Chile demands answers in WB ease of doing business ranking controversy

Chilean President Michelle BacheletChilean President Michelle Bachelet demanded an investigation into a World Bank report after the bank’s chief economist said its global rankings on the ease of doing business in different countries may have been manipulated for political reasons. The World Bank’s Paul Romer told the Wall Street Journal that Chile’s recent decline in the annual “Doing Business” rankings was almost entirely due to methodological changes that could have been politically motivated, and that it wasn’t driven by an actual deterioration in the South American nation’s business environment. “Given the seriousness of what happened, as a government, we will formally request a full investigation by the World Bank,” Bachelet said Saturday on her Twitter account. “Beyond the negative impact on Chile’s position, the alteration harms the credibility of an institution that must count on the confidence of the international community.” The “Doing Business” report ranks nations on data points that include how easy it is to get construction permits or register property. While Chile’s rank in the World Economic Forum’s global competitiveness report has hovered between 33 and 35 in the past five years, its “Doing Business” position has been more volatile. Chile ranked as high as 34 under the pro-business administration of President Sebastian Pinera in 2010 to 2014, but as low as 57 during Bachelet’s two terms in office, which ran from 2006 to 2010, and from 2014 to now. Pinera won a new term during elections in December and takes office on March 11. He swept to victory in the second round of Chile’s presidential election in December by a wider than expected margin after pledging to reverse four years of sluggish economic growth.

Source: Business Standard