The World Bank's most recent edition of its Doing Business report has stirred up some controversy. The report, published annually, measures 189 economies based on 11 distinctive indicator sets. While many of the results are unsurprising (for example, Hong Kong and Singapore are still the most business-friendly locations in the world), the eclectic nature of the top 10 most improved countries warrants a second look. Though some of the most improved economies seem like a steal in terms of investment opportunity, many warrant caution.


Perhaps the greatest surprise of this year's report, Egypt ranked as the 10th most improved economy in 2013. Indeed, the Egyptian stock exchange recently closed at its highest level since the fall of former president Hosni Mubarak.

With the World Bank calling the country North Africa and the Middle East's most improved country since 2005, many would likely see foreign investment as assured. Unfortunately, the fate of country is still relatively unknown in the wake of the complex issues dealing with the Muslim Brotherhood. Additionally, recent pushes to increase transparency while reducing systemic corruption are nowhere near completion.

The additional burden of an uncertain political future (and any resultant economic instability) forces the intelligent investor to tread carefully.


In the lowest quartile of rated countries overall, Burundi has made interstate trading far easier by reducing market protection measures and courting foreign investment. Hailed as the most improved state in terms of starting a business, there are indications that Burundi is streamlining a formerly ponderous system into a far more fluid and responsive market. Finally, Burundi has made great strides in simplifying and encouraging in-country development through the easing of construction permit restrictions.

Unfortunately, the Burundi economy is heavily dependent on foreign aid (42% of total national income). Coupled with a highly corrupt system, the private sector has been stifled by an ever-changing set of investment rules. Unless the country can manage to reduce the risk currently undermining all reform efforts, then Burundi has no real chance of developing further infrastructure to support its slowly energizing market.


With little external demand and with an economy that has just come off paying far too much for Russian energy this past August, the Ukrainian economy is lagging badly in Eastern Europe.

While recent positive retail growth in the country showed Ukraine as a burgeoning economy, the recent civil unrest has erased any hope of this trend continuing. Although Ukraine had been seen as effectively encouraging foreign investment, import coverage levels are at a mere two months, the lowest in the country's history and only ahead of Venezuela. While this is not a precise measurement of rating economic progress, the simple fact that currency reserves have fallen by half since 2011 should be a cause for worry.

The final nail in the coffin comes in the form of the new online tax system now mandated for all domestic enterprise. While large firms see this as a victory, small and medium businesses are bankrupted as the new system is seen as more convoluted than the old one. 

But the list isn't all bad...


Macedonia has many problems and yet real potential to successfully transition to a better world position. Although the state is cited as possessing the worst unemployment in the world at nearly one in three, Macedonia is currently fifth on the most improved countries in relation to the frontier, and the country also boosts an extremely easy to understand tax base.

While many say the improvements were made only for inclusion into the EU, Macedonia has managed to reduce, and in many instances overcome, the instability associated with the Balkan region. What's more, Macedonia's economy is seen as rapidly diversifying into the most dynamic of the region and seems certainly poised to trend further upward in the near future.

Make no mistake, top 10 lists are misleading. Investing in any of the states mentioned or any of the others on the list itself is not a guarantee of wasting money. Rather, what the list shows is that many countries are slowly closing the gap between emerging markets and developed markets.

But there is still a long way to go before investing in the most improved economies is the same as investing intelligently.