World Bank To Announce New Methodology To Calculate Business Climate

The World Bank will announce on Monday a new methodology for assessing the business climate in up to 180 countries, following the cancellation of the "Doing Business" rankings two years ago due to embarrassing revelations of data irregularities and favouritism towards China.

A pilot edition of the new replacement annual series called "Business Ready" will be published in the spring of 2024, covering an initial group of 54 economies in Asia, Latin America, Europe, the Middle East, and Sub-Saharan Africa, according to the bank.

According to World Bank Chief Economist Indermit Gill, the new approach enabled "a fuller and sharper measure of countries' investment climate — something that is desperately needed in a global economy experiencing a generalised slowdown."

"Business Ready" was developed in response to recommendations from World Bank experts, governments, the private sector, and civil society organisations, and it includes, for the first time, worker rights as defined by the International Labour Organisation, while also acknowledging that regulation can have positive effects.

"The main thing that went wrong was that Doing Business's data integrity was compromised," Norman Loayza, director of the World Bank's Indicators Group, which leads the project, told Reuters. "The main point for us is that we need to ensure data integrity, and we have a very comprehensive approach for doing that."

Loayza stated that the new project focuses on ten topics covering a firm's lifecycle, such as business entry, utility services, labour, dispute resolution, market competition, taxation, and insolvency - another move aimed at addressing criticism of the previous product.

"We take into account not only the perspective of the private entrepreneur, but also the perspective of workers, consumers, and other market participants," he explained. "We will, for example, look for worker safety, environmental sustainability, and market competition."