The World Bank “Doing Business” annual ranking of 190 economies has taken a huge hit in the past few weeks as an internal investigation showed how Senior Management had manipulated data on the ease of doing business to please China (ranked 31st out of 190, with a DB score of 77.9/100) in exchange for a capital increase. The World Bank finally announced it was ending the initiative which had been developed at an extremely high cost to taxpayers and employed thousands of consultants globally.
The Bank described “Doing Business”, the 2021 iteration of which would have been the 18th as it first launched in 2002, as an annual study investigating the regulations that enhance business activity and those that constrain it. It measures topics such as access to electricity, registering property, and resolving insolvency. What it did not measure was how social exclusion constrains business.
Long before the current crisis, civil society including LGBTQ+ activists had called out the index for overlooking the role of inclusion in attracting talent but also ensuring that talent reaches its potential.
In 2016, the Bank finally added a gender dimension to its measures, including this in the annual ranking on each country’s ease of doing business. The Bank’s staff celebrated the move. However, it never included an LGBTQ+ dimension to the ranking.
As a result, Singapore – a country that not only criminalizes same-sex relationships but also muzzles LGBTQ+ civil society – was constantly ranking among the top places in the world (ranked 2nd, with a DB score of 86.2/100) to do business. Something I denounced again in a February 2020 article on Indonesia. While nobody has tried to figure out the ease of accessing credit for LGBTQ+ people in Singapore, it is obviously much lower than for their heterosexual peers. They cannot use the assets of their partners as collateral as an example. Similarly, the impossibility for foreigners to obtain visas for their same-sex spouses has been a huge constraint for multinationals. If there is one country that could benefit from the pressure of multilateral institutions on decriminalization, it is Singapore.
Multiple studies have shown a correlation between a supportive legal environment, progressive societal attitudes on LGBTQ+ issues, and economic performance. In fact, after a 2014 study I led at the Bank showed that economies suffered from LGBTQ+ exclusion, Open for Business published an in-depth study on how LGBTQ+ inclusion specifically damages the business environment, particularly in cities. With its Country CEO briefs, Out Leadership has developed a methodology to rank countries on their LGBTQ+ friendliness. Improving LGBTQ+ equality positively impacts GDP, results in higher employment levels, and increases productivity. Period.
Yet, the Bank “Doing Business” ranking continued to ignore LGBTQ+ voices despite considering developing its own LGBTI inclusion index in 2017, under pressure from civil society.
In doing so, the World Bank sent a clear signal that it did not want to undermine the seriousness of “Doing Business” with a frivolous topic such as sexual orientation and gender identity. The heterosexual Ph.D. in economics from western universities that populate the Bank persist in seeing LGBTQ+ issues as irrelevant to economic issues. In doing so, they fail to play their part in raising awareness on the importance of LGBTQ+ inclusion to a sustainable economy and addressing the issue of poverty in our community, which after all is what they are (extremely well) paid to do.
Unfortunately, the World Bank “Doing Business” report is not the only report that continues to exclude LGBTQ+ inclusion as a factor in the ease of doing business.
Doing Business in North America, published by Arizona State University, lists at the top of its ranking states that have the lowest scores on the Out Leadership State Index: North Carolina, Mississippi, Oklahoma, and South Dakota. Similarly, Refinitiv’s diversity and inclusion index give similar inclusion scores to France and Malaysia, despite Malaysian law punishing “carnal knowledge against the order of nature” with up to 20 years in prison and mandatory whipping.
Out Leadership remains the platform set up specifically to fill the void, build and champion the business case for LGBTQ+ inclusion. Our work is obviously far from over. Daily, we provide useful guidance for businesses that believe LGBTQ+ equality is necessary for business success and the right thing to do. Demonstrating that LGBTQ+ inclusion is a win-win proposition for both business and society may indeed be a good starting point to effect the lasting change we should all be seeking, in China, Singapore, and elsewhere. It is long past time that multilateral institutions and international rankings play their part.