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Augusto Lopez ClarosAugusto Lopez ClarosDirector
Global Indicators & Analysis
November 22, Brussels
Benchmarking as a Development Tool: Benchmarking as a Development Tool:
Promoting Better Business Regulation in EU Candidate and Potential Candidate
Countries
2
Global Indicators and Analysis Department (GIA)
Objectives
Current products
Deliverables
Data dashboardData dashboard• To track performance over time
At the national level At the subnational level (municipal and state) At the regional level
• To spur competition for reform• To promote transparency
Period regional, national and subnational reportsPeriod regional, national and subnational reports• To compare primary micro level data
Over time Across a number of locations in the same country Across countries/regions
Subnational Doing BusinessSubnational Doing Business
Investing Across BordersInvesting Across Borders
Women, Business and the LawWomen, Business and the Law
Enterprise SurveysEnterprise Surveys
Building BlocksBuilding Blocks
Doing Business in South East Europe 2008• Created a baseline for 15 subnational cities in addition to the 7 cities representing their respective economies in the annual report
Doing Business in South East Europe 2011• Updates benchmarks for 18 cities in 6 economies (all but Croatia) previously measured • Tracks business reforms in these cities• Adds a new economy (Moldova) and 4 new cities from Albania, FYR Macedonia and Moldova (Eastern Neighborhood)
MOLDOVA
8 economies and 26 cities surveyed
Both reports cover 4 indicators
• Starting a business
• Dealing with construction permits
• Registering property
• Enforcing contracts
6
Doing Business in South East Europe
• Skopje (FYR Macedonia) and Banja Luka (Bosnia and Herzegovina) most improved in the areas benchmarked
• No single city or economy outperforms the others in all areas
• The best overall improvement of the region is in the starting a business area
• Dealing with construction permits remains expensive in the region
• There is rich variation in performance by indicators across economies and even among cities within the same economy
• Cities can learn from existing good practices across the region to become more competitive nationally, regionally and globally
Remarkable progress in regulatory reform across the region results in significant time and cost savings for entrepreneurs
7
What are the key findings?
Procedures (number) Time (days) Cost (% of GNI pc)
SEE Average 2008
SEE Average 2011
10
8
26
17
22.3
13
6 EU Average 2011
15
5.7 Skopje (FYR Macedonia) 3
3
1.5 Pljevlja (Montenegro)
8
South East Europe’s business entry averages improved significantly
• The number of procedures varies from 15 in Pljevlja and Skopje to 30 in Chisinau
• Pre-construction clearances take up the most time
• SEE is one of the most expensive regions in the world: the average cost is 1,134% of
income per capita
9
Dealing with construction permits is expensive
Time (days)
Property transfer tax (% of property value)
10
Wide variation in property registration across the region
Measure progress over time
Expand the subnational and regional analysis to cover other areas such as “Paying Taxes”, “Trading across Borders”, “Getting Electricity” and “Closing a Business”
Support regional “peer-to-peer” learning events to disseminate good practices and motivate the replication of successful business reforms from the region and internationally
11
Ia. Doing Business in South East Europe 2013
EU averageTurkey
EU accession countries average
12
IndicatorWorld’s top
rankedEU’s top ranked
Turkey
Starting a business New Zealand Ireland (13) 61
Dealing with construction permits
Hong Kong SAR, China
Denmark (10) 155
Registering property Saudi Arabia Lithuania (7) 44
Enforcing contracts Luxembourg Luxembourg (1) 51
Ease of doing business
Turkey and EU rankings on the ease of doing business 2010/11
4 Doing Business indicators:
• Starting a business
• Dealing with construction permits
• Registering property
• Enforcing contracts
13
Ib. Doing Business in Turkey 2012
7 regional centers:
• Istanbul, Marmara
• Ankara, Central Anatolia
• Izmir, Aegean
• Mersin, Mediterranean
• Gaziantep, South-eastern Anatolia
• Malatya, Eastern Anatolia
• Samsun, Black Sea
14
II. Investing Across Borders (IAB): Overview
Overview Objectives
• The IAB indicators focus on FDI regulation, and follow the Doing Business methodology for data collection.
• The first report on 87 economies was launched in July 2010 and a second report is planned for June 2012.
• IAB 2012 will cover 5 topics (see next slide)
• Respond to information requests for benchmarks on FDI regulations by governments, private sector, development partners and academics.
• Facilitate policy dialogue by identifying good practices and sharing of reform experiences
• Stimulate reforms
• Inform reform advisory work, research and analysis
Investing across sectors
Starting a foreign investment
Hiring skilled expatriates
Converting and transferring
currency
Arbitrating and mediating disputes
Foreign equity ownership restrictions in:
Primary sectors:Mining, oil and gas; agriculture and forestry
Manufacturing: Electronics; food processing; basic chemicals
Services:Telecommunications; banking; insurance; transportation; etc.
Rules and process of starting a foreign business
Land-related legal rights and information access
Rules for Special Economic Zones (pilot/research section)
Rules and process of employing skilled expatriates
Process of appealing a rejected application for a work permit
Rules and process for obtaining a spousal work permit
Restrictions on the membership of the Board of Directors
Rules for currency convertibility and repatriation
Process of obtaining and servicing a foreign loan, and repatriating dividends
Restrictions on holding bank accounts
Strength of arbitration and mediation laws
Strength of arbitration and mediation institutions
Extent of judicial assistance
Ease of arbitration process
Ease of enforcement process
15
Topics of IAB 2012 (Proposed publication date June 2012)
16
IAB 2012 country coverage
EU member states EU candidates and potential candidates
Included in IAB:Austria, Bulgaria, Czech Republic, France, Greece, Ireland, Poland, Romania, Slovakia, Spain, United Kingdom
Not included in IAB:Belgium, Cyprus, Denmark, Estonia, Finland, Germany, Hungary, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovenia, Sweden
Included in IAB:Albania, Bosnia and Herzegovina, Croatia, Kosovo, Macedonia FYR, Montenegro, Serbia, Turkey
Not included in IAB:Iceland
Economy Selected IAB indicatorsEconomy
score
Highest global score
Selected reform recommendations
Investing across sectors
Turkey
Maximum foreign equity ownership allowed in:- Consider abolishing FDI ownership limits. - Increase competition in strategic sectors.(See iab.worldbank.org for more specific
information.)
- Electricity transmission and distribution
0% 100%
- Airlines and port operation 49% 100%
- Television broadcasting 0% 100%
Starting a foreign business
Bosnia and Herzegovina
Number of days to establish a foreign-owned subsidiary
83 days 4 days- Eliminate and/or simplify specific procedures.
(See iab.worldbank.org for more specific information.)
Accessing industrial land
Bulgaria Time to lease public land (days) 351 20- Streamline and regularize the process of leasing
public land. (See iab.worldbank.org for more specific information.)
MontenegroStrength of lease rights index (0-100)
69.2 100- Strengthen various investor lease rights. (See
iab.worldbank.org for more specific information.)
Arbitrating commercial disputes
AlbaniaEase of arbitration process index (0-100)
40.7 88.5 - Strengthen investor rights and overall legal and institutional regime for arbitration. (See iab.worldbank.org for more specific information.)Kosovo
Extent of judicial assistance (0-100)
27.5 98.8
17
Sample bottlenecks IAB 2010 data in selected economies
Objective: The Women, Business and the Law (WBL) dataset and report focuses on how easy or difficult is it for women to get jobs or start and run businesses. Using quantitative and objective data, it examines where laws differentiating between men and women way affect women’s opportunities and incentives to work.
18
III. Women, Business & the Law (WBL): Topic Areas
Indicator Coverage
1 Accessing Institutions
Explores women’s legal ability to interact with public authorities and the private sector in the same way as men
2 Using Property Analyzes women’s ability to access and use property based on their capacity to own, manage, control and inherit property.
3 Getting a Job Examines restrictions on women’s working hours and industries; work-related maternity , paternity and parental leave benefits; and retirement and pensionable ages
4 Providing Incentives to Work
Covers personal income tax liabilities, including credits and deductions available to women relative to men and examines public provisions of childcare and education
5 Building Credit Identifies minimum loan thresholds in private credit bureaus and registries that collect information from microfinance institutions
6 Going to Court Considers the ease and affordability of justice by examining women’s access to small claims courts and women’s capacity to file cases in a court of law
Women, Business and the Law 2012 Indicators:
The report objectively measures legal gender differentiations in 141 economies worldwide within six categories:
It does not capture the full extent of the gender gap, nor does it indicate the relative importance of each aspect covered.
19
What the WBL report measures
20
Gender disparities in Turkey as measured by WBL
The gender gap in Turkey remains huge
Turkey (ranked 122 out of 135 countries worldwide) occupies the last place among European countries in the Global Gender Gap 2011 report. The country performs particularly poorly in measures of political empowerment of women and variables which capture measures of economic participation and opportunity. In the latter category, Turkey ranks among the 10 worst performers in the world.
Source: World Economic Forum Global Gender Gap Report 2011
21
IV. Enterprise Surveys: the world's most comprehensive company-level data
Current coverage Proposed work program
EU countries (sample size):Bulgaria (270), Czech Republic (270), Estonia (270), Hungary (270), Latvia (270), Lithuania (270), Poland (540) , Romania (540) , Slovakia (270) , Slovenia (270)
EU candidate countries (sample size):Croatia (360), FYR of Macedonia (360), Montenegro (150), Turkey (1320)
Expand samples in main BEEPs
Small follow-up modules (every 6 months) to measure effects of reforms and economic changes
Incorporate other EU countries: Greece, Portugal, Spain, Ireland.
The Business Environment and Enterprise Performance Surveys (BEEPs) generate indicators of the overall business environment including infrastructure, regulation, corruption, finance, labor practices, competition, etc.
22
Analyze the 11 Doing Business (DB) indicators as well as the 5 Investing Across Borders (IAB) indicators and the 6 Women, Business & the Law (WBL) indicators plus firm data from the Enterprise Surveys (ES)
Provide an in-depth analysis of the business environment in the EU accession countries and their comparative performance vis-à-vis the 27 EU member countries and other selected countries (e.g. China, India, Brazil)
Synthesis report brings 4 indicator groups into one package analyzing business environment from 3 perspectives:
• Domestic firms and entrepreneurs (DB & ES)• Foreign firms (IAB)• Gender (WBL)
23
V. Synthesis report: comparing the accession countries to the EU and the rest of the world
24
VI. Economy profile and data dashboard
Economy-specific report analyzing the business environment through 4 indicator sets:
• Doing Business / subnational Doing Business• Investing across Borders• Women Business and the Law• Enterprise Surveys
25
Dashboard: Albania
Albania
26
Proposed Timeline
2012
2013
Initial 2-year agreement extendable for another 7-year period• Initial period: 2012 - 2013• Renewal period: 2014 – 2020
Cost estimates (2012 - 2013)
Component Resources ( in Euro) Output
I. Subnational Doing Business 1.6 million 2 reports: Turkey and SEE
II. Investing Across Borders 0.8 million IAB data update
III. Women, Business & the Law 0.5 million WBL data update
IV. Enterprise Surveys TBD Additional coverage
V. Synthesis report 0.4 millionRegional report covering EU members
and EU candidate countries
VI. Economy profiles or dashboard: all indicators
0.2 millionWeb-based comparisons or economy
profile reports
Total 3.5 million
27
Institutional arrangements and budget