India complains Doing Business “not robust”

8 April 2013

As an independent review of the World Bank’s controversial Doing Business rankings begins, India’s public criticism of the rankings adds weight to the opposition.

Announcing that a formal letter of complaint had been sent to the Bank, Arvind Mayaram, a departmental secretary in the Indian finance ministry, criticised the Doing Business rankings methodology during a late March speech, as “not robust”, citing the Bank’s reliance on only one city (Mumbai) to justify its rating of 138 for land acquisition. Mayaram acknowledged that it is “difficult” to buy land in Mumbai, but that this rating does not reflect the national picture: a “very large number of US businesses who have been [in India] for more than 100 years and have done exceptionally well, have made lots of money and would like to continue to work [in the country].”

The panel tasked by the Bank in October to review the rankings, which is chaired by former South African planning minister Trevor Manual (see Update 83), has appointed independent advisers Peter Bakvis of the International Trade Union Confederation, and Jeffrey Owens, formerly at the Organisation for Economic Cooperation and Development, on labour and tax issues respectively. A February letter, signed by 20 NGOs, including UK-based CAFOD and Zambian Jesuit Centre for Theological Reflection, highlighted that the review “risks side-lining critical voices of affected groups”, including poor small business owners and civil society. Lack of consultation means that the panel is denied a vital “understanding of how the Doing Business products are used in client countries”.

risks side-lining critical voices of affected groups

Summarising the priorities for the panel, Christina Chang of CAFOD said: “first, they need to ensure that they address reforms that are relevant to poor small businesses; second, they need to ensure that they are used in an appropriate manner in policy making – driven by broad consultation and not by ranking; third, they need to recognise the limitations of Doing Business and make greater use of tools such as enterprise surveys; fourth, they need to ensure Doing Business is not promoted inappropriately in countries, including by donors; and finally, they need to rethink some damaging reforms advocated by indicators, such as the paying taxes indicator.”

The panel, which had held three meetings by mid-March, has already confirmed that it will not meet its original schedule of reporting to the Bank by March and publishing a final report by May. In mid March the panel opened an online consultation which ends in mid April 2013. It will hold consultations with CSOs on the sidelines of the World Bank spring meetings in mid-April. Anyone wishing to meet the panel should contact the panel secretary Hanief Ebrahim:

Doing Business in agriculture

Despite widespread criticism of the rankings’ objectives, methodology and criteria (see Update 84, 81,78), the Bank is pressing ahead with the launch of Doing Business in Agriculture (see Update 83) announcing in December its plans for “pilot stage data collection and indicator development” in 10 countries in 2013. The pilots, which will be selected by end May, will commence in the second half of 2013.