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WB Views Overly Restrictive And Obsolete Laws As Impediment To Forei

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  • WB Views Overly Restrictive And Obsolete Laws As Impediment To Forei

    WB VIEWS OVERLY RESTRICTIVE AND OBSOLETE LAWS AS IMPEDIMENT TO FOREIGN DIRECT INVESTMENT

    /ARKA/
    July 7, 2010
    YEREVAN

    Overly restrictive and obsolete laws are an impediment to foreign
    direct investment and their poor implementation creates additional
    costs to investment, finds Investing Across Borders 2010, a new report
    by the World Bank Group.

    The report sent to ARKA News Agency by the WB Yerevan Office is the
    first World Bank Group report to offer objective data on laws and
    regulations affecting foreign direct investment that can be compared
    across 87 countries.

    According to the report, leasing industrial land in Nicaragua and
    Sierra Leone typically requires half a year as opposed to less than
    two weeks in Armenia, Republic of Korea, and Sudan.

    In Angola and Haiti excessive red tape means it can take half a year
    to establish a subsidiary of a foreign company.

    Pakistan, Philippines, and Sri Lanka it can take up to two years to
    enforce an arbitration award.

    "Foreign direct investment is critical for countries' development,
    especially in times of economic crisis. It brings new and more
    committed capital, introduces new technologies and management styles,
    helps create jobs, and stimulates competition to bring down local
    prices and improve people's access to goods and services," said
    Janamitra Devan, Vice President of Financial and Private Sector
    Development, World Bank Group.

    The report finds that countries that do well on the Investing Across
    Borders indicators also tend to attract more foreign direct investment
    relative to the size of their economies and population. Conversely,
    countries that score poorly tend to have higher incidence of
    corruption, higher levels of political risk, and weaker governance
    structures.

    Investing Across Borders 2010 aims to help countries develop more
    competitive business environments by identifying good practices in
    investment policy design and implementation. It provides indicators
    examining sector-specific restrictions on foreign equity ownership,
    the process of starting a foreign business, access to industrial land,
    and commercial arbitration regimes in 87 countries.

    The World Bank Group is one of the world's largest sources of funding
    and knowledge for developing countries. It comprises five closely
    associated institutions: the International Bank for Reconstruction
    and Development (IBRD) and the International Development Association
    (IDA), which together form the World Bank; the International Finance
    Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA);
    and the International Centre for Settlement of Investment Disputes
    (ICSID).




    From: A. Papazian
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