WORLD BANK'S RANKING ON DOING BUSINESS IN SINGAPORE

WORLD BANK'S RANKING ON DOING BUSINESS IN SINGAPORE: 1.

Mdm Ho Geok Choo asked the Minister for Trade and Industry in view of the recent World Bank's ranking on the ease of doing business which has put

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Singapore as the most business friendly country for the second consecutive year (a) why did Singapore rank lowly for areas of registering property, starting a business and getting credit; and (b) how can Singapore improve in such areas.

The Minister of State for Trade and Industry (Mr Lee Yi Shyan) (for the Minister for Trade and Industry): Mr Speaker, Sir, for the second year running, the World Bank has ranked Singapore as the easiest place in the world to do business, among 178 countries. Compared to last year, we have improved or maintained our ranking in all of the 10 areas covered. This ranking speaks well of our pro-enterprise and business-friendly environment.

Mdm Ho has asked why Singapore ranked lowly in the areas of registering property, starting a business, and getting credit; and how Singapore can improve in these areas. First of all, let me state that World Bank ranked Singapore 7th in Getting Credit, 9th in Starting a Business, and 13th in Registering Property. Rankings from 7th to 13th position put Singapore comfortably within the top 10% of the 178 economies surveyed. So, to say that Singapore ranked lowly in these areas may be inaccurate.

Secondly, we should also understand World Bank's methodology. On the subject of access to capital, for instance, the World Bank report shows that Singapore ranked lower in terms of the availability of credit information. We assume that World Bank defines a linear relationship between the availability of credit information and access to capital. The World Bank methodology measures coverage of the entire adult population by a credit bureau whereas our newly formed Credit Bureau has only captured people with credit history. But I am sure our Credit Bureau's database, even though it

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is small now, will grow with time. More importantly, the latest SME Development Survey shows that the percentage of SMEs which reported difficulty in accessing funds has decreased from 13% in 2006 to 9.5% in 2007. This, we believe, is the outcome of joint efforts by the Action Community for Entrepreneurship (ACE), SPRING Singapore and our private sector financial institutions to increase financing options and loan products customised for SMEs in the last 4-5 years.

On starting a business, the World Bank has reported that it takes five days to start a business in Singapore whereas in the best country surveyed, Australia, it takes only two days. The reality, fortunately, is that over 90% of our new business registration done online via ACRA's BizFile were all carried out within a day. It is also worthy to note that we have improved our performance from last year by removing the need to register with the Central Provident Fund Board when a business is started. More improvements are due to be made in the coming years and I am confident that our ranking in this area will continue to improve. World Bank's 'five-day' assessment is, I believe, due to their treating parallel and optional procedures as sequential. We will work with ACRA to see how we can improve the user interface for business registration by, for instance, streamlining the five procedures identified by World Bank into one.

On registration of properties, World Bank measured how long it took and how much it cost to register a property. World Bank concluded that it is more costly to register a property in Singapore because of our higher stamp duty compared to some other economies ranked above us, such as New Zealand. But our businesses look at property transactions from a total-cost perspective. For instance, Singapore does not impose any capital gain tax on the property transaction. On the other

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hand, capital gain tax in other regimes can be costly.

World Bank also considers the online search for information related to property registration here to take longer, at seven days, compared to leading jurisdictions. We acknowledge that there is room for improvement here. MTI will work closely with the Singapore Land Authority (SLA) to simplify and shorten the process for property registration.

Mr Speaker, Sir, I am glad that the World Bank has recognised Singapore's efforts in setting pro-enterprise best practices, and accorded us the distinction of being the easiest place in the world to do business for the second year running. While we are gratified with the acknowledgement, we must not become complacent but instead seek continuous improvement in enhancing our business environment for our businesses. I would like to assure Mdm Ho that we will make every effort to keep Singapore's lead in our economic competitiveness.

Mdm Ho Geok Choo (West Coast): I would like to thank the Minister for the very comprehensive and reassuring response. Sir, although this it the second year that Singapore is on the study, how does MTI intend to keep track of Singapore's rankings in such surveys? How will MTI cascade the action steps for improvement to the industry at large? And how are the results of such findings to be translated into action plans? Also, are there examples to showcase that we have tracked and how well are we doing in those areas that we have not fared so well in the past?

Mr Lee Yi Shyan: Mr Speaker, Sir, World Bank's survey on the ease of doing business is but one of the many surveys that are done by international organisations. We take all these various surveys seriously. Whenever we identify opportunities for improvement, we will work

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tirelessly with different agencies to improve the measurement.

Sir, I think many of these surveys point to the fact that it is important for us to continue to remain responsive and to continue to receive input from the private sector, from the businesses we are serving. I think the other important conclusion that we can find of course is also the fact that our overall competitiveness depends not on one Ministry but on many regulatory bodies whose policy may have an impact on business cost and business efficiency. So MTI's role would be to work with the various agencies to channel the right input to the regulatory bodies to make improvement or incremental steps at times, and to make fundamental changes if we deem necessary.