Are we making “doing business” an uphill task? - HATICE KARAHAN

Are we making “doing business” an uphill task?

“You must either modify your dreams or magnify your skills.”

This sentence by Jim Rohn, who began as a warehouse employee and climbed all the way to the top by becoming an entrepreneur, is simple yet full of meaning: If you have great ambitions then you have to acquire the necessary skills. If you are unable to do that then you have to narrow your horizons.

Although Rohn said this in regard to individuals and at a micro level for enterprises it is valid for countries as well, Turkey included…

WORLD BANK STATEMENT  

As part of our surge toward 2023 and given that we cannot just forego our goals it is vital that we adapt new skills. In this regard, since one of the goals in our dream is the economy and the economy depends on “business,” the issue of “doing business” becomes one of our priorities.

The reason I want to touch on this subject today is to shed light on our current situation following the release of the “Doing Business 2015” report by the World Bank.

We are all aware that an effective strategy is required to attain sustainable growth and develop a private sector with increased dynamism and the power to compete. One of the sub strategies involved are reforms regarding businesses.

In my opinion, this is basically reflected in two ways. The first is not to scare emerging entrepreneurs away from the business environment and the second is to facilitate the grounds for existent firms to flourish even more.

THE SOURCE OF OUR ENTREPRENEURIAL SPIRIT

How many countries can boast the entrepreneurial spirit that exists in Turkey today?

During my studies in the United States I examined entrepreneurship there. I concluded that entrepreneurship as a final resort due to existing market conditions came to the fore there: Entrepreneur due to need!

Whereas when one says entrepreneur, it basically means a “risk-loving” spirit, courage and passion…

It isn’t easy to find that spirit. However, our people have had this spirit passed on to them through their genes. This potential was even converted to numbers in recent days. Based on the findings released by the Entrepreneurship Monitor -- a collaboration of TEB and KOSGEB -- 32 people out of every 100 in our country plan to be entrepreneurs.

Almost 1 out of every 3 persons! It is a ratio higher than the global average… Even more important, the majority of people are looking at entrepreneurship not out of necessity but in the name of making use of opportunities.

The same study has another message to impart as well: Out of these 32 people only 10 take action to realize this dream. Certainly there are various reasons for this, but it is clear that the entrepreneurial spirit needs to have life breathed into it.

WE ARE PROMOTED TO 55TH PLACE

Let us leave aside those that want to establish a business for the moment and come to the firms that already exist. We say that these firms should invest and be productive. We say that they should conduct research and development and create added value. However, we are aware that since they have to deal with so many daily problems there is hardly any energy left in them to think about these things. One of the measures required in this regard is to create a more favorable business environment for our firms…

Every year the World Bank report throws this truth in our face. In the 2015 report it is stated like this: We need to breathe new life into our procedures for doing business.

Of course we are in a better position when compared to the past. This year, due to a revision in the methodology used, we were promoted to 55th place from 69th among 189 countries in total. However, this is not enough. The hidden details can only be found after conducting a breakdown of the index…

GOOD AND BAD NEWS

The most pleasing factor when examining the sub indices is protection for minority investors. We are the 13th most successful country in this regard.

We are 34th when it comes to being connected to the electricity grid. Don’t say “so what is special about this?” Many developed countries, from America to Europe, lag behind in this regard.

We are in 38th place when it comes to implementation of agreements. We improved in this regard as a result of our courts shifting to a system where documents are filed electronically.

When it comes to the topics of deeds registration and taxes we are around the 50 mark. It is clear that we need to improve in these areas.

When it comes to establishing a business… Yes, Turkey has now reduced the steps needed to establish a business to seven procedures and a period of 6.5 days; however, the rates of costs involved and minimum capital requirements are relatively high… This is why we regressed 15 places in the sub index and are now ranked 79th.

We rank 90th among countries with the easiest procedures for foreign trade! This means that in addition to discussing export activities we also need to consider the difficulties of doing business in this field. On average seven documents and 13 days are required for exporting items.

When it comes to bankruptcy and liquidation procedures we are in 109th place. The time taken and costs involved are far higher than the global average.

When it comes to construction permits we literally face many difficulties. We are ranked 136th. To obtain a permit we have to go through 18 procedures and put aside a period of 169 days.

And finally let me make it clear that despite saying that we attained a higher rank in the index as a whole, when we factor in the new methodology used, we have regressed four places in reality. Our points tally increased but those that reacted quicker have surpassed us.

80 PERCENT OF THE WORLD DID NOT STAND STILL

Topping the list of countries where it is easiest to do business are Singapore, New Zealand and Hong Kong. The countries that entered the top 20 this year are Estonia, Germany and Switzerland. It is eye catching that the report states that even countries at the top end of the list continue to try to improve…

The scores of 80 percent of the countries in the index improved this year. This means that doing business is becoming increasingly easier in many parts of the world!

Turkey needs to move fast and take steps in order to make a difference.

This is because our task will get easier to the same extent that we make it easy to “do business.” 

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