Singapore tops the global list in ease of doing business, while fellow ASEAN countries

Malaysia and Thailand are in the top 20 as well, according to an annual World Bank
ranking. Myanmar, despite huge leaps in economic and political reforms, remains one of
the hardest countries to do business in, ranking 182nd out of the 189 nations studied.
The World Bank released its annual report, "Doing Business 2014: Understanding
Regulations for Small and Medium-Size Enterprises," on Tuesday. The report evaluates
economies based on 11 areas of business regulations, from starting a business to
cleaning up insolvency.
Singapore is no stranger to the top this is the eighth consecutive year that the small
city-state has been crowned as the nation in which doing business is the easiest. But
Malaysia may congratulate itself on making it to the top 10 for the first time, jumping to
sixth place from 12th last year. The World Bank said Malaysia cut back the number of
procedures required to obtain a construction permit, lowered the time required for new
electricity connections and reduced company registration fees.
Regulation is a reality from the beginning of a firms life to the end, the report stated,
acknowledging the importance of regulations for a healthy business climate. On
average around the world, starting a business takes seven procedures, 25 days and costs
32 percent of income per capita in fees.
But the ease of doing business can cover a great range even within a single region. While
Singapore, Malaysia and Thailand are at the top of the list, and Brunei and Vietnam
made to the top 100, the rest of Southeast Asia is not faring as well.
Cambodia slipped two places to 137th this year, the only ASEAN economy to drop in
ranking. Starting a business in Cambodia is particularly difficult, and the country
ranked 184th owing to new regulations.
Cambodia made starting a business more difficult by introducing a requirement for a
company name check at the Department of Intellectual Property and by increasing the
costs for both getting registration documents approved and stamped by the Phnom
Penh Tax Department and completing incorporation with the commercial registrar, the
World Bank said in the report.
This is the first year data has been collected in Myanmar, which signifies a big step for a
nation still emerging from decades of military rule. Even as it is being touted as Asias
last great frontier, Myanmars myriad problems, from a lack of adequate regulations to
unreliable electricity supply, make it still one of the hardest countries in which to start a
business, beating only war-torn nations like the Congos and Libya.

Policy challenges posed by Asian FTAs
Asian economies face important policy challenges regarding the use of free trade
agreements (FTAs): primarily their scope and their impact on regionalization trends. These
topics are the front line of contemporary negotiations and of interest to policymakers. This
column examines these challenges based on new data on the business impacts of FTAs
and contents of existing FTAs. It also discusses political economy considerations of FTA
consolidation in Asia and its potential connection with North America and Europe.
Spread of Asian FTAs
Asias rise as the global factory over the past several decades was underpinned by
outward-oriented development strategies and multilateralism. FTAs, as trade-policy
instruments in the region, were largely absent until the 1990s. The Asia-Pacific Trade
Agreement (APTA) of 1976 was the regions first agreement and the Association of
Southeast Asian Nations (ASEAN) Free Trade Agreement (1993) was another prominent
one among a very small number of Asias early FTAs. Today, Asia is a world leader.
Between January 2000 and April 2013, the number of concluded FTAs increased from 3 to
76 and more are under development.
The regions largest economies (Peoples Republic of China [PRC], India, and Japan) as
well as a few advanced ASEAN economies (e.g., Singapore and Thailand) have become
key players in FTA activity. Smaller neighboring economies are now also actively involved
in such efforts. Reflecting the growth of FTAs, the importance of FTAs to Asias trade and
investment has also increased.
The spread in FTAs is attributed to factors including the need to remove impediments to
broadening the market-led integration of regional supply chains, the intensification of FTA
activity in Europe and the Americas, and the stalled World Trade Organization (WTO) Doha
Round trade talks.
Concerns over such agreements have increased as FTAs have spread across Asia (e.g.
Banda and Whalley 2005; Bhagwati 2008; Drysdale and Amstrong 2010; and Manchin and
Pelkmans-Balaoing 2007). Several key challenges associated with Asian FTAs are
examined here, from a pragmatic perspective, with a view to providing better informed
policy decisions.
Challenges of Asian FTAs
Raising FTA preference use. While well-designed FTAs can provide demonstrable benefits
to FTA member economies, previous studies document that the historic use of FTAs in Asia
has been relatively low. These studies, however, relied on data for the 1980s and early
1990s, before the major spurt in Asian FTAs. Using new data from certificates of origin, we
computed average FTA preference use for four Asian countries (Republic of Korea [Korea],
Thailand, Viet Nam, and Malaysia). A significant increase is visible in this figure from 24
percent to 37 percent of total exports between 2008 and 2011. Korea (49%) and Thailand
(42%) emerge as outliers with particularly high FTA use in 2011 compared with Viet Nam
(33%) and Malaysia (24%).
The enterprise surveys conducted by the Asian Development Bank (ADB) and ADB Institute
(ADBI) in the PRC, Japan, Korea, Malaysia, Philippines, Singapore, and Thailand also
indicate higher-than-expected FTA use at the enterprise-level with 32 percent of enterprises
utilizing FTAs and more planning to do so (see Kawai and Wignaraja, eds. 2011; Kawai and
Wignaraja 2013). The surveys also reveal that FTA use entails fixed costs and that large
enterprises are better able to muster the requisite financial and human resources than
small- and medium-sized enterprises (SMEs).
A lack of information on FTAs is identified as the most significant reason for non-use of
FTAs. Low margins of preference, administrative costs and delays associated with rules of
origin (ROOs) and other export documentation, and non-tariff measures in partner
economies were the other reasons cited for non-use of FTAs.
Tackling multiple rules of origin. Existing literature suggests that multiple ROOs in
overlapping FTAs constitute an Asian noodle bowl which raises transaction costs for
SMEs. ADB-ADBI surveys indicate that multiple ROOs are a future risk to Asian enterprises
rather than a present issue (Kawai and Wignaraja, eds. 2011). These surveys also reveal
that, contrary to our usual expectations, larger enterprises in Asia have more negative
perceptions of multiple ROOs than SMEs. Large established enterprises export to multiple
markets and adapt their business strategies in response to FTAs. They are, therefore, more
likely to express concerns regarding multiple ROOs. In contrast, SMEs tend to export to
single markets and hence have little basis for complaint. However, as SMEs grow and start
exporting to multiple markets, they will more likely express concerns about the Asian noodle
bowl of complex, multiple, overlapping ROOs.
Liberalizing agricultural trade. The literature shows that the coverage of agricultural trade
differs markedly among current Asian FTAs. Agricultural trade tended to be excluded from
most of the early agreements due to pressure from powerful farm lobbies or social concerns
regarding poverty in rural areas. Review of tariff-line coverage of agricultural products in
current Asian FTAs shows that, over time, these agreements are becoming more
comprehensive in their coverage of agricultural trade. Of the 69 FTAs for which data were
available as of December 2012, 46 percent had comprehensive coverage, another 28
percent had some coverage, and 26 percent had little or no coverage of agricultural
products.
Reducing restrictions to services trade. FTAs can contribute to reducing the significant
regulatory barriers to services trade currently present in the region. Review of criteria
covering key sectors of the General Agreement on Trade in Services (GATS) similarly
indicates a trend in Asian FTAs towards progressively liberalizing the services-trade sectors
of participants and providing, again over time, for increased regulatory cooperation on
services trade. Of the 69 FTAs reviewed, 41 percent had comprehensive coverage, another
36 percent had some coverage, and 23 percent had little or no coverage of services trade.
Increasing WTO-plus elements. Studies demonstrate that Asian FTAs vary considerably in
scope in terms of coverage of issues going beyond the WTO framework. Review of criteria
covering the four Singapore issues (competition, intellectual property, investment, and
public procurement) shows that of the 69 FTAs reviewed, 23 percent had comprehensive
WTO-plus coverage, another 54 percent had partial WTO-plus coverage, and 23 percent
were goods-and-services agreements only.
Policy implications
Several recommendations may be made for the future. These include strengthening
national support systems for enterprises, especially SMEs, using or wishing to use FTAs;
rationalizing ROOs and improving their administration; ensuring better coverage of
agricultural trade; facilitating services-trade liberalization; forging comprehensive WTO-plus
FTAs; and multilateralizing regional FTAs. Reducing protectionism through enhanced
international surveillance of non-tariff measures and concluding the WTO Doha Round
trade talks would also be invaluable in boosting FTA use. In the medium term, a WTO
agenda on supply chains and FTAs would be necessary to encourage convergence of
regional and global trading rules (Baldwin 2011).
Multilateralization of regional FTAsthrough liberal cumulation rules and eventually a
merger of various overlapping FTAs in Asiawould provide economic benefits such as:
greater market access for goods, services, skills, and technology; larger market size
permitting increased specialization and realization of economies of scale; easier foreign
direct investment and technology transfer by multinational corporations and SMEs; simpler
trade and investment rules; inclusion of small, low income economies in the regions wider
trade agreement; and insurance against protectionist sentiments.
Convergence of RCEP and TPP?
A region-wide FTA could arise from a series of linked agreements covering varied issues
and participants (Kawai and Wignaraja 2013). Two competing processes are emerging as
the future basis for a region-wide FTA: a Regional Comprehensive Economic Partnership
(RCEP) among the ASEAN+6 countries (the 10 ASEAN economies plus Australia, the PRC,
India, Japan, Korea, and New Zealand); and the Trans-Pacific Strategic Economic
Partnership (Trans-Pacific Partnership, or TPP) agreement among the 11 economies
(Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru,
Singapore, United States [US], and Viet Nam) currently in negotiations as well as Japan
which is expected to join the negotiations as early as July 2013.
To realize the RCEP, a trilateral FTA among the PRC, Japan, and Korea should first be
concluded and then be connected with the existing ASEAN+1 FTAsthat is, ASEANs five
FTAs with Australia-New Zealand, the PRC, India, Japan, and Korea. The TPP aims to
achieve a high-quality agreement and includes four ASEAN members and Japan, from
Asia. These two mega FTAs are key processes to create a larger Asia-Pacific FTA, which
however would require successfully addressing the difficult task of forging a US-PRC
agreement.
These two processes are not mutually exclusive and will likely prove to be complementary.
The changing center of global economic gravitygiven the rapid economic rise of the PRC
and Indiasuggests that a RCEP is attractive to many Asian economies, including
developing ones. Countries that are ready to accept high standards required for the TPP
and wish to strengthen existing ties with the US will likely join the TPP.
Whichever path or paths may be taken, it will be important to accelerate the liberalization of
goods and services trade and of investment, reduce behind-the-border barriers, and pursue
domestic reforms. A harmonious Asia-Pacific would likely see a convergence of the two
processes being considered. This would be a win-win solution for the Asia-Pacific
community.
Asias next step would be to strengthen its trade relationships with other parts of the world,
starting with Europe. A mega Asia-Europe FTA would be another important building bock,
along with the Asia-Pacific FTA, to connect Asia with the global economy and support
global trade integration in a way to complement the WTO Doha Round trade talks.


The global gross domestic product (GDP), i.e. the total value of all goods and services manufactured
and produced in one year, amounted to approximately 71.3 trillion U.S. dollars in 2012. Among
the states with the highest gross domestic product, the United States ranked first (15.7 trillion U.S.
dollars), followed by China, Japan, and Germany. According to a forecast for 2030, this ranking is
about to be shaken up significantly, since emerging countries, such as the BRIC states China, India,
Russia and Brazil, are growing faster than the industrialized states. In total, global economic
growth amounted to about 3.2 percent in 2012 a decrease from 3.9 percent in 2011.

However, if we compare the gross domestic product to the number of inhabitants and take a look
at GDP per capita, the industrialized states are significantly ahead of the emerging countries. Norway,
Luxembourg and Qatar have the highest GDP per capita worldwide, while the Democratic Republic of
the Congo, Malawi and Burundi lead the ranking of thecountries with the lowest GDP per capita in 2012.
On average, global GDP per capita amounted to approximately 10,000 U.S. dollars in 2011.

In 2011, approximately 200 million people were unemployed worldwide, equating to a global
unemployment rate of 6 percent. Among the world regions with the highest unemployment rates are North
Africa and the Middle East, both with an unemployment rate of more than 10 percent.

The global inflation rate was at 4.9 percent in 2011, and is estimated to decrease in 2012. Consumer
prices are increasing most significantly in Belarus, South Sudan and the Sudan, while the lowest
inflation rates were reported from Switzerland, Japan and Georgia.

The leading exporting country in 2011 was China, with exports worth about 1.9 trillion U.S. dollars,
closely followed by the United States and Germany. The ranking of the leading importing countries,
however, sees the United States at the top, followed by China and Germany.

http://www.statista.com/statistics/281744/gdp-of-the-united-kingdom-uk-since-2000/
https://www.gfmag.com/global-data/economic-data/economic-dataworlds-gdp-growth-by-region



http://www.eastasiaforum.org/2010/02/23/the-scale-of-chinas-economic-impact/