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Makati City, December 08, 2010. Janamitra Devan Vice President Financial and Private Sector Development The World Bank and International Finance Corporation Tanya Lat Project Manager AIM Policy Center. What does Doing Business measure?. Doing Business indicators: - PowerPoint PPT Presentation
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Financial & Private Sector DevelopmentMakati City, December 08, 2010
Janamitra Devan Vice President
Financial and Private Sector Development
The World Bank and International Finance Corporation
Tanya Lat Project Manager
AIM Policy Center
Financial & Private Sector Development
What does Doing Business measure?
Doing Business indicators:
Focus on regulations relevant to the life cycle of a small to medium-sized domestic business in the largest business city
Are built on standardized case scenarios
The objective: efficient regulations, accessible to all, and simple to implement
DO NOT measure all aspects of the business environment such as macroeconomic stability, corruption, level of labor skills, proximity to markets, or of regulation specific to foreign investment or financial markets.
2
Financial & Private Sector Development
1 Footnote goes here (add tab after number for proper alignment). 10 pt Arial regular. Source: Place here. 10 pt Arial regular.
Doing Business indicators – 11 areas of business regulation (9 included in the ranking)
Start-up Expansion Operations Closing Starting a
business
Minimum capital requirement,
procedures, time and cost
Registering property
Procedures, time and cost
Getting credit
Credit information systems
Movable collateral laws
Protecting investors
Disclosure and liability in related party transactions
Enforcing contracts
Procedures, time and cost to resolve a commercial dispute
Dealing with construction permits
Procedures, time and cost
Paying taxes
Payments, time and Total Tax Rate
Trading across borders
Documents, time and cost
Getting electricity (annex I)
Procedures, time and cost
Employing workers (annex II)
Closing a business
Time, cost and recovery rate
Property rightsInvestor protectionAccess to credit
Entry Administrative burden Flexibility in hiring
Recovery rateReallocation of assets
Financial & Private Sector Development
Top 30 economies on the ease of Doing Business 2009/10
4
1. Singapore 16. Korea, Rep.
2. Hong Kong SAR, China 17. Estonia
3. New Zealand 18. Japan
4. United Kingdom 19. Thailand
5. United States 20. Mauritius
6. Denmark 21. Malaysia
7. Canada 22. Germany
8. Norway 23. Lithuania
9. Ireland 24. Latvia
10. Australia 25. Belgium
11. Saudi Arabia 26. France
12. Georgia 27. Switzerland
13. Finland 28. Bahrain
14. Sweden 29. Israel
15. Iceland 30. Netherlands
148. Philippines
Financial & Private Sector Development
61%
63%
59%
47%
67%
OECD high Income
Eastern Europe and Central Asia
Sub-Saharan Africa
Middle East and North Africa
Latin America and
Caribbean
South Asia
East Asia and Pacific
Economies in East Asia & the Pacific were among the most active in making it easier for local firms to do business in 2009/10
5
84%
75%
Percentage of countries with at least one positive improvement in 2009/10
Financial & Private Sector Development
Closer to an apples-to-apples comparison
Expands Doing Business beyond the largest business
city
Captures local differences in regulations or enforcement
Gives specific locations an opportunity to tell their story
and provides a tool for locations to compete globally
Provides information on good practices within the same
country that can be easily replicated
Why expand Doing Business to the subnational level?
Financial & Private Sector Development
Doing Business in the Philippines 2011 covers 25 cities
Doing Business in the Philippines 2011 updates 2008 data and expands the analysis to 25 cities. The study measures national and local regulations across the country in 3 areas of the life of a business:
1. starting a business
2. dealing with construction permits
3. registering property
Second in a series of reports undertaken in partnership with the Asian Institute of Management Policy Center
Data collected with the help of more than 500 private sector contributors and public sector officials
Luzon: Batangas City, Caloocan, Las Piñas, Makati, Malabon, Mandaluyong, Manila, Marikina, Muntinlupa, Navotas, Parañaque, Pasay, Pasig, Quezon City, San Juan, Taguig, Valenzuela
Visayas: Cebu City, Iloilo City, Lapu-Lapu, Mandaue
Mindanao: Cagayan de Oro, Davao City, General Santos, Zamboanga City
Financial & Private Sector Development
• 65% of cities benchmarked in 2008 and again in 2010 have improved in at least one area measured
• Computerization and multiple service providers make it easier to do business, lower transaction costs and increase transparency across the Philippines
• High number of procedures continues to be a challenge for entrepreneurs
• Wide variation in local business regulation across the country points to ample room for further business reforms
• National level business reforms needed for more results
• Cities can learn from the existing good practices of their peers and become more competitive nationally and globally
Key findings
Financial & Private Sector Development9
19 business reforms since 2008 made it easier to do business in the Philippines
City or departmental reforms Implementation of national reforms
Starting a business
Dealing with construction
permits
Registering property
Starting a business
Dealing with construction
permits
Registering property
Caloocan
Cebu City
Davao City
Las Piñas
Makati
Malabon
Mandaluyong
Mandaue
Manila
Marikina
Muntinlupa
Navotas
Parañaque
Pasay
Quezon City
San Juan
Taguig
Valenzuela
Financial & Private Sector Development
Manila made starting a business easier in 2009/10 thanks to local level reforms
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 160
10
20
30
40
50
60
Procedures
Tim
e (
da
ys
)
1 procedure cut
Time cut from 53 to 38 days
Manila introduced a one-stop shop for the municipal license and cut the inspection by the mayor’s office, reducing start-up time by 15 days
Financial & Private Sector Development
Easier business entry means more new firms: evidence from empirical research
MexicoImpact of the reduction of registration procedures through the introduction of One-Stop Shops and the elimination of federally required procedures
Increase in the number of new firms of about 6% Increase in employment by 2.6% Consumer Price Index decrease by 1% due to competitive pressures of new
entrants
ColombiaImpact of the introduction of One-Stop Shops in 6 cities:
Increase of 5.2% in the number of new firms
IndiaImpact of the elimination of License Raj in 16 states over 64 industries:
Increase in the number of new firms by 6%
Why business regulation reform matters
Financial & Private Sector Development
9 of 20 cities benchmarked in 2008 made it easierto start a business
Financial & Private Sector Development
Majority of permit requirements during pre- and post-construction phases
Financial & Private Sector Development16
90% of construction permit cost relates to electricityconnection
Financial & Private Sector Development18
6 of 20 cities benchmarked in 2008 made it easier to register property
Financial & Private Sector Development
Philippine cities have good practices…
IndicatorGlobal Rank
(183 economies)Days to deal with construction permits Zamboanga City (46 days) 5Days to register property Mandaluyong (22 days) 49Cost to register property Mandaue (3.35% of property value) 64Cost to deal with construction permits Davao City (94.24% of income per capita) 67
Financial & Private Sector Development
…but there is room for improvement
IndicatorGlobal Rank Range (183 economies)
Number of procedures to register property 8-9 procedures 137-159Number of procedures to deal with construction permits
25-36 procedures 155-178Number of procedures to start a business 15-22 procedures 175-183