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