Transcript Title – Maximum Two Lines - Regional Cooperation Council

Benchmarking as a Development Tool:
Promoting Better Business Regulation in
EU Candidate and Potential Candidate
Countries
Augusto Lopez Claros
Director
Global Indicators & Analysis
November 22, Brussels
Global Indicators and Analysis Department (GIA)
Objectives
• Generate and disseminate actionable and comparable data and indicators,
as well as research and analysis, as key knowledge products - to inform the
agenda for financial sector and private sector development, underpin policy
dialogue, catalyze action, and engender research.
• Doing Business: 11 indicator sets, 183 economies.
Current
products
• Sub-National Doing Business: Driven by client demand – 27 reports on
over 300 cities in 54 economies in 5 years. Complements national DB
studies. Drives municipal/regional reforms – almost 200 reforms in a large
number of countries over 5 years.
• Investing Across Borders: Pilot launched in 2010 covering 87
economies. Concept to be fine-tuned, country coverage expanded.
Underpins FDI advisory work.
• Women, Business and the Law: Path-breaking database and analysis of
gender barriers to women’s economic participation in 128 economies.
Launched 2010 – dissemination ongoing.
• Enterprise Surveys: 130k + firms surveyed. All regions covered.
Complements DB, with broader scope. Basis for Investment Climate
Assessments, IC reform programs. Over 300 research papers using ES
data.
2
Proposal
Investment Climate Indicators
in EU Candidate and Potential Candidate Countries
Deliverables
Data 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 reports
• To compare primary micro level data
 Over time
 Across a number of locations in the same country
 Across countries/regions
Building Blocks
Subnational Doing Business
Investing Across Borders
Women, Business and the Law
Enterprise Surveys
Doing Business in South East Europe
8 economies and 26 cities surveyed
MOLDOVA
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)
Both reports cover 4 indicators
•
•
•
•
Starting a business
Dealing with construction permits
Registering property
Enforcing contracts
6
What are the key findings?
 Remarkable progress in regulatory reform across the region
results in significant time and cost savings for entrepreneurs
•
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
7
South East Europe’s business entry averages
improved significantly
SEE Average 2008
26
22.3
SEE Average 2011
17
15
13
10
8
EU Average 2011
Skopje (FYR Macedonia)
6
5.7
3
3
1.5 Pljevlja (Montenegro)
Procedures (number)
Time (days)
Cost (% of GNI pc)
8
Dealing with construction permits is expensive
•
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
Wide variation in property registration across the region
Property transfer tax (% of property value)
Time (days)
10
Ia. Doing Business in South East Europe 2013
 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
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Turkey and EU rankings on the ease of doing business
2010/11
World’s top
ranked
EU’s top
ranked
Turkey
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
Indicator
Starting a business
EU accession
countries average
125
117
100
Turkey
80 82
EU average
Ease of doing
business
5
7
9 10 11
14
22 24
19 21
30 31 32
27 28 29
71 72 73
40
37 38
12
44
51
48 50
56
59
62 64
87
92
Ib. Doing Business in Turkey 2012
 7 regional centers:
•
•
•
•
•
•
•
 4 Doing Business indicators:
• Starting a business
• Dealing with construction permits
• Registering property
• Enforcing contracts
13
Istanbul, Marmara
Ankara, Central Anatolia
Izmir, Aegean
Mersin, Mediterranean
Gaziantep, South-eastern Anatolia
Malatya, Eastern Anatolia
Samsun, Black Sea
II. Investing Across Borders (IAB): Overview
Overview
Objectives
• The IAB indicators focus on FDI
regulation, and follow the Doing
Business methodology for data
collection.
• Respond to information requests for
benchmarks on FDI regulations by
governments, private sector,
development partners and academics.
• The first report on 87 economies was
launched in July 2010 and a second
report is planned for June 2012.
• Facilitate policy dialogue by identifying
good practices and sharing of reform
experiences
• IAB 2012 will cover 5 topics (see next
slide)
• Stimulate reforms
• Inform reform advisory work, research
and analysis
14
Topics of IAB 2012 (Proposed publication date June 2012)
Investing across
sectors
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.
Starting a foreign
investment
Hiring skilled
expatriates
Rules and process of
starting a foreign
business
Rules and process
of employing skilled
expatriates
Land-related legal
rights and information
access
Rules for Special
Economic Zones
(pilot/research
section)
Converting and
transferring
currency
Rules for currency
convertibility and
repatriation
Process of
appealing a
rejected application
for a work permit
Process of obtaining
and servicing a foreign
loan, and repatriating
dividends
Rules and process
for obtaining a
spousal work
permit
Restrictions on holding
bank accounts
Restrictions on the
membership of the
Board of Directors
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Arbitrating and
mediating
disputes
Strength of arbitration
and mediation laws
Strength of arbitration
and mediation
institutions
Extent of judicial
assistance
Ease of arbitration
process
Ease of enforcement
process
IAB 2012 country coverage
EU member states
 Included in IAB:
Austria, Bulgaria, Czech Republic,
France, Greece, Ireland, Poland,
Romania, Slovakia, Spain, United
Kingdom
EU candidates and potential
candidates
 Included in IAB:
Albania, Bosnia and Herzegovina,
Croatia, Kosovo, Macedonia FYR,
Montenegro, Serbia, Turkey
 Not included in IAB:
 Not included in IAB:
Belgium, Cyprus, Denmark, Estonia,
Iceland
Finland, Germany, Hungary, Italy, Latvia,
Lithuania, Luxembourg, Malta,
Netherlands, Portugal, Slovenia,
Sweden
16
Sample bottlenecks IAB 2010 data in selected
economies
Economy
Turkey
Selected IAB indicators
Economy
score
Investing across sectors
Maximum foreign equity ownership allowed in:
- Electricity transmission and
0%
distribution
Highest
global
score
- Consider abolishing FDI ownership limits.
- Increase competition in strategic sectors.
(See iab.worldbank.org for more specific
information.)
100%
- Airlines and port operation
49%
100%
- Television broadcasting
0%
100%
Selected reform recommendations
Starting a foreign business
Bosnia and
Number of days to establish a
Herzegovina 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
Montenegro
Time to lease public land (days)
Strength of lease rights index (0100)
Arbitrating commercial disputes
351
20
69.2
100
Albania
Ease of arbitration process index
(0-100)
40.7
88.5
Kosovo
Extent of judicial assistance (0100)
27.5
98.8
- Streamline and regularize the process of leasing
public land. (See iab.worldbank.org for more
specific information.)
- Strengthen various investor lease rights. (See
iab.worldbank.org for more specific information.)
- Strengthen investor rights and overall legal and
institutional regime for arbitration. (See
iab.worldbank.org for more specific information.)
17
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
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
What the WBL report measures
Women, Business and the Law 2012 Indicators:
 The report objectively measures legal gender differentiations in 141 economies
worldwide within six categories:
1. Accessing
institutions
•Can a woman get
a job or pursue a
trade or profession
in the same way as
a man?
•Do women need a
man’s permission
to sign a contract
or register a
business?
2. Using property
•Do men and
women have equal
rights to use and
manage property?
•What is the default
marital property
regime?
3. Getting a job
•Can women work
in the same
sectors as men?
• Are there laws
mandating equal
pay between men
and women for
equal work?
4. Incentives to
work
• Is there equal tax
treatment for men
and women?
•Are there laws
establishing the
public provision of
childcare?
5. Building credit
• What Is the
minimum amount
for inclusion
covered by credit
bureaus?
• Do microfinance
institutions inform
credit bureaus?
6. Going to court
•Are small claims
courts available?
• What is the
maximum amount
for a small claim?
It does not capture the full extent of the gender gap, nor does it indicate the
relative importance of each aspect covered.
19
Gender disparities in Turkey as measured by WBL
Workplace
incentives
• Turkey has no laws preventing sexual harassment in the
workplace, while all EU countries have legislation that explicitly
prohibits sexual harassment in the workplace. Nor does Turkey have
laws explicitly making it illegal to ask a woman’s marital status
during a job interview. Nine EU member countries prohibit such
questioning.
Retirement
• In Turkey, the retirement age is 60 for men. This is lower than the
retirement age in most of the current EU countries which ranges from
67 in Denmark and Germany to 60 in France. In Turkey, the
retirement age is 58 for women.
• Most EU member states have equalized their retirement ages and
Turkey will equalize retirement ages by 2048
Parental
Benefits
• In Turkey, women are entitled to 112 days of paid maternity leave and
are paid 66% of their wages by the government during this time.
• The average in the EU is 140 days of paid maternity leave. Ten EU
countries pay maternity wages at 100%, however the UK pays 28% of
wages and Ireland pays 44%.
• Turkey does not offer any paid or unpaid paternity or parental leave.
• In all EU countries there are laws establishing the public provision of
childcare, or the state subsidizes childcare for children under the age of
primary education. This is not the case in Turkey.
20
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

The Business Environment and Enterprise Performance Surveys (BEEPs)
generate indicators of the overall business environment including infrastructure,
regulation, corruption, finance, labor practices, competition, etc.
Current coverage
Proposed work program
 EU countries (sample size):
 Expand samples in main BEEPs
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)
 Small follow-up modules (every 6
months) to measure effects of reforms
and economic changes
 Incorporate other EU countries:
Greece, Portugal, Spain, Ireland
.
22
V. Synthesis report: comparing the accession countries
to the EU and the rest of the world
 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
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
24
Dashboard: Albania
Albania
25
Proposed Timeline
2012
• Doing Business in Turkey – subnational DB study measuring the largest
business centers from 7 main regions of the country
• Investing Across Borders update
• Web-based dashboard and/or economy profiles
2013
• Doing Business in South East Europe – subnational DB study covering 7
economies and over 20 subnational cities
• Women Business and the Law update
• Synthesis report
• Web-based dashboard and/or economy profiles
26
Institutional arrangements and budget
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
TBD
Additional coverage
IV. Enterprise Surveys
V. Synthesis report
0.4 million
VI. Economy profiles or dashboard:
all indicators
0.2 million
Total
Regional report covering EU members
and EU candidate countries
Web-based comparisons or economy
profile reports
3.5 million
27