The World Bank on Monday unveiled a new methodology and improved safeguards to assess the business climate in 180 countries after embarrassing revelations of data breaches and favoritism toward China forced it to scrap its flagship rating two years ago, Reuters reported.

The bank withdrew its Doing Business rating in September 2021, citing internal audits and an independent investigation that found senior World Bank executives pressured staff to change data in China’s favor.

He cited data breaches that also boosted the ratings of other countries, including Saudi Arabia, the United Arab Emirates and Azerbaijan.

A pilot edition of the new annual replacement series, called Business Ready, will be published in spring 2024, covering an initial group of 54 economies in Asia, Latin America, Europe, the Middle East and sub-Saharan Africa, the bank said. .

More countries will be added over the next two years as the bank refines its methodology and ramps up a new project that aims to help countries attract investment and increase jobs and productivity to accelerate development.

“Business is ready… reflects a more balanced and transparent approach to assessing the country’s business and investment climate,” the bank said in a statement.

The World Bank’s chief economist, Indermit Gill, said the new approach allows for a “more complete and accurate assessment of the investment climate in countries,” which, in his opinion, is desperately needed by the global economy amid a general slowdown.

Business Ready was shaped by recommendations from experts from the World Bank, governments, the private sector and civil society groups, and for the first time includes workers’ rights as defined by the International Labor Organization, recognizing that regulation can also have a positive impact. aspects

“The main thing that went wrong was that the integrity of the Doing Business data was compromised. The main thing for us is that we have to ensure the integrity of the data, and we have a very comprehensive approach to that,” Norman Loaiza, director of the World Bank’s Indicators Group, which is leading the project, told Reuters.

DATA TRANSPARENCY

To ensure full transparency, Loayza said the bank will publish all the data it collects – raw data, scores and calculations used to derive the scores – from depositors in the private sector, as well as surveys of entrepreneurs, business owners and managers.

The Bank will also provide third parties with the necessary tools to reproduce the data evaluation results.

But World Bank officials are still debating whether to re-use the business climate rating that was at the center of the Doing Business controversy or create an overall index, Loaiza said, and a decision is expected before the first report.

Loaiza said that while the rankings have been criticized for encouraging political pressure to boost countries’ scores, they have also helped drive nearly 4,000 regulatory reforms in developing and advanced economies over the past two decades.

He said the new project focuses on 10 themes that cover the life cycle of a firm, including business start-up, utilities, labor, dispute resolution, market competition, taxation and insolvency, another step to address criticism of the previous product.

“We take into account not only the perspective of the private entrepreneur, but also the perspective of workers, consumers and other market participants,” he explained, referring to the inclusion of factors such as worker safety, environmental sustainability and market competition.

To implement the new approach, the bank published two key documents: a guideline and a business manual, which set out detailed protocols and safeguards, including how the bank interacts with governments and lines of approval, as well as a methodology guide on metrics and assessment. methodology.