KUWAIT CITY, Oct 26, (Agencies): Kuwait Direct Investment Promotion Authority (KDIPA) stressed the need to harness the current serious reform efforts by embarking on further coordination to improve doing business in the country which is a major pillar to achieve its aspired developmental goals for diversifying sources of income and encouraging local and foreign investment.
Commenting on the results that showed Kuwait rank in the Ease of Doing Business Report 2017 (DB2017) published annually by the World Bank Group, KDIPA referred to the drop in Kuwait’s rank in the said indicator, which measures 10 aspects relating to business activity, to 102 out of 190 countries as compared to its amended rank at 98 out of 189 countries in DB2016, highlighting that Kuwait beheld the top 6th rank globally in paying tax sub indicator.
Whereas in the parallel measure based on the Distance to Frontier (DTF) comparing performance against international best practices, Kuwait recorded 59. 55 percent in the DB2017 as compared to 60.12 percent (amended) in DB2016. Within DTF, it showed improvement in two sub indicators (trading cross borders, resolving insolvency), maintained unchanged status in four sub indicators (getting credit, protecting minority investors, paying taxes, and enforcing contracts), but dropped in the four remaining sub indicators (starting a business, dealing with construction permits, getting electricity, and registering property).
KDIPA stressed that the collective resolve in improving regulatory performance will not be inhibited, despite the strenuous international and regional circumstances, as well as the intensified pressures and rising challenges surrounding the national economic and reform decisions.
It added that current efforts will require more rigorous approach and applicability in order to better identify areas of concern and ensure progress in the right direction. In this regard, KDIPA clarified that the actual impact of several important decisions and measures undertaken so far to streamline business environment during the report period from beginning of June 2015 till end of May 2016, did not actually materialize to effect notable changes in advancing Kuwait’s position in this report.
In the same token, and given the magnitude of attention this report generates within the public and the business community, KDIPA finds it imperative to highlight other technical and methodological considerations in the case of Kuwait that might have hindered to reflect the intensity of the efforts exerted to effect positive changes in its position in this indicator.
Meanwhile, New Zealand has edged out Singapore to take top spot for ease of doing business, but money laundering experts warned the honour masked the darker side of the Pacific nation’s vulnerability as a channel for illegal funds. In its annual “Doing Business” report released on Tuesday, the World Bank cited tax improvements as a key reason for moving New Zealand to the top spot from its previous runner-up position.
The country also topped the Bank’s indicator on ease of company formation, a particularly worrisome aspect for anti-money laundering efforts and one that had recently raised some alarm bells given the use of shell companies to launder funds. New Zealand-registered companies were among a network of opaque firms that were used to dupe Chinese investors out of millions of dollars in a pyramid scheme called ‘EuroFX’ reported by Reuters earlier this year.
New Zealand also came under fire this year when the Panama Papers showed the country’s shell companies and trusts were touted as a secretive way to channel funds around the world, including for tax avoidance purposes. “You want a jurisdiction that has a clean reputation, but doesn’t ask many questions when you’re setting up a company there,” said Jason Sharman, an Australia-based money laundering expert and co-author of the book ‘Global Shell Games’.