As the global economy begins to recover from the pandemic and the shock of the war in Ukraine, many businesses in the U.S. and abroad are experiencing strong headwinds. We heard serious concerns from business leaders and politicians all through the Chamber’s Global Forum on May 10-11, 2022. Governments everywhere are crafting responses to multiple overlapping challenges and trying to align their actions with the longer-term trends like the green transition and digital inclusion. Spurred on by these challenges, the worrying trend of global market fragmentation is creating obstacles to the cross-border flow of capital, goods, services, ideas, and technologies as countries increasingly form economic blocs.
Fortunately, the World Bank has a new tool, the Business Enabling Environment Report, that will help policymakers and investors evaluate and compare how successful different governments are in meeting the challenges of recovery and competitiveness. The new report will assess the business environment by looking at three factors: promoting economic growth through innovation and entrepreneurship; increasing equality of opportunities among market participants; and ensuring the general sustainability of the economy in the long term.
The World Bank has access to a vast amount of data from emerging and mature markets and decades of experience to interpret it. Importantly, its practical involvement in projects in emerging markets should add to the credibility of its findings. We are encouraged by the scope of the Bank’s ambition and the resources it intends to commit to making their assessments useful in policy development and execution of reforms.
In March 2022, the Bank finalized its online consultation on the methodology of the Report. Many governments, companies and NGOs filed voluminous comments reflecting, among other things, the extraordinary acceleration of the digital adaptation forced by the pandemic. Companies that contemplated a slow transition to online environment found themselves forced to make do-or-die decisions. Millions of businesses have not survived the lock-down, millions are starting anew. Value chains have been disrupted, reimagined, and stress tested. With all of this in mind, it will be important for the new global survey to incorporate a deep understanding of the very fluid enabling environment. However, the Bank has chosen to move up its Board discussion on the project to May or June 2022. If approved, a pilot questionnaire will be sent to businesses early this summer.
While we look forward to the report, we urge the Bank to exercise great care in designing the survey and vetting its methodology with practitioners – especially along the bleeding edge of technological and fintech innovation. At the G20 level, these issues have been brought up in the context of financial digital inclusion. The debates have revealed their complexity and a diversity of experiences. Ultimately, it is businesses who are the key stakeholders and beneficiaries of the report, so it is critical that businesses are meaningfully consulted to create the most useful tool.
Together with our colleagues around the world, we stand ready to engage in a substantive exchange of views with the World Bank with an emphasis on the dynamic disruption in the ways of doing business that we are experiencing in many markets. We offer to work on a robust feedback loop to make sure the Bank taps into the wealth of lived experiences of businesses big and small in countries across the spectrum of development. As an example of our commitment to sharing business insights and networks, the Chamber was one of the first business partners to join the SME Finance Forum of the World Bank.
Dialogue with business innovators is the best way to make sure that the Report is based on indicators and criteria that will lead to genuinely enabling regulatory choices that are reflective of local context, while at the same time creating a safe space for regulatory consultation at the country level where the proverbial rubber meets the road towards. Done well, this tool could truly enable a better business environment.
Story by Gary Litman, U.S Chamber of Commerce
Gary Litman, senior vice president of Global Initiatives at the U.S. Chamber of Commerce, is responsible for the Chamber’s policy advocacy for the economic reform agenda of the G20, G7, and international institutions. He leads the Chamber’s participation in a range of global business coalitions and related business summits focused on sustainable economic policies.