, on-going reforms. We are committed to continuing reforms in order to make it as easy as possible to invest and do business in Tunisia. Upcoming priorities include:
- Digital transformation is a top priority:
- An online one-stop-shop for starting business will be extended to all investment agencies
- A digital platform for applying to a construction permit is under-construction within the municipalities, in cooperation with USAID
- Laws on “Secured Transaction” and “Credit Bureaus” are in parliament and will be adopted in the next parliamentary session. The adoption of these laws will significantly improve Tunisia’s ranking on the Getting Credit Indicator.
- Simplification of the process of VAT refunds and the introduction of the principle of “limited tax audit” in the Financial bill for the year 2020 will make paying taxes easier; and
- Implementation of the “Tunisia Landing Information System” and on-going digital transformation within Tunisian cadastre will improve our rankings in the Registering Property Indicator.
In 2010 Tunisia ranked 40th in the world in ease of doing business. The Government remains optimistic that indicators are moving in the right direction and that the country has the potential to again reach the heights of almost a decade ago.