The World Bank’s new Business Ready (B-READY) 2024 report provides us with a treasure trove of insights. I have meticulously examined the B-READY data, and I have some words words about the North Macedonia’s current standing and its potential for future growth.
The B-READY report, the successor to the esteemed Doing Business report, employs a nuanced approach, evaluating economies across three critical pillars:
- Regulatory Framework (Pillar I): The rulebook for businesses.
- Public Services (Pillar II): The government support system.
- Operational Efficiency (Pillar III): The ease of doing business in practice.
North Macedonia’s overall performance is commendable, placing it in the second-highest quintile among the 50 economies analyzed in this inaugural report. This signals a generally favorable business climate, which is excellent news for both domestic and foreign investors. However, as with any economy, there’s always room for refinement.
A Closer Look at the Pillars
Let’s delve deeper into North Macedonia’s performance across the three pillars:
Pillar I: Regulatory Framework – A Solid Foundation
North Macedonia shines brightly here, securing a place in the second quintile. This indicates a robust set of laws and regulations governing business activities. The country’s legal framework, particularly in areas like Business Entry and Labor, is well-structured. For instance, its streamlined processes for starting a business, including requirements for reporting beneficial ownership information, are noteworthy. This commitment to a strong regulatory foundation is commendable, creating a predictable and secure environment for businesses.
Pillar II: Public Services – Bridging the Gap
This is where North Macedonia faces its most significant challenge. Landing in the third quintile, the nation’s public services demonstrate a need for substantial improvement. The report reveals a stark contrast between the quality of regulations (Pillar I) and the effectiveness of public services that help businesses comply with these regulations (Pillar II). This “public services gap” is a common issue globally, but it’s particularly pronounced in North Macedonia. For example, although the country has a taxpayer online portal, it lacks electronic self-service tools, showing the need for more investment in public services digitalization.
While the country has made strides in establishing a sound regulatory framework, the implementation and accessibility of these regulations through efficient public services are lagging. This is like having a beautiful blueprint for a house but struggling to gather the necessary materials and skilled labor to build it.
To truly unlock its potential, North Macedonia must prioritize investments in modernizing its public services. This includes enhancing the availability and functionality of digital platforms, streamlining bureaucratic processes, and ensuring that these services are user-friendly and accessible to all businesses, regardless of size or location.
Pillar III: Operational Efficiency – Resilience Amidst Challenges
Despite the shortcomings in public services, North Macedonian businesses demonstrate remarkable resilience. The country ranks in the second quintile for Operational Efficiency, suggesting that firms have found ways to navigate the existing challenges and operate relatively efficiently.
This is a testament to the entrepreneurial spirit and adaptability of North Macedonian businesses. However, it’s crucial to remember that relying solely on the resilience of firms is not a sustainable strategy for long-term economic growth.
Key Areas for Improvement
My analysis reveals that North Macedonia’s path to a truly thriving business environment lies in addressing the following:
Closing the Public Services Gap: This is paramount. The government must invest heavily in developing and implementing efficient, accessible, and transparent public services. Digitalization should be a top priority. Streamlining bureaucratic processes, making more services available online, and improving the interoperability of government systems are essential steps.
Strengthening Market Competition: The B-READY report places North Macedonia in the second to the last group in this area. Fostering a more competitive market environment requires a concerted effort to dismantle barriers to entry for new businesses and ensure a level playing field for all.
Improving Business Insolvency: Enhancing the framework for handling bankruptcies is essential for improving the business environment. Reforms in this area can include: clarifying priorities among creditors, and specifying timelines.
Leveraging Digital Adoption: While the report primarily focuses on digital public services, fostering digital adoption among businesses themselves is equally crucial. This includes promoting digital literacy, incentivizing investments in technology, and ensuring affordable access to high-speed internet.
Gender Mainstreaming: According to the B-READY report, all economies have room to improve. Although not a focus of the report, the collection of sex-disaggregated data should also be prioritized to measure gender gaps in different areas.
A Bright Future Within ReachNorth Macedonia possesses significant potential. Its strong regulatory framework, coupled with the resilience of its businesses, provides a solid foundation for future growth. By addressing the public services gap and focusing on the key areas for improvement I’ve outlined, North Macedonia can unlock its true economic potential, attract greater investment, and create a more prosperous future for all its citizens.
I am confident that North Macedonia is on the right track. With strategic reforms and a commitment to continuous improvement, our country can become a shining example of a dynamic and thriving business environment.
And remember to keep an eye on the B-READY report and its future editions, as they are invaluable tools especially for any serious student of economics!