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Economic Reform Programme
DIAGNOSTIC TOOL For Identifying Key Constraints to Competitiveness
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This paper is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and the arguments employed herein do not necessarily reflect the official views of OECD member countries.
This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
This document has been produced with the financial assistance of the European Union. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the European Union.
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Foreword
Structural reforms are fundamental for the six economies of South East Europe (SEE) – Albania, Bosnia and Herzegovina, the Former Yugoslav Republic of Macedonia, Kosovo*, Montenegro, and Serbia – in their transition to becoming fully-functional market economies. They are also an indispensable pre-requisite for joining the European Union. To guide the accession process, SEE economies are required to prepare Economic Reform Programmes (ERPs), which outline economies’ medium-term macroeconomic and fiscal policy frameworks and structural reform agendas. The ERPs are reviewed at the highest instances of the EU and discussed at the annual Economic and Financial Dialogue between the EU and the Western Balkans and Turkey. Once agreed, they serve as roadmaps for governments to prioritise and implement needed economic reforms.
To support Western Balkan governments in this novel economic governance exercise, the European Commission mandated the OECD SEE regional programme to provide policy advice and capacity building to SEE governments in the ERP preparation and co-ordination process. Building upon its unique expertise in supporting economies in the region in the design and implementation of reforms in favour of growth, investment and employment, the OECD SEE regional programme engages in a highly collaborative policy dialogue with SEE government officials and stakeholders from the region to: 1) analyse the main constraints to growth and competitiveness; 2) identify policy responses and prioritise structural reforms; and 3) monitor progress in the ERP implementation.
The resulting ERP tool box aims to provide line ministries with a practical instrument that will help strengthen institutional capacities and boost inter-governmental transparency. It consists of three different tools, which can be used separately, or optimally, all together:
1. The ERP Diagnostic Tool identifies key structural obstacles that affect an economy’s competitiveness and inclusive growth, offering two customised methodologies to analyse the state of play and to define constraints per policy area.
2. The ERP Prioritisation Tool helps authorities to select and prioritise reform measures for their annual ERPs using a three-step approach: By offering; 1) a set of screening questions; 2) an evaluation of proposed measures; and 3) a holistic review vis-à-vis all pre-selected reforms.
3. The ERP Monitoring Tool provides guidelines and examples on how to track progress in the ERP implementation over time as well as to measure immediate outputs and the outcome of reforms.
To support the effective implementation of the ERP tool box, the OECD has provided hands-on assistance to government authorities in preparing their annual ERPs, and in particular: 1) supporting governments in setting-up the ERP preparation process and building capacities of line ministries involved in the ERP; 2) providing extended ad-hoc analytical support on issues of regional interest as well as on specific requests from each economy, both in terms of analytical reports and policy workshops; and 3) reviewing the final ERP documents and providing its own assessment to the EC. The ERP tools were pilot-tested in selected SEE economies in 2016 and 2017 and are being constantly updated to reflect feedback from its users to align with changes in the ERP Guidance Note and process.
* This designation is without prejudice to positions on status and is in line with United Nations Security Council Resolution 1244/99 and the Advisory Opinion of the International Court of Justice on Kosovo’s declaration of independence. Hereafter referred to as Kosovo.
FOREWORD
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Governments from the SEE regions and the EC have recognised the usefulness and relevance of these tools and the ERP exercise. They have contributed to better inter-ministerial co-ordination and to reinforcing economic governance structures across SEE economies.
Box. The ERP annual cycle and the role of the OECD
Since 2015 SEE economies have been developing annual ERPs. The ERP exercise derived from the European Semester and form part of the EU’s multilateral surveillance and economic policy co-ordination procedures. The ERPs are centrally co-ordinated within each economy and endorsed at the highest political level. An official ERP Co-ordinator is appointed within the government who steers the process and ensures a widespread consensus. The work of the ERP Co-ordinator is typically supported by technical co-ordinators within each line ministry. Together they form an ERP Working Group that ensures broad ownership of the exercise and a whole-of-government approach. As one of the key institutions involved in this process, the OECD provides substantive support to the ERP Working Groups throughout the ERP annual cycle. Key milestones in the ERP annual cycle include:
Guidance for the Economic Reform Programmes (April): The European Commission (EC) issues the updated Guidance for the ERPs, providing detailed guidelines on the structure and content of the ERP.
Joint Conclusions of the Economic and Financial Dialogue (JCEFD) between the European Union (EU) and the Western Balkans and Turkey (May): Representatives of the EU Member States, the Western Balkans and Turkey, the EC and the European Central Bank (ECB), as well as representatives of the central banks of the Western Balkans and Turkey meet for their annual economic policy dialogue, to present a set of policy guidelines to support economies’ efforts towards fulfilling the Copenhagen economic criteria. This policy guidance represents a cornerstone for SEE economies’ subsequent ERPs.
Regional Meeting of the ERP Co-ordinators (May): The OECD and the EC jointly organise the yearly Regional Meeting of the ERP Co-ordinators to discuss the ERP Guidance Note and the OECD expertise to help prepare the ERPs. Meetings are attended by high-level officials from the Western Balkans and Turkey and present the opportunity to discuss lessons learnt and next steps in the ERP preparation, and present economy-specific work plans and support.
Commission’s Overview and Country Assessments (June): The EC provides an assessment of the previous year’s ERPs, taking stock of the implementation of the country-specific policy guidance. Together with the JCEFD, this document represents the basis for the following ERP cycle.
In-country kick-off events (June–July): In-country kick-off events take place in the SEE capitals to align all stakeholders involved in the ERP preparation process by setting a clear timeframe and clarifying responsibilities of line ministries. The OECD also takes this opportunity to discuss pending challenges linked to the previous year’s exercise and key milestones to be achieved in the new cycle.
Policy seminars and capacity-building events (September–October): Upon ERP Co-ordinators’ request, the OECD holds in-country policy seminars and capacity building events with line ministries to discuss specific structural challenges and potential reform priorities for each economy, suggesting ways to further improve them for the purposes of the ERP. For example, in the 2016 and 2017 ERP cycles, the OECD organised more than 30 seminars, involving over 800 participants collectively.
OECD review of the first draft ERP (October–November): After the submission of the first draft ERP, the OECD reviews and provides written feedback on the draft diagnostics and reform measures. To do so, key reference sources consulted include the OECD SEE regional programme publications , as well as other international analyses (e.g. from the European Commission, World Bank, EBRD) and international experts’ feedback.
FOREWORD
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FOREWORD
Box. The ERP annual cycle and the role of the OECD
Stakeholder consultations (November–December): ERP Co-ordinators undertake in-country consultations to receive feedback on the diagnostics and reform measures from relevant stakeholders, including the private sector, NGOs and international organisations.
OECD review of the second draft ERP (December): After the submission of the second draft ERP, the OECD reviews and provides feedback on the updated versions of the draft diagnostics and reform measures.
Submission of the final ERP to the European Commission and the OECD (31 January): Finally, ERP Co-ordinators submit the final ERP to the European Commission and the OECD.
OECD involvement in the annual ERP cycle
May: ERP launch event in Brussels & bilateral meetings.
November - December: Stakehol-ders consultations in the countries.
December: OECD reviews 2nd ERP drafts.
October - November: OECD reviews 1st ERP drafts.
31 January: Countries submit final ERP 2017-19 to the EC.
September - November: Policy seminars and capacity building events.
February - April: ERP assessment and new guidelines.
June - July: Kick-off events and seminars in the capitals.
August- September:
Review of relevant
sources and documents to provide ERP
support.
In addition, the OECD SEE regional programme provides analytical support on topics of regional or economy-specific interest when setting their structural reform agendas. For example, it has provided policy makers with a comprehensive growth diagnostic and a regional study on special economic zones. It examines their relevance as a policy tool for sustainable investment in the region and raises questions on potential deadweight effects, foregone revenues and competition distortion.
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ACKNOWLEDGEMENTS
Acknowledgements
The ERP Tools have been specifically developed to support governments from the Western Balkans and Turkey to prepare their annual Economic Reform Programmes (ERP). They consist of three components to be applied in the different stages of the preparation process: the (1) ERP Diagnostic Tool to identify obstacles to competitiveness and growth; the (2) ERP Prioritisation Tool to select the most credible and growth-enhancing reform measures and the (3) ERP Monitoring Tool to track progress in the reform implementation.
The work was led by Anita Richter, Project Manager, Haris Avdić Pejićić, Alessandro Kandiah, Marijana Petrović and Filip Stefanović, Policy Analysts in the OECD South East Europe regional programme under the guidance of Marzena Kisielewska, Head of Division. The tools also benefited from significant contributions from Marija Kuzmanović (ERP Diagnostic Tool) and Janez ŠuŠterŠič (ERP Prioritisation Tool, ERP Monitoring Tool). Max Bulakovskiy, Sandra Hannig, Katarina Djermanovic-Largenton, Umur Gökçe, Jovana Pavlović, Patrik Pruzinsky and Juliane Stolle, OECD South East Europe regional programme, provided useful input. Editorial and technical support was provided by Sally Hinchcliffe and Pierre-Yves Perez-Queyroi.
The project also benefitted from inputs and suggestions from the European Commission, the ERP Co-ordinators from the region and their teams, in particular: Bernard Brunet, Hillen Francke and Gabriela Negut, European Commission (DG NEAR); Ms Adela Karapici, Ministry of Economic Development, Tourism, Transport and Entrepreneurship (Albania); Mr Amil Kamenica, Office of the Prime Minister, Council of Ministers (Bosnia and Herzegovina); Mr Qemajl Marmullakaj, Office of the Prime Minister (Kosovo); Mr Andrija Aleksoski, Ministry of Finance (The Former Yugoslav Republic of Macedonia); Ms Nina Vujosević, Office of the Prime Minister (Montenegro); and Ms Jasna Atanasijević, Public Policy Secretariat (Serbia).
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Table of contents
Introduction ............................................................................................................................................................................................................. 11
Chapter 1 Overall diagnostic ...................................................................................................................................................................... 13Objective ....................................................................................................................................................................................................... 15
Key Questions to be Answered ................................................................................................................................................... 15Step-by-step Approach .................................................................................................................................................................... 15
Methodologies for identifying obstacles to competitiveness and growth ............................................ 17
Chapter 2 Policy area diagnostic ............................................................................................................................................................. 19Objective ....................................................................................................................................................................................................... 21
Key Questions to be Answered ................................................................................................................................................... 21Step-by-step Approach .................................................................................................................................................................... 21
Energy and transport market reform .................................................................................................................................... 25Sectoral Development ........................................................................................................................................................................ 33Business environment and reduction of the informal economy .................................................................. 45Trade-related reforms ......................................................................................................................................................................... 51Research, development and innovation (RDI) and Digital Economy ......................................................... 59Education and skills ............................................................................................................................................................................. 67Employment and labour market ................................................................................................................................................ 73Social inclusion, poverty reduction and equal opportunities ......................................................................... 79
TABLE OF CONTENTS
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INTRODUCTION
IntroductionThe Diagnostic Tool was developed by the OECD South East Europe (SEE) regional
programme with the purpose of supporting governments of SEE in identifying the key structural challenges that hinder competitiveness and inclusive growth. The tool could serve as the cornerstone of the structural reform chapter of the Economic Reform Programme (ERP), from which all structural reform proposals should logically stem.
The tool offers a systematic approach for identifying and describing structural challenges to growth. As they address both economy-wide and sector-specific obstacles, the tool proposes two customised methodologies: the overall diagnostic and the policy area diagnostic. Both methods are presented in a ready-to-use format with detailed descriptions, but are not necessarily economy-specific: the accessing economies from SEE (Albania, Bosnia and Herzegovina, Former Yugoslav Republic of Macedonia, Kosovo, Montenegro and Serbia) share a significant number of similar challenges, but face an array of specific obstacles at the same time. Therefore, this Diagnostic Tool provides a framework, targeting the most common and significant obstacles to growth that SEE economies address; it is neither exhaustive, nor specifically tailored upon any of them.
The tool is specifically designed to be used by government authorities in charge of co-ordinating the structural reforms of the ERP (i.e. ERP co-ordinators) as well as by the line ministries when drafting their sector analyses, adapting it to the context of the specific economy they operate in.
A. The overall diagnostic methodology sheds light on the most critical obstacles to growth for the economy in general and consists of two implementation steps:
1. Definition of high-level growth challenges: This first step serves the purpose of providing a bird’s eye view of the economy and highlighting fundamental growth challenges. It should ideally seek to provide information on the key features of an economy’s state of play, such as the structure of the economy, its productive base and current growth drivers.
2. Identification of the underlying obstacles to growth: This second step aims to zoom in on the main structural constraints identified in the previous step, by taking into account findings of existing studies that identify obstacles to growth, or selecting a methodology to conduct a new analysis.
A brief summary of key selected methodologies to identify economic constraints, analyse growth opportunities, and derive policy priorities accordingly economy-wide is presented at the end of this section.
A. The policy area diagnostic methodology focuses on the key challenges the economy faces in each policy area and explains how they affect competitiveness. It will help, in particular line ministries, in providing accurate analysis input to the ERP and linking them with reform measure proposals. It consists of three implementation steps:
1. Definition of the state of play in a given policy area: This first step should provide a general overview of the current landscape for the given policy area to be analysed, by asking for the key features of the given policy area, state-of-play vis-à-vis the government’s strategic targets and other benchmarks.
2. Identification of the underlying obstacles to growth: This second step aims to zoom in on the main constraints that impede the economic development in that specific policy area. This step should help in giving an answer to the main structural obstacles in that area.
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3. Highlighting how these obstacles impact economic competitiveness and inclusive growth: This final step puts the structural obstacles into perspective by highlighting how they affect the overall economy. It also demonstrates why the identified obstacles are the most relevant ones for that policy area. This section should give an answer on how the structural obstacles affect investment, exports, consumption, productivity or employment, and how does this impact manifest itself.
This section will also offer a set of relevant indicators, potential structural obstacles and the consequent impact on growth for all ERP policy areas, with the exception of Public Finance Management (PFM).
The set of proposed indicators for the analysis of the state of play takes into consideration their availability for the SEE region. They derive from OECD and other international sources* directly applicable to the region (e.g. Competitiveness in South East Europe: A Policy Outlook, SME Policy Index Western Balkans and Turkey) or serve as good practice examples for gauging certain aspects of the market regulation (e.g. OECD Indicators of Product Market Regulation). When a source for an envisaged indicator was not directly available, the most relevant ministry was suggested as best institution to provide a similar set of data. Overall, the indicators and the methodology outlined in the Diagnostic Tool, are not mandatory: they should serve as a guidance for national ERP co-ordinators, when selecting relevant data for the analysis of the state of play of the economy, but can be complemented or replaced, based on criteria of pertinence and availability, by best proxies available at the time of conduction of the diagnostics.
By following these steps, ERP co-ordinators, in co-operation with relevant line -ministries, can come up with a detailed analysis that will allow for a better selection of measures that will effectively tackle the economy’s main constraints.
INTRODUCTION
* Eurostat, EBRD, World Bank Development Indicators, ILO, UNCTAD, UNESCO, FAO, World Economic Forum, national statistical offices.
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Chapter 1
OVERALL DIAGNOSTICStep-by-step approach and summary of key selected methodologies
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Overall diagnostic
Objective
To identify the key economy-wide structural challenges that hinder competitiveness and inclusive growth. This diagnostic is the foundation of the structural reform section of the Economic Reform Programme (ERP) from which all reform proposals should logically follow. Specifically, this methodology should help authorities when selecting and providing input for the drafting of the ERP Section 4.1 (Identification of key obstacles to competitiveness and inclusive growth).
Key questions to be answered
1. What are the high-level growth challenges (e.g. weak domestic and foreign investment, limited export capability or low levels of export sophistication)?
2. What are the key underlying causes behind these growth challenges, as derived from diagnostic analyses (e.g. weak access to finance for domestic small and medium-sized enterprises, or low quality education producing inadequate skills for the needs of the economy)?
Suggested approach
Define the high-level growth challengesProvide a bird’s eye view of the economy and highlight fundamental growth challenges.
Identify the underlying obstacles to growth/ growth challengesDetail these structural obstacles and explain how they affect competitiveness and growth.
Step-by-step approach
1. Define the high-level growth challenges
This step provides a bird’s eye view of the economy and highlights the fundamental growth challenges (e.g. the economy is not exporting enough, the economy does not innovate enough, or human capital is weak). It should demonstrate how the current economic structure and growth drivers differ from the desired outcomes as based on government development goals or strategies.
This part should seek to answer the following questions:
1. What is the overall structure of the economy? i.e. what is the share of investment and exports vs. other components of gross domestic product (GDP), what is the share of manufacturing vs. services vs. agriculture? What are the key recent trends in these indicators?
2. What does the economy produce – its main sectors, main exports and export sophistication? Which products have high development potential? What are the key recent trends in these indicators?
3. What is the investment composition and where is investment going? For example what is the share of private vs. public investment as a share of GDP, domestic vs. foreign investment and foreign direct investment (FDI) vs. portfolio? What are the key recent trends in these indicators?
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4. What are the current growth drivers? For example, what are the growth rate of exports and investment vs. other components of GDP, or the growth of manufacturing vs. that of services?
5. How do indicators 1) to 4) compare to the government’s strategic targets? How do they compare to relevant benchmarks from other economies?
Note: benchmark economies will vary depending on the indicator under examination. They can thus include developed economies (e.g. EU15), EU28, new EU member states (EU13), fast-growing emerging markets (for example if looking at GDP growth rate figures or the range of products the economies produce) as well as regional peers (e.g. WB6). Selecting the right benchmarks is essential for the development of a sound and objective diagnostic. If needed, the OECD can assist in identifying appropriate benchmarks.
2. Identify the underlying obstacles to growth and growth challenges
This second step aims to provide a more detailed overview of the key growth challenges, zooming in on the main structural obstacles that impede the development of the economy. It should also explain how these structural constraints affect competiveness and inclusive growth.
The writing of this section consists of two steps:
1. Take stock of existing studies that identify obstacles to growth for that economy
Most economies will have at their disposal a number of studies, for example by the OECD, World Bank or the International Monetary Fund (IMF), which identify the most critical and pressing obstacles to growth and competitiveness. They can rely on those results for this section of the ERP document.
2. If a new study is needed, select the methodologies to be used for the analysis
If economies need to conduct new analyses or update old ones, proposed tables summarise the suggested methodologies. The tool for writing the ERP policy area diagnostics provides concrete examples of indicators that can be used in the diagnostic analysis, and the sources where these data can be found.
Note: this section should not necessarily highlight issues in all policy areas of the ERP document nor does it need to follow the ERP policy area structure. This part of the document should shed light on the most critical obstacles to growth.
This section should answer the following questions:
a. What are the main structural obstacles as identified in your diagnostic analysis/analyses? These could include weak access to finance for small and medium-sized enterprises (SMEs), a weak and unpredictable regulatory environment, unreliable and poorly maintained infrastructure, heavy administrative and regulatory burden on businesses, limited capacity for innovation, or poor quality of education.
Note: this section should not go deeper into the analysis of these constraints, as that analysis will be presented in the specific policy area diagnostics. For example, it is sufficient to say access to finance is a constraint without explaining that it is a constraint because of high interest rates and collateral requirements, etc. as that will be examined more closely in the policy area diagnostic.
b. How do these obstacles hinder the economy’s competitiveness and growth? What is the impact on relevant variables such as investment, exports, consumption, productivity, employment and inequality, and through what channels is this impact manifested? For example weak access to finance affects SMEs’ capacity for investment and innovation, which, in turn, limits the scope for the diversification of the domestic production and export base and the capacity of SMEs to link into global value chains.
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Most economies will have at their disposal a number of studies which identify the most critical and pressing obstacles to growth and competitiveness (Step 2 in the writing of the diagnostic section as described in the diagnostic tool) and thus can rely on those results when writing this section of the Economic Reform Programme (ERP) document. However, in case some countries need to conduct new analyses or update old ones. For this reason, this tool also includes some suggested methodologies:
Table 1 below gives a brief summary of the key selected methodologies. Some of these seek to identify economic constraints, while others analyse growth opportunities and derive policy priorities accordingly. Some of the methodologies are comprehensive enough to be able to independently meet the ERP diagnostic requirements, whilst others will have to be supplemented with additional analysis.
Table 2 provides a more detailed discussion of each methodology and its relevance for the ERP document.
Methodologies for identifying obstacles to competitiveness and growth
Table 1. Methodologies
Identifying economic constraints
1 Growth diagnostic Identifies binding constraints to an economy’s economic growth.
2 Growth identification and facilitation (GIF) framework
Identifies industries with high growth potential and the constraints that hamper their development.
Investigating economic opportunities
4 Growth accounting Examines the contribution of different factors to economic growth (available capital, labour, human capital, and technology) in order to determine which factor has the highest potential to boost GDP growth
5 ITC export competitiveness assessments Identifies 1) the drivers and/or obstacles to an economy’s export competitiveness; 2) high potential export products and attractive markets for each high performing export product and 3) export opportunities for economies and regions (can be done bilaterally).
6 EXPY (export sophistication)/product space analysis
Estimates the level of technological sophistication embodied in an economy’s export portfolio.
7 Cluster analysis Examines and evaluates the health and dynamics of an economy through benchmarking clusters.
Table 2. Diagnostic methodologies
Identifying obstacles/constraints Description Advantages Disadvantages Relevance to ERP
Growth diagnostics
Identifies binding constraints to an economy’s economic growth.
• Undertakes a comprehensive economy-specific assessment of a wide set of economic indicators to identify most pressing constraints to competitiveness and growth.
• Targets and prioritises policy reforms with the highest potential impact on growth.
• Most of the data needed are available from domestic/international sources.
• Does not provide insights for specific sectors nor does it examine potential new industries (which are not diagnosed).
• Focus is only on competitiveness and growth and does not factor in social inclusion, poverty reduction and equal opportunities.
• Focuses on binding constraints to growth, so cannot provide detailed policy recommendations across all thematic areas of analysis.
Can provide insights for an overview of the main structural obstacles to competitiveness and growth at national level (i.e. economy-wide diagnostic).
Depending on the identified binding constraints, the methodology can provide insights into some of the sector-specific diagnostics in the ERP document.
Growth identification and facilitation (GIF) framework
Identifies industries with high growth potential and the constraints that hamper their development.
• Provides insights on key strategic sectors by comparing the country to others with similar factor endowments.
• Identifies key barriers preventing the development of selected industries.
• Lays out a step-by-step approach for policy makers to facilitate structural change based on the framework of New Structural Economics.
• Data can be obtained from domestic/international sources (e.g. the United Nations Comtrade Database)
• Comparing to other economies based on factor endowments does not take into account changing economic circumstances (such as new technologies or shifts in demand for goods).
• Depending on the selected sectors, the analysis may not provide a comprehensive overview of cross-sectoral/horizontal obstacles to competitiveness and growth.
• Focus is only on competitiveness and growth and does not factor in social inclusion, poverty reduction and equal opportunities.
Can provide insights for the sectoral development section of the ERP document i.e. what are the sectors with the greatest development potential.
Can provide some insights for the overall economy-wide diagnostic of key obstacles to competitiveness and growth.
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Table 2. Diagnostic methodologies
Investigating Economic Opportunities Description Advantages Disadvantages Relevance to ERP
Growth accounting
Examines the contribution of different factors to economic growth (available capital, labour, human capital and technology) in order to determine which factor is most likely to create an increase in real gross domestic product (GDP).
• Suggests where the potential structural improvements in growth of real GDP lie.
• Required data should be available for all South East Europe (SEE) economies.
• Does not explain the underlying causes of growth. It therefore should be complemented by institutional, historical and case studies if one wants to explore the underlying causes of growth, innovation and productivity change.
It is critical for the analysis of growth challenges at the national level(i.e. economy-wide diagnostic) especially the section on high-level growth challenges.
ITC export competitiveness assessments
Trade competitiveness assessments: Identify drivers and/or obstacles to an economy’s export competitiveness.Export potential assessments: Identify high-potential export products and attractive markets for each high-performing export product. Export opportunity scans: Identify export opportunities for economies and regions (can be done bilaterally)
• Gives a better understanding of what encourages/discourages export competitiveness.
• Benchmarks an economy’s export strength in terms of factors of production and the general business environment.
• Compares an economy to others with similar export structures to help understand where domestic capacities are strong/weak.
• Required data is mostly trade-related and thus available for most SEE economies.
• Cross-country comparison does not take into account the changing dynamic structures of the global economy.
• Focus is only on competitiveness and growth and does not factor in social inclusion, poverty reduction and equal opportunities.
Can provide insights on external competitiveness for the economy-wide diagnostic.
Can provide insights for the sectoral development section of the ERP document i.e. which sectors have the greatest development potential.
Can provide insights for the diagnostic of the external trade and investment facilitation section of the document.
EXPY (export sophistication) / product space analysis
Estimates the level of technological sophistication embodied in an economy’s export portfolio.
• Gives an indication of the economy’s potential for export diversification and further productivity gains.
• Provides insights into how easily export diversification can be achieved.
• Helps understand which sectors have high development potential based on complementarities with existing sectors.
• Relies on data that is available for most economies in the SEE region.
• Does not take into account the differences in quality of exported goods between economies, which reflect differences in productivity.
• Does not provide insights into structural/institutional constraints to export diversification.
• Focus is only on competitiveness and growth and does not factor in social inclusion, poverty reduction and equal opportunities.
Can provide insights on external competitiveness for the economy-wide diagnostic.
Can provide insights for the sectoral development section of the ERP document i.e. which sectors have the greatest development potential.
Can provide insights for the diagnostic of the external trade and investment facilitation section of the ERP document.
Cluster analysis
Examines and evaluates the health and dynamics of an economy through benchmarking clusters.
• Helps identify the sectors with highest diversification potential.
• Helps evaluate which regions are most likely to develop clusters in new areas.
• Cluster development is a challenging endeavour with mixed results.
• Data limitations may constrain such an analysis in some SEE economies.
• Focus is only on competitiveness and growth and does not factor in social inclusion, poverty reduction and equal opportunities.
Can provide some insights for the overall economy-wide diagnostic of key obstacles to competitiveness and growth
Can provide insights for the sectoral development section of the ERP document i.e. which sectors have the greatest development potential.
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Chapter 2
Policy area diagnosticStep-by-step approach and selected policy area indicators, structural obstacles and impacts on growth and competitiveness.
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Policy area diagnostic
Objective
To summarise the key challenges the economy faces in each policy area and to explain how they affect competitiveness, growth and social outcomes. The policy area diagnostics are part of the foundation of the structural reform section of the ERP from which all policy area-specific reform proposals should follow logically. The methodology laid in the following pages should help line ministries and other relevant authorities in providing an analysis of main obstacles for the ERP Section 4.3 (Analysis by area and structural reform priorities).
Key questions to be answered
1. What is the state of play in the given policy area? What are the key features characterising the policy area?
2. What are the main structural obstacles and bottlenecks in this policy area?
3. How do these obstacles affect competitiveness and growth?
Suggested approach
Define the state of play in the given policy areaProvide an overview of the key features characterising the policy area.
Identify the underlying obstacles to growth and growth challengesSummarise the key barriers to sector development (economic) for the given policy area.
Highlight how these obstacles impact economic competitiveness and inclusive growthExplain through what channels these key obstacles affect the economy.
Step-by-step approach
1. Define the state of play in a given policy area
This first step should provide an overview of the current landscape for the given policy area. As with the economy-wide diagnostic, this first step seeks to give a bird’s eye view of the main features of that policy area.
Note: this section should not be backward-looking and should not provide a progress report on what has been done to reach the current state. The focus of the diagnostic should really be on describing, as succinctly as possible, the current challenges/situation in each policy area.
This first part should seek to answer the following questions:
1. What are the key features characterising this policy area?
A good diagnostic will provide a concise but thorough overview of the state of play in each policy area. To help line ministries in this endeavour, an overview of key features that should be covered in the diagnostic for each policy area of the ERP
2. POLICY AREA DIAGNOSTIC
2322 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
document is provided (see Table 3 below). In addition, the tables of this document provide a list of key indicators that could be used to analyse and subsequently describe these key features in the document.
2. How do the indicators in 1) compare to the government’s strategic targets (i.e. where is the economy now compared to where the government wants it to be)? How do they compare to relevant benchmarks from other economies?
Note: benchmark economies will vary depending on the indicator under examination. They can thus include developed economies (e.g. EU15), the EU28, new EU member states (EU13), fast-growing emerging markets (for example if looking at growth figures) as well as regional peers (WB6). Selecting appropriate benchmarks is essential for a sound and objective diagnostic. If needed, the OECD can assist in identifying appropriate benchmarks.
Table 3. Key features of the state of play
Policy area Key features of state of play
Energy and transport market reform
Transport: main transport corridors, different modes of transport, inter-modal connectivity, road safety, institutional infrastructure governing transport (including private sector share, level of unbundling, alignment with EU legislation).Energy: main energy corridors, different sources of energy supply, energy connectivity with neighbouring countries, institutional infrastructure governing the energy sector (private sector share, level of unbundling, extent of liberalisation of the market. alignment with EU legislation).
Sectoral development Agriculture: size and significance of the sector (including contribution to GDP, contribution to employment, level of state aid), structure of the sector (including agricultural and livestock production), capacity and potential of the sector (including agricultural land, level of consolidation, irrigation, quality of machinery, food safety and quality standards compliance, size of rural population, labour productivity in agriculture).Manufacturing: size and significance of manufacturing industry (including contribution to GDP, contribution to employment, level of state aid), structure of manufacturing industry (including industrial and manufacturing production), capacity and potential of the industry (including quality of machinery, compliance with quality and eco- standards, labour productivity in manufacturing). Tourism: size and significance of tourism (including contribution to GDP, contribution to employment, level of state aid), capacity and potential of tourism (including overnights in all types of accommodation, destination accessibility, tourism infrastructure [accommodation facilities, air connectivity and inter-modality], natural resources and cultural resources, visitor satisfaction rating and intention to repeat visits, use of e-tourism and other innovative services, labour productivity in tourism).
Business environment and reduction of the informal economy
Overall ease of doing business, administrative and regulatory burden on businesses (including fiscal and para-fiscal charges), property rights, competition (including informal economy), bankruptcy and second chance.
Trade-related reforms Trade integration at regional, EU and global level, with a special focus on standards, trade agreements, trade openness, membership towards the World Trade Organization (WTO), main trading partners, main trading sectors, policies to attract FDI.
Research, development and innovation (RDI) and Digital Economy
Research, development and innovation (RDI): level of public and private investment in research and innovation, incentives for innovation, inter-institutional collaboration on innovation.Digital Economy: significance and capacity of the ICT industry, regulatory framework, digital skills, e-government
Education and skills Educational attainment and quality, alignment with needs of labour market, life-long learning, public-private partnerships in education etc.
Employment and labour market Employment, labour force participation, unemployment (including structural), labour market flexibility.
Social inclusion, poverty reduction and equal opportunities
Poverty rate and profile (by age, gender, ethnicity etc.), access to education and other public services (by gender, ethnicity etc.), income inequality.
2. Identify the underlying obstacles to growth and growth challenges
This second step aims to provide a more detailed overview of the key growth challenges, zooming in on the main structural obstacles that impede the economic development in that policy area.
Most economies will be able to rely on existing studies to identify the most critical and pressing obstacles to inclusive growth and competitiveness for each policy area when writing this section of the ERP document. The OECD Competitiveness in South East Europe: a Policy Outlook and SME Policy Index, World Bank Doing Business report, studies of the national investment forum council and other relevant publications can also serve as repositories of data and insights on key structural obstacles by policy area.
2. POLICY AREA DIAGNOSTIC
23ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
The approach outlined in this tool relies predominantly on benchmarking against relevant comparable countries, but economies in South East Europe (SEE) can also rely on other approaches if they deem them more appropriate.
This section should answer the following question:
What are the main structural obstacles, as identified in your analyses? Structural obstacles represent features in the current economic and governance structure that hamper economic development and growth. They can be caused by government failures (inefficient or ineffective government policies) or by market failures (problems arising from inefficient functioning of the market due to externalities, information asymmetries etc.).
Defining the structural obstacles to growth or development in a given policy area can be challenging for a number of reasons. First, it may be difficult to disentangle obstacles from their negative outcomes on the economy. For example, outdated infrastructure can be defined as an obstacle in that it has a negative impact on the cost, speed and quality of transport of goods and services, which, in turn, negatively affects investment and exports. However, outdated infrastructure is also fundamentally a negative outcome of structural issues pertaining to underinvestment (especially private) in infrastructure, which, in turn, has to do with incentives for private-sector participation in this sector.
Another challenge is to identify the level at which to define obstacles. For example limited access to finance is a key obstacle to growth and competitiveness. If firms cannot easily and affordably access finance, they cannot make productive investments that enable them to grow. However, difficulties accessing finance can reflect a series of underlying structural constraints from weak competition in the banking sector to issues with the cadastre system.
In this tool, the OECD attempts to provide some illustrative guidance on how countries could define the structural obstacles. It mostly concentrates on high-level obstacles that are essential ingredients of the diagnostic, keeping in mind that elaborating those obstacles will require the provision of specifics about the underlying causes, which will differ from economy to economy. It also distinguishes between obstacles and their potential impact on the economy which can also help disentangle the two.
The tables present in the following pages summarise these structural obstacles along with common symptoms associated with each. This is by no means an exhaustive list and economies are encouraged to use them as examples/templates against which they can define their own obstacles for the ERP documents.
3. Highlight how these obstacles impact economic competitiveness and inclusive growth
The final step puts the structural obstacles into perspective by highlighting how they affect the overall economy. It also demonstrates that the structural obstacles identified are indeed the most relevant and important ones for that policy area.
This section should answer the following questions:
1. Do the obstacles affect one or more of the following variables: investment, exports, consumption, productivity or employment?
2. If so, through what channels is this impact manifested? For example, weak access to finance affects SMEs’ capacity for investment and innovation, which, in turn, limits the scope for diversification of the domestic production and export base and limits the capacity of SMEs to link into global value chains.
Please note this can be just a qualitative overview of the kinds of negative impacts that the structural obstacles have on the economy. However, if there are concrete studies that have attempted to provide a quantitative measure of that impact, they can be cited in the report (e.g. “a study conducted in 2014 estimates that disruptions from electricity outages costs companies X millions of euros annually”).
2. POLICY AREA DIAGNOSTIC
2524 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Note
1. The indicators, structural obstacles and envisaged impacts on competitiveness and growth listed in the following pages should not be considered rigid or exhaustive: the main purpose is to guide line ministries in collecting relevant information and processing it in order to detect relevant structural obstacles and their impact on growth and competitiveness in the specific field of competence. Line ministries are invited to reduce, expand or change indicators according to their availability and relevance in describing the state of the economy. Likewise, if economies can define the underlying structural problems behind these obstacles more narrowly, they should concisely do so in the ERP diagnostic. Additionally, users should go through the questions outlined above to provide a more detailed review specific to the obstacles they have identified.
2. The categorisation of indicators, obstacles and their effect on the economy is meant to provide illustrative guidance to support line ministries in effectively defining the overall state of play in its field of competence. The outcome should be a clear and concise description of the main obstacles limited to approximately one page in the final Economic Reform Programme (ERP) document (Section 4.3, as detailed on p. 12 of the European Commission’s ERP Guidance Note).
2. POLICY AREA DIAGNOSTIC
25ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Energy and transport market reformPolicy area indicators, structural obstacles and impact on competitiveness and growth
27ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
27ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
I. IN
FRAS
TRUC
TURE
AND
CAP
ACIT
Y
1. E
nerg
y
Mai
n en
ergy
cor
rido
rs, b
y ty
pe o
f ene
rgy
Indi
cate
s th
e ec
onom
y’s
mai
n co
rrid
ors
for d
iffer
ent e
nerg
y se
gmen
ts (
oil,
gas,
ele
ctri
city
). In
par
ticul
ar, h
ighl
ight
s w
here
ene
rgy
tran
smis
sion
de
pend
s m
assi
vely
on
one
chan
nel/
coun
try
of o
rigi
n. T
his
indi
cato
r is
rele
vant
to a
sses
sing
ove
r-re
lianc
e on
sin
gle
supp
liers
and
sys
tem
ic r
isks
to
ene
rgy
suff
icie
ncy
in c
ase
of d
isru
ptio
ns.
Sou
rce:
En
erg
y m
inis
try.
Tota
l inv
estm
ent i
n en
ergy
infr
astr
uctu
re (
% o
f GD
P)M
easu
res
the
leve
l of i
nves
tmen
t in
ener
gy in
fras
truc
ture
as
a pe
rcen
tage
of g
ross
dom
estic
pro
duct
(G
DP)
. It g
ives
an
idea
of t
he e
cono
my’
s ca
paci
ty to
upg
rade
its
curr
ent i
nfra
stru
ctur
e.So
urc
e: E
ner
gy
min
istr
y.
Inve
stm
ent i
n en
ergy
wit
h pr
ivat
e pa
rtic
ipat
ion
(cur
rent
USD
)M
easu
res
the
amou
nt o
f pri
vate
par
ticip
atio
n in
infr
astr
uctu
re (
PPI)
in th
e en
ergy
sec
tor a
t cur
rent
pri
ces.
It is
a r
elev
ant i
ndic
ator
of t
he
econ
omy’
s op
enne
ss to
pri
vate
fund
s fo
r ene
rgy
infr
astr
uctu
re p
roje
cts.
Sou
rce:
Wo
rld
Ba
nk
Dev
elo
pm
ent
Ind
icat
ors
, htt
p:/
/dat
aba
nk
.wo
rld
ba
nk
.org
/
Tota
l ene
rgy
prod
ucti
on/T
PES
(%)
Mea
sure
s th
e am
ount
of e
nerg
y pr
oduc
ed in
the
econ
omy
as a
sha
re o
f the
tota
l prim
ary
ener
gy s
uppl
y (T
PES)
. Thi
s is
a r
elev
ant i
ndic
ator
of t
he
econ
omy’
s en
ergy
sel
f-su
ffic
ienc
y, w
hich
is s
trat
egic
ally
impo
rtan
t for
dev
elop
men
t and
as
a so
urce
of p
oten
tial f
luct
uatio
ns in
the
perf
orm
ance
of
the
econ
omy.
Sou
rce:
Eu
rop
ean
Co
mm
issi
on
, Eu
rost
at d
atab
ase
, htt
p:/
/ec.
euro
pa
.eu
/eu
rost
at/d
ata
/dat
aba
se.
Tota
l fin
al e
nerg
y co
nsum
ptio
n (T
FEC)
(M
toe)
Mea
sure
s th
e ag
greg
ate
of a
ll of
the
ener
gy th
at is
use
d fo
r pro
vidi
ng v
ario
us e
nerg
y se
rvic
es in
mill
ion
tonn
es o
f oil
equi
vale
nt (
Mto
e). U
sual
ly,
tota
l fin
al c
onsu
mpt
ion
is a
n ag
greg
ate
of e
nd-u
se e
nerg
y. T
his
mea
ns th
at it
focu
ses
on e
nerg
y cu
rren
cies
like
ele
ctri
city
and
sec
onda
ry
fuel
s lik
e ga
solin
e. T
he fo
cus
of th
e TF
EC is
in c
ontr
ast w
ith th
e TP
ES. T
otal
fina
l con
sum
ptio
n co
nsis
ts o
f ene
rgy
that
can
rea
dily
be
used
by
cons
umer
s to
ser
ve th
eir e
nerg
y ne
eds,
whi
le T
PES
is a
n ag
greg
ate
of a
ll of
the
ener
gy g
oing
into
the
ener
gy s
ecto
r.So
urc
e: I
nte
rnat
ion
al E
ner
gy
Age
ncy
(IE
A) s
tati
stic
s, w
ww
.iea
.org
/sta
tist
ics/
.
Tota
l net
impo
rts
of e
nerg
y (M
toe)
, and
by
sour
ceM
easu
res
impo
rts
of e
nerg
y in
mill
ion
toe.
The
gre
ater
the
impo
rts,
the
mor
e de
pend
ent a
n ec
onom
y is
on
fore
ign
prov
isio
n an
d th
e m
ore
vuln
erab
le d
omes
tic e
nerg
y pr
ices
are
to e
xter
nal f
luct
uatio
ns in
pri
ce.
Sou
rce:
Eu
rop
ean
Co
mm
issi
on
, Eu
rost
at d
atab
ase
, htt
p:/
/ec.
euro
pa
.eu
/eu
rost
at/d
ata
/dat
aba
se.
Ener
gy b
alan
ceTh
e m
ake
up o
f ene
rgy
sour
ces
in th
e ec
onom
y’s
tota
l pro
duct
ion
and
cons
umpt
ion
of e
nerg
y (c
oal,
crud
e oi
l, oi
l pro
duct
s, n
atur
al g
as, n
ucle
ar,
hydr
o, g
eoth
erm
al, s
olar
, bio
fuel
s an
d w
aste
, ele
ctri
city
, hea
t). H
eavy
dep
ende
nce
on fo
rms
of e
nerg
y w
hich
are
not
loca
lly p
rodu
ced
lead
s in
m
ost c
ases
to h
ighe
r im
port
s an
d a
high
er tr
ade
defic
it. H
eavy
dep
ende
nce
on s
olid
fuel
s (c
oal,
ligni
te) l
eads
to h
ighe
r lev
els
of p
ollu
tion
with
co
sts
to th
e en
viro
nmen
t and
hea
lth.
Sou
rce:
IE
A s
tati
stic
s, w
ww
.iea
.org
/sta
tist
ics/
.
ENER
GY
MA
RK
ET
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
1. L
ack
of r
elia
ble
elec
tric
ity
supp
ly.
A co
ntrib
utin
g fa
ctor
is th
e er
ratic
el
ectr
icity
con
sum
ptio
n pa
tter
n of
the
poor
er p
arts
of t
he p
opul
atio
n, w
hich
ex
acer
bate
s se
ason
al a
nd w
eath
er-
rela
ted
peak
s in
ele
ctri
city
dem
and
(par
ticul
arly
for s
pace
and
wat
er
heat
ing)
. Ext
rem
e pe
aks
can
lead
to
blac
kout
s an
d/or
ele
ctri
city
rat
ioni
ng.
To e
nsur
e co
ntin
ued
serv
ice,
ver
tical
ly
inte
grat
ed u
tiliti
es a
re fo
rced
to
mai
ntai
n co
nsid
erab
le r
eser
ve
capa
city
. Sym
ptom
s of
this
obs
tacl
e in
clud
e on
e or
mor
e of
the
follo
win
g: •fr
eque
nt b
lack
outs
(nu
mbe
r of
outa
ges
over
last
fisc
al y
ear)
•hi
gh s
hare
of e
lect
rici
ty p
rodu
ced
by e
stab
lishm
ent’s
ow
ned/
shar
ed
gene
rato
r(s)
•m
easu
reab
le r
even
ue lo
sses
due
to
dis
rupt
ions
(qu
antif
iabl
e as
ex
pect
ed %
dec
reas
e in
tota
l cos
ts if
el
ectr
icity
dis
rupt
ion
was
no
long
er
an o
bsta
cle)
.
2. L
ow r
egio
nal c
onne
ctiv
ity.
Lack
of s
upra
natio
nal i
nter
conn
ectin
g en
ergy
pro
ject
s an
d in
fras
truc
tura
l di
vide
. Sym
ptom
s of
this
obs
tacl
e in
clud
e on
e or
mor
e of
the
follo
win
g: •he
avy
depe
nden
ce o
n a
sing
le
ener
gy s
uppl
ier
•he
avy
depe
nden
ce o
n a
sing
le
ener
gy s
ourc
e.
3. In
suff
icie
nt o
vera
ll in
vest
men
t in
new
ene
rgy
infr
astr
uctu
re p
roje
cts
and
mai
nten
ance
or u
pgra
ding
of
exis
ting
one
. Sy
mpt
oms
of th
is o
bsta
cle
incl
ude
one
or m
ore
of th
e fo
llow
ing:
•lo
w in
vest
men
t in
ener
gy
infr
astr
uctu
re a
s %
of G
DP
•lo
w P
PI.
1. L
ack
of a
rel
iabl
e el
ectr
icity
su
pply
is a
maj
or d
eter
rent
for
inve
stm
ent e
spec
ially
for l
arge
m
anuf
actu
rers
that
rel
y on
a s
tead
y su
pply
of e
lect
rici
ty. D
isru
ptio
ns in
el
ectr
icity
sup
ply
resu
lt in
red
uced
pr
oduc
tion
and
thus
loss
of r
even
ue.
2. L
ow r
egio
nal c
onne
ctiv
ity
redu
ces
the
poss
ibili
ty o
f sup
ply
diff
eren
tiat
ion,
trad
e po
tent
ial
and
ener
gy s
ecur
ity,
lead
ing
to
an in
effic
ient
allo
catio
n of
ene
rgy
supp
ly th
at tr
ansl
ates
into
an
inab
ility
to m
eet p
eaks
in d
eman
d.
Mor
e br
oadl
y it
mea
ns in
crea
sed
unce
rtai
nty
and
redu
ced
grow
th
oppo
rtun
ities
. Reg
iona
l int
egra
tion
wou
ld a
lso
bene
fit e
nerg
y su
pplie
rs
inso
far a
s it
enla
rges
thei
r mar
ket,
unca
ppin
g th
eir g
row
th p
oten
tial.
3. L
ack
of in
vest
men
t lea
ds to
ou
tdat
ed e
nerg
y in
fras
truc
ture
, re
sult
ing
in in
effi
cien
t and
po
lluti
ng e
nerg
y pr
oduc
tion
, whi
ch
redu
ces
dom
estic
cap
acity
for
pow
er g
ener
atio
n, a
nd d
amag
es
the
envi
ronm
ent,
viol
atin
g EU
en
viro
nmen
tal s
tand
ards
. It m
ay
resu
lt in
dep
ende
nce
on e
nerg
y im
port
s, a
con
side
rabl
e is
sue
for e
nerg
y se
curi
ty e
spec
ially
if
conn
ectiv
ity w
ith th
e re
gion
is lo
w.
4. T
he u
se o
f hig
hly
pollu
ting
ener
gy s
ourc
es a
nd p
roce
dure
s ha
s ha
rmfu
l con
sequ
ence
s fo
r hu
man
hea
lth
– of
ten
with
a
disp
ropo
rtio
nate
eff
ect o
n po
orer
pa
rts
of th
e po
pula
tion.
Alto
geth
er,
it le
ads
to in
crea
ses
in th
e le
vel o
f ai
r pol
lutio
n, d
ust,
and
leve
ls o
f su
lphu
r dio
xide
and
nitr
ogen
oxi
de
com
ing
from
the
ener
gy s
ecto
r.
2. POLICY AREA DIAGNOSTIC
2928 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
TPES
/GD
P (t
oe p
er th
ousa
nd 2
005
USD
)TP
ES d
ivid
ed b
y G
DP
mea
sure
s th
e en
ergy
inte
nsity
of a
n ec
onom
y, i.
e. th
e am
ount
of e
nerg
y it
need
s to
gen
erat
e a
unit
of g
ross
dom
estic
pr
oduc
t. It
is u
sual
ly p
refe
rred
to T
PES
per c
apita
bec
ause
the
latt
er d
oes
not t
ake
into
acc
ount
eith
er th
e im
pact
of c
limat
e on
ene
rgy
use
(hea
ting,
coo
ling)
or t
he s
ize
of th
e te
rrito
ry a
nd th
e de
nsity
of t
he p
opul
atio
n.So
urc
e: E
uro
pea
n C
om
mis
sio
n, E
uro
stat
dat
aba
se, h
ttp
://e
c.eu
rop
a.e
u/e
uro
stat
/dat
a/d
atab
ase
.
2. E
lect
rici
ty
Elec
tric
ity
gene
rati
on (
for h
eat/
othe
r use
and
by
prod
ucti
on s
ourc
e: c
oal,
oil,
gas
, bio
fuel
s, w
aste
, nuc
lear
, hyd
ro, g
eoth
erm
al, s
olar
ph
otov
olta
ics
(PV
), s
olar
ther
mal
and
oth
erSh
ows
whi
ch s
ourc
es o
f ele
ctri
city
gen
erat
ion
the
econ
omy
mos
tly d
epen
ds o
n, a
nd c
an b
e an
indi
cato
r of v
ulne
rabi
lity.
It a
lso
show
s th
e ex
tent
to w
hich
pro
duct
ion
is d
epen
dent
on
high
ly p
ollu
ting
ligni
te v
s. c
lean
er s
ourc
es li
ke h
ydro
pow
er a
nd r
enew
able
s an
d ca
n su
gges
t why
ec
onom
ies
may
not
be
mee
ting
Euro
pean
env
ironm
enta
l sta
ndar
ds.
Sou
rce:
IE
A s
tati
stic
s, w
ww
.iea
.org
/sta
tist
ics/
.
Impo
rts,
exp
orts
and
dom
esti
c su
pply
of e
lect
rici
tyTh
ese
indi
cato
rs p
oint
to th
e tr
ade
bala
nce
in e
lect
rici
ty a
nd th
eref
ore
the
econ
omy’
s se
lf-su
ffic
ienc
y in
ele
ctri
city
gen
erat
ion.
Sou
rce:
IE
A s
tati
stic
s, w
ww
.iea
.org
/sta
tist
ics/
.
Loss
es in
tran
smis
sion
An in
dica
tor o
f tra
nsm
issi
on n
etw
ork
qual
ity a
nd e
nerg
y in
tens
ity in
the
econ
omy.
Sou
rce:
IE
A s
tati
stic
s, w
ww
.iea
.org
/sta
tist
ics/
. N
umbe
r of p
ower
out
ages
ove
r las
t fis
cal y
ear
Num
ber o
f pow
er o
utag
es th
at d
isru
pted
pro
duct
ion,
dec
lare
d by
a s
ampl
e of
firm
s in
the
econ
omy.
Bla
ckou
ts m
ake
busi
ness
unp
redi
ctab
le a
nd
incr
ease
cos
ts fo
r ent
erpr
ises
.So
urc
e: W
orl
d B
an
k, E
nte
rpri
se S
urv
eys
Perc
enta
ge o
f est
ablis
hmen
ts’ e
lect
rici
ty fr
om g
ener
ator
(s) o
wne
d or
sha
red
Unr
elia
ble
elec
tric
gri
ds fo
rce
som
e fir
ms
to s
ecur
e el
ectr
ic p
ower
thro
ugh
owne
d or
sha
red
gene
rato
rs. T
his
incr
ease
s op
erat
iona
l cos
ts.
Sou
rce:
Wo
rld
Ba
nk
, En
terp
rise
Su
rvey
s
Shar
e of
ent
erpr
ises
men
tion
ing
elec
tric
ity
as a
n ob
stac
le to
cur
rent
ope
rati
ons
Rel
evan
t ind
icat
or to
ass
ess
if el
ectr
icity
(ac
cess
to, r
elia
bilit
y, c
ost…
) rep
rese
nts
a si
gnifi
cant
obs
tacl
e to
dai
ly o
pera
tions
and
ther
efor
e to
pr
oduc
tion
for e
ntre
pren
eurs
.So
urc
e: W
orl
d B
an
k, E
nte
rpri
se S
urv
eys
Expe
cted
% d
ecre
ase
in to
tal c
osts
if e
lect
rici
ty w
as n
o lo
nger
an
obst
acle
Mea
sure
s th
e im
pact
of m
ore
stab
le e
lect
rici
ty p
rovi
sion
on
firm
s’ to
tal o
pera
tiona
l, ac
cord
ing
to th
e en
trep
rene
urs
surv
eyed
.So
urc
e: W
orl
d B
an
k, E
nte
rpri
se S
urv
eys
II. R
EGUL
ATOR
Y FR
AMEW
ORK
Entr
y re
gula
tion
for g
as a
nd e
lect
rici
tyIn
dica
tes
how
the
term
s an
d co
nditi
ons
of th
ird p
arty
acc
ess
(TPA
) to
the
ener
gy tr
ansm
issi
on g
rid a
re d
eter
min
ed. I
s th
ere
a lib
eral
ised
who
lesa
le m
arke
t fo
r ene
rgy
(a w
hole
sale
poo
l)? W
hat i
s th
e m
inim
um c
onsu
mpt
ion
thre
shol
d th
at c
onsu
mer
s m
ust e
xcee
d in
ord
er to
be
able
to c
hoos
e th
eir s
uppl
ier?
Sou
rce:
OEC
D, I
nd
icat
ors
of
Pro
du
ct M
ark
et R
egu
lati
on
.
ENER
GY
MA
RK
ET
(con
t.)In
dica
tors
of
sta
te o
f pla
ySt
ruct
ural
ob
stac
les
Impa
ct o
n co
mpe
titi
vene
ss
and
grow
th
4. H
igh
ener
gy in
tens
ity
is th
e co
mbi
natio
n of
thre
e m
ain
fact
ors:
de
grad
ed e
nerg
y in
fras
truc
ture
; hig
h en
ergy
loss
es in
tran
sfor
mat
ion,
tr
ansm
issi
on a
nd d
istr
ibut
ion
of
ener
gy; a
nd in
effic
ienc
y in
the
end-
use
sect
or. S
ympt
oms
of th
is o
bsta
cle
incl
ude:
•hi
gh T
PES
to G
DP
ratio
com
pare
d to
EU
eco
nom
ies.
5. H
igh
carb
on in
tens
ity
due
to h
eavy
de
pend
ence
on
ligni
te.
Oth
er e
nviro
nmen
tal c
once
rns
incl
ude
pollu
tion
from
ene
rgy
com
bust
ion
(e.g
. ind
oor a
nd lo
cal a
ir po
llutio
n fr
om in
effic
ient
and
impr
oper
ly
used
sto
ves)
, def
ores
tatio
n an
d la
nd
degr
adat
ion
(fro
m e
xces
sive
use
of
woo
d fo
r fue
l).
6. H
igh
mar
ket d
epen
denc
e on
hy
droc
arbo
ns im
port
ed fr
om
outs
ide
the
regi
on.
Sym
ptom
s of
this
obs
tacl
e in
clud
e: •hi
gh to
tal n
et im
port
s of
ene
rgy.
7. L
ack
of c
apac
ity
in e
nerg
y ad
min
istr
atio
n.
Adm
inis
trat
ive
bodi
es a
re
unde
rsta
ffed
and
nee
d to
bui
ld
capa
city
and
enh
ance
mec
hani
sms
to in
crea
se tr
ansp
aren
cy a
nd p
ublic
co
nsul
tatio
n on
str
ateg
y an
d po
licy
deve
lopm
ent.
This
par
ticul
arly
in
clud
es s
eeki
ng in
put f
rom
ac
adem
ia, e
nerg
y an
d en
viro
nmen
tal
asso
ciat
ions
, and
con
sum
er
orga
nisa
tions
.
5. H
ighe
r net
impo
rts
of
hydr
ocar
bons
incr
ease
the
net
ener
geti
c tr
ade
defi
cit o
f the
co
untr
y. T
his
in tu
rn w
ill h
ave
to b
e co
vere
d by
sur
plus
es in
oth
er s
ecto
rs
of th
e ec
onom
y.
6. R
educ
ed a
dmin
istr
ativ
e ca
paci
ty
affe
cts
the
deve
lopm
ent o
f ene
rgy
mar
kets
in a
num
ber o
f way
s:
lack
of r
elia
ble
ener
gy d
ata
time
seri
es w
hich
mak
es it
har
d to
bui
ld
just
ified
ana
lyse
s, la
ck o
f reg
ulat
ive
tran
spar
ency
or a
nat
iona
l ene
rget
ic
stra
tegy
, and
lack
of s
yner
gies
, bot
h w
ithin
the
coun
try
and
regi
onal
ly.
7. C
ondi
tions
of m
onop
oly
or q
uasi
-m
onop
oly
redu
ce e
nerg
y pr
ovid
ers’
co
mpe
titi
vene
ss o
n se
vera
l fro
nts,
in
clud
ing
high
cos
ts o
f ene
rgy
prod
uctio
n, a
nd lo
w q
ualit
y su
pply
. Co
uple
d w
ith li
mite
d re
gula
tory
ca
paci
ty, i
t als
o re
sults
in la
ck o
f da
ta a
nd tr
ansp
aren
cy, c
onge
sted
cr
oss-
bord
er c
apac
ity
and
wea
k m
arke
t rul
es.
8. If
a s
ingl
e co
mpa
ny o
pera
tes
a tr
ansm
issi
on n
etw
ork
and
also
ge
nera
tes
or s
ells
ene
rgy,
it m
ay h
ave
an in
cent
ive
to o
bstr
uct c
ompe
titor
s’
acce
ss to
infr
astr
uctu
re. T
his
prev
ents
fair
com
peti
tion
in th
e m
arke
t and
can
lead
to h
ighe
r pr
ices
fo
r co
nsum
ers.
9. D
ue to
the
limit
ed in
volv
emen
t of
priv
ate
acto
rs, m
ost e
nerg
y pr
ojec
ts
are
not c
omm
erci
ally
dri
ven.
Th
ey a
re c
ostly
and
ris
k be
ing
unde
rutil
ised
. Com
mer
cial
oil
and
gas
oper
ator
s ar
e be
st p
lace
d to
2. POLICY AREA DIAGNOSTIC
29ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Publ
ic o
wne
rshi
pW
hat p
erce
ntag
e of
sha
res
does
the
gove
rnm
ent o
wn,
eith
er d
irect
ly o
r ind
irect
ly, i
n th
e la
rges
t firm
in th
e se
ctor
?So
urc
e: O
ECD
, In
dic
ato
rs o
f P
rod
uct
Ma
rket
Reg
ula
tio
n
Vert
ical
inte
grat
ion
Wha
t is
the
degr
ee o
f ver
tical
sep
arat
ion
betw
een
any
give
n se
gmen
t of t
he e
lect
rici
ty s
ecto
r and
oth
er s
egm
ents
of t
he in
dust
ry?
(Ave
rage
d ov
er fo
ur s
egm
ents
: gen
erat
ion/
impo
rt, t
rans
mis
sion
, dis
trib
utio
n an
d su
pply
.)So
urc
e: O
ECD
, In
dic
ato
rs o
f P
rod
uct
Ma
rket
Reg
ula
tio
n.
Mar
ket s
truc
ture
Wha
t is
the
mar
ket s
hare
of t
he la
rges
t com
pany
in th
e el
ectr
icity
indu
stry
?So
urc
e: O
ECD
, In
dic
ato
rs o
f P
rod
uct
Ma
rket
Reg
ula
tio
n.
Conn
ecti
vity
wit
h ot
her r
egio
nal e
nerg
y m
arke
tsSt
ate
of im
plem
enta
tion
of s
oft m
easu
res
targ
eted
at i
nteg
ratin
g re
gion
al m
arke
ts, h
ence
incr
easi
ng e
nerg
y ef
ficie
ncy
and
secu
rity
. The
se
incl
ude
deve
lopm
ent o
f spo
t mar
kets
, cro
ss-b
orde
r bal
anci
ng, r
egio
nal c
apac
ity a
lloca
tion
and
cros
s-cu
ttin
g m
easu
res.
Sou
rce:
En
erg
y C
om
mu
nit
y.
Cent
ral a
nd S
EE G
as C
onne
ctiv
ity
Init
iati
veLo
ng te
rm s
ecur
isat
ion
of g
as s
uppl
y th
roug
h re
gion
al in
tegr
atio
n of
sto
cks
and
links
. Thi
s in
clud
es m
arke
t ope
nnes
s to
third
par
ty o
pera
tors
, en
surin
g fr
ee fl
ow o
f gas
, inf
rast
ruct
ure
rela
ted
(e.g
. con
nect
ion
of s
pur l
ines
thro
ugh
the
Ener
gy C
omm
unity
Gas
Rin
g) a
nd m
arke
t int
egra
tion
mea
sure
s, tr
ansm
issi
on s
yste
ms
oper
ator
s (T
SO) u
nbun
dlin
g an
d na
tiona
l reg
ulat
ory
auth
ority
(N
RA)
inde
pend
ence
.So
urc
e: E
ner
gy
Co
mm
un
ity.
Dev
elop
men
t in
regi
onal
oil
stoc
khol
ding
Prog
ress
in th
e le
vel o
f sec
uris
atio
n of
oil
and
petr
oleu
m s
tock
hold
ing
syst
ems
in a
ccor
danc
e w
ith E
U d
irect
ives
(st
ate
of le
gisl
ativ
e ha
rmon
isat
ion)
, in
orde
r to
min
imis
e ri
sks
and
cost
s. D
ue to
a h
igh
depe
nden
cy o
n im
port
s w
ith a
lim
ited
num
ber o
f dom
estic
pro
duce
rs,
secu
rity
of o
il su
pply
is o
f spe
cial
con
cern
. The
dep
ende
ncy
is a
ggra
vate
d by
the
lack
of i
nter
conn
ectio
ns to
faci
litat
e oi
l flo
ws
as w
ell a
s in
suff
icie
nt s
tora
ge c
apac
ities
.So
urc
e: E
ner
gy
Co
mm
un
ity.
Stru
ctur
al c
hang
e in
dica
tors
: inf
rast
ruct
ure
refo
rms:
ele
ctri
c po
wer
(w
here
1 =
full
stat
e co
ntro
l, 4
+ =
full
liber
alis
atio
n)Th
is E
urop
ean
Bank
for R
econ
stru
ctio
n an
d D
evel
opm
ent (
EBR
D) i
ndic
ator
pro
vide
s a
quan
titat
ive
foun
datio
n fo
r ana
lysi
ng p
rogr
ess
in th
e re
form
of t
he e
lect
rici
ty m
arke
t. It
capt
ures
law
s, m
arke
t reg
ulat
ion
and
pric
e co
ntro
l fac
tors
to a
sses
the
scor
e.So
urc
e: E
BR
D, h
ttp
://w
ww
.eb
rd.c
om
/wh
at-w
e-d
o/e
con
om
ic-r
esea
rch
-an
d-d
ata
/dat
a/f
ore
cast
s-m
acro
-dat
a-tr
an
siti
on
-in
dic
ato
rs.h
tml.
Res
iden
tial
and
non
-res
iden
tial
ele
ctri
city
pri
ces,
eur
ocen
ts/k
Wh
(exc
ludi
ng ta
xes)
Mea
sure
s th
e pr
ice
of e
lect
rici
ty b
efor
e ta
xes
(eur
ocen
ts/k
Wh)
for r
esid
entia
l and
non
-res
iden
tial u
se. A
mor
e co
mpe
titiv
e en
ergy
mar
ket c
an
lead
to lo
wer
cos
ts o
f ele
ctri
city
for f
inal
use
rs.
Cost
of e
nerg
y is
a v
ery
impo
rtan
t fac
tor f
or p
oten
tial i
nves
tors
in d
ecid
ing
whe
re to
loca
te th
eir p
rodu
ctio
n pl
ants
, and
ther
efor
e lo
wer
el
ectr
icity
pri
ces
can
mak
e an
eco
nom
y m
ore
attr
activ
e fo
r for
eign
dire
ct in
vest
men
t (FD
I), a
ll ot
her t
hing
s be
ing
equa
l, th
an it
s co
mpe
titor
s.So
urc
e: E
ner
gy
reg
ula
tors
’ reg
ion
al a
sso
ciat
ion
s.
ENER
GY
MA
RK
ET
(con
t.)In
dica
tors
of
sta
te o
f pla
ySt
ruct
ural
ob
stac
les
Impa
ct o
n co
mpe
titi
vene
ss
and
grow
th
8. L
ack
of c
lear
reg
ulat
ory
and
anti
-m
onop
oly
fram
ewor
k.
In th
e ab
senc
e of
rob
ust r
egul
ator
y st
ruct
ures
, the
pos
sibi
lity
that
a
sing
le c
ompa
ny –
of a
ny n
atio
nalit
y –
mig
ht c
ontr
ol th
e m
ajor
par
t of
the
oil,
gas
or e
lect
rici
ty a
sset
s in
a
mar
ket r
educ
es th
e lik
elih
ood
of
mar
ket-
base
d ap
proa
ches
to e
nerg
y po
licy
deve
lopi
ng. S
ympt
oms
of th
is
obst
acle
incl
ude:
•lo
w n
umbe
r of e
nerg
y pr
ovid
ers
on
the
mar
ket.
9. S
talle
d un
bund
ling
proc
ess,
de
fined
as
the
sepa
ratio
n of
ene
rgy
supp
ly a
nd g
ener
atio
n fr
om th
e op
erat
ion
of tr
ansm
issi
on n
etw
orks
. Sy
mpt
oms
of th
is o
bsta
cle
incl
ude:
•lo
w n
umbe
r of e
nerg
y pr
ovid
ers
on th
e m
arke
t and
no
dist
inct
ion
betw
een
oper
ator
s in
gen
erat
ion,
tr
ansm
issi
on a
nd d
istr
ibut
ion.
10. E
lect
rici
ty m
arke
ts n
ot fu
lly
liber
alis
ed.
The
lack
of a
com
petit
ive
regi
onal
en
ergy
mar
ket h
inde
rs s
tabi
lity
and
econ
omic
sus
tain
abili
ty. S
ympt
oms
of
this
obs
tacl
e in
clud
e on
e or
mor
e of
th
e fo
llow
ing:
•el
ectr
icity
pri
ces
are
regu
late
d an
d no
t det
erm
ined
by
the
mar
ket
•en
ergy
reg
ulat
ory
agen
cy is
not
in
depe
nden
t •re
side
ntia
l ele
ctri
city
pri
ces
are
low
com
pare
d to
rel
evan
t EU
be
nchm
arks
•no
n-re
side
ntia
l ele
ctri
city
pri
ces
are
low
com
pare
d to
rel
evan
t EU
be
nchm
arks
.
stud
y, im
plem
ent a
nd o
pera
te la
rge
proj
ects
for e
nerg
y tr
ansp
orta
tion.
In
effic
ient
pub
lic p
roje
cts
are
not o
nly
unsu
stai
nabl
e in
them
selv
es, b
ut a
lso
risk
cro
wdi
ng o
ut p
riva
te c
ompa
nies
, ex
acer
batin
g th
e pr
oble
m. I
f tar
iffs
fo
r ele
ctri
city
are
kep
t art
ifici
ally
low
by
the
publ
ic r
egul
ator
, thi
s re
duce
s in
tere
st fo
r pri
vate
ope
rato
rs a
nd
also
the
gene
ral a
bilit
y to
inve
st in
m
aint
enan
ce a
nd u
pgra
ding
, fur
ther
re
duci
ng th
e qu
ality
of t
he e
cono
my’
s en
ergy
infr
astr
uctu
re.
2. POLICY AREA DIAGNOSTIC
30 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
I. IN
FRAS
TRUC
TURE
AND
CAP
ACIT
Y
Mai
n tr
ansp
ort c
orri
dors
(la
nd, w
ater
, air
)O
utlin
es th
e m
ain
tran
spor
t art
erie
s, li
nkin
g to
the
mos
t rel
evan
t int
erna
tiona
l tra
de r
oute
s.So
urc
e: T
ran
spo
rt a
nd
in
fra
stru
ctu
re m
inis
trie
s.
Part
icip
atio
n in
TEN
-T c
ore
netw
ork
proj
ects
and
con
nect
ivit
y ag
enda
Leve
l of e
ngag
emen
t in
the
Tran
s-Eu
rope
an T
rans
port
Net
wor
k (T
EN-T
) and
Eur
opea
n co
nnec
tivity
age
nda
(sta
te o
f int
egra
tion
and
com
plet
ion
of m
ajor
tran
spor
t cor
rido
rs).
Bet
ter c
onne
ctiv
ity w
ith th
e EU
is a
key
fact
or fo
r gro
wth
and
jobs
.So
urc
e: T
ran
spo
rt a
nd
in
fra
stru
ctu
re m
inis
trie
s
Inla
nd tr
ansp
ort i
nfra
stru
ctur
e in
vest
men
t in:
road
reha
bilit
atio
n, ro
ad m
aint
enan
ce, n
ew ro
ad c
onst
ruct
ion,
railw
ay m
aint
enan
ce (%
of G
DP)
Mea
sure
s th
e le
vel o
f inv
estm
ent i
n tr
ansp
ort i
nfra
stru
ctur
e as
a p
erce
ntag
e of
GD
P, b
roke
n do
wn
into
diff
eren
t are
as o
f int
erve
ntio
n. G
ives
an
idea
of t
he e
cono
mic
cap
abili
ty to
upg
rade
the
curr
ent i
nfra
stru
ctur
e.So
urc
e: N
atio
na
l sta
tist
ics.
Num
ber o
f roa
ds p
er s
quar
e ki
lom
etre
, per
uni
t of G
DP
Rel
ates
the
num
ber o
f roa
ds to
the
size
of t
he te
rrito
ry a
nd th
e ec
onom
y at
the
sam
e tim
e. A
n in
dica
tor o
f the
ade
quat
enes
s of
the
road
net
wor
k co
mpa
red
to th
e ph
ysic
al a
nd e
cono
mic
dim
ensi
on o
f the
cou
ntry
.So
urc
e: N
atio
na
l sta
tist
ics.
Roa
ds a
s a
shar
e of
tota
l tra
nspo
rt in
fras
truc
ture
leng
th, a
nd s
ervi
ce d
eliv
ery
(fre
ight
tonn
e/pa
ssen
ger k
m)
Mea
sure
s th
e ro
le o
f roa
ds b
oth
in te
rms
of to
tal t
rans
port
infr
astr
uctu
re in
vest
men
t, an
d sh
are
of to
tal t
rans
port
they
car
ry.
Sou
rce:
Nat
ion
al s
tati
stic
s.
Rai
l tra
ffic
inte
nsit
y (f
reig
ht to
nne
per k
m p
lus
pass
enge
r km
per
km
of l
ine)
Indi
cate
s th
e le
vel o
f util
isat
ion
of r
ailw
ay n
etw
orks
, bot
h fo
r the
tran
spor
t of p
eopl
e an
d of
goo
ds.
Sou
rce:
Nat
ion
al s
tati
stic
s.
Shar
e of
tran
spor
t of g
oods
con
duct
ed b
y ro
ad /
rail
/ wat
er /
air
Mea
sure
s th
e sh
are
of th
e to
tal g
oods
tran
spor
t for
eac
h ty
pe o
f tra
nspo
rt. I
ndic
ates
rev
eale
d pr
efer
ence
s in
tran
spor
tatio
n, b
ut c
an a
lso
hint
at
spec
ific
obst
acle
s fo
r cer
tain
mod
es o
f tra
nspo
rt th
at r
educ
e its
usa
ge c
ompa
red
to o
ther
s.
Sou
rce:
Nat
ion
al s
tati
stic
s.
Num
ber o
f inj
ured
and
num
ber o
f fat
alit
ies
on r
oads
This
is a
n in
dica
tor o
f the
gen
eral
saf
ety
of th
e ro
ads,
and
thus
, ind
irect
ly, a
lso
of th
eir l
evel
of m
aint
enan
ce.
Sou
rce:
Nat
ion
al s
tati
stic
s.
II. R
EGU
LATO
RY
FRAM
EWO
RK
Logi
stic
s Pe
rfor
man
ce In
dex
(1=l
ow; 5
=hig
h)Th
e Lo
gist
ics
Perf
orm
ance
Inde
x (L
PI) i
s th
e w
eigh
ted
aver
age
of th
e ec
onom
y’s
scor
es fo
r six
key
dim
ensi
ons:
1) e
ffic
ienc
y of
the
clea
ranc
e pr
oces
s (i.
e. s
peed
, sim
plic
ity a
nd p
redi
ctab
ility
of f
orm
aliti
es) b
y bo
rder
con
trol
age
ncie
s, in
clud
ing
cust
oms;
2) q
ualit
y of
trad
e an
d tr
ansp
ort-
rela
ted
infr
astr
uctu
re (
e.g.
por
ts, r
ailro
ads,
roa
ds, i
nfor
mat
ion
tech
nolo
gy);
3) e
ase
of a
rran
ging
com
petit
ivel
y pr
iced
shi
pmen
ts; 4
) com
pete
nce
and
qual
ity o
f log
istic
s se
rvic
es (
e.g.
tran
spor
t ope
rato
rs, c
usto
ms
brok
ers)
; 5) a
bilit
y to
trac
k an
d tr
ace
cons
ignm
ents
; 6) t
imel
ines
s of
sh
ipm
ents
in r
each
ing
dest
inat
ion
with
in th
e sc
hedu
led
or e
xpec
ted
deliv
ery
time.
Sou
rce:
Wo
rld
Ba
nk
, LPI
, htt
p:/
/lp
i.wo
rld
ba
nk
.org
/.
TR
AN
SPO
RT
MA
RK
ET
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
1. In
suff
icie
nt o
vera
ll in
vest
men
t in
tran
spor
t inf
rast
ruct
ure
proj
ects
an
d m
aint
enan
ce o
f exi
stin
g in
fras
truc
ture
. Sy
mpt
oms
of th
is o
bsta
cle
incl
ude
one
or m
ore
of th
e fo
llow
ing:
•lo
w o
vera
ll tr
ansp
ort i
nfra
stru
ctur
e in
vest
men
t •lim
ited
road
den
sity
per
1 0
00
inha
bita
nts
•re
duce
d ro
ad s
afet
y w
ith h
ighe
r nu
mbe
rs o
f inj
ured
/fat
aliti
es.
2. L
ack
of c
o-m
odal
tran
spor
t so
luti
ons.
Th
e ab
senc
e of
mul
ti-m
odal
tr
ansp
orta
tion
node
s re
duce
s se
nsib
le
syne
rgie
s be
twee
n di
ffer
ent m
odes
of
tran
spor
t (ro
ad, r
ail,
air a
nd w
ater
).
3. L
ack
of a
dmin
istr
ativ
e ca
paci
ty.
This
is r
efle
cted
in u
nder
staf
fed
and
unde
rfun
ded
adm
inis
trat
ions
, and
ab
ove
all l
ack
of c
o-or
dina
tion
amon
g di
ffer
ent t
rans
port
aut
hori
ties,
whi
ch
prev
ents
the
deve
lopm
ent o
f a n
atio
nal
co-o
rdin
ated
str
ateg
y on
tran
spor
t.
4. N
on-p
hysi
cal b
arri
ers
to th
e m
ovem
ent o
f goo
ds a
nd p
asse
nger
s.
Thes
e in
clud
e ex
cess
ive
bord
er-
cros
sing
pro
cedu
res,
adm
inis
trat
ive
and
regu
lativ
e pr
oced
ure
obst
acle
s.
Sym
ptom
s of
this
obs
tacl
e in
clud
e on
e or
mor
e of
the
follo
win
g: •la
rge
num
bers
of d
ocum
ents
re
quire
d to
exp
ort a
nd im
port
•un
cert
aint
y ab
out t
he ti
me
cust
oms
proc
edur
es w
ill ta
ke a
t the
bor
ders
.
5. L
imit
ed o
penn
ess
of tr
ansp
ort
netw
orks
to p
riva
te o
pera
tors
. D
espi
te p
rogr
esse
s in
libe
ralis
atio
n,
the
mar
ket i
s st
ill m
uch
clos
ed.
Sym
ptom
s of
this
obs
tacl
e in
clud
e: •no
pri
vate
ope
rato
rs o
n th
e m
arke
t.
1. In
adeq
uate
inte
rnat
iona
l co
nnec
tions
red
uce
the
leve
l of
tran
spor
t for
frei
ght a
nd p
eopl
e.
This
als
o m
akes
tran
spor
t slo
wer
, due
to
a la
ck o
f fas
t roa
ds, w
hile
the
divi
de
betw
een
prim
ary
and
seco
ndar
y ro
ads
crea
tes
disr
uptio
n an
d co
nges
tion
acro
ss d
iffer
ent r
egio
ns. O
vera
ll, th
is
decr
ease
s in
vest
ors’
inte
rest
and
pa
rtic
ular
ly r
educ
es F
DI,
in e
cono
mie
s w
here
mos
t of t
he p
rodu
ctio
n is
ex
port
ed a
nd p
rodu
ctio
n pl
ants
nee
d to
re
spon
d qu
ickl
y to
dem
ands
from
thei
r he
adqu
arte
rs a
broa
d.
2. L
ack
of c
o-m
odal
sol
utio
ns n
ot
only
incr
ease
s fr
eigh
t tra
nspo
rtat
ion
time,
but
als
o su
gges
ts th
at n
ot a
ll tr
ansp
ort s
yste
ms
are
used
to th
eir
full
capa
city
. Thi
s lim
its th
e ec
onom
y’s
trad
e po
tent
ial a
nd re
duce
s th
e be
nefit
of
indi
vidu
al in
fras
truc
ture
pro
ject
s.
3. L
ow a
dmin
istr
ativ
e ca
paci
ty
redu
ces
the
abili
ty to
bui
ld c
oher
ent,
na
tion
wid
e tr
ansp
ort s
trat
egie
s th
at
wou
ld e
ncom
pass
diff
eren
t tra
nspo
rt
syst
ems
and
crea
te s
yner
gies
am
ong
road
, rai
l and
wat
er tr
ansp
ort.
Inef
fect
ive
tran
spor
tatio
n sy
stem
s ne
gativ
ely
affe
ct o
vera
ll tr
ansp
orta
tion
of p
eopl
e an
d go
ods.
4. B
urde
nsom
e pr
oced
ures
cre
ate
a di
sinc
entiv
e to
trad
e go
ods
acro
ss
bord
ers.
One
vis
ible
out
com
e is
a lo
w
ratio
of f
reig
ht tr
ansp
ort t
onne
-km
/GDP
, an
d m
ore
gene
rally
a re
duct
ion
in F
DI
due
to in
crea
sed
barr
iers
to in
vest
men
t.
5. A
bsen
ce o
f pri
vate
ope
rato
rs
redu
ces
com
peti
tion
in th
e se
ctor
. O
n th
e on
e ha
nd, t
his
unde
rmin
es
the
sust
aina
bilit
y an
d pr
ofita
bilit
y of
the
tran
spor
t sec
tor,
and
on th
e ot
her c
once
ntra
tes
the
burd
en o
f ca
pita
l inv
estm
ent o
n th
e sh
ould
ers
of th
e pu
blic
sec
tor,
whi
ch h
as li
mite
d ca
paci
ty to
inve
st.
2. POLICY AREA DIAGNOSTIC
31ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Entr
y re
gula
tion
for r
ail t
rans
port
Wha
t are
the
lega
l con
ditio
ns o
f ent
ry in
to th
e pa
ssen
ger/
frei
ght t
rans
port
mar
ket?
Sim
ple
aver
age
over
two
segm
ents
(fre
ight
tran
spor
t and
pa
ssen
ger t
rans
port
).So
urc
e: O
ECD
, In
dic
ato
rs o
f P
rod
uct
Ma
rket
Reg
ula
tio
n.
Publ
ic o
wne
rshi
p (r
ail t
rans
port
)W
hat p
erce
ntag
e of
sha
res
do th
e go
vern
men
t ow
n in
the
larg
est f
irm in
the
oper
atio
n of
the
infr
astr
uctu
re s
ecto
r? W
hat p
erce
ntag
e of
sha
res
do th
e go
vern
men
t ow
n in
the
larg
est f
irm in
the
pass
enge
r/fr
eigh
t tra
nspo
rt s
ecto
r? S
impl
e av
erag
e ov
er tw
o se
gmen
ts (f
reig
ht tr
ansp
ort a
nd
pass
enge
r tra
nspo
rt).
Sou
rce:
OEC
D, I
nd
icat
ors
of
Pro
du
ct M
ark
et R
egu
lati
on
.
Vert
ical
sep
arat
ion
(rai
l tra
nspo
rt)
Wha
t is
the
degr
ee o
f sep
arat
ion
betw
een
the
oper
atio
n of
infr
astr
uctu
re a
nd th
e pr
ovis
ion
of r
ailw
ay s
ervi
ces
(the
act
ual t
rans
port
of
pass
enge
rs o
r fre
ight
)?So
urc
e: O
ECD
, In
dic
ato
rs o
f P
rod
uct
Ma
rket
Reg
ula
tio
n.
Mar
ket s
truc
ture
(ra
il tr
ansp
ort)
Wha
t is
the
max
imum
num
ber o
f ope
rato
rs c
ompe
ting
in th
e sa
me
area
/rai
l dis
tric
t pas
seng
er/f
reig
ht tr
ansp
ort m
arke
t?
Sou
rce:
OEC
D, I
nd
icat
ors
of
Pro
du
ct M
ark
et R
egu
lati
on
.
Entr
y re
gula
tion
(ro
ad tr
ansp
ort)
In o
rder
to e
stab
lish
a na
tiona
l roa
d fr
eigh
t bus
ines
s (o
ther
than
for t
rans
port
ing
dang
erou
s go
ods
or g
oods
for w
hich
san
itary
ass
uran
ces
are
requ
ired)
do
oper
ator
s ne
ed to
obt
ain
a lic
ence
(ot
her t
han
a dr
ivin
g lic
ence
) or p
erm
it fr
om th
e go
vern
men
t? A
re d
ecis
ions
on
the
entr
y of
new
op
erat
ors
base
d on
cri
teri
a ot
her t
han
tech
nica
l and
fina
ncia
l fitn
ess
and
com
plia
nce
with
pub
lic s
afet
y re
quire
men
ts?
Doe
s th
e re
gula
tor,
thro
ugh
licen
ces
or o
ther
wis
e, h
ave
any
pow
er to
lim
it in
dust
ry c
apac
ity?
Are
prof
essi
onal
bod
ies
or r
epre
sent
ativ
es o
f tra
de
and
com
mer
cial
inte
rest
s in
volv
ed in
spe
cify
ing
or e
nfor
cing
ent
ry r
egul
atio
ns?
Sou
rce:
OEC
D, I
nd
icat
ors
of
Pro
du
ct M
ark
et R
egu
lati
on
.
Pric
e co
ntro
ls (
road
tran
spor
t)Ar
e re
tail
pric
es o
f roa
d fr
eigh
t ser
vice
s in
any
way
reg
ulat
ed b
y th
e go
vern
men
t? D
oes
the
gove
rnm
ent p
rovi
de p
rici
ng g
uide
lines
to r
oad
frei
ght c
ompa
nies
? Ar
e pr
ofes
sion
al b
odie
s or
rep
rese
ntat
ives
of t
rade
and
com
mer
cial
inte
rest
s in
volv
ed in
spe
cify
ing
or e
nfor
cing
pri
cing
gu
idel
ines
or r
egul
atio
ns?
Sou
rce:
OEC
D, I
nd
icat
ors
of
Pro
du
ct M
ark
et R
egu
lati
on
.
Publ
ic o
wne
rshi
p of
air
tran
spor
tW
hat p
erce
ntag
e of
sha
res
in th
e la
rges
t car
rier
(do
mes
tic a
nd in
tern
atio
nal t
raff
ic c
ombi
ned)
are
ow
ned
by n
atio
nal,
stat
e or
pro
vinc
ial
auth
oriti
es?
Sou
rce:
OEC
D, I
nd
icat
ors
of
Pro
du
ct M
ark
et R
egu
lati
on
.
Reg
iona
l air
agr
eem
ent
Doe
s th
e ec
onom
y pa
rtic
ipat
e in
a r
egio
nal a
gree
men
t?So
urc
e: O
ECD
, In
dic
ato
rs o
f P
rod
uct
Ma
rket
Reg
ula
tio
n.
TR
AN
SPO
RT
MA
RK
ET
(con
t.)In
dica
tors
of
sta
te o
f pla
ySt
ruct
ural
ob
stac
les
Impa
ct o
n co
mpe
titi
vene
ss
and
grow
th
2. POLICY AREA DIAGNOSTIC
33ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
33ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Sectoral developmentPolicy area indicators, structural obstacles and impact on competitiveness and growth
35ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
35ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
I. SI
ZE A
ND S
IGNI
FICA
NCE
OF T
HE S
ECTO
R
Agri
cult
ure
(% o
f GD
P, g
row
th)
The
first
indi
cato
r mea
sure
s th
e co
ntrib
utio
n of
agr
icul
ture
to to
tal g
ross
dom
estic
pro
duct
(G
DP)
, sho
win
g th
e im
port
ance
of a
gric
ultu
re fo
r ov
eral
l out
put.
The
seco
nd in
dica
tor m
easu
res
the
grow
th o
r dec
line
in v
alue
of a
gric
ultu
ral p
rodu
ctio
n ye
ar-o
n-ye
ar.
Sou
rce:
Nat
ion
al s
tati
stic
s.
Agro
-foo
d se
ctor
(%
of v
alue
add
ed in
man
ufac
turi
ng, g
row
th)
The
agro
-foo
d se
ctor
ref
ers
to th
e su
bset
of m
anuf
actu
ring
that
pro
cess
es r
aw m
ater
ials
and
inte
rmed
iate
pro
duct
s de
rive
d fr
om th
e ag
ricu
ltura
l se
ctor
. The
firs
t ind
icat
or m
easu
res
agro
-foo
d pr
oduc
tion
as a
sha
re o
f ove
rall
man
ufac
turin
g. It
dem
onst
rate
s ho
w m
uch
proc
essi
ng th
ere
is
beyo
nd b
asic
agr
icul
ture
and
giv
es a
n id
ea o
f lev
els
of a
gric
ultu
ral p
rodu
ct s
peci
alis
atio
n. T
he s
econ
d in
dica
tor m
easu
res
the
cont
ribut
ion
of th
e ag
ro-f
ood
sect
or to
the
valu
e ad
ded
in m
anuf
actu
ring,
whi
ch g
iven
an
indi
catio
n of
the
impo
rtan
ce o
f thi
s se
ctor
for t
he e
cono
my.
So
urc
e: N
atio
na
l sta
tist
ics.
Empl
oym
ent i
n ag
ricu
ltur
e (%
of t
otal
em
ploy
men
t)M
easu
res
the
shar
e of
em
ploy
men
t gen
erat
ed b
y th
e ag
ricu
ltura
l sec
tor,
indi
catin
g th
e im
port
ance
of t
he s
ecto
r for
em
ploy
men
t cre
atio
n.
Sou
rce:
Nat
ion
al s
tati
stic
s.
Empl
oym
ent i
n ag
ro-f
ood
indu
stry
(%
of t
otal
em
ploy
men
t)M
easu
res
the
shar
e of
peo
ple
empl
oyed
in th
e ag
ro-f
ood
sect
or c
ompa
red
to to
tal e
mpl
oym
ent.
It de
mon
stra
tes
the
impo
rtan
ce o
f the
agr
o-fo
od
sect
or fo
r ove
rall
empl
oym
ent.
So
urc
e: F
oo
d a
nd
Ag
ricu
ltu
re O
rga
niz
atio
n o
f th
e U
nit
ed N
atio
ns
(FA
O).
Shar
e of
cen
tral
gov
ernm
ent e
xpen
ditu
re o
n ag
ricu
ltur
e (%
of t
he to
tal b
udge
t, p
er h
ead,
per
hec
tare
)M
easu
res
the
shar
e of
tota
l gov
ernm
ent b
udge
t dire
cted
to th
is s
ecto
r. W
hen
benc
hmar
ked
agai
nst c
ompa
rato
r eco
nom
ies,
it in
dica
tes
how
wel
l th
e se
ctor
is s
uppo
rted
by
the
gove
rnm
ent c
ompa
red
to r
elev
ant p
eers
. So
urc
e: N
atio
na
l sta
tist
ics.
II. S
TRUC
TURE
OF
THE
SECT
OR
Agri
cult
ural
pro
duct
ion
(by
diff
eren
t com
mod
ity
grou
ps)
Tota
l agr
icul
tura
l pro
duct
ion
brok
en d
own
by c
omm
odity
gro
up, i
ndic
atin
g th
e st
ruct
ure
of a
gric
ultu
ral p
rodu
ctio
n.
Sou
rce:
FA
OS
TA
T h
ttp
://f
aost
at3.
fao.
org
/sea
rch
/ag
ricu
ltu
ral%
20p
rod
uct
ion
%20
by
%20
com
mo
dit
y%
20g
rou
ps%
20/E
.
Live
stoc
k pr
oduc
tion
(%
of o
vera
ll ag
ricu
ltur
al p
rodu
ctio
n)
Live
stoc
k pr
oduc
tion
as a
per
cent
age
of to
tal a
gric
ultu
ral p
rodu
ctio
n.
Sou
rces
: FA
OS
TA
T, n
atio
na
l sta
tist
ics.
Ara
ble
land
(%
of t
otal
agr
icul
tura
l lan
d)M
easu
res
how
muc
h of
the
tota
l agr
icul
tura
l lan
d ar
ea is
ara
ble
land
, ind
icat
ing
how
favo
urab
le c
ondi
tions
are
for a
gric
ultu
ral p
rodu
ctio
n.
Sou
rce
: Eu
rop
ean
Co
mm
issi
on
, Eu
rost
at d
atab
ase
, htt
p:/
/ec.
euro
pa
.eu
/eu
rost
at/d
ata
/dat
aba
se.
Agri
cult
ural
are
a un
der u
se (
% o
f the
tota
l agr
icul
tura
l are
a)M
easu
res
the
ratio
of a
gric
ultu
ral l
and
unde
r use
to to
tal a
gric
ultu
ral l
and,
indi
catin
g th
e po
tent
ial f
or e
xpan
sion
of t
he a
gric
ultu
ral s
ecto
r int
o ot
her c
urre
ntly
unu
sed
land
. So
urc
e: E
uro
pea
n C
om
mis
sio
n, E
uro
stat
dat
aba
se, h
ttp
://e
c.eu
rop
a.e
u/e
uro
stat
/dat
a/d
atab
ase
.
AG
RIC
ULT
UR
E
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
1. H
ighl
y de
cent
ralis
ed a
gric
ultu
ral
prod
ucti
on in
volv
ing
smal
l-sc
ale
agri
cultu
re w
ith m
ixed
pro
duct
ion
syst
ems,
pro
duci
ng o
nly
smal
l qu
antit
ies
of m
arke
tabl
e su
rplu
s.
Frag
men
ted
prod
uctio
n an
d la
ck o
f m
echa
nisa
tion
and
know
-how
mak
es
it di
ffic
ult f
or fa
rmer
s to
ach
ieve
ec
onom
ies
of s
cale
in p
rodu
ctio
n an
d pr
oduc
e th
e qu
antit
ies
requ
ired
for s
ome
mar
kets
, con
stra
inin
g ag
ricu
ltura
l gro
wth
. Sy
mpt
oms
of th
is o
bsta
cle
incl
ude
one
or m
ore
of th
e fo
llow
ing:
•sm
all a
vera
ge s
ize
of fa
rms
(u
nder
5 h
a, s
omet
imes
und
er 1
ha)
•lo
w s
hare
of i
rrig
ated
land
.
2. L
ow s
tand
ards
for f
ood
safe
ty
and
qual
ity,
and
und
erde
velo
ped
rela
ted
legi
slat
ion.
Sym
ptom
s of
this
ob
stac
le in
clud
e on
e or
mor
e of
the
follo
win
g: •lo
w n
umbe
r of H
ACCP
and
ISO
22
000
cert
ifica
tes
issu
ed
•fr
agm
ente
d le
gisl
atio
n; m
ultip
le
juri
sdic
tions
; and
wea
knes
ses
in s
urve
illan
ce, m
onito
ring
and
enfo
rcem
ent o
f nat
iona
l foo
d co
ntro
l sy
stem
s.
3. W
eak
inst
itut
iona
l and
ad
min
istr
ativ
e fr
amew
ork
for t
he
deve
lopm
ent a
nd im
plem
enta
tion
of
agri
cult
ural
and
rur
al d
evel
opm
ent
polic
ies.
Sym
ptom
s of
this
obs
tacl
e in
clud
e on
e or
mor
e of
the
follo
win
g:
•no
mar
ket-
base
d an
alys
is o
f the
po
tent
ial n
eeds
of t
he s
ecto
r or
polic
ies
tailo
red
acco
rdin
gly
•lit
tle in
volv
emen
t of a
gric
ultu
ral
facu
lties
and
res
earc
h in
stitu
tes
in
the
polic
y an
alys
is a
nd fo
rmul
atio
n pr
oces
s.
1. S
mal
l-sc
ale
agri
cultu
ral p
rodu
ctio
n re
sults
in o
ne o
r mor
e of
the
follo
win
g:
•ou
tdat
ed te
chno
logy
/ m
echa
nisa
tion
and
insu
ffic
ient
and
po
orly
des
igne
d ir
riga
tion
sys
tem
s (i
f any
) •lo
w le
vels
of c
apac
ity
utili
sati
on •lo
w p
rodu
ct s
peci
alis
atio
n •la
ck o
f sta
ndar
ds fo
r foo
d sa
fety
•lo
w p
rodu
ctiv
ity
•lim
ited
add
ed v
alue
and
co
ntrib
utio
n to
GD
P •hi
gher
info
rmal
em
ploy
men
t in
the
sect
or •hi
gh s
hare
of a
gric
ultu
ral l
and
left
un
cult
ivat
ed •ri
sing
trad
e de
fici
t.2.
Eco
nom
ies
that
rely
on
food
exp
orts
fo
r for
eign
exc
hang
e ha
ve a
par
ticul
ar
inte
rest
in s
tren
gthe
ning
nat
iona
l foo
d co
ntro
l sys
tem
s, h
arm
onis
ing
natio
nal
food
regu
latio
ns w
ith in
tern
atio
nal
stan
dard
s, a
nd e
stab
lishi
ng im
port
and
ex
port
food
insp
ectio
n an
d ce
rtifi
catio
n sy
stem
s to
ens
ure
conf
orm
ity w
ith th
e W
orld
Tra
de O
rgan
izat
ion’
s ag
reem
ents
re
gard
ing
sani
tary
and
phy
tosa
nita
ry
mea
sure
s an
d te
chni
cal b
arrie
rs to
tr
ade.
Low
food
saf
ety
and
qual
ity
stan
dard
s an
d un
derd
evel
oped
rela
ted
legi
slat
ion
thus
resu
lt in
lim
ited
expo
rt
capa
city
and
can
lead
to o
utda
ted
tech
nolo
gy a
nd/o
r mec
hani
satio
n as
w
ell a
s lo
wer
pro
duct
ivit
y. T
hese
in
turn
aff
ect p
rosp
ects
for g
row
th a
nd
the
com
petit
iven
ess
of th
e se
ctor
.
3. A
d ho
c ag
ricu
ltura
l pol
icy
resu
lts in
in
adeq
uate
sup
port
for a
gric
ultu
ral
prod
ucer
s, lo
w p
rodu
ctiv
ity
and
low
ex
port
cap
acit
y, a
mon
g ot
her i
ssue
s.
2. POLICY AREA DIAGNOSTIC
3736 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Labo
ur p
rodu
ctiv
ity
(GD
P/w
orke
r in
USD
, as
% o
f the
EU
ave
rage
and
as
% o
f the
SEE
ave
rage
)M
easu
res
outp
ut p
er a
gric
ultu
ral w
orke
r com
pare
d to
: 1) t
he E
U a
vera
ge a
nd 2
) the
Sou
th E
ast E
urop
e (S
EE) a
vera
ge.
Sou
rce:
In
tern
atio
na
l Lab
ou
r O
rga
niz
atio
n (
ILO
) htt
p:/
/ww
w.i
lo.o
rg/g
lob
al/
stat
isti
cs-a
nd
-dat
aba
ses/
lan
g--e
n/i
nd
ex.h
tm.
Rur
al p
opul
atio
n (%
of t
he to
tal p
opul
atio
n)
Mea
sure
s th
e ru
ral p
opul
atio
n as
a s
hare
of t
he o
vera
ll po
pula
tion
and
can
be u
sed
as a
pro
xy fo
r the
labo
ur a
vaila
ble
to th
e ag
ricu
ltura
l sec
tor.
Sou
rce:
Nat
ion
al s
tati
stic
s.
Aver
age
size
of i
ndiv
idua
l agr
icul
tura
l hol
ding
(in
ha)
Mea
sure
s th
e av
erag
e fa
rm s
ize,
indi
catin
g po
tent
ial s
mal
l-sc
ale
prod
uctio
n an
d th
e le
vel o
f con
solid
atio
n. In
the
EU, h
oldi
ngs
with
less
than
5
ha o
f lan
d un
der c
ultiv
atio
n ar
e co
nsid
ered
sm
all.
So
urc
e: N
atio
na
l sta
tist
ics.
Irri
gate
d ag
ricu
ltur
al la
nd (
% o
f tot
al a
gric
ultu
ral l
and)
Irri
gate
d ag
ricu
ltura
l lan
d re
fers
to a
gric
ultu
ral a
reas
pur
pose
ly p
rovi
ded
with
wat
er, i
nclu
ding
land
irri
gate
d by
con
trol
led
flood
ing.
The
sha
re o
f irr
igat
ed a
gric
ultu
ral l
and
as a
per
cent
age
of o
vera
ll la
nd u
nder
cul
tivat
ion
give
s an
idea
of h
ow d
evel
oped
irri
gatio
n is
. The
mor
e it
is d
evel
oped
, th
e be
tter
the
pros
pect
s fo
r lar
ge-s
cale
pro
duct
ion
and
high
er p
rodu
ctiv
ity, b
ut ir
riga
tion
is a
maj
or d
rivi
ng fo
rce
behi
nd w
ater
abs
trac
tion,
m
eani
ng s
usta
inab
le w
ater
man
agem
ent h
as to
be
in p
lace
.So
urc
e: W
orl
d B
an
k.
Agri
cult
ural
exp
orts
(%
of t
otal
exp
orts
)Ex
port
s of
agr
icul
tura
l pro
duct
s as
a s
hare
of t
otal
exp
orts
, ind
icat
ing
thei
r im
port
ance
to th
e ec
onom
y’s
over
all e
xpor
t per
form
ance
. So
urc
e: N
atio
na
l sta
tist
ics.
Agri
cult
ural
trad
e (e
xpor
t/im
port
) wit
h EU
(%
of t
otal
trad
e)
Mea
sure
s ag
ricu
ltura
l tra
de w
ith E
U c
ount
ries
as
a sh
are
of o
vera
ll tr
ade.
Thi
s in
dica
tes
the
stre
ngth
of a
gric
ultu
ral t
rade
link
s w
ith th
e EU
.So
urc
e: N
atio
na
l sta
tist
ics.
Non
-pro
cess
ed a
gro-
food
exp
orts
/im
port
s (%
tota
l tra
de)
Mea
sure
s no
n-pr
oces
sed
agro
-foo
d pr
oduc
ts a
s a
shar
e of
tota
l exp
orts
or i
mpo
rts.
Eco
nom
ies
shou
ld a
im to
pro
cess
as
muc
h ag
ricu
ltura
l pr
oduc
e th
emse
lves
as
poss
ible
and
exp
ort l
ess
raw
agr
icul
tura
l pro
duct
s, s
ince
that
tran
slat
es in
to m
ore
dom
estic
val
ue a
dded
and
hen
ce m
ore
job
crea
tion
and
inco
me
gene
ratio
n.So
urc
e: N
atio
na
l sta
tist
ics.
Agro
-foo
d tr
ade
bala
nce
(%
of G
DP)
Mea
sure
s th
e di
ffer
ence
bet
wee
n ex
port
s an
d im
port
s of
agr
o-fo
od p
rodu
cts
and
whe
ther
the
econ
omy
is a
net
exp
orte
r or i
mpo
rter
of t
hese
pr
oduc
ts.
Sou
rce:
Nat
ion
al s
tati
stic
s.
Fore
ign
dire
ct in
vest
men
t (FD
I) in
flow
s to
agr
icul
ture
(%
of a
ll FD
I inf
low
s)M
easu
res
the
shar
e of
FD
I inf
low
s to
agr
icul
ture
as
a pe
rcen
tage
of t
otal
inflo
ws.
Indi
cate
s ho
w a
ttra
ctiv
e th
is s
ecto
r is
for i
nves
tors
. So
urc
e: F
AO
ST
AT
.
AG
RIC
ULT
UR
E (c
ont.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
4. L
imit
ed in
vest
men
t in
hum
an
reso
urce
s ne
eded
to e
nhan
ce th
e te
chni
cal,
mar
ketin
g an
d m
anag
eria
l ca
pabi
litie
s of
the
tota
l lab
our f
orce
. Sy
mpt
oms
of th
is o
bsta
cle
incl
ude
one
or m
ore
of th
e fo
llow
ing:
•vo
catio
nal e
duca
tion
and
trai
ning
(V
ET) c
urri
cula
are
out
date
d an
d ar
e no
t in
line
with
labo
ur m
arke
t nee
ds •w
eak
capa
city
of e
mpl
oym
ent
serv
ices
with
und
erfu
nded
and
un
ders
taff
ed p
rogr
amm
es •no
or l
imite
d se
ctor
trai
ning
nee
ds
anal
ysis
(TN
A) •lo
w p
artic
ipat
ion
in li
felo
ng le
arni
ng.
5. D
elay
s in
res
truc
turi
ng a
nd
priv
atis
atio
n of
sta
te o
wne
d ag
ricu
ltur
al fi
rms.
Sym
ptom
s in
clud
e:
•la
ck o
f a c
ompr
ehen
sive
pr
ivat
isat
ion
stra
tegy
•lo
w c
apac
ity u
tilis
atio
n
4. L
imite
d in
vest
men
t in
hum
an
reso
urce
s re
sults
in in
adeq
uate
hu
man
cap
ital
at a
ll le
vels
, mea
ning
th
e se
ctor
lack
s su
ffic
ient
num
bers
, ca
paci
ty, k
now
ledg
e an
d re
leva
nt
expe
rtis
e to
mee
t the
cha
lleng
es o
f a
mod
ern,
com
petit
ive
agro
-foo
d sy
stem
or t
he d
iver
sity
of p
robl
ems
faci
ng u
nder
deve
lope
d ru
ral a
reas
. Th
is h
as d
irect
neg
ativ
e ef
fect
s on
em
ploy
men
t and
its
qual
ity,
prod
uctiv
ity, i
nter
nal c
onsu
mpt
ion
and
pove
rty
redu
ctio
n.5.
Del
ays
in th
e pr
ivat
isat
ion
of fi
rms
resu
lt in
the
brea
king
-up
of m
arke
ting
ch
anne
ls a
nd s
ervi
ces
for s
mal
l-sc
ale
prod
ucer
s, c
oupl
ed w
ith th
e sl
ow e
mer
genc
e of
new
mar
keti
ng
mec
hani
sms.
Add
ition
ally
, a
sign
ific
ant s
hare
of a
gric
ultu
ral l
and
mig
ht b
e le
ft u
ncul
tiva
ted
or u
sed
for
urba
n us
es. T
his
dete
rs in
vest
men
ts
in a
gric
ultu
re, p
rodu
ctiv
ity g
row
th,
empl
oym
ent,
etc.
2. POLICY AREA DIAGNOSTIC
37ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Agri
cult
ural
mac
hine
ry (
num
ber o
f tra
ctor
s pe
r 100
km
2, a
vera
ge a
ge o
f tra
ctor
s)Th
e fir
st in
dica
tor i
s a
prox
y fo
r the
agr
icul
tura
l sec
tor’s
leve
l of m
echa
nisa
tion.
The
sec
ond
mea
sure
s ho
w o
bsol
ete
the
trac
tors
use
d m
ight
be
, ind
icat
ing
the
stat
e of
mec
hani
satio
n an
d po
tent
ial e
ffec
ts o
n pr
oduc
tivity
. Bot
h ca
n be
use
d as
pro
xies
for t
he le
vel o
f pro
duct
ivity
in
agri
cultu
re.
Sou
rces
: Wo
rld
Ba
nk
, Dat
aba
se o
f A
gri
cult
ura
l In
dic
ato
rs; n
atio
na
l sta
tist
ics.
Aver
age
age
of p
roce
ssin
g eq
uipm
ent i
n th
e ag
ro-f
ood
indu
stry
M
easu
res
the
leve
l of o
bsol
esce
nce
of th
e eq
uipm
ent u
sed,
indi
catin
g th
e st
ate
of m
echa
nisa
tion
and
pote
ntia
l eff
ects
on
prod
uctiv
ity. C
an b
e us
ed a
s pr
oxy
for l
abou
r pro
duct
ivity
in th
e fo
od p
roce
ssin
g in
dust
ry in
the
abse
nce
of o
ther
dat
a.So
urc
e: N
atio
na
l sta
tist
ics.
Org
anic
pro
duct
ion
as a
sha
re o
f tot
al a
gro-
food
pro
duct
ion
Dem
and
for o
rgan
ic p
rodu
cts
is g
row
ing,
esp
ecia
lly in
EU
cou
ntri
es a
nd o
rgan
ic p
rodu
ctio
n ca
n re
pres
ent a
n av
enue
for d
iver
sific
atio
n in
to
high
er-v
alue
pro
duct
s an
d ov
eral
l exp
ort g
row
th in
the
sect
or.
Sou
rce:
Nat
ion
al s
tati
stic
s.
Num
ber o
f foo
d sa
fety
and
qua
lity
cert
ific
ates
issu
ed in
the
prev
ious
yea
r (H
ACCP
, ISO
220
00) c
ompa
red
to a
cer
tain
ben
chm
ark
(thi
s w
ill
depe
nd o
n th
e ec
onom
y)
Mea
sure
s th
e le
vel o
f alig
nmen
t with
inte
rnat
iona
l foo
d st
anda
rds.
The
impl
emen
tatio
n of
sta
ndar
ds h
as th
e po
tent
ial t
o ea
se a
cces
s to
the
EU
sing
le m
arke
t and
libe
ralis
e in
tern
atio
nal t
rade
. Th
e gr
eate
r the
num
ber o
f cer
tific
ates
issu
ed, t
he g
reat
er th
e ex
pect
ed le
vel o
f com
petit
iven
ess
whe
n ex
port
ing
to th
e EU
mar
ket.
Sou
rce:
Nat
ion
al s
tati
stic
s (e
.g. c
ha
mb
ers
of
com
mer
ce).
AG
RIC
ULT
UR
E (c
ont.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
2. POLICY AREA DIAGNOSTIC
3938 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
I. SI
ZE A
ND S
IGNI
FICA
NCE
OF T
HE S
ECTO
R
Valu
e ad
ded
by in
dust
ry (
% o
f GD
P)
Indu
stry
rep
rese
nts
the
part
of t
he e
cono
my
devo
ted
to p
rodu
cing
goo
ds, a
s op
pose
d to
agr
icul
tura
l out
put a
nd s
ervi
ces.
It c
ompr
ises
, am
ong
othe
rs, m
inin
g, m
anuf
actu
ring,
con
stru
ctio
n an
d el
ectr
icity
gen
erat
ion.
Thi
s in
dica
tor m
easu
res
the
shar
e of
val
ue a
dded
by
indu
stry
as
a pe
rcen
tage
of G
DP.
So
urc
e: W
orl
d B
an
k.
Valu
e ad
ded
by m
anuf
actu
ring
(%
of t
otal
val
ue a
dded
, % g
row
th)
Mea
sure
s m
anuf
actu
ring’
s sh
are
of to
tal v
alue
add
ed a
nd it
s gr
owth
or d
eclin
e.. I
t ind
icat
es th
e co
ntrib
utio
n of
this
sec
tor t
o th
e to
tal v
alue
ad
ded.
So
urc
es: E
uro
pea
n C
om
mis
sio
n, E
uro
stat
dat
aba
se, h
ttp
://e
c.eu
rop
a.e
u/e
uro
stat
/dat
a/d
atab
ase
; Wo
rld
Ba
nk
.
Empl
oym
ent i
n m
anuf
actu
ring
(%
of t
otal
em
ploy
men
t)M
easu
res
the
shar
e of
em
ploy
men
t gen
erat
ed in
the
man
ufac
turin
g se
ctor
, ind
icat
ing
the
impo
rtan
ce o
f thi
s se
ctor
to e
mpl
oym
ent c
reat
ion.
So
urc
e: N
atio
na
l sta
tist
ics.
Stat
e ai
d to
indu
stry
exc
ludi
ng tr
ansp
ort,
agr
icul
ture
and
fish
erie
s (%
GD
P)M
easu
res
the
shar
e of
bud
get d
evot
ed to
this
sec
tor a
s a
shar
e of
GD
P, in
dica
ting
the
leve
l of s
uppo
rt p
rovi
ded
by th
e go
vern
men
t. So
urc
e: N
atio
na
l sta
tist
ics.
Shar
e of
cen
tral
gov
ernm
ent e
xpen
ditu
re o
n m
anuf
actu
ring
(%
of t
he to
tal b
udge
t, p
er h
ead,
per
ha)
M
easu
res
the
shar
e of
bud
geta
ry fu
nds
to th
is s
ecto
r out
of t
he o
vera
ll bu
dget
, ind
icat
ing
the
leve
l of s
uppo
rt p
rovi
ded
by th
e go
vern
men
t. So
urc
e: N
atio
na
l sta
tist
ics.
Nat
iona
l ind
ustr
y de
velo
pmen
t str
ateg
y an
d ac
tion
pla
nA
natio
nal s
trat
egy
and
actio
n pl
an e
nabl
es p
olic
y m
aker
s to
ass
ess
the
area
s of
gre
ates
t com
petit
ive
pote
ntia
l and
dire
ct th
eir e
ffor
ts m
ore
effe
ctiv
ely
to c
aptu
re th
e ec
onom
ic a
nd w
ider
soc
ial b
enef
its o
f ind
ustr
y. M
easu
red
as a
yes
/no,
with
sco
ring
base
d on
cri
teri
a in
clud
ing
qual
ity,
deve
lopm
ent p
roce
sses
, evi
denc
e ba
se, d
eliv
ery
thro
ugh
co-o
rdin
ated
act
ion
plan
ning
with
par
tner
s ov
er ti
me
and
inte
grat
ion
with
a n
atio
nal
stra
tegy
and
gov
ernm
ent a
ppro
pria
tions
for i
ndus
try.
The
exi
sten
ce o
f an
actio
n pl
an d
oes
not o
n its
ow
n gu
aran
tee
effe
ctiv
e as
sist
ance
to
impr
ove
the
com
petit
iven
ess
of th
e ec
onom
y’s
indu
stry
. Ass
essm
ent o
f thi
s in
dica
tor w
ill r
equi
re a
car
eful
and
dee
per c
onsi
dera
tion
of th
e co
ntex
t and
com
pone
nts
for t
he p
lan
and
wha
t it s
eeks
to d
eliv
er in
term
s of
impr
ovin
g co
mpe
titiv
enes
s. S
ome
plan
s m
ay b
e ge
nera
l whe
n m
ore
deta
iled
segm
ent-
spec
ific
actio
ns m
ight
be
need
ed to
impr
ove
com
petit
iven
ess.
Thi
s is
esp
ecia
lly im
port
ant g
iven
the
pace
of e
xter
nal f
acto
rs
such
as
cris
es. w
hich
can
hav
e ke
y im
pact
s on
com
petit
iven
ess.
Thi
s ca
n re
quire
act
ion
plan
s to
be
adju
sted
at s
hort
not
ice,
bas
ed o
n ev
iden
ce,
and
the
plan
ning
pro
cess
, act
ors
and
colla
bora
tion
mus
t be
stro
ng e
noug
h to
allo
w s
uch
adju
stm
ents
.So
urc
e: M
inis
try
resp
on
sib
le f
or
ind
ust
ry.
II. S
TRUC
TURE
OF
THE
SECT
OR
Man
ufac
turi
ng p
rodu
ctio
n (i
ndex
: 201
0=10
0)M
easu
res
chan
ges
in th
e pr
ice-
adju
sted
out
put o
f man
ufac
turin
g ov
er a
giv
en r
efer
ence
per
iod,
exp
ress
ed a
s an
inde
x w
ith a
bas
e of
201
0=10
0.
It pr
ovid
es in
sigh
ts in
to th
e tr
ends
in m
anuf
actu
ring
prod
uctio
n ov
er ti
me.
Sou
rce:
Eu
rop
ean
Co
mm
issi
on
, Eu
rost
at d
atab
ase
, htt
p:/
/ec.
euro
pa
.eu
/eu
rost
at/d
ata
/dat
aba
se.
IND
US
TR
Y A
ND
MA
NU
FAC
TU
RIN
G
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
1. S
low
res
truc
turi
ng o
f the
sec
tor
follo
win
g de
indu
stri
alis
atio
n in
the
1990
s an
d 20
00s.
Sym
ptom
s of
this
ob
stac
le in
clud
e: •lo
w le
vels
of c
apac
ity u
tilis
atio
n •lo
w le
vels
of i
ndus
tria
l pro
duct
ion
•in
suff
icie
nt in
vest
men
t in
the
sect
or
•hi
gh p
erce
ntag
e of
uns
ucce
ssfu
l pr
ivat
isat
ions
and
the
lack
of a
co
mpr
ehen
sive
priv
atis
atio
n st
rate
gy.
2. A
lack
of t
arge
ted
indu
stri
al
deve
lopm
ent a
nd in
effi
cien
t m
anag
emen
t of s
tate
sup
port
for
the
prom
otio
n of
inve
stm
ents
and
ex
port
s. S
ympt
oms
of th
is o
bsta
cle
incl
ude:
•in
dust
rial
pol
icy
fails
to ta
rget
the
mos
t sev
ere
obst
acle
s to
indu
stri
al
deve
lopm
ent
•st
ate
inve
stm
ent a
nd e
xpor
t pr
omot
ion
is fr
agm
ente
d,
unsy
nchr
onis
ed, i
nsuf
ficie
ntly
tr
ansp
aren
t and
lack
s ad
equa
te
eval
uatio
n m
echa
nism
s •in
dust
rial s
tate
aid
ofte
n di
scrim
inat
es
agai
nst s
mal
ler p
rivat
ely
owne
d pr
oduc
tion
com
pani
es, w
ith to
o m
uch
stat
e ai
d gr
ante
d to
unp
rofit
able
pub
lic
com
pani
es o
r to
non-
tran
spar
ent F
DI
proj
ects
.
3. L
imit
ed k
now
ledg
e tr
ansf
er
betw
een
univ
ersi
ties
and
indu
stry
.
Sym
ptom
s of
this
obs
tacl
e in
clud
e:
•lim
ited
ince
ntiv
es fo
r aca
dem
ics
to
cond
uct r
esea
rch
of c
omm
erci
al v
alue
•lit
tle o
r no
co-o
pera
tion
betw
een
the
rese
arch
inst
itute
s an
d in
dust
ry.
4. L
imit
ed in
vest
men
t in
hum
an
reso
urce
s, w
hich
res
ults
in a
n in
adeq
uate
ly s
kille
d in
dust
rial
w
orkf
orce
. Sym
ptom
s of
this
obs
tacl
e in
clud
e on
e or
mor
e of
the
follo
win
g: •an
edu
catio
n sy
stem
not
alig
ned
with
labo
ur m
arke
t nee
ds
1., 2
. Slo
w r
estr
uctu
ring
of t
he s
ecto
r fo
llow
ing
the
dein
dust
rial
isat
ion
of
the
1990
s an
d 20
00s
has
cont
ribu
ted
to d
efic
ienc
ies
in th
e te
chno
logi
cal
leve
l of i
ndus
tria
l cap
acit
ies
and
skill
s ba
se, u
nfav
oura
ble
expo
rt
stru
ctur
es, u
nfav
oura
ble
leve
ls o
f sp
ecia
lisa
tion
of i
ndus
tria
l pro
duct
s an
d ov
eral
l low
pro
duct
ivit
y in
the
sect
or. A
lthou
gh d
eind
ustr
ialis
atio
n ap
pear
s to
hav
e st
oppe
d, th
e le
vel
of p
rodu
ctiv
ity in
the
sect
or r
emai
ns
very
low
(40
% b
elow
leve
ls in
Cen
tral
an
d Ea
ster
n Eu
rope
).
Sust
aine
d in
vest
men
t in
indu
stry
an
d m
anuf
actu
ring
is n
eede
d to
saf
egua
rd a
nd u
pgra
de s
kills
, im
prov
e pr
oduc
tivity
and
so
enab
le
the
inte
grat
ion
of m
ore
firm
s in
to
glob
al v
alue
cha
ins.
Pri
vatis
atio
n on
its
own
is u
nlik
ely
to p
rom
ote
econ
omic
gro
wth
in th
e ab
senc
e of
a
com
preh
ensi
ve in
dust
rial
pol
icy
to g
uide
the
repl
acem
ent o
f the
old
in
dust
rial
str
uctu
res.
Fur
ther
, the
lack
of
a p
olic
y do
es n
ot c
ompl
y w
ith th
e EU
acq
uis.
Lack
of i
nves
tmen
t tra
nsla
tes
into
un
derd
evel
oped
indu
stry
pro
duci
ng
undi
ffer
enti
ated
and
bas
ic p
rodu
cts
and
a la
rge
shar
e of
raw
mat
eria
ls
and
unco
mpe
titi
ve e
xpor
ts, l
eadi
ng
to lo
w in
com
es a
nd o
vera
ll lo
w
prod
uctiv
ity o
f the
sec
tor.
Poor
ly d
efin
ed s
tate
aid
res
ults
in
a fa
ilur
e to
targ
et a
id e
ffic
ient
ly
whe
re it
will
cre
ate
the
mos
t gro
wth
. Th
is a
ffec
ts in
dust
ry’s
cap
acity
to
inve
st a
nd in
nova
te a
nd in
dire
ctly
le
ads
to lo
w p
rodu
ctiv
ity a
nd a
wea
k ex
port
bas
e.
2. POLICY AREA DIAGNOSTIC
39ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Indu
stri
al p
rodu
ct e
xpor
ts (
% o
f tot
al e
xpor
ts, g
row
th)
Mea
sure
s th
e pe
rcen
tage
of i
ndus
tria
l pro
duct
s as
a s
hare
of t
otal
exp
orts
, ind
icat
ing
thei
r im
port
ance
to th
e ec
onom
y’s
over
all e
xpor
t bas
e.
Sou
rce:
Nat
ion
al s
tati
stic
s.
Inte
rmed
iate
indu
stri
al p
rodu
cts,
exp
orts
/im
port
s (%
of t
otal
trad
e)M
easu
res
inte
rmed
iate
indu
stri
al p
rodu
cts
as a
sha
re o
f tot
al e
xpor
ts o
r im
port
s, in
dica
ting
the
leve
l of s
peci
alis
atio
n in
the
indu
stri
al s
ecto
r. Th
e hi
gher
the
shar
e of
inte
rmed
iate
indu
stri
al p
rodu
cts
in to
tal e
xpor
ts, a
nd th
e lo
wer
thei
r sha
re o
f tot
al im
port
s, th
e le
ss s
peci
alis
ed th
e in
dust
rial
sec
tor.
A hi
gh s
hare
of i
nter
med
iate
indu
stri
al p
rodu
cts
in to
tal e
xpor
ts s
igna
ls th
e ne
ed to
shi
ft o
utpu
t to
high
er v
alue
, spe
cial
ist
prod
ucts
. So
urc
e: N
atio
na
l sta
tist
ics.
Fi
nal i
ndus
tria
l pro
duct
s ex
port
s/im
port
s (%
of t
otal
trad
e)
Mea
sure
s th
e sh
are
of fi
nal i
ndus
tria
l pro
duct
s in
the
tota
l exp
ort o
r im
port
. Ind
icat
es th
e le
vel o
f spe
cial
isat
ion
in th
e in
dust
rial
sec
tor.
The
high
er th
e sh
are
of fi
nal i
ndus
tria
l pro
duct
s of
tota
l exp
orts
and
the
low
er th
eir s
hare
of t
otal
impo
rts,
the
mor
e sp
ecia
lised
the
indu
stri
al s
ecto
r. So
urc
e: N
atio
na
l sta
tist
ics.
Hig
h te
chno
logy
exp
orts
(%
of t
otal
exp
orts
) M
easu
res
high
tech
nolo
gy p
rodu
cts
as a
sha
re o
f ove
rall
expo
rts,
indi
catin
g th
e le
vel o
f sop
hist
icat
ion
of th
e co
untr
y’s
expo
rts.
So
urc
e: W
orl
d B
an
k.
III. C
APAC
ITY
AND
POTE
NTIA
L
Labo
ur p
rodu
ctiv
ity
in m
anuf
actu
ring
(in
dex:
201
0=10
0)M
easu
res
chan
ges
in th
e va
lue
adde
d pe
r per
son
empl
oyed
in th
e m
anuf
actu
ring
sect
or e
xpre
ssed
as
an in
dex
with
bas
e 20
10=1
00. I
ndic
ates
ch
ange
s in
labo
ur p
rodu
ctiv
ity o
ver t
ime.
So
urc
e: E
uro
pea
n C
om
mis
sio
n, E
uro
stat
dat
aba
se, h
ttp
://e
c.eu
rop
a.e
u/e
uro
stat
/dat
a/d
atab
ase
.
Com
peti
tive
Indu
stri
al P
erfo
rman
ce (
CIP)
inde
xTh
e CI
P in
dex
cons
ists
of e
ight
sub
-indi
cato
rs a
long
thre
e di
men
sion
s of
indu
stri
al c
ompe
titiv
enes
s. T
he fi
rst d
imen
sion
des
crib
es a
n ec
onom
y’s
capa
city
to p
rodu
ce a
nd e
xpor
t man
ufac
ture
d go
ods
and
is c
aptu
red
by it
s m
anuf
actu
ring
valu
e ad
ded
(MVA
) per
cap
ita (
MVA
pc)
and
its m
anuf
actu
red
expo
rts
per c
apita
(M
Xpc)
. The
sec
ond
dim
ensi
on c
over
s an
eco
nom
y’s
leve
ls o
f tec
hnol
ogic
al d
eepe
ning
and
upg
radi
ng.
The
third
dim
ensi
on is
the
econ
omy’
s im
pact
on
wor
ld m
anuf
actu
ring,
bot
h in
term
s of
val
ue-a
dded
sha
re o
f wor
ld M
VA (
ImW
MVA
) and
of w
orld
m
anuf
actu
ring
trad
e (I
mW
MT)
.So
urc
e: U
nit
ed N
atio
ns
Ind
ust
ria
l Dev
elo
pm
ent
Org
an
izat
ion
(U
NID
O),
CIP
, un
ido.
org
/dat
a1/S
tati
stic
s/R
esea
rch
/cip
.htm
l.
Net
fina
ncia
l res
ult o
f man
ufac
turi
ng in
the
over
all e
cono
my
(tot
al, %
, by
sect
or)
Mea
sure
s th
e pr
ofita
bilit
y of
the
man
ufac
turin
g se
ctor
, whi
ch c
an s
erve
as
a pr
oxy
for i
ts r
elat
ive
com
petit
iven
ess.
Sou
rce:
Nat
ion
al s
tati
stic
s.
Indu
stri
al p
rodu
cts
trad
ed (
expo
rt/i
mpo
rt) w
ith
the
EU a
nd w
ith
SEE
(im
port
/exp
ort,
% o
f tot
al tr
ade)
Mea
sure
s th
e sh
are
of tr
ade
in th
e in
dust
rial
pro
duct
s di
rect
ed to
: 1) E
U c
ount
ries
and
2) S
EE c
ount
ries
, out
of o
vera
ll tr
ade.
It in
dica
tes
the
stre
ngth
of i
ndus
tria
l tra
de li
nks
with
the
EU a
nd S
EE e
cono
mie
s.So
urc
e: E
uro
pea
n C
om
mis
sio
n, E
uro
stat
dat
aba
se, h
ttp
://e
c.eu
rop
a.e
u/e
uro
stat
/dat
a/d
atab
ase
.
IND
US
TR
Y A
ND
MA
NU
FAC
TU
RIN
G (
cont
.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
•w
eak
capa
city
of e
mpl
oym
ent
serv
ices
to m
atch
peo
ple
with
jobs
w
ith u
nder
fund
ed a
nd u
nder
staf
fed
prog
ram
mes
•no
or l
imite
d se
ctor
trai
ning
nee
ds
anal
ysis
(TN
A) r
esul
ting
in li
mite
d ac
cess
to th
e tr
aini
ng n
eede
d •lo
w p
artic
ipat
ion
in li
felo
ng le
arni
ng.
5. L
ack
of in
stit
utio
nal s
uppo
rt fo
r en
viro
nmen
tall
y fr
iend
ly in
dust
rial
pr
oduc
tion
. •ou
tdat
ed “
dirt
y” te
chno
logy
in u
se •lo
w n
umbe
r of e
co-s
tand
ards
im
plem
ente
d or
cer
tific
ates
issu
ed •In
suff
icie
nt fi
nanc
ial s
uppo
rt
prov
ided
for e
co-f
rien
dly
prod
uctio
n (l
ack
of s
ubsi
dies
/tax
ince
ntiv
es)
•Li
mite
d no
n-fin
anci
al s
uppo
rt
prov
ided
, suc
h as
was
te
man
agem
ent p
rogr
amm
es, w
ater
co
nser
vatio
n pr
ogra
mm
es, t
rain
ing
on th
e ci
rcul
ar e
cono
my.
Stat
e su
ppor
t sys
tem
s sh
ould
ens
ure
that
fina
ncia
l aid
is g
rant
ed o
n th
e ba
sis
of c
lear
cri
teri
a in
line
with
EU
an
d St
abili
satio
n an
d As
soci
atio
n Ag
reem
ent (
SAA)
sta
te a
id r
ules
, an
d ac
cord
ing
to fu
lly tr
ansp
aren
t pr
oced
ures
.
3. L
imite
d kn
owle
dge
tran
sfer
bet
wee
n ac
adem
ia a
nd in
dust
ry re
duce
s th
e ca
paci
ty o
f the
sec
tor t
o in
nova
te
and
dete
rs p
oten
tial i
n-co
untr
y te
chno
logy
dev
elop
men
t. Th
is in
tu
rn le
ads
to lo
w le
vels
of p
rodu
ct
spec
ialis
atio
n, a
nd a
wea
k ex
port
bas
e an
d ha
mpe
rs p
oten
tial i
nves
tmen
ts in
th
e se
ctor
and
lim
its it
s gr
owth
.
4. L
imite
d in
vest
men
t in
hum
an
reso
urce
s, w
hich
res
ults
in
inad
equa
te h
uman
cap
ital
at a
ll le
vels
, mos
tly
lack
ing
suff
icie
nt
capa
city
, kno
wle
dge
and
rele
vant
ex
pert
ise
to m
eet t
he c
halle
nges
of a
m
oder
n, c
ompe
titiv
e m
anuf
actu
ring
se
ctor
or t
o ta
ckle
the
rang
e of
pr
oble
ms
faci
ng u
nder
deve
lope
d ru
ral
area
s. T
his
has
dire
ct n
egat
ive
effe
cts
on e
mpl
oym
ent a
nd it
s qu
ality
, pr
oduc
tivity
, int
erna
l con
sum
ptio
n an
d p
over
ty r
educ
tion.
5.
Lac
k of
inst
itutio
nal s
uppo
rt to
en
viro
nmen
tally
frie
ndly
indu
stri
al
prod
uctio
n le
ads
to u
nsus
tain
able
gr
owth
and
an
expo
rt s
truc
ture
th
at d
oes
not m
eet i
nter
nati
onal
de
man
d.
2. POLICY AREA DIAGNOSTIC
4140 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Indu
stri
al p
rodu
cts
trad
e ba
lanc
e (%
of G
DP)
M
easu
res
the
defic
it or
sur
plus
in in
dust
rial
pro
duct
s tr
aded
, ind
icat
ing
if th
e ec
onom
y is
a n
et e
xpor
ter o
r net
impo
rter
of i
ndus
tria
l pro
duct
s.So
urc
e: N
atio
na
l sta
tist
ics.
FDI i
nflo
ws
to m
anuf
actu
ring
(%
of a
ll FD
I inf
low
s)M
easu
res
the
shar
e of
FD
I inf
low
s to
man
ufac
turin
g as
a p
erce
ntag
e of
tota
l inf
low
s. I
t ind
icat
es h
ow a
ttra
ctiv
e th
is s
ecto
r is
for i
nves
tors
. So
urc
e: N
atio
na
l sta
tist
ics.
Inve
stm
ent i
n m
achi
nery
and
equ
ipm
ent,
inve
stm
ent i
n fi
xed
asse
ts (
% o
f G
DP)
Mea
sure
s th
e le
vel o
f inv
estm
ent i
n m
achi
nery
and
equ
ipm
ent a
nd th
e le
vel o
f inv
estm
ent i
n fix
ed a
sset
s as
a p
erce
ntag
e of
GD
P. C
an s
erve
as
a pr
oxy
for t
he le
vel o
f sop
hist
icat
ion
of m
achi
nery
/cap
ital a
vaila
bilit
y in
the
man
ufac
turin
g se
ctor
.So
urc
es: E
uro
pea
n C
om
mis
sio
n, E
uro
stat
dat
aba
se, h
ttp
://e
c.eu
rop
a.e
u/e
uro
stat
/dat
a/d
atab
ase
; nat
ion
al s
tati
stic
s.
Prod
ucti
on c
erti
fica
tion
(nu
mbe
r of C
E-m
arke
d pr
oduc
ts)
By a
ffix
ing
the
CE m
arki
ng to
a p
rodu
ct, m
anuf
actu
rers
dec
lare
on
thei
r sol
e re
spon
sibi
lity
that
the
prod
uct i
s in
con
form
ity w
ith th
e es
sent
ial
requ
irem
ents
of t
he a
pplic
able
EU
har
mon
isat
ion
legi
slat
ion,
and
that
the
rele
vant
con
form
ity a
sses
smen
t pro
cedu
res
have
bee
n fu
lfille
d.
Prod
ucts
bea
ring
the
CE m
arki
ng a
re p
resu
med
to b
e in
com
plia
nce
with
the
appl
icab
le E
U h
arm
onis
atio
n le
gisl
atio
n an
d he
nce
bene
fit fr
om fr
ee
circ
ulat
ion
in th
e Eu
rope
an s
ingl
e m
arke
t. So
urc
e: N
atio
na
l sta
tist
ics.
Num
ber o
f qua
lity
cert
ific
ates
issu
ed
Mea
sure
s th
e le
vel o
f alig
nmen
t with
inte
rnat
iona
l qua
lity
stan
dard
s. T
he im
plem
enta
tion
of s
tand
ards
con
trib
utes
to e
asin
g th
e ac
cess
to th
e EU
sin
gle
mar
ket a
nd li
bera
lisin
g in
tern
atio
nal t
rade
.So
urc
e: N
atio
na
l sta
tist
ics.
Eco-
frie
ndly
tech
nolo
gies
as
a sh
are
of o
vera
ll te
chno
logy
use
d Ec
o-fr
iend
ly te
chno
logy
can
hel
p pr
eser
ve th
e en
viro
nmen
t thr
ough
ene
rgy
effic
ienc
y an
d re
duct
ion
of h
arm
ful w
aste
. Pot
entia
l are
as fo
r suc
h te
chno
logy
incl
ude
gree
n en
ergy
, eco
-fri
endl
y te
xtile
s, g
reen
bui
ldin
g co
nstr
uctio
n, a
nd m
anuf
actu
ring
prod
ucts
and
mat
eria
ls to
sup
port
gre
en
busi
ness
. Dem
and
for t
hese
pro
duct
s is
gro
win
g, e
spec
ially
in E
U c
ount
ries
and
suc
h pr
oduc
tion
can
repr
esen
t an
aven
ue fo
r div
ersi
ficat
ion
into
hi
gher
-val
ue in
dust
rial
pro
duct
s an
d ov
eral
l exp
ort g
row
th in
the
sect
or.
Sou
rce:
Nat
ion
al s
tati
stic
s.
IND
US
TR
Y A
ND
MA
NU
FAC
TU
RIN
G (
cont
.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
2. POLICY AREA DIAGNOSTIC
41ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
I. SI
ZE A
ND S
IGNI
FICA
NCE
OF T
HE S
ECTO
R
Tour
ism
(%
GD
P)
Mea
sure
s th
e sh
are
of G
DP
gene
rate
d by
tour
ism
. Tou
rism
is o
ne o
f the
wor
ld’s
mos
t im
port
ant i
ndus
trie
s in
term
s of
GD
P. A
s to
uris
m d
eman
d co
ntin
ues
to r
ise
over
all,
tour
ism
GD
P in
crea
ses
but c
ompe
titio
n is
als
o in
crea
sing
with
the
grow
th o
f em
ergi
ng e
cono
mie
s an
d th
e re
sulti
ng
new
pre
ssur
es o
n th
e m
arke
t pos
ition
of d
evel
oped
eco
nom
ies.
Sou
rce:
Wo
rld
Tra
vel a
nd
To
uri
sm C
ou
nci
l (W
TT
C).
Tour
ism
em
ploy
men
t (%
tota
l em
ploy
men
t)
Empl
oym
ent i
n to
uris
m a
s a
shar
e of
tota
l em
ploy
men
t. So
urc
e: W
TT
C.
Tour
ism
exp
orts
(%
of t
he to
tal e
xpor
t)To
uris
m e
xpor
t ear
ning
s as
a s
hare
of o
vera
ll ex
port
s.
Sou
rce:
WT
TC
.
Expo
rts
of to
uris
m s
ervi
ces
(% a
nnua
l gro
wth
)M
easu
res
the
grow
th o
r dec
line
year
-on-
year
in v
alue
of t
ouri
sm e
xpor
ts, i
n th
e lo
cal c
urre
ncy,
exp
ress
ed a
s a
perc
enta
ge c
hang
e. A
s a
year
-on
-yea
r ind
icat
or, t
his
mea
sure
sho
ws
chan
ges
in p
erfo
rman
ce r
efle
ctin
g co
mpe
titio
n in
term
s of
bra
ndin
g, v
alue
aw
aren
ess
and
inte
rnat
iona
l ap
peal
. Int
erna
tiona
l com
pari
sons
usi
ng th
is in
dica
tor w
ill in
form
pol
icy
mak
ers
of th
e ec
onom
y’s
perf
orm
ance
rel
ativ
e to
the
leve
l of i
nves
tmen
t w
hich
, in
com
bina
tion
with
oth
er p
erfo
rman
ce in
dica
tors
cou
ld in
form
the
deba
te o
n w
hat w
orks
to in
crea
se to
uris
m c
ompe
titiv
enes
s.So
urc
es: O
ECD
; In
tern
atio
na
l Mo
net
ary
Fu
nd
(IM
F).
Budg
et a
lloca
ted
to to
uris
m
Hig
h le
vels
of g
over
nmen
t fin
anci
al c
omm
itmen
t to
the
tour
ism
sec
tor (
espe
cial
ly in
the
area
s of
pre
serv
atio
n of
nat
ural
, cul
tura
l and
his
tori
c he
rita
ge, a
nd to
uris
m in
fras
truc
ture
) sho
uld,
if p
rope
rly
targ
eted
, con
trib
ute
to im
prov
ing
its c
ompe
titiv
enes
s. L
ow o
r vol
atile
fina
ncia
l spe
ndin
g fr
om g
over
nmen
t ove
r tim
e w
ill r
esul
t in
a su
bopt
imal
per
form
ance
and
mar
ket f
ailu
res,
and
res
ult i
n a
long
-ter
m lo
ss o
f glo
bal c
ompe
titiv
enes
s.So
urc
e: N
atio
na
l sta
tist
ics.
Budg
et o
f the
nat
iona
l tou
rism
age
ncy
The
size
of t
he a
genc
y’s
budg
et r
efle
cts
its c
apac
ity to
con
duct
its
wor
k on
tour
ism
pro
mot
ion
and
deve
lopm
ent.
An u
nder
fund
ed a
nd
unde
rsta
ffed
age
ncy
will
hav
e di
ffic
ulty
in fu
lfilli
ng it
s m
anda
te.
Sou
rce:
Nat
ion
al s
tati
stic
s.
Nat
iona
l tou
rism
str
ateg
y an
d ac
tion
pla
nA
natio
nal s
trat
egy
and
actio
n pl
an e
nabl
es p
olic
y m
aker
s to
ass
ess
the
area
s of
gre
ates
t com
petit
ive
pote
ntia
l and
dire
ct th
eir e
ffor
ts m
ore
effe
ctiv
ely
to c
aptu
re th
e ec
onom
ic a
nd w
ider
soc
ial b
enef
its fr
om to
uris
m. M
easu
red
as a
yes
/no,
with
a s
corin
g ba
sed
on c
rite
ria
incl
udin
g qu
ality
, dev
elop
men
t pro
cess
es, e
vide
nce
base
, del
iver
y th
roug
h co
-ord
inat
ed a
ctio
n pl
anni
ng w
ith p
artn
ers
over
tim
e, a
nd in
tegr
atio
n w
ith a
nat
iona
l str
ateg
y an
d go
vern
men
t app
ropr
iatio
ns fo
r tou
rism
. The
exi
sten
ce o
f a to
uris
m a
ctio
n pl
an d
oes
not o
n its
ow
n gu
aran
tee
effe
ctiv
e as
sist
ance
to im
prov
e th
e co
mpe
titiv
enes
s of
the
econ
omy’
s to
uris
m. A
sses
smen
t of t
his
indi
cato
r will
req
uire
a c
aref
ul a
nd d
eepe
r co
nsid
erat
ion
of th
e co
ntex
t and
com
pone
nts
of th
e pl
an a
nd w
hat i
t see
ks to
del
iver
in te
rms
of im
prov
ing
com
petit
iven
ess.
Som
e pl
ans
may
be
gene
ral w
here
mor
e de
taile
d se
gmen
t-sp
ecifi
c ac
tions
mig
ht b
e ne
eded
to im
prov
e co
mpe
titiv
enes
s. T
his
is e
spec
ially
impo
rtan
t giv
en th
e pa
ce
of e
xter
nal f
acto
rs s
uch
as c
rise
s w
hich
can
hav
e ke
y im
pact
s on
com
petit
iven
ess.
The
se c
an r
equi
re a
ctio
n pl
ans
to b
e ad
just
ed a
t sho
rt n
otic
e,
base
d on
evi
denc
e, a
nd th
e pl
anni
ng p
roce
ss, a
ctor
s an
d co
llabo
ratio
n m
ust b
e st
rong
eno
ugh
to a
llow
suc
h ad
just
men
ts.
Sou
rce:
Min
istr
y r
esp
on
sib
le f
or
tou
rism
.
SER
VIC
ES
: Tou
rism
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
1. In
suff
icie
nt/i
nade
quat
e in
stit
utio
nal s
uppo
rt to
the
sect
or.
Sym
ptom
s of
this
obs
tacl
e in
clud
e:
•la
ck o
f a c
ompr
ehen
sive
tour
ism
st
rate
gy ta
king
into
con
side
ratio
n en
viro
nmen
tal p
rote
ctio
n an
d ne
w
tren
ds in
tour
ism
suc
h as
cul
tura
l an
d le
isur
e, c
ulin
ary,
and
eco
-tou
rism
•fe
w s
tudi
es o
n cr
eatin
g an
att
ract
ive
tour
ism
off
er •lim
ited
co-o
pera
tion
betw
een
the
rele
vant
min
istr
ies
(min
istr
ies
of
tour
ism
, cul
ture
and
infr
astr
uctu
re)
•la
ck o
f one
-sto
p sh
ops
prov
idin
g a
sing
le s
ourc
e of
info
rmat
ion
for
tour
ists
•fe
w p
rom
otio
n ca
mpa
igns
•la
ck o
f reg
ular
dat
a co
llect
ion
on
tour
ism
•lo
w r
anki
ng b
rand
str
ateg
y ra
ting.
2. T
he la
ck o
f an
appr
opri
atel
y sk
illed
wor
kfor
ce h
inde
rs th
e de
velo
pmen
t of a
hig
h-qu
ality
tour
ism
of
fer.
Rel
evan
t mar
ket-
driv
en s
kills
(e
.g. a
naly
sing
mar
ket n
eeds
to
crea
te n
ew o
ffer
s an
d th
e ab
ility
to
iden
tify
and
empl
oy o
ptim
al m
arke
ting
stra
tegi
es) a
nd s
ervi
ce d
eliv
ery
skill
s (e
.g. g
athe
ring,
ana
lysi
ng a
nd
inte
rpre
ting
cust
omer
feed
back
) can
be
rat
her s
carc
e. S
ympt
oms
of th
is
obst
acle
incl
ude:
•fe
w ta
rget
ed tr
aini
ng p
rogr
amm
es
and
pers
iste
nt s
kills
mis
mat
ches
•no
trai
ning
on
e-to
uris
m a
nd o
ther
in
nova
tive
serv
ices
.
3. L
imit
ed c
o-op
erat
ion
betw
een
nati
onal
tour
ism
org
anis
atio
ns a
nd
the
priv
ate
sect
or. S
ympt
oms
of th
e ob
stac
le in
clud
e: •lo
w n
umbe
r of p
rogr
amm
es to
tr
ansm
it th
e m
ain
goal
s of
tour
ism
de
velo
pmen
t and
hel
p sh
ape
the
tour
ism
off
er p
rovi
ded
by th
e pr
ivat
e se
ctor
.
1., 3
., 4
., 5
. The
se o
bsta
cles
res
ult
in in
effi
cien
t use
of a
vaila
ble
reso
urce
s, a
d ho
c m
easu
res
to
supp
ort t
ouri
sm, a
nd d
isjo
inte
d pr
omot
ion
and
mar
keti
ng, w
hich
all
ham
per t
he d
evel
opm
ent o
f str
ateg
ies
targ
etin
g hi
gh-g
row
th to
uris
m
mar
kets
with
a g
ood
regi
onal
fit.
This
, in
turn
, aff
ects
em
ploy
men
t and
pr
ivat
e in
vest
men
ts in
the
sect
or, a
nd
cons
eque
ntly
det
ers
its g
row
th a
nd
deve
lopm
ent p
oten
tial.
2. A
wel
l-ed
ucat
ed a
nd s
kille
d w
orkf
orce
is c
ruci
al to
pro
vidi
ng
tour
ists
with
a h
igh-
qual
ity o
ffer
. To
uris
m is
a h
ighl
y la
bour
inte
nsiv
e se
rvic
e se
ctor
and
nee
ds a
co
mpr
ehen
sive
poo
l of e
mpl
oyee
sk
ills
to k
eep
pace
wit
h m
arke
t de
velo
pmen
ts. I
f an
econ
omy
fails
to
dev
elop
this
poo
l, it
has
a ne
gativ
e im
pact
on
empl
oym
ent,
prod
uctiv
ity,
com
petit
iven
ess.
Indi
rect
ly, t
his
affe
cts
inve
stm
ents
and
dom
estic
co
nsum
ptio
n.
6. In
tern
atio
nal t
ouri
sm d
eman
d ha
s be
en s
how
n to
be
high
ly
depe
nden
t on
the
ease
of r
each
ing
the
dest
inat
ion,
cro
ssin
g bo
rder
s an
d en
teri
ng o
ther
cou
ntri
es. A
cces
s in
fras
truc
ture
, saf
ety
and
secu
rity
, an
d cu
stom
s pr
oced
ures
are
som
e of
the
issu
es th
at c
an a
ffec
t eas
e of
tr
avel
. Fa
cilit
atin
g tr
avel
to a
nd w
ithin
a
coun
try,
in p
artic
ular
to to
uris
t si
tes,
is a
n es
sent
ial e
lem
ent o
f a
dest
inat
ion’
s ov
eral
l com
petit
iven
ess.
So
und
air a
nd g
roun
d tr
ansp
ort
infr
astr
uctu
re (
e.g.
roa
ds, r
ailw
ays
and
airp
orts
) can
enc
oura
ge to
uris
ts
to c
hoos
e on
e de
stin
atio
n ov
er
anot
her.
2. POLICY AREA DIAGNOSTIC
42 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
II. C
APAC
ITY
AND
POTE
NTIA
L1
Inbo
und
tour
ism
rev
enue
s pe
r vis
itor
by
sour
ce m
arke
t (%
ann
ual g
row
th)
Mea
sure
s th
e pe
rcen
tage
gro
wth
or d
eclin
e ye
ar-o
n-ye
ar in
inbo
und
tour
ism
rev
enue
s pe
r vis
itor b
y so
urce
mar
ket.
This
mea
sure
is a
mor
e di
rect
indi
cato
r of e
cono
mic
ret
urns
than
oth
er “
activ
ity”
mea
sure
s su
ch a
s vi
sito
r num
bers
and
it p
rovi
des
polic
y m
aker
s w
ith a
per
spec
tive
on
whe
ther
the
inte
rnat
iona
l com
petit
iven
ess
of th
e to
uris
m s
ecto
r is
impr
ovin
g or
dec
linin
g.So
urc
es: N
atio
na
l sta
tist
ics;
Eu
rop
ean
Co
mm
issi
on
, Eu
rost
at d
atab
ase
, htt
p:/
/ec.
euro
pa
.eu
/eu
rost
at/d
ata
/dat
aba
se.
Ove
rnig
hts
in a
ll ty
pes
of a
ccom
mod
atio
n (%
ann
ual g
row
th)
Perc
enta
ge g
row
th o
r dec
line
year
-on-
year
in o
vern
ight
sta
ys in
all
type
s of
acc
omm
odat
ion
or, i
f not
ava
ilabl
e, in
hot
els
and
sim
ilar
esta
blis
hmen
ts. T
his
indi
cato
r foc
uses
on
the
inte
rnal
(in
boun
d an
d do
mes
tic) t
ouri
sm e
cono
my.
The
per
cent
age
chan
ge is
an
impo
rtan
t m
easu
re o
f rec
ent t
rend
s in
the
sect
or a
nd s
houl
d be
par
ticul
arly
use
d in
the
ERP
if th
ere
is a
not
able
dec
line
or u
ptur
n in
tour
ism
, and
sho
uld
be
acco
mpa
nied
by
som
e ex
plan
atio
n as
to w
hy th
is m
ight
be
the
case
.So
urc
e: N
atio
na
l sta
tist
ics.
Occ
upan
cy r
ate
in c
omm
erci
al a
ccom
mod
atio
n fa
cilit
ies,
per
mon
th, a
vera
ge fo
r the
yea
r, %
cha
nge
The
aver
age
leng
th o
f tou
rist
s’ s
tay
is o
ne o
f the
mos
t im
port
ant i
ndic
ator
s fo
r acc
omm
odat
ion
busi
ness
es. L
onge
r sta
ys r
esul
t in
high
er
occu
panc
y ra
tes,
whi
ch is
the
othe
r key
indi
cato
r for
acc
omm
odat
ion.
The
long
er to
uris
ts s
tay,
the
high
er th
e re
turn
on
inve
stm
ent f
or m
arke
ting
and
sale
s an
d gr
eate
r im
pact
for h
ospi
talit
y bu
sine
sses
. As
with
the
prev
ious
indi
cato
r, th
e pe
rcen
tage
cha
nge
year
-on-
year
is im
port
ant f
or
obse
rvin
g tr
ends
in th
e se
ctor
. So
urc
e: N
atio
na
l sta
tist
ics.
Visi
tor s
atis
fact
ion
rati
ng a
nd in
tent
ion
to m
ake
repe
at v
isit
sA
cons
iste
ntly
hig
h cu
stom
er s
atis
fact
ion
ratin
g ac
ross
a r
ange
of c
rite
ria,
and
hig
h le
vels
of s
tate
d in
tent
ion
to r
etur
n in
dica
tes
a co
mpe
titiv
e de
stin
atio
n, b
oth
now
and
in th
e fo
rese
eabl
e fu
ture
. Evi
denc
e of
abi
lity
to c
onve
rt in
tere
st a
nd s
atis
fact
ion
into
add
ition
al v
isits
, eco
nom
ic
bene
fits
and
soci
al in
fluen
ce a
re a
ssoc
iate
d w
ith a
hig
h le
vel o
f com
petit
iven
ess.
Eco
nom
ies
that
do
not g
athe
r evi
denc
e of
vis
itor s
atis
fact
ion
or
scor
e lo
w in
term
s of
the
agre
ed c
rite
ria
are
asso
ciat
ed w
ith lo
w le
vels
of c
ompe
titiv
enes
s.So
urc
e: N
atio
na
l sta
tist
ics
(vis
ito
r sa
tisf
acti
on
su
rvey
s).
Num
ber o
f rec
ogni
sed
natu
ral h
erit
age
site
sEc
onom
ies
with
a la
rge
num
ber o
f nat
ural
her
itage
site
s, a
hig
h de
gree
of b
iodi
vers
ity a
nd a
net
wor
k of
nat
ural
ass
ets,
form
al a
nd in
form
al, c
an
prom
ote
thes
e at
trac
tions
as
part
of a
tour
ism
com
petit
iven
ess
stra
tegy
. For
mal
ly d
esig
nate
d si
tes
can
be a
n im
port
ant i
ngre
dien
t in
effe
ctiv
e pl
ace
mak
ing
to d
evel
op s
tron
g m
arke
ting
mes
sage
s an
d at
trac
t vis
itors
, whi
le in
form
al s
ites
and
natu
ral a
ttra
ctio
ns c
an a
lso
atta
in s
tatu
s,
incl
udin
g th
roug
h so
cial
med
ia n
etw
orks
, and
att
ract
vis
itors
, im
prov
ing
inte
rnat
iona
l com
petit
iven
ess.
Sou
rces
: U
nit
ed
Nat
ion
s In
du
stri
al
Dev
elo
pm
ent
Org
an
izat
ion
(U
NE
SC
O);
In
tern
atio
na
l U
nio
n
for
Co
nse
rvat
ion
o
f N
atu
re
(IU
CN
),
bio
div
ersi
ty i
nd
icat
ors
.
Tota
l pro
tect
ed a
reas
(%
of t
otal
terr
itor
ial a
rea)
The
indi
cato
r sho
uld
be ta
ken
in c
onju
nctio
n w
ith in
form
atio
n on
bio
dive
rsity
and
eco
syst
ems
and
inte
rpre
ted
in li
ght o
f lev
els
of e
cono
mic
de
velo
pmen
t and
the
stru
ctur
e of
the
tour
ism
eco
nom
ic p
atte
rns.
Geo
grap
hica
l loc
atio
n an
d po
pula
tion
dens
ity a
lso
play
a r
ole.
So
urc
e: W
orl
d B
an
k.
Num
ber o
f cul
tura
l att
ract
ions
(U
NES
CO c
ultu
ral d
atab
ase)
Coun
trie
s w
ith a
vib
rant
and
/or d
istin
ct c
ultu
ral i
dent
ity a
nd r
ange
of c
reat
ive
activ
ities
and
eve
nts
can
attr
act m
ore
visi
tors
and
eco
nom
ic
bene
fits.
Thi
s m
easu
re in
dica
tes
the
impo
rtan
ce o
f cul
tura
l ass
ets
in th
e ec
onom
y’s
tour
ism
off
er.
Sou
rce:
UN
ES
CO
htt
p:/
/wh
c.u
nes
co.o
rg/e
n/l
ist/
.
SER
VIC
ES
: Tou
rism
(co
nt.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
4. U
nder
deve
lope
d m
easu
res
to
pres
erve
the
regi
on’s
nat
ural
and
cu
ltur
al h
erit
age.
Sym
ptom
s of
the
obst
acle
incl
ude:
•lo
w n
umbe
r of m
onum
ents
on
the
Wor
ld H
erita
ge L
ist i
n D
ange
r •N
o pa
rtne
rshi
p w
ith U
NES
CO o
n th
e pr
eser
vatio
n of
the
natu
ral a
nd
cultu
ral h
erita
ge (
norm
ally
the
min
istr
y of
tour
ism
or c
ultu
re w
ould
fo
rm th
is p
artn
ersh
ip)
•fin
anci
ng o
f cul
ture
her
itage
pr
ojec
ts c
omes
mai
nly
out o
f go
vern
men
t bud
gets
with
litt
le to
no
fina
ncin
g fr
om E
urop
ean
pre-
acce
ssio
n fu
nds,
the
priv
ate
sect
or,
corp
orat
e ph
ilant
hrop
y or
cor
pora
te
soci
al r
espo
nsib
ility
lack
of r
egul
ar
envi
ronm
ent r
isk
scre
enin
g an
d ca
tego
risa
tion,
and
env
ironm
ent r
isk
asse
ssm
ent
5. In
adeq
uate
tour
ism
infr
astr
uctu
re.
Sym
ptom
s of
the
obst
acle
incl
ude:
•lo
w n
umbe
r of p
roje
cts
to im
prov
e in
fras
truc
ture
aro
und
hist
oric
site
s •lo
w-q
ualit
y tr
ansp
ort i
nfra
stru
ctur
e,
limite
d ro
ad s
afet
y an
d w
eak
inte
rmod
al c
onne
ctiv
ity (w
eak
conn
ectiv
ity o
f tou
rist
des
tinat
ions
w
ith m
ain
tran
spor
t cor
rido
rs, l
ack
of m
edia
n st
rips,
sm
all n
umbe
r of
ove
rtak
ing
lane
s, n
arro
w r
oad
shou
lder
s, a
nd lo
w n
umbe
rs o
f ai
rline
con
nect
ions
esp
ecia
lly to
m
ajor
citi
es)
•lim
ited
or n
o co
-ope
ratio
n am
ong
natio
nal g
over
nmen
ts, r
egio
ns a
nd
mun
icip
aliti
es to
fina
nce
com
mon
in
fras
truc
ture
pro
ject
s (s
uch
as
thro
ugh
publ
ic-p
riva
te p
artn
ersh
ips
or th
roug
h so
me
inno
vativ
e ap
proa
ches
to in
fras
truc
ture
fin
anci
ng (
infr
astr
uctu
re b
onds
).
1. T
o av
oid
repl
icat
ion,
som
e re
leva
nt in
dica
tors
reg
ardi
ng th
e ov
eral
l qua
lity
of to
uris
m in
fras
truc
ture
and
des
tinat
ion
acce
ssib
ility
can
be
foun
d un
der t
he tr
ansp
ort p
art o
f the
ener
gy a
nd tr
ansp
ort m
arke
t ref
orm
sec
tion.
2. POLICY AREA DIAGNOSTIC
Num
ber o
f cre
ativ
e at
trac
tion
sAs
with
the
prev
ious
indi
cato
r, th
is in
dica
tes
the
impo
rtan
ce o
f cre
ativ
e at
trac
tions
for t
he p
rom
otio
n of
the
econ
omy
and
can
form
par
t of a
to
uris
m s
trat
egy,
dev
elop
ing
thes
e as
sets
to im
prov
e co
mpe
titiv
enes
s
Sou
rce:
Nat
ion
al s
tati
stic
s.
Entr
y vi
sa r
equi
rem
ents
and
num
bers
Mea
sure
s: 1
) the
num
ber o
f cou
ntri
es o
n th
e vi
sa-r
equi
red
list a
nd h
ow v
isas
are
issu
ed, i
nclu
ding
pap
er v
isas
, eVi
sas
or v
isa
on a
rriv
al; 2
) the
nu
mbe
r of v
isas
issu
ed e
ach
year
as
a sh
are
of in
boun
d to
uris
m a
rriv
als.
Vis
a re
quire
men
ts a
re p
art o
f an
econ
omy’
s to
uris
m c
ompe
titiv
enes
s en
viro
nmen
t. Th
is in
dica
tor h
elps
pol
icy
mak
ers
achi
eve
a ba
lanc
e be
twee
n ot
her p
olic
y co
nsid
erat
ions
and
the
oppo
rtun
ity to
att
ract
mor
e hi
gh-s
pend
ing
visi
tors
from
mai
n so
urce
s of
inbo
und
tour
ism
by
asse
ssin
g vi
sa r
equi
rem
ents
, the
ir co
sts
and
the
pote
ntia
l eff
ects
on
tour
ism
co
mpe
titiv
enes
s.
Sou
rces
: Fo
reig
n a
ffa
irs
an
d i
nte
rio
r m
inis
trie
s, n
atio
na
l to
uri
sm a
dm
inis
trat
ion
s.
Num
ber o
f bed
s av
aila
ble
in c
omm
erci
al v
isit
or a
ccom
mod
atio
n fa
cilit
ies
per 1
00 r
esid
ents
Mea
sure
s th
e ac
com
mod
atio
n ca
paci
ties
of a
des
tinat
ion.
Sou
rce:
Nat
ion
al s
tati
stic
s.
Coun
try
bran
d st
rate
gy r
atin
g (r
anki
ng)
The
indi
cato
r act
s as
a p
roxy
for t
he e
ffec
tiven
ess
of th
e ec
onom
y’s
mar
ketin
g an
d br
andi
ng to
att
ract
tour
ists
, and
indi
cate
s th
e qu
ality
of t
he
tour
ism
off
er.
Sou
rces
: Nat
ion
al s
tati
stic
al a
gen
cies
/go
vern
men
t d
epa
rtm
ents
; pri
vat
e se
cto
r su
rvey
s.
Use
of e
-tou
rism
and
oth
er in
nova
tive
ser
vice
sN
umbe
r of b
usin
esse
s de
mon
stra
ting
inno
vatio
n an
d de
liver
ing
e-to
uris
m s
ervi
ces.
Mea
sure
s th
e pr
opor
tion
of b
usin
esse
s w
ithin
the
sect
or
that
sho
w th
e ch
arac
teri
stic
s of
inno
vatio
n as
def
ined
in in
nova
tion
surv
eys.
Incr
easi
ng b
usin
ess
inno
vatio
n, a
focu
s on
e-t
ouri
sm a
nd r
elat
ed
tech
nolo
gica
l too
ls in
dica
te th
e co
mpe
titiv
enes
s of
the
busi
ness
bas
e an
d its
abi
lity
to c
aptu
re in
tern
et a
nd e
-ser
vice
s bu
sine
ss.
Sou
rces
: Nat
ion
al s
tati
stic
al a
gen
cies
/go
vern
men
t d
epa
rtm
ents
; pri
vat
e se
cto
r su
rvey
s.
Labo
ur p
rodu
ctiv
ity
in to
uris
m
Mea
sure
s th
e le
vel o
f and
cha
nge
in p
rodu
ctiv
ity o
f tho
se e
mpl
oyed
in to
uris
m a
nd th
e pr
oduc
tive
pote
ntia
l of t
he to
uris
m e
cono
my.
Pro
duct
ivity
is
one
key
dim
ensi
on o
f com
petit
iven
ess.
The
cha
lleng
e w
ith th
is in
dica
tor i
s th
e di
ffic
ulty
of m
easu
rem
ent,
part
icul
arly
add
ress
ing
qual
ity
issu
es, a
nd th
e sp
ecifi
city
of t
he to
uris
m s
ecto
r, in
clud
ing
the
smal
l siz
e of
bus
ines
ses.
Sou
rce:
Nat
ion
al s
tati
stic
s
Perc
enta
ge o
f tou
rism
ent
erpr
ises
pro
vidi
ng s
tude
nt in
tern
ship
sTh
e sk
ill le
vel o
f tou
rism
em
ploy
ees
is in
dica
tive
of th
e qu
ality
of e
mpl
oym
ent.
This
indi
cato
r hel
ps a
sses
s ho
w m
any
loca
l tou
rism
ent
erpr
ises
ar
e he
lpin
g to
trai
n th
e ne
xt g
ener
atio
n of
trav
el a
nd to
uris
m p
rofe
ssio
nals
.
Sou
rce:
Nat
ion
al s
tati
stic
s
SER
VIC
ES
: Tou
rism
(co
nt.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
43ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
2. POLICY AREA DIAGNOSTIC
Business environment and reduction of the informal economyPolicy area indicators, structural obstacles and impact on competitiveness and growth
45ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
47ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 47ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
47ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 47ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
I. GE
NERA
L BU
SINE
SS E
NVIR
ONM
ENT
Ease
of d
oing
bus
ines
sM
easu
res
how
eas
y it
is in
gen
eral
to o
pera
te a
bus
ines
s in
the
econ
omy.
Thi
s in
dica
tor c
over
s th
e tim
e ta
ken
and
ease
of s
tart
ing
a bu
sine
ss,
deal
ing
with
con
stru
ctio
n pe
rmits
, get
ting
elec
tric
ity, r
egis
terin
g pr
oper
ty, g
ettin
g cr
edit,
pay
ing
taxe
s, tr
adin
g ac
ross
bor
ders
, enf
orci
ng
cont
ract
s an
d re
solv
ing
inso
lven
cy, a
nd h
ow s
tron
g th
e pr
otec
tions
for m
inor
ity in
vest
ors
are.
The
inde
x al
so s
how
s fo
r eac
h of
thes
e in
dica
tors
w
heth
er th
e bu
rden
is m
ostly
reg
ulat
ory
and
adm
inis
trat
ive,
fina
ncia
l, or
bot
h, a
nd th
e di
agno
stic
sec
tion
shou
ld m
ake
this
exp
licit
in th
e ER
P do
cum
ent.
Not
e: s
ub
-co
mp
on
ents
of
this
in
dex
ca
n b
e u
sed
as
rele
va
nt
for
the
eco
no
my.
Th
is d
iag
no
stic
ca
n h
igh
ligh
t th
e a
rea
s w
her
e th
e ec
on
om
y is
do
ing
wel
l b
ut
sho
uld
mo
stly
fo
cus
on
th
e a
rea
s w
her
e it
is
lag
gin
g b
ehin
d, b
ase
d o
n t
he
glo
ba
l ra
nk
ing
s a
s w
ell
as
the
ran
kin
gs
wit
h
rega
rd t
o p
eer
eco
no
mie
s (E
uro
pe
an
d C
entr
al A
sia,
So
uth
Ea
st E
uro
pe
etc.
).
Sou
rce:
Wo
rld
Ba
nk
, Do
ing
Bu
sin
ess,
htt
p:/
/dat
a.w
orl
db
an
k.o
rg/i
nd
icat
or/
IC.B
US
.EA
SE
.XQ
.
Glo
bal C
ompe
titi
vene
ss In
dex
(GCI
)Th
is in
dex
atte
mpt
s to
qua
ntify
the
impa
ct o
f a n
umbe
r of k
ey fa
ctor
s w
hich
con
trib
ute
to th
e ec
onom
y’s
com
petit
iven
ess,
with
par
ticul
ar
focu
s on
the
mac
roec
onom
ic c
ondi
tions
, the
qua
lity
of it
s in
stitu
tions
, and
the
stat
e of
its
tech
nolo
gy a
nd s
uppo
rtin
g in
fras
truc
ture
. In
othe
r w
ords
, the
GCI
mea
sure
s “t
he s
et o
f ins
titut
ions
, fac
tors
and
pol
icie
s th
at s
et th
e su
stai
nabl
e cu
rren
t and
med
ium
-ter
m le
vels
of e
cono
mic
pr
ospe
rity
”(G
loba
l Com
petit
iven
ess
Inde
x), i
.e. t
hose
fact
ors
that
faci
litat
e or
dri
ve p
rodu
ctiv
ity.
Sou
rce:
Wo
rld
Eco
no
mic
Fo
rum
, Glo
ba
l Co
mp
etit
iven
ess
Ind
ex, h
ttp
://w
ww
.gap
ort
al.
org
/glo
ba
l-in
dic
ato
rs/g
lob
al-
com
pet
itiv
enes
s-in
dex
.
Legi
slat
ive
sim
plif
icat
ion
and
regu
lato
ry im
pact
ana
lysi
s As
sess
es th
e m
echa
nism
s fo
r leg
isla
tive
sim
plifi
catio
n an
d re
gula
tory
impa
ct a
sses
smen
t (R
IA),
incl
udin
g w
heth
er th
ere
is a
test
to e
nsur
e th
at th
e sp
ecifi
c im
pact
of n
ew la
ws
and
regu
latio
ns o
n sm
all a
nd m
ediu
m-s
ized
ent
erpr
ises
(SM
Es),
for e
xam
ple,
is p
rope
rly
mea
sure
d an
d m
itiga
ted.
Sou
rce:
OEC
D, S
ME
Poli
cy I
nd
ex.
Rul
e of
law
indi
cato
rM
easu
res
the
tran
spar
ency
and
con
sist
ency
of t
he le
gisl
atio
n sy
stem
. Ind
icat
es h
ow tr
ansp
aren
t rul
es a
nd le
gisl
atio
n ar
e, h
ow p
redi
ctab
le
chan
ges
in le
gisl
atio
n ar
e fo
r the
pub
lic, h
ow o
ften
law
s ch
ange
etc
.So
urc
e: W
orl
d B
an
k, G
ove
rna
nce
In
dic
ato
rs.
II.FI
SCAL
AND
PAR
A-FI
SCAL
BUR
DEN
Tota
l tax
rat
e (%
of c
omm
erci
al p
rofi
ts)
Mea
sure
s th
e am
ount
of t
axes
and
man
dato
ry c
ontr
ibut
ions
pay
able
by
busi
ness
es a
fter
acc
ount
ing
for a
llow
able
ded
uctio
ns a
nd e
xem
ptio
ns a
s a
shar
e of
com
mer
cial
pro
fits.
Sou
rce:
Wo
rld
Ba
nk
, Wo
rld
Dev
elo
pm
ent
Ind
icat
ors
.
Tax
filin
g an
d pa
ymen
t pro
cedu
res
Asse
sses
the
smoo
thne
ss o
f the
tax
paym
ent f
orm
aliti
es a
nd w
heth
er e
ffor
ts h
ave
been
mad
e to
str
eam
line
them
thro
ugh
the
use
of s
impl
ified
or
pre
-fill
ed ta
x re
turn
s, c
lear
and
use
r-fr
iend
ly m
etho
ds fo
r cal
cula
ting
the
tax
due,
and
the
prov
isio
n of
e-f
iling
and
e-p
aym
ents
.So
urc
e: O
ECD
, Co
mp
etit
iven
ess
in S
ou
th E
ast
Eu
rop
e.
Firm
s id
enti
fyin
g ta
x ra
tes
and
proc
edur
es a
s a
maj
or c
onst
rain
t (%
)Th
e pe
rcen
tage
of f
irms
iden
tifyi
ng ta
x ra
tes
as a
“m
ajor
” or
“ve
ry s
ever
e” o
bsta
cle,
on
a se
ven-
poin
t Lik
ert s
cale
.So
urce
: Wor
ld B
ank
and
Euro
pea
n B
ank
for R
econ
stru
ctio
n a
nd
Dev
elop
men
t (EB
RD
), Bu
sin
ess
Envi
ron
men
t an
d En
terp
rise
Per
form
ance
Su
rvey
(BEE
PS).
BU
SIN
ES
S E
NV
IRO
NM
ENT
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
1. A
n in
cons
iste
nt, u
npre
dict
able
an
d un
frie
ndly
legi
slat
ive
envi
ronm
ent.
Sym
ptom
s in
clud
e: •la
rge
degr
ee o
f col
lisio
n of
pur
port
s be
twee
n la
ws
•la
ws
chan
ge fr
eque
ntly
, with
lim
ited
cons
ulta
tion
with
the
priv
ate
sect
or •bu
sine
sses
rep
ort h
avin
g a
hard
tim
e ke
epin
g up
with
rul
es a
nd
regu
latio
ns
•no
mec
hani
sms
for l
egis
lativ
e si
mpl
ifica
tion
or th
ey a
re n
ot
impl
emen
ted
regu
larl
y an
d co
nsis
tent
ly •th
e ch
ance
of s
elec
tive
law
en
forc
emen
t is
high
, cre
atin
g an
un
even
pla
ying
fiel
d fo
r bus
ines
ses.
2. H
igh
fisc
al a
nd p
ara-
fisc
al b
urde
n.
This
obs
tacl
e is
ass
ocia
ted
with
one
or
mor
e of
the
follo
win
g sy
mpt
oms:
•hi
gh ta
x ch
arge
s as
a %
of t
otal
ch
arge
s •he
avy
adm
inis
trat
ive
burd
en
of ta
xatio
n pr
oced
ures
, with
bu
sine
sses
faci
ng a
larg
e nu
mbe
r of
pro
cedu
res
whe
n ha
ving
to p
ay
taxe
s •a
high
and
ris
ing
shar
e of
firm
s id
entif
y ta
x ra
tes
as a
maj
or
busi
ness
con
stra
int
•a
larg
e sh
are
of fi
rms
iden
tify
freq
uent
cha
nges
in ta
xatio
n la
w a
s a
maj
or c
onst
rain
t •pa
ra-f
isca
l cha
rges
are
hig
h an
d nu
mer
ous
and/
or u
ncle
arly
spe
cifie
d to
the
know
ledg
e of
the
busi
ness
es •pa
ra-f
isca
l cha
rges
rep
rese
nt a
su
bsta
ntia
l sha
re o
f sub
natio
nal
juri
sdic
tions
’ rev
enue
.
3. A
n in
effi
cien
t leg
al s
yste
m,
addi
ng to
the
diff
icul
ty o
f enf
orce
men
t pr
oces
ses
and
the
trad
abili
ty o
f ow
ners
hip
righ
ts. S
ympt
oms
incl
ude:
•co
mm
erci
al d
ispu
tes
are
time
cons
umin
g an
d co
stly
com
pare
d to
1. A
n in
cons
iste
nt le
gisl
ativ
e en
viro
nmen
t com
bine
d w
ith
freq
uent
and
sile
nt c
hang
es o
f la
ws
and
regu
latio
ns w
ill in
crea
se
inve
stor
s’ r
eluc
tanc
e to
mak
e ne
w
inve
stm
ents
. An
unpr
edic
tabl
e le
gisl
ativ
e en
viro
nmen
t and
sel
ectiv
e la
w e
nfor
cem
ent i
ncre
ases
bot
h op
erat
iona
l cos
ts a
nd th
e di
ffic
ulty
of
cor
pora
te p
lann
ing.
Thi
s ca
n be
a
maj
or d
eter
rent
for f
orei
gn in
vest
ors
if th
ey d
on’t
cons
ider
the
econ
omy
to b
e a
pred
icta
ble
and
safe
wor
king
en
viro
nmen
t. 2.
Hig
h ta
xes
and
a la
ck o
f sup
port
fo
r the
sim
plifi
catio
n of
tax
proc
esse
s re
duce
inve
stm
ent,
pro
duct
ivit
y an
d em
ploy
men
t due
to th
e as
soci
ated
hi
gher
inve
stm
ent,
oper
atio
nal
and
empl
oym
ent c
osts
, and
low
er
expe
cted
pro
fits.
Hig
h ta
x ra
tes
also
dis
cour
age
wor
k, s
avin
g an
d en
trep
rene
ursh
ip a
nd e
ncou
rage
ta
xpay
ers
to r
earr
ange
thei
r tax
ob
ligat
ions
to r
ecei
ve m
ore
of th
eir
com
pens
atio
n in
less
hea
vily
taxe
d fo
rms.
Rel
ativ
ely
high
par
a-fis
cal c
harg
es
dete
r inv
estm
ent b
ecau
se th
ey
gene
rate
con
side
rabl
e un
cert
aint
y ab
out t
he c
osts
ass
ocia
ted
with
in
vest
ing
and
oper
atin
g in
a s
peci
fic
loca
lity.
3. In
effic
ient
con
trac
t enf
orce
men
t pr
oced
ures
als
o in
crea
se in
vest
or
unce
rtai
nty
and
dete
r inv
estm
ent.
The
rule
of l
aw a
nd e
ffec
tive
pro
tect
ions
fo
r inv
esto
rs’ r
ight
s ar
e ke
y pr
e-re
quis
ites
for a
wel
l-fu
ncti
onin
g an
d pr
ospe
rous
eco
nom
y. B
oth
requ
ire
a w
ell-f
unct
ioni
ng ju
dici
ary
that
re
solv
es c
ases
in a
rea
sona
ble
time
and
is p
redi
ctab
le a
nd a
cces
sibl
e to
th
e pu
blic
.
2. POLICY AREA DIAGNOSTIC
4948 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Para
-fis
cal c
harg
esAs
sess
es th
e nu
mbe
r of s
epar
ate
para
-fis
cal c
harg
es a
nd th
eir s
ize
rela
tive
to th
e ec
onom
y. S
ourc
e: V
ario
us (f
orei
gn in
vest
ors
coun
cil,
cham
bers
of c
omm
erce
etc
.)
III. P
ROPE
RTY
RIGH
TS A
ND C
ONTR
ACT
ENFO
RCEM
ENT
Coun
try
Polic
y an
d In
stit
utio
nal A
sses
smen
t (CP
IA) p
rope
rty
righ
ts a
nd r
ule-
base
d go
vern
ance
Asse
sses
the
exte
nt to
whi
ch p
riva
te e
cono
mic
act
ivity
is fa
cilit
ated
by
an e
ffec
tive
lega
l sys
tem
and
rul
e-ba
sed
gove
rnan
ce s
truc
ture
in w
hich
pr
oper
ty a
nd c
ontr
act r
ight
s ar
e re
liabl
y re
spec
ted
and
enfo
rced
.So
urc
e: W
orl
d B
an
k G
rou
p, C
PIA
.
Smal
l- a
nd la
rge-
scal
e pr
ivat
isat
ion
Mea
sure
s th
e pe
rcen
tage
of e
nter
pris
e as
sets
tran
sfer
red
from
pub
lic to
pri
vate
ow
ners
hip.
Sou
rce:
EB
RD
, Tra
nsi
tio
n I
nd
icat
ors
.
Cont
ract
enf
orce
men
t M
easu
res
the
time
take
n an
d co
st o
f res
olvi
ng a
com
mer
cial
dis
pute
thro
ugh
a lo
cal f
irst
-inst
ance
cou
rt.
Sou
rce:
Wo
rld
Ba
nk
, Do
ing
Bu
sin
ess
rep
ort
.
IV. C
OMPE
TITI
ON
Com
peti
tion
pol
icy
Mea
sure
s th
e re
stri
ctio
ns fa
ced
by n
ew m
arke
t ent
rant
s, a
buse
of m
arke
t pow
er a
nd th
e pr
omot
ion
of c
ompe
titiv
e en
viro
nmen
t.So
urc
e: E
BR
D, T
ran
siti
on
In
dic
ato
rs.
V. C
ORRU
PTIO
N AN
D TH
E IN
FORM
AL E
CONO
MY
Corr
upti
on P
erce
ptio
ns In
dex
(Tra
nspa
renc
y In
tern
atio
nal)
& C
ontr
ol o
f Cor
rupt
ion
Inde
x (W
orld
Ban
k)
Mea
sure
s pe
rcep
tions
of t
he e
xten
t to
whi
ch p
ublic
pow
er is
exe
rcis
ed fo
r pri
vate
gai
n, in
clud
ing
both
pet
ty a
nd g
rand
form
s of
cor
rupt
ion,
as
wel
l as
“cap
ture
” of
the
stat
e by
elit
es a
nd p
riva
te in
tere
sts.
So
urc
es: T
ran
spa
ren
cy I
nte
rnat
ion
al,
Co
rru
pti
on
Per
cep
tio
ns
Ind
ex; W
orl
d B
an
k, C
on
tro
l of
Co
rru
pti
on
In
dex
. In
form
al e
mpl
oym
ent (
% o
f tot
al e
mpl
oym
ent;
and
% o
f GD
P)Fi
rstly
, thi
s in
dica
tor s
erve
s to
mea
sure
s in
form
al e
mpl
oym
ent a
s a
shar
e of
tota
l em
ploy
men
t. It
also
look
s at
the
wor
king
pov
erty
rat
e in
the
econ
omy,
whi
ch is
oft
en d
irect
ly a
ssoc
iate
d w
ith in
form
al e
mpl
oym
ent a
nd p
oor w
orki
ng c
ondi
tions
, inf
orm
al s
ecto
ral e
mpl
oym
ent a
nd fo
rmal
em
ploy
men
t in
the
info
rmal
sec
tor a
s a
perc
enta
ge o
f tot
al e
mpl
oym
ent.
Addi
tiona
lly, a
n es
timat
e ca
lcul
atio
n of
the
tota
l siz
e of
the
info
rmal
eco
nom
y, a
s a
perc
ent o
f the
nat
iona
l GD
P, c
ould
hel
p un
ders
tand
the
actu
al
dept
h of
info
rmal
ity in
an
econ
omy.
Sou
rce:
In
tern
atio
na
l La
bo
ur
Org
an
izat
ion
, co
un
try-
spec
ific
stu
die
s a
nd
ass
essm
ents
; N
atio
na
l B
an
k C
alc
ula
tio
ns,
WB
, O
ther
IFI
P
ub
lica
tio
ns.
Firm
s id
enti
fyin
g th
e pr
acti
ces
of in
form
al c
ompe
tito
rs a
s a
maj
or c
onst
rain
t (%
)M
easu
res
the
perc
enta
ge o
f firm
s id
entif
ying
the
prac
tices
of c
ompe
titor
s in
the
info
rmal
sec
tor a
s a
“maj
or”
obst
acle
on
a se
ven-
poin
t Lik
ert
scal
e.So
urc
e: W
orl
d B
an
k, E
nte
rpri
se S
urv
eys
BU
SIN
ES
S E
NV
IRO
NM
ENT
(co
nt.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
EU a
vera
ges,
som
etim
es b
ecau
se
ther
e is
no
sepa
rate
com
mer
cial
se
ttle
men
t circ
uit a
nd c
omm
erci
al
disp
utes
are
stil
l set
tled
by c
ivil
cour
ts •th
ere
is n
o cl
earl
y es
tabl
ishe
d w
ay
of r
esol
ving
dis
pute
s, a
ddin
g to
the
unce
rtai
nty
and
unpr
edic
tabi
lity
of
the
lega
l sys
tem
•pr
oper
ty r
ight
s ar
e un
clea
r and
di
ffic
ult t
o en
forc
e •no
cle
ar le
gal m
easu
res
to m
inim
ise
liabi
lity
expo
sure
, esp
ecia
lly fo
r sm
all b
usin
esse
s.
4. N
o ef
fici
ent p
olic
ies
to e
nhan
ce
com
peti
tion
hav
e be
en im
plem
ente
d.
Som
e as
pect
s w
orth
men
tioni
ng a
re:
•lim
ited
oppo
rtun
ities
to r
estr
uctu
re
ente
rpri
ses
or le
gal p
roce
dure
s fo
r res
truc
turin
g ar
e un
clea
r and
co
mpl
ex •co
nsum
er p
rote
ctio
n or
ant
itrus
t le
gisl
atio
n is
wea
k, p
artic
ular
ly fo
r sm
all b
usin
esse
s •ne
w m
arke
t ent
rant
s fa
ce h
igh
barr
iers
to e
ntry
•do
min
ant m
arke
t pos
ition
s ar
e ab
used
in m
any
sect
ors
•lit
tle g
uida
nce
is a
vaila
ble
to
exte
rnal
par
ticip
ants
abo
ut
the
com
petit
ion
auth
oriti
es’
enfo
rcem
ent p
ract
ices
•pu
blic
pro
cure
men
t is
not d
one
in a
tr
ansp
aren
t and
obj
ectiv
e m
anne
r.
5. T
he in
form
al s
ecto
r mak
es u
p a
rela
tive
ly la
rge
shar
e of
the
tota
l ec
onom
y. S
ympt
oms
of th
is o
bsta
cle
incl
ude:
•a
larg
e sh
are
of e
nter
pris
es
oper
atin
g in
the
shad
ow e
cono
my
•a
larg
e sh
are
of e
nter
pris
es c
ite
stro
ng a
nd u
nfai
r com
petit
ion
from
th
e in
form
al e
cono
my
(unc
ontr
olle
d se
ason
al e
mpl
oym
ent,
no s
ocia
l pr
otec
tion
requ
ired,
etc
.)
Effe
ctiv
e pr
otec
tion
and
enfo
rcem
ent
of p
rope
rty
righ
ts is
als
o as
soci
ated
w
ith
bett
er a
cces
s to
ext
erna
l fi
nanc
e. C
lear
pro
pert
y ri
ghts
mak
e it
easi
er fo
r firm
s to
mee
t col
late
ral
requ
irem
ents
and
to r
ecei
ve b
ank-
and
no
n-ba
nk fi
nanc
ing.
4. C
ompe
titio
n po
licie
s lie
at t
he
hear
t of a
suc
cess
ful t
rans
ition
to a
w
ell-f
unct
ioni
ng m
arke
t eco
nom
y.
Inef
fect
ive
com
petit
ion
polic
ies
resu
lt in
mon
opol
ies
and
rest
rict
ive
trad
e pr
acti
ces,
whi
ch s
tifl
e pr
ivat
e se
ctor
gro
wth
. As
a co
nseq
uenc
e,
the
ubiq
uito
us r
ole
of th
e st
ate
in
the
plan
ned
econ
omy
may
sim
ply
be r
epla
ced
by d
omin
ant f
irms
cont
rolli
ng s
egm
ents
of a
dis
tort
ed
mar
ket e
cono
my.
O
n th
e ot
her h
and,
eff
ectiv
e co
mpe
titio
n po
licie
s al
low
for m
arke
t en
try
dere
gula
tion
whi
ch c
an d
rive
pr
oduc
tivi
ty g
row
th b
y sh
ifti
ng
mar
ket s
hare
tow
ards
mor
e ef
fici
ent
prod
ucer
s, a
nd in
duci
ng fi
rms
to
beco
me
mor
e ef
ficie
nt s
o to
sur
vive
.
5. A
larg
e in
form
al e
cono
my
rela
tive
to
the
tota
l eco
nom
y is
ass
ocia
ted
with
: •La
ck o
f pro
tect
ion
in th
e ev
ent o
f no
n-pa
ymen
t of w
ages
, com
puls
ory
over
time
or e
xtra
shi
fts, l
ay-o
ffs
with
out n
otic
e or
com
pens
atio
n,
unsa
fe w
orki
ng c
ondi
tions
and
the
abse
nce
of s
ocia
l ben
efits
suc
h as
pen
sion
s, s
ick
pay
and
heal
th
insu
ranc
e (IL
O, T
rans
ition
ing
from
the
info
rmal
to th
e fo
rmal
eco
nom
y, 2
014)
. •Lo
ss o
f bud
get r
even
ues
by
redu
cing
taxe
s an
d so
cial
sec
urity
co
ntrib
utio
ns p
aid
to th
e st
ate,
w
hich
impa
cts
the
avai
labi
lity
and
qual
ity o
f pub
lic g
oods
and
ser
vice
s.
It in
vari
ably
lead
s to
a h
igh
tax
burd
en o
n re
gist
ered
labo
ur (
The
Wor
ld B
ank)
.
2. POLICY AREA DIAGNOSTIC
49ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Publ
ic p
rocu
rem
ent
Mea
sure
s th
e de
gree
of t
rans
pare
ncy
to w
hich
pub
lic a
utho
ritie
s, s
uch
as g
over
nmen
t dep
artm
ents
or l
ocal
aut
hori
ties,
pur
chas
e w
orks
, goo
ds
and
serv
ices
to b
oost
eco
nom
ic g
row
th, a
nd w
heth
er s
uch
arra
ngem
ents
are
mor
e or
less
pro
ne to
cor
rupt
ion
(e.g
. if c
ontr
acts
are
neg
otia
ted
with
out p
rior
pub
lishe
d no
tice
or th
orug
h a
call
for t
ende
r),
on a
sca
le fr
om 0
to 5
. So
urc
e: O
ECD
, Co
mp
etit
iven
ess
in S
ou
th E
ast
Eu
rop
e.
VI. A
CCES
S TO
FIN
ANCE
Dom
esti
c cr
edit
to p
riva
te s
ecto
r (%
of G
DP)
M
easu
res
the
finan
cial
res
ourc
es a
s a
shar
e of
gro
ss d
omes
tic p
rodu
ct (
GD
P) p
rovi
ded
to th
e pr
ivat
e se
ctor
by
finan
cial
cor
pora
tions
thro
ugh
loan
s, p
urch
ases
of n
on-e
quity
sec
uriti
es, a
nd tr
ade
cred
its a
nd o
ther
acc
ount
s re
ceiv
able
that
est
ablis
h a
clai
m fo
r rep
aym
ent.
Sou
rce:
Wo
rld
Ba
nk
, Wo
rld
Dev
elo
pm
ent
Ind
icat
ors
.
Rea
l int
eres
t rat
e (%
)M
easu
res
the
lend
ing
inte
rest
rat
e ad
just
ed fo
r inf
latio
n as
mea
sure
d by
the
GD
P de
flato
r.So
urc
e: W
orl
d B
an
k, W
orl
d D
evel
op
men
t In
dic
ato
rs.
Bank
non
perf
orm
ing
loan
s to
tota
l gro
ss lo
ans
(%)
Mea
sure
s th
e va
lue
of n
onpe
rfor
min
g lo
ans
divi
ded
by th
e to
tal v
alue
of t
he lo
an p
ortf
olio
(in
clud
ing
nonp
erfo
rmin
g lo
ans
befo
re th
e de
duct
ion
of s
peci
fic lo
an-lo
ss p
rovi
sion
s). T
he lo
an a
mou
nt r
ecor
ded
as n
onpe
rfor
min
g sh
ould
be
the
gros
s va
lue
of th
e lo
an a
s re
cord
ed o
n th
e ba
lanc
e sh
eet,
not j
ust t
he a
mou
nt th
at is
ove
rdue
.So
urc
e: W
orl
d B
an
k, W
orl
d D
evel
op
men
t In
dic
ato
rs.
Valu
e of
col
late
ral r
equi
rem
ents
(%
of l
oan
amou
nt)
Mea
sure
s th
e va
lue
of c
olla
tera
l nee
ded
for a
loan
or l
ine
of c
redi
t as
a pe
rcen
tage
of t
he lo
an v
alue
or t
he v
alue
of t
he li
ne o
f cre
dit.
Sou
rce:
Wo
rld
Ba
nk
, En
terp
rise
Su
rvey
s.
Mar
ket c
apit
alis
atio
n of
dom
esti
c lis
ted
com
pani
es (
% o
f GD
P)M
easu
res
the
mar
ket v
alue
of t
he c
ompa
nies
list
ed o
n th
e do
mes
tic s
tock
mar
ket a
s a
perc
enta
ge o
f GD
P.So
urc
e: T
he
Wo
rld
Ba
nk
Gro
up
.
Fina
ncia
l lit
erac
y an
d in
vest
men
t rea
dine
ss
The
finan
cial
lite
racy
indi
cato
r con
side
rs w
heth
er a
nat
iona
l str
ateg
y is
in p
lace
for a
sses
sing
fina
ncia
l lite
racy
leve
ls a
nd p
rom
otin
g fin
anci
al
educ
atio
n. It
als
o de
term
ines
whe
ther
the
gove
rnm
ent r
uns
any
finan
cial
edu
catio
n pr
ogra
mm
es a
nd w
heth
er fi
nanc
ial i
nfor
mat
ion
is w
idel
y av
aila
ble
to th
e pu
blic
. The
inve
stm
ent r
eadi
ness
indi
cato
r loo
ks a
t bus
ines
ses’
fam
iliar
ity w
ith e
quity
fina
nce
and
thei
r kno
wle
dge
of h
ow to
“se
ll”
thei
r ide
as to
pot
entia
l inv
esto
rs.
Sou
rce:
OEC
D, C
om
pet
itiv
enes
s in
So
uth
Ea
st E
uro
pe.
Firm
s us
ing
bank
s to
fina
nce
inve
stm
ent (
% o
f fir
ms)
M
easu
res
the
perc
enta
ge o
f firm
s us
ing
bank
s to
fina
nce
inve
stm
ents
.So
urc
e: W
orl
d B
an
k, W
orl
d D
evel
op
men
t In
dic
ato
rs
Entr
epre
neur
s ci
ting
acc
ess
to fi
nanc
e as
a c
onst
rain
t (%
of e
ntre
pren
eurs
) In
dica
tes
to w
hat e
xten
t acc
ess
to fi
nanc
e is
per
ceiv
ed a
s a
cons
trai
nt b
y en
trep
rene
urs
com
pare
d to
oth
er c
onst
rain
ts b
ased
on
BEEP
S, a
firm
-le
vel s
urve
y of
a r
epre
sent
ativ
e sa
mpl
e of
the
econ
omy’
s pr
ivat
e se
ctor
. So
urc
e: W
orl
d B
an
k a
nd
EB
RD
, BE
EP
S.
BU
SIN
ES
S E
NV
IRO
NM
ENT
(co
nt.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
•hi
gh c
osts
of o
pera
ting
in th
e fo
rmal
ec
onom
y •lim
ited
enfo
rcem
ent o
f leg
al
oblig
atio
ns in
the
info
rmal
sec
tor
and
a la
ck o
f eff
ectiv
e sa
nctio
ning
of
info
rmal
pra
ctic
es.
6. C
orru
ptio
n is
stil
l a p
robl
em fo
r bo
th th
e pu
blic
and
pri
vate
sec
tor
(i.e.
the
gove
rnm
ent a
nd p
riva
te
cont
ract
ors)
. Sym
ptom
s in
clud
e: •a
sign
ifica
nt s
hare
of c
ontr
acts
not
go
ing
to th
e be
st-q
ualif
ied
supp
liers
, fr
eque
ntly
infla
ted
pric
es to
cov
er
brib
e pa
ymen
ts, e
nviro
nmen
tal
requ
irem
ents
not
bei
ng e
nfor
ced
and
taxe
s no
t bei
ng c
olle
cted
•la
rge
info
rmal
pay
men
ts m
ade
to
publ
ic o
ffic
ials
to “
get t
hing
s do
ne”
•in
tern
al a
uditi
ng in
stitu
tions
ar
e un
able
to tr
igge
r rel
iabl
e in
vest
igat
ions
of g
over
nmen
t op
erat
ions
.
7. L
imit
ed a
cces
s to
fina
nce
rem
ains
on
e of
the
bigg
est p
robl
ems
for
firm
s, e
spec
iall
y fo
r inn
ovat
ive
com
pani
es. T
his
obst
acle
has
a
num
ber o
f dim
ensi
ons.
Firm
s’ a
cces
s to
fina
nce
is c
onst
rain
ed b
y un
cert
ain
pros
pect
s of
suc
cess
, lon
g tim
e ho
rizo
ns, a
lack
of t
angi
ble
asse
ts
to b
e us
ed a
s co
llate
ral a
nd a
lim
ited
oper
atin
g hi
stor
y. K
ey c
onst
rain
ts in
th
is a
rea
incl
ude:
•ca
dast
re s
yste
ms
are
only
par
tially
in
pla
ce, a
nd n
ot fu
lly fu
nctio
nal a
nd
acce
ssib
le b
y ba
nks
and
othe
r cre
dit
inst
itutio
ns •co
llate
ral r
equi
rem
ents
, as
a ke
y pr
e-co
nditi
on fo
r obt
aini
ng fu
ndin
g,
are
still
hig
h •in
tere
st r
ates
are
hig
h co
mpa
red
to
rele
vant
ben
chm
arks
•no
n-pe
rfor
min
g lo
ans
are
high
co
mpa
red
to r
elev
ant b
ench
mar
ks
•R
elat
ive
adva
ntag
es fo
r inf
orm
al
firm
s, i.
e. w
hen
labo
ur c
osts
/tax
es/
soci
al c
ontr
ibut
ions
are
too
high
, th
us c
reat
ing
unfa
ir co
mpe
titio
n to
en
terp
rise
s op
erat
ing
in th
e fo
rmal
se
ctor
.
6. C
orru
ptio
n ha
s a
sign
ifica
nt
nega
tive
effe
ct o
n gr
owth
driv
ers,
su
ch a
s in
vest
men
t, in
clud
ing
fore
ign
dire
ct in
vest
men
t (FD
I); c
ompe
titio
n;
entr
epre
neur
ship
; gov
ernm
ent
effic
ienc
y, in
clud
ing
gove
rnm
ent
expe
nditu
re a
nd re
venu
e; a
nd
hum
an c
apita
l for
mat
ion.
Hig
h-le
vel
corr
uptio
n le
ads
to in
effic
ienc
y an
d re
sour
ce m
isal
loca
tion.
Cor
rupt
ion
will
als
o af
fect
oth
er im
port
ant
indi
cato
rs o
f eco
nom
ic d
evel
opm
ent
such
as
the
qual
ity o
f the
env
ironm
ent,
pers
onal
hea
lth a
nd s
afet
y, e
quity
(in
com
e di
strib
utio
n), a
nd v
ario
us
type
s of
soc
ial o
r civ
ic c
apita
l (“t
rust
”)
– w
hich
sig
nific
antly
aff
ect e
cono
mic
w
elfa
re a
nd, i
n th
e ca
se o
f tru
st, a
lso
the
econ
omy’
s de
velo
pmen
t pot
entia
l.
7. L
imite
d ac
cess
to fi
nanc
e is
one
of
the
mos
t pro
noun
ced
barr
iers
to
effo
rts
to b
uild
pro
duct
ive
capa
city
an
d co
mpe
titiv
enes
s, th
us h
ampe
ring
jo
b cr
eati
on, s
ocia
l inc
lusi
on a
nd
sust
aina
ble
grow
th. T
he r
easo
ns fo
r th
is in
clud
e:
•Po
or q
ualit
y fin
anci
al in
term
edia
tion
(i.e.
the
inab
ility
of i
nstit
utio
ns to
su
cces
sful
ly in
term
edia
te b
etw
een
lend
ers
and
borr
ower
s) re
sults
in h
igh
tran
sact
ion
cost
s, h
igh
leve
ls o
f non
-pe
rfor
min
g lo
ans,
and
lim
ited
acce
ss
for s
mal
l firm
s an
d ho
useh
olds
to
finan
cial
ser
vice
s. Id
eally
, eco
nom
ies
shou
ld a
im t
o im
prov
e in
term
edia
tion
to e
nsur
e pr
oper
and
pre
cise
fund
al
loca
tion,
boo
stin
g do
mes
tic
inve
stm
ents
and
thus
pro
duct
ivity
and
ec
onom
ic g
row
th.
2. POLICY AREA DIAGNOSTIC
50 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
BU
SIN
ES
S E
NV
IRO
NM
ENT
(co
nt.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
•ba
nkru
ptcy
pro
cedu
res
are
inef
ficie
nt, s
low
and
poo
rly
defin
ed
•fin
anci
al li
tera
cy le
vels
are
ver
y lo
w a
nd n
o na
tiona
l fin
anci
al
educ
atio
n st
rate
gy h
as b
een
impl
emen
ted
•cr
edit
guar
ante
e sc
hem
es a
re
limite
d in
num
ber a
nd s
cope
, go
vern
men
t cre
dit r
atin
g is
low
an
d th
ere
are
no r
isk
shar
ing
mec
hani
sms
avai
labl
e •de
velo
pmen
t ban
ks a
re n
ot fi
lling
in
the
gap
left
by
priv
ate
bank
s,
eith
er d
ue to
lim
ited
finan
ce,
poor
targ
etin
g of
ent
erpr
ises
, or
beca
use
ther
e ar
e no
dev
elop
men
t ba
nks
in th
e ec
onom
y.
7.1.
Lim
ited
acc
ess
to e
quit
y fi
nanc
e, w
ith e
quity
fina
ncin
g un
deve
lope
d in
the
econ
omy.
Sy
mpt
oms
incl
ude:
•un
derd
evel
oped
cap
ital m
arke
ts
(sto
ck m
arke
t cap
italis
atio
n an
d liq
uidi
ty is
low
rel
ativ
e to
be
nchm
ark)
•ve
ntur
e ca
pita
l act
ivity
is in
its
infa
ncy
and
lack
s cl
ear l
egal
de
finiti
ons
•lim
ited
ange
l inv
estm
ent a
ctiv
ity,
ofte
n w
ith n
o le
gal f
ram
ewor
k to
go
vern
ing.
7.2.
Lim
ited
alt
erna
tive
sou
rces
of
fina
ncin
g. S
ympt
oms
incl
ude:
•lim
ited
use
of fa
ctor
ing
and
a la
ck
of e
xplic
it fa
ctor
ing
law
s •cr
owdf
undi
ng h
ardl
y ex
ists
or i
s in
th
e ea
rly
stag
es o
f dev
elop
men
t •m
icro
finan
ce la
cks
a w
ell-
esta
blis
hed
regu
lato
ry fr
amew
ork.
•Po
orly
func
tion
ing
cred
it m
arke
ts
with
hig
h co
llate
ral r
equi
rem
ents
re
duce
dem
and
in th
e ec
onom
y du
e to
hig
h co
sts
or th
e in
abili
ty o
f fir
ms
to m
eet l
ende
rs’ t
erm
s. B
anks
us
ually
res
ort t
o ov
er-c
olla
tera
lisin
g w
hen
ther
e ar
e pr
oble
ms
asso
ciat
ed
with
fore
clos
ure
and
loan
-rec
over
y pr
oced
ures
. Ine
ffic
ient
ban
krup
tcy
proc
edur
es (w
hich
are
of g
reat
im
port
ance
if b
usin
esse
s ar
e to
be
abl
e to
acc
ess
finan
ce a
nd
thus
sur
vive
) as
wel
l as
the
lack
of
sec
ond
chan
ce o
ppor
tuni
ties
will
furt
her w
orse
n th
e te
rms
of
borr
owin
g an
d re
duce
inve
stm
ent.
•U
ndev
elop
ed c
adas
tre
syst
ems
mea
n cr
edit
info
rmat
ion
regi
ster
s ar
e of
littl
e us
e to
ban
ks. T
hey
also
m
ean
bank
s w
ill n
ot b
e ab
le to
ef
ficie
ntly
ass
ess
the
risk
asso
ciat
ed
with
bor
row
ers,
thus
redu
cing
the
avai
labi
lity
of b
ank
finan
ce to
the
priv
ate
sect
or a
nd h
ence
inve
stm
ent.
•La
ck o
f rel
evan
t leg
isla
tion
co
veri
ng v
entu
re c
apit
al a
nd
ange
l inv
estm
ents
leav
es in
vest
ors
inad
equa
tely
pro
tect
ed, r
educ
ing
both
the
supp
ly a
nd d
eman
d of
su
ch in
vest
men
ts. T
his
limits
th
e us
e of
fund
ing
chan
nels
for
high
-pot
entia
l bus
ines
s st
art-
ups
such
as
crow
dfun
ding
. Fai
lure
to
expl
oit s
uch
pote
ntia
l sou
rces
of
inve
stm
ent d
irect
ly r
educ
es th
e ec
onom
y’s
prod
uctiv
ity, i
nnov
atio
n an
d in
vest
men
t pot
entia
l. •La
ck o
f fin
anci
al li
tera
cy a
nd
inve
stm
ent r
eadi
ness
con
trib
utes
to
the
unde
ruse
of t
he fi
nanc
ial
sect
or a
s a
sour
ce o
f fun
ds. L
ack
of a
na
tiona
l fin
anci
al e
duca
tion
stra
tegy
af
fect
s pe
ople
’s u
nder
stan
ding
of
how
the
finan
cial
sys
tem
wor
ks, t
he
diff
eren
t typ
es o
f fin
ance
ava
ilabl
e an
d ho
w to
acc
ess
it.
2. POLICY AREA DIAGNOSTIC
Trade-related reformsPolicy area indicators, structural obstacles and impact on competitiveness and growth
51ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
53ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
53ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
I. GE
NERA
L TR
ADE
INDI
CATO
RS
Tota
l tra
de in
goo
ds a
nd s
ervi
ces
(% o
f GD
P, %
cha
nge)
Trad
e in
goo
ds a
nd s
ervi
ces
is d
efin
ed a
s th
e tr
ansf
er in
ow
ners
hip
of m
ater
ial r
esou
rces
and
ser
vice
s be
twee
n on
e ec
onom
y an
d an
othe
r. It
is
mea
sure
d as
a p
erce
ntag
e of
gro
ss d
omes
tic p
rodu
ct (
GD
P) fo
r net
trad
e an
d al
so a
nnua
l gro
wth
of e
xpor
ts a
nd im
port
s.So
urc
es: N
atio
na
l sta
tist
ics
agen
cies
; Wo
rld
Ba
nk
, Wo
rld
Dev
elo
pm
ent
Ind
icat
ors
.
Ope
nnes
s to
trad
e (t
rade
-to-
GD
P ra
tio
for l
ates
t ava
ilabl
e ye
ar)
Mea
sure
s op
enne
ss to
trad
e as
the
trad
e-to
-GD
P ra
tio. I
t wei
ghs
the
com
bine
d im
port
ance
of e
xpor
ts a
nd im
port
s of
goo
ds a
nd s
ervi
ces
in a
n ec
onom
y, g
ivin
g an
insi
ght i
nto
the
over
all a
cces
s to
fore
ign
mar
kets
by
dom
estic
firm
s, a
s w
ell a
s th
e ex
tent
of f
orei
gn p
enet
ratio
n in
to th
e na
tiona
l mar
ket.
So
urc
es: N
atio
na
l sta
tist
ics
agen
cies
; Wo
rld
Ba
nk
, Wo
rld
Dev
elo
pm
ent
Ind
icat
ors
.
Trad
e ba
lanc
e de
fici
t/su
rplu
s (%
of G
DP,
tim
e se
ries
, las
t 10
year
s)In
dica
tes
the
degr
ee to
whi
ch d
omes
tic d
eman
d ex
ceed
s do
mes
tic s
uppl
y, o
r vic
e ve
rsa.
Pro
vide
s an
indi
catio
n of
the
econ
omy’
s in
tern
atio
nal
com
petit
iven
ess.
So
urc
es: N
atio
na
l sta
tist
ics
agen
cies
; cen
tra
l ba
nk
s; W
orl
d B
an
k, W
orl
d I
nte
gra
ted
Tra
de
So
luti
on
(W
ITS
).
Curr
ent a
ccou
nt d
efic
it/s
urpl
us (
% o
f GD
P; ti
me
seri
es, l
ast 1
0 ye
ars,
indi
cati
ng th
e sh
are
of n
et tr
ade
in g
oods
, net
trad
e in
ser
vice
s, n
et
inco
me
and
net c
urre
nt tr
ansf
ers
in th
e fi
nal f
igur
e)
The
curr
ent a
ccou
nt c
over
s al
l tra
nsac
tions
(ex
clud
ing
finan
cial
item
s) th
at in
volv
e ec
onom
ic v
alue
s a
nd o
ccur
bet
wee
n re
side
nts
and
non-
resi
dent
ent
ities
. It i
nclu
des
som
e of
the
indi
cato
rs o
bser
ved
in th
e ba
lanc
e of
trad
e (p
lus/
min
us tr
ade
leve
ls o
f goo
ds a
nd s
ervi
ces)
but
it g
ives
a
bett
er/f
ulle
r ins
ight
into
the
over
all h
ealth
and
inte
rnat
iona
l com
petit
iven
ess
of a
n ec
onom
y.
Pers
iste
nt c
urre
nt a
ccou
nt d
efic
its o
r sur
plus
es in
dica
te a
mac
roec
onom
ic im
bala
nce
that
is n
ot c
ondu
cive
to s
usta
ined
eco
nom
ic g
row
th a
nd,
ther
efor
e, s
usta
ined
impl
emen
tatio
n of
sus
tain
able
dev
elop
men
t goa
ls.
Sou
rces
: Nat
ion
al s
tati
stic
s ag
enci
es; W
orl
d B
an
k; I
nte
rnat
ion
al M
on
eta
ry F
un
d (
IMF)
.
Expo
rts
of g
oods
and
ser
vice
s (%
of G
DP,
by
sect
or [
agri
cult
ure,
indu
stry
, ser
vice
s])
Mer
chan
dise
trad
e, c
ompr
isin
g go
ods
and
serv
ices
leav
ing
the
stat
istic
al te
rrito
ry, a
s a
shar
e of
GD
P. T
his
indi
cato
r hel
ps to
bet
ter u
nder
stan
d th
e le
vel o
f ext
erna
l dem
and
for d
omes
tic g
oods
and
ser
vice
s, th
us a
lso
illus
trat
ing
the
inte
rnat
iona
l com
petit
iven
ess
of g
oods
and
ser
vice
s pr
oduc
ed in
the
econ
omy.
Sou
rce:
Nat
ion
al s
tati
stic
s ag
enci
es.
Impo
rts
of g
oods
and
ser
vice
s (%
of G
DP,
by
sect
or [
agri
cult
ure,
indu
stry
, ser
vice
s])
Mer
chan
dise
trad
e, c
ompr
isin
g go
ods
and
serv
ices
ent
erin
g th
e st
atis
tical
terr
itory
, as
a sh
are
of G
DP.
Indi
cate
s ho
w d
epen
dent
an
econ
omy
is
on g
oods
(raw
mat
eria
ls, f
oods
tuff
s, m
achi
nery
, etc
.) an
d se
rvic
es c
omin
g fr
om it
s tr
ade
part
ners
.So
urc
e: N
atio
na
l sta
tist
ics
agen
cies
.
Mai
n tr
ade
part
ners
(ra
nked
as
a sh
are
of to
tal t
rade
and
in a
bsol
ute
term
s)
This
indi
cato
r pro
vide
s an
insi
ght i
nto
the
gene
ral t
rade
dyn
amic
s of
an
econ
omy:
whe
ther
it h
as a
div
erse
ran
ge o
f tra
ding
par
tner
s or
is ti
ed to
ju
st a
han
dful
. Dep
ende
nce
on a
few
trad
ing
part
ners
sug
gest
s he
ight
ened
vul
nera
bilit
y to
eco
nom
ic d
evel
opm
ents
(pa
rtic
ular
ly s
hock
s) in
thos
e co
untr
ies,
esp
ecia
lly if
they
are
all
part
of t
he s
ame
trad
ing
bloc
k.
Sou
rces
: Nat
ion
al s
tati
stic
s ag
enci
es; U
nit
ed N
atio
ns,
Co
mtr
ade
Dat
aba
se; W
orl
d B
an
k, W
ITS
.
TR
AD
E-R
ELA
TED
REF
OR
MS
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
1. L
ow le
vel o
f ope
nnes
s to
trad
e an
d lo
w le
vel o
f int
egra
tion
into
the
mul
tilat
eral
trad
ing
syst
em
•tr
ade
as a
sha
re o
f GD
P is
low
•lit
tle p
artic
ipat
ion
in b
ilate
ral a
nd
mul
tilat
eral
trad
e ag
reem
ents
•la
rge
and
num
erou
s ta
riff
s an
d ot
her
barr
iers
to tr
ade.
2. L
ow q
ualit
y of
trad
e
infr
astr
uctu
re a
nd lo
gist
ics
•lo
w q
ualit
y of
tran
spor
t and
oth
er
trad
e-re
late
d in
fras
truc
ture
, as
dem
onst
rate
d by
rel
evan
t ind
ices
•lim
ited
conn
ectiv
ity to
mai
n tr
ansp
ort c
orri
dors
and
mai
n tr
adin
g pa
rtne
rs •lo
w s
core
on
the
LPI.
3. S
low
, exp
ensi
ve a
nd c
umbe
rsom
e cu
stom
s pr
oced
ures
. Sym
ptom
s of
th
is o
bsta
cle
incl
ude:
•cl
earin
g ex
port
s th
roug
h cu
stom
s ta
kes
a si
gnifi
cant
num
ber o
f day
s (w
ith n
o si
gnifi
cant
red
uctio
ns in
re
cent
yea
rs)
•a
belo
w r
egio
nal a
vera
ge p
ositi
on in
th
e D
oing
Bus
ines
s Tr
adin
g Ac
ross
Bo
rder
s ra
nkin
g, a
s w
ell a
s an
y sp
ecifi
c su
b-in
dica
tors
in w
hich
an
econ
omy
does
par
ticul
arly
poo
rly
com
pare
d w
ith r
egio
nal o
r oth
er
aver
ages
•a
low
sco
re fo
r the
LPI
Dim
ensi
on 1
in
dica
tor (
effic
ienc
y of
the
clea
ranc
e pr
oces
s).
4. L
ow le
vel o
f har
mon
isat
ion
wit
h in
tern
atio
nal s
tand
ards
res
ultin
g in
lo
w e
xpor
ts a
s w
ell a
s pa
rtic
ipat
ion
in
trad
ing
bloc
ks. S
ympt
oms
incl
ude:
•Fe
w q
ualit
y an
d ec
o-st
anda
rds
are
impl
emen
ted
or c
ertif
icat
es
issu
ed (
HAC
CP a
nd IS
O 2
2000
in
the
agri
cultu
ral s
ecto
r; IS
O/
TS 1
6949
, ISO
900
0/90
01; C
E m
arki
ng in
man
ufac
turin
g, e
tc.)
1. A
low
leve
l of o
penn
ess
to tr
ade
is
ofte
n as
soci
ated
with
a lo
wer
leve
l of
eco
nom
ic g
row
th. T
his
is d
ue to
a
num
ber o
f rea
sons
: •in
effi
cien
t allo
cati
on o
f res
ourc
es
(inab
ility
to b
enef
it fr
om a
focu
s on
com
para
tive
adva
ntag
e an
d re
sulti
ng g
ains
from
trad
ing
with
ot
her e
cono
mie
s) •in
abili
ty to
rea
lise
econ
omie
s of
sc
ale
and
scop
e an
d th
e re
sulti
ng
effic
ienc
y ga
ins
•in
abili
ty to
ben
efit
from
dif
fusi
on
of k
now
ledg
e an
d, a
s a
resu
lt,
fost
erin
g of
tech
nolo
gica
l pro
gres
s •lim
ited
com
peti
tion
from
fore
ign
mar
kets
whi
ch a
ffec
ts d
omes
tic
prod
uctiv
ity a
s w
ell a
s pr
ices
.
2. L
ow q
ualit
y tr
ade
infr
astr
uctu
re a
nd
logi
stic
s re
duce
the
econ
omy’
s ex
tern
al
com
petit
iven
ess
and
trad
ing
capa
city
. En
terp
rise
s ne
ed c
heap
and
rel
iabl
e ac
cess
to a
net
wor
k of
hig
h-qu
alit
y in
fras
truc
ture
to b
e m
ore
com
petit
ive.
N
o or
low
-qua
lity
infr
astr
uctu
re m
ay
canc
el o
ut a
n ec
onom
y’s
pote
ntia
l co
mpa
rativ
e ad
vant
age
in th
e pr
oduc
tion
of a
pro
duct
.
3. S
low
, exp
ensi
ve a
nd c
umbe
rsom
e cu
stom
s pr
oced
ures
als
o de
ter t
rade
. Th
e lo
nger
it ta
kes
to c
ompl
ete
a tr
ansa
ctio
n, th
e gr
eate
r the
tend
ency
fo
r tra
de v
olum
es to
be
redu
ced.
Le
ngth
y pr
oced
ures
for e
xpor
ts a
nd
impo
rts
redu
ce th
e pr
obab
ility
that
fir
ms
will
ent
er e
xpor
t mar
kets
for
time-
sens
itive
pro
duct
s.
4. L
ow le
vels
of h
arm
onis
atio
n w
ith in
tern
atio
nal s
tand
ards
lim
its
econ
omie
s’ e
xpor
t cap
acit
ies
and
abili
ty to
link
up
to g
loba
l val
ue
chai
ns.
Inad
equa
te a
lignm
ent w
ith
inte
rnat
iona
l sta
ndar
ds a
nd p
ract
ices
2. POLICY AREA DIAGNOSTIC
5554 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Mai
n ex
port
and
impo
rt p
rodu
cts
(HS-
6 D
igit
Leve
l, p
rodu
ct s
hare
and
tota
l val
ue)
Iden
tifie
s th
e m
ain
prod
uct c
ateg
orie
s co
ncer
ned
in th
e ec
onom
y’s
impo
rt a
nd e
xpor
t tra
de u
sing
the
Nom
encl
atur
e st
atis
tique
des
act
ivité
s éc
onom
ique
s da
ns la
Com
mun
auté
eur
opée
nne
(NAC
E) R
evis
ion
2, o
r the
Har
mon
ized
Com
mod
ity D
escr
iptio
n an
d Co
ding
Sys
tem
(HS-
4 or
HS-
6).
Dep
ende
nce
on a
few
exp
ort p
rodu
cts
mak
es a
n ec
onom
y vu
lner
able
and
indi
cate
s th
at s
cope
for d
iver
sific
atio
n is
hig
h. T
his
indi
cato
r can
als
o gi
ve a
sen
se o
f the
sop
hist
icat
ion
of e
xpor
ts a
nd th
e sc
ope
for m
ovin
g up
the
valu
e ch
ains
/incr
easi
ng v
alue
add
ed. L
ast b
ut n
ot le
ast,
it ca
n h
elp
to id
entif
y cu
rren
tly im
port
ed p
rodu
cts
that
cou
ld b
e re
plac
ed b
y do
mes
tical
ly p
rodu
ced
good
s.So
urc
es: N
atio
na
l sta
tist
ics
agen
cies
; Un
ited
Nat
ion
s, C
om
trad
e D
atab
ase
; Wo
rld
Ba
nk
, WIT
S.
Perc
enta
ge o
f fir
ms
expo
rtin
g di
rect
ly o
r ind
irec
tly
(at l
east
1%
of s
ales
)Ca
lcul
ates
the
shar
e of
firm
s pr
oduc
ing
good
s an
d se
rvic
es th
at a
re u
ltim
atel
y co
nsum
ed in
fore
ign
mar
kets
. It p
rovi
des
insi
ghts
into
the
exte
nt
to w
hich
dom
estic
ent
erpr
ises
mee
t th
e qu
ality
, saf
ety
and
othe
r sta
ndar
ds n
eede
d to
exp
ort t
o fo
reig
n m
arke
ts.
Sou
rce:
Wo
rld
Ba
nk
, En
terp
rise
Su
rvey
Logi
stic
s Pe
rfor
man
ce In
dex
(LPI
) sco
re a
nd r
ank
(tim
e se
ries
, las
t 10
year
s)Th
e LP
I ran
ks 1
60 c
ount
ries
on
6 di
men
sion
s of
trad
e –
incl
udin
g pe
rfor
man
ce, i
nfra
stru
ctur
e qu
ality
and
tim
elin
ess
of s
hipm
ents
– th
at a
re
incr
easi
ngly
rec
ogni
sed
as im
port
ant t
o de
velo
pmen
t. Th
e da
ta u
sed
in th
e ra
nkin
g co
me
from
a s
urve
y of
logi
stic
s pr
ofes
sion
als.
The
LPI
pr
ovid
es in
sigh
ts o
n th
e ov
eral
l qua
lity
of a
ll tr
ade-
rela
ted
logi
stic
s in
a p
artic
ular
eco
nom
y, th
us d
eter
min
ing
its o
vera
ll tr
adin
g co
nditi
ons.
Sou
rce:
Wo
rld
Ba
nk
, LP
I.
II. C
USTO
MS-
RELA
TED
INDI
CATO
RS
Day
s to
cle
ar d
irec
t exp
orts
thro
ugh
cust
oms
(tim
e se
ries
, las
t 10
year
s)Sp
ecifi
es th
e av
erag
e nu
mbe
r of d
ays
to c
lear
dire
ct e
xpor
ts th
roug
h cu
stom
s as
repo
rted
by
the
firm
s su
rvey
ed in
the
Wor
ld B
ank’
s En
terp
rise
Surv
ey.
Sou
rce:
Wo
rld
Ba
nk
, En
terp
rise
Su
rvey
Doi
ng B
usin
ess
Trad
ing
Acro
ss B
orde
rs in
dica
tors
, ove
rall
rank
ing
and
spec
ific
topi
cs (
time
seri
es, l
ast 1
0 ye
ars)
•ov
eral
l ran
k in
Tra
ding
Acr
oss
Bord
ers
•tim
e to
exp
ort:
bord
er c
ompl
ianc
e (h
ours
) •co
st to
exp
ort:
bord
er c
ompl
ianc
e (U
SD)
•tim
e to
exp
ort:
docu
men
tary
com
plia
nce
(hou
rs)
•co
st to
exp
ort:
docu
men
tary
com
plia
nce
(USD
) •tim
e to
impo
rt: b
orde
r com
plia
nce
(hou
rs)
•co
st to
impo
rt: b
orde
r com
plia
nce
(USD
) •tim
e to
impo
rt: d
ocum
enta
ry c
ompl
ianc
e (h
ours
) •co
st to
impo
rt: d
ocum
enta
ry c
ompl
ianc
e (U
SD)
A se
ries
of i
ndic
ator
s ba
sed
on a
sam
ple
impo
rt/e
xpor
t pro
cedu
re in
one
bor
der g
ate
to e
stim
ate
the
bure
aucr
atic
and
mon
etar
y bu
rden
of
impo
rtin
g an
d ex
port
ing.
So
urc
e:
Wo
rld
B
an
k,
Do
ing
Bu
sin
ess
– M
easu
rin
g B
usi
nes
s R
egu
lati
on
s “T
rad
ing
Acr
oss
B
ord
ers”
w
ww
.do
ingb
usi
nes
s.o
rg/d
ata
/ex
plo
reto
pic
s/tr
adin
g-ac
ross
-bo
rder
.
LPI s
core
and
ran
k (t
ime
seri
es, l
ast 1
0 ye
ars)
•ov
eral
l pos
ition
in th
e ra
nkin
g •D
imen
sion
1: E
ffic
ienc
y of
the
clea
ranc
e pr
oces
s (i.
e. s
peed
, sim
plic
ity a
nd p
redi
ctab
ility
of f
orm
aliti
es) b
y bo
rder
con
trol
age
ncie
s, in
clud
ing
cust
oms.
Indi
cato
rs b
ased
on
var
ious
lo
gist
ical
asp
ects
of t
rade
(fro
m in
fras
truc
ture
to b
urea
ucra
tic p
roce
dure
s), i
nclu
ding
a s
peci
fic in
dica
tor o
n th
e ef
ficie
ncy
of th
e im
port
/exp
ort c
lear
ance
pro
cess
. So
urc
e: W
orl
d B
an
k, L
PI.
TR
AD
E-R
ELA
TED
REF
OR
MS
(co
nt.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
See
the
rele
vant
indi
cato
rs in
the
Sect
oral
Dev
elop
men
t pol
icy
area
di
agno
stic
s. •Fr
agm
ente
d le
gisl
atio
n, m
ultip
le
juri
sdic
tions
, and
wea
knes
ses
in s
urve
illan
ce, m
onito
ring
and
enfo
rcem
ent o
f nat
iona
l sta
ndar
ds
offic
e co
ntro
l sys
tem
s. •D
omes
tic c
ompa
nies
do
not w
idel
y pa
rtic
ipat
e in
glo
bal v
alue
cha
ins.
5. L
ow e
xpor
t div
ersi
fica
tion
and
so
phis
tica
tion
•fe
w e
xpor
t pro
duct
s an
d po
tent
ial
mar
kets
•hi
gh fi
nal s
core
in th
e H
erfin
dahl
-H
irsc
hman
pro
duct
con
cent
ratio
n in
dex
•lo
w v
alue
for t
he e
xpor
t mar
ket
pene
trat
ion
mea
sure
•a
rela
tivel
y hi
gh s
hare
of r
esou
rce-
base
d an
d pr
imar
y pr
oduc
t exp
orts
, co
mpa
red
to lo
w, m
ediu
m a
nd h
igh
tech
nolo
gy e
xpor
ts •lo
w le
vel o
f exp
ort s
ophi
stic
atio
n fo
r the
eco
nom
y’s
mai
n ex
port
s,
whi
ch u
ltim
atel
y re
sults
in a
n ov
eral
l lo
w e
xpec
ted
GD
P pe
r cap
ita r
esul
t –
indi
catin
g a
less
sop
hist
icat
ed
expo
rt p
ortf
olio
.
clos
es p
rosp
ectiv
e m
arke
ts to
the
agri
cultu
ral a
nd in
dust
rial
sec
tors
. St
anda
rds
are
also
a m
ajor
obs
tacl
e to
th
e in
tegr
atio
n of
dom
estic
com
pani
es
into
glo
bal v
alue
cha
ins,
whi
ch in
turn
re
duce
s th
eir s
cope
for g
row
th a
nd
prod
uctiv
ity g
ains
.
5. L
ow e
xpor
t div
ersi
fica
tion
mak
es
econ
omie
s vu
lner
able
to p
rice
vo
latil
ity.
A b
road
enin
g of
the
expo
rt
base
thro
ugh
a m
ore
dive
rsifi
ed
natio
nal t
rade
por
tfol
io c
an h
elp
mai
ntai
n st
abili
ty in
exp
ort r
ecei
pts,
th
us fo
ster
ing
long
-ter
m e
cono
mic
gr
owth
. As
Acem
oglu
and
Zili
bott
i (“
Was
Pro
met
heus
unb
ound
by
chan
ce?
Ris
k di
vers
ifica
tion
and
grow
th”,
Jour
nal o
f Pol
itica
l Eco
nom
y 10
5(4)
: 709
-751
, 199
7) a
rgue
, di
vers
ifica
tion
may
incr
ease
inco
me
by s
prea
ding
ris
ks o
ver a
wid
er e
xpor
t po
rtfo
lio o
f goo
ds a
nd s
ervi
ces.
Expo
rt s
ophi
stic
atio
n he
lps
mov
e ec
onom
ies
away
from
a r
elia
nce
on p
rim
ary
com
mod
itie
s –
whi
ch
usua
lly
tran
slat
es in
to d
eclin
ing
term
s of
trad
e, lo
w v
alue
add
ed, a
nd
slow
er p
rodu
ctiv
ity
grow
th.
2. POLICY AREA DIAGNOSTIC
55ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
III. T
RADE
LIB
ERAL
ISAT
ION/
MAR
KET
ACCE
SS IN
DICA
TORS
Num
ber o
f reg
iona
l and
bila
tera
l fre
e tr
ade
agre
emen
ts (
FTA
s)N
otes
the
num
ber o
f reg
iona
l or b
ilate
ral f
ree
trad
e ag
reem
ents
cur
rent
ly in
forc
e in
an
econ
omy.
FTA
s ha
ve p
rove
d cr
ucia
l in
the
redu
ctio
n of
tr
ade
barr
iers
, and
the
crea
tion
of m
ore
stab
le a
nd tr
ansp
aren
t tra
ding
and
inve
stm
ent e
nviro
nmen
ts, a
llow
ing
for i
ncre
ased
exp
orts
of p
rodu
cts
and
serv
ices
to p
artn
er c
ount
ries
.
Sou
rce:
Nat
ion
al t
rad
e o
r ec
on
om
y m
inis
try.
Tari
ffs
by p
rodu
ct g
roup
s (s
umm
ary
and
duty
ran
ges)
Sum
mar
ises
the
stat
e of
pla
y fo
r tar
iffs
on a
gric
ultu
ral a
nd in
dust
rial
pro
duct
s, in
clud
ing
the
shar
e of
dut
y-fr
ee p
rodu
cts,
and
the
aver
age
and
max
imum
fina
l bou
nd d
utie
s, a
s w
ell a
s th
e sa
me
cate
gori
es fo
r tra
de p
artn
ers
gran
ted
mos
t-fa
vour
ed n
atio
n st
atus
. So
urc
e: W
orl
d T
rad
e O
rga
niz
atio
n, S
tati
stic
s d
atab
ase
(ta
riff
pro
file
s).
Info
rmat
ion
on n
on-t
arif
f bar
rier
s (N
TBs)
, num
ber o
f NTB
mea
sure
s, a
nd n
umbe
r of a
ffec
ted
prod
ucts
(H
S-6
Dig
it)
Spec
ifies
the
num
ber o
f dis
tinct
NTB
mea
sure
s in
eff
ect i
n a
give
n ye
ar, a
s w
ell a
s th
e nu
mbe
r of s
peci
fic p
rodu
cts
(at t
he H
S 6-
digi
t lev
el)
affe
cted
in a
giv
en y
ear.
Sou
rce:
Wo
rld
Ba
nk
, WIT
S.
Qua
ntit
ativ
e re
stri
ctio
ns (
num
ber a
nd ty
pes
of q
uota
s)D
etai
ls th
e lim
its, i
f any
, im
pose
d on
the
valu
e or
vol
ume
of g
oods
trad
ed.
Sou
rce:
Wo
rld
Tra
de
Org
an
izat
ion
, Qu
an
tita
tive
Res
tric
tio
ns
dat
aba
se.
IV. E
XPOR
T DI
VERS
IFIC
ATIO
N AN
D SO
PHIS
TICA
TION
1. D
iver
sific
atio
n
Num
ber o
f pro
duct
s an
d m
arke
tsLi
sts
all t
radi
ng p
artn
ers
and
give
s th
e nu
mbe
r of p
artn
er m
arke
ts a
nd n
umbe
r of p
rodu
cts
expo
rted
, cla
ssifi
ed a
t the
6-d
igit
HS
leve
l.So
urc
e: W
orl
d B
an
k, W
ITS
.
Her
find
ahl-
Hir
schm
an p
rodu
ct c
once
ntra
tion
inde
xM
easu
res
the
dist
ribut
ion
of tr
ade
valu
e ac
ross
an
expo
rter
’s p
artn
ers.
An
econ
omy
with
mos
t of i
ts tr
ade
valu
e co
ncen
trat
ed in
a v
ery
few
mar
kets
will
hav
e an
inde
x va
lue
clos
e to
1. I
ndic
ates
the
expo
rter
’s d
epen
denc
y on
its
trad
ing
part
ners
and
the
dang
er it
face
s sh
ould
its
par
tner
s in
crea
se tr
ade
barr
iers
, fac
e do
wnw
ard
busi
ness
cyc
les
or o
ther
ris
ks. M
easu
red
over
tim
e, a
fall
in th
e in
dex
may
indi
cate
a
dive
rsifi
catio
n of
trad
ing
part
ners
hips
. So
urc
e: W
orl
d B
an
k, W
ITS
.
Inde
x of
exp
ort m
arke
t pen
etra
tion
Mea
sure
s th
e ex
tent
to w
hich
an
econ
omy’
s ex
port
s re
ach
alre
ady
prov
en m
arke
ts. C
alcu
late
d as
the
num
ber o
f cou
ntri
es to
whi
ch th
e ec
onom
y ex
port
s a
part
icul
ar p
rodu
ct, d
ivid
ed b
y th
e nu
mbe
r of c
ount
ries
that
rep
ort i
mpo
rtin
g th
e pr
oduc
t tha
t yea
r. A
low
val
ue m
ay s
igna
l the
pre
senc
e of
bar
rier
s to
trad
e th
at a
re p
reve
ntin
g fir
ms
from
exp
andi
ng th
eir e
xpor
t mar
kets
. So
urc
e: W
orl
d B
an
k, W
ITS
.
TR
AD
E-R
ELA
TED
REF
OR
MS
(co
nt.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
2. POLICY AREA DIAGNOSTIC
5756 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
2. S
ophi
stic
atio
n
Tech
nolo
gica
l cla
ssif
icat
ion
of e
xpor
tsPr
ovid
es a
per
cent
age
brea
kdow
n of
an
econ
omy’
s ex
port
s ac
cord
ing
to fi
ve b
road
tech
nolo
gica
l cat
egor
ies
of fi
nal p
rodu
cts:
hig
h te
ch, m
ediu
m
tech
, low
tech
, prim
ary
prod
ucts
and
res
ourc
e-ba
sed
prod
ucts
. Whi
le th
e as
sign
men
t of p
rodu
cts
to s
peci
fic c
ateg
orie
s is
not
unc
ontr
over
sial
, an
alys
ing
how
an
econ
omy’
s ex
port
bas
ket h
as c
hang
ed o
ver t
he y
ears
may
giv
e in
sigh
t int
o th
e pa
tter
n of
its
econ
omic
dev
elop
men
t.So
urc
e: W
orl
d B
an
k, W
ITS
.
Soph
isti
cati
on o
f exp
orts
(EX
PY)
Estim
ates
the
leve
l of t
echn
olog
ical
sop
hist
icat
ion
embo
died
in a
n ec
onom
y’s
expo
rt p
ortf
olio
, ind
icat
ing
its e
cono
mic
dev
elop
men
t. Th
is m
easu
re is
bas
ed o
n th
e as
sum
ptio
n th
at if
a p
rodu
ct is
mos
tly p
rodu
ced
by d
evel
oped
cou
ntri
es, t
hen
it is
rev
eale
d to
be
a “r
ich”
or
soph
istic
ated
pro
duct
. The
exp
ort s
ophi
stic
atio
n fig
ure
is c
alcu
late
d as
a w
eigh
ted
aver
age
of p
er c
apita
GD
P of
cou
ntri
es p
rodu
cing
that
pr
oduc
t, w
ith w
eigh
ts d
eriv
ed fr
om r
evea
led
com
para
tive
adva
ntag
e. T
he e
cono
my’
s ex
pect
ed G
DP
per c
apita
, EXP
Y, is
cal
cula
ted
by s
umm
ing
all t
he e
xpor
t sop
hist
icat
ion
valu
es fo
r the
pro
duct
s it
expo
rts,
wei
ghte
d by
the
prod
uct’s
sha
re o
f tot
al e
xpor
ts.
Sou
rces
: Wo
rld
Ba
nk
, WIT
S; H
arv
ard
, Atl
as
of
Eco
no
mic
Co
mp
lex
ity
; MIT
, Ob
serv
ato
ry o
f E
con
om
ic o
f E
con
om
ic C
om
ple
xit
y.
TR
AD
E-R
ELA
TED
REF
OR
MS
(co
nt.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
2. POLICY AREA DIAGNOSTIC
57ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
I. GE
NERA
L IN
DICA
TORS
Fore
ign
dire
ct in
vest
men
t (FD
I) fl
ows
(% o
f GD
P, ti
me
seri
es, l
ast 1
0 ye
ars)
Asse
sses
the
dyna
mic
s of
inve
stm
ent (
incl
udin
g pr
e- a
nd p
ost-
finan
cial
cri
sis
flow
s), a
s w
ell a
s to
und
erst
and
the
natu
re o
f the
FD
I (fo
r exa
mpl
e no
ticea
ble
peak
s m
ay b
e lin
ked
to la
rge-
scal
e pr
ivat
isat
ions
, rat
her t
han
new
gre
enfie
ld in
vest
men
ts).
Sou
rce:
Nat
ion
al c
entr
al b
an
ks.
FDI f
low
s, in
mill
ion
EUR
, cla
ssif
ied
by ty
pe o
f act
ivit
y (N
ACE
Rev
2)
Hel
ps d
isce
rn w
heth
er th
e m
ajor
ity o
f FD
I goe
s to
the
non-
trad
able
sec
tor,
part
icul
arly
fina
ncia
l ope
ratio
ns a
nd r
eal e
stat
e.
Sou
rce:
Nat
ion
al c
entr
al b
an
ks.
FDI s
tock
s in
mill
ion
EUR
, by
inve
stor
cou
ntri
es a
nd ty
pe o
f act
ivit
y (N
ACE
Rev
2, t
ime
seri
es, l
ast 2
0 ye
ars)
Th
e fir
st ti
me
seri
es s
how
s th
e pa
tter
ns in
inve
stm
ent r
elat
ions
with
diff
eren
t cou
ntri
es a
nd c
an a
lso
help
det
erm
ine
if th
e ec
onom
y is
dep
ende
nt
on F
DI f
rom
a li
mite
d nu
mbe
r of e
cono
mie
s. T
his
seco
nd ti
me
seri
es w
ill fu
rthe
r hel
p in
und
erst
andi
ng w
here
FD
I flo
ws
have
gon
e in
the
last
two
deca
des
– co
verin
g th
e en
tire
tran
sitio
n to
mar
ket e
cono
mie
s of
thes
e ec
onom
ies.
So
urc
e: N
atio
na
l cen
tra
l ba
nk
s.
Cum
ulat
ive
GD
P of
eco
nom
ies
wit
h w
hich
bila
tera
l inv
estm
ent a
gree
men
ts a
re in
forc
e In
dica
tes
the
exte
nt to
whi
ch a
n ec
onom
y ha
s si
gned
inve
stm
ent a
gree
men
ts w
ith s
izea
ble
fore
ign
econ
omie
s (e
.g. F
ranc
e, G
erm
any,
Ital
y an
d th
e U
nite
d St
ates
),w
hich
tend
to a
lso
be th
e bi
gges
t sou
rces
of F
DI.
Suc
h ag
reem
ents
are
cru
cial
faci
litat
ors
for f
orei
gn in
vest
men
t, si
nce
they
hi
ghlig
ht th
e w
illin
gnes
s of
an
econ
omy
to a
pply
inte
rnat
iona
l arb
itrat
ion
and
disp
ute
sett
lem
ent m
echa
nism
s w
ith p
oten
tial f
orei
gn in
vest
ors.
So
urc
es:
UN
CT
AD
(20
15),
htt
p:/
/un
ctad
.org
/en
/Pag
es/D
IAE
/FD
I%20
Sta
tist
ics/
Inte
ract
ive-
dat
aba
se.a
spx
; O
ECD
, C
om
pet
itiv
enes
s in
So
uth
Ea
st E
uro
pe
(Ch
apte
r 1,
Su
b-d
imen
sio
n 1
).
Inve
stm
ent f
reed
om r
anki
ng (
Inde
x of
Eco
nom
ic F
reed
om)
Star
ting
from
an
idea
l sco
re o
f 100
, the
Inve
stm
ent F
reed
om in
dex
dedu
cts
poin
ts fo
r eac
h re
stric
tion
foun
d in
an
econ
omy’
s in
vest
men
t reg
ime,
app
lyin
g to
: 1) n
atio
nal t
reat
men
t of f
orei
gn in
vest
men
t; 2)
rest
rictio
ns o
n la
nd o
wne
rshi
p; a
nd 3
) the
exp
ropr
iatio
n of
inve
stm
ents
with
out f
air c
ompe
nsat
ion.
Sou
rces
: U
NC
TA
D (
2015
), h
ttp
://u
nct
ad.o
rg/e
n/P
ages
/DIA
E/F
DI%
20S
tati
stic
s/In
tera
ctiv
e-d
atab
ase
.asp
x;
OEC
D,
Co
mp
etit
iven
ess
in S
ou
th
East
Eu
rop
e (C
hap
ter
1, S
ub
-dim
ensi
on
1).
Inve
stin
g Ac
ross
Bor
ders
indi
cato
rs o
n FD
I reg
ulat
ion
The
Inve
stin
g Ac
ross
Bor
ders
indi
cato
rs a
sses
s th
e la
ws,
regu
latio
ns a
nd p
ract
ices
that
affe
ct fo
reig
n di
rect
inve
stm
ent.
The
met
hodo
logy
is b
ased
on
that
of t
he
Wor
ld B
ank
Grou
p’s
Doin
g Bu
sine
ss p
roje
ct. T
he in
dica
tors
hig
hlig
ht d
iffer
ence
s in
eco
nom
ies’
regu
lato
ry tr
eatm
ent o
f FDI
to id
entif
y go
od p
ract
ices
, fac
ilita
te
lear
ning
opp
ortu
nitie
s, s
timul
ate
refo
rms
and
prov
ide
annu
al cr
oss-
coun
try
data
. The
indi
cato
rs c
over
four
mai
n ar
eas:
1) i
nves
ting
acro
ss s
ecto
rs (f
rom
min
ing,
oi
l and
gas
to h
ealth
car
e an
d w
aste
man
agem
ent);
2) s
tart
ing
a fo
reig
n bu
sine
ss; 3
) acc
essi
ng in
dust
rial la
nd; a
nd 4
) arb
itrat
ing
com
mer
cial
disp
utes
.So
urc
e: W
orl
d B
an
k, I
nve
stin
g A
cro
ss B
ord
ers.
II. Q
UALI
TY O
F IN
VEST
MEN
T, IN
VEST
MEN
T PO
LICY
AND
PRO
MOT
ION
Exis
tenc
e of
inve
stor
-tar
geti
ng s
trat
egie
sM
easu
res
the
exte
nt to
whi
ch n
atio
nal i
nves
tmen
t pro
mot
ion
agen
cies
effe
ctiv
ely
scre
en p
oten
tial i
nves
tors
in o
rder
to id
entif
y th
e m
ost s
uita
ble
ones
.So
urc
e: N
atio
na
l so
urc
es.
FDI a
nd s
mal
l and
med
ium
-siz
ed e
nter
pris
e (S
ME)
link
ages
Mea
sure
s th
e ex
tent
to w
hich
spe
cific
pub
lic p
olic
ies
aim
to b
oost
link
ages
bet
wee
n FD
I and
a lo
cal s
uppl
ier b
ase.
Sou
rce:
Nat
ion
al s
ou
rces
.
Afte
rcar
e se
rvic
esM
easu
res
the
supp
ort o
ffer
ed to
inve
stor
s on
ce th
ey h
ave
set u
p th
eir b
usin
ess
oper
atio
ns.
Sou
rce:
Nat
ion
al s
ou
rces
.
INV
ES
TM
ENT
FA
CIL
ITA
TIO
N
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
1. U
nfav
oura
ble
busi
ness
and
in
vest
men
t clim
ate.
See
indi
cato
rs a
nd o
bsta
cles
iden
tifie
d in
the
busi
ness
env
ironm
ent p
olic
y ar
ea ta
ble.
If th
ey a
re e
xpla
ined
in
deta
il in
that
sec
tion,
onl
y ge
nera
l re
fere
nce
to th
e ke
y ob
stac
les
shou
ld b
e m
ade
here
, in
one
or tw
o se
nten
ces.
2. L
ack
of o
r ine
ffic
ient
FD
I-ta
rget
ing
polic
ies
(i.e.
with
an
emph
asis
on
spec
ific
sect
ors
or s
peci
alis
ing
in a
pa
rtic
ular
typo
logy
of i
nves
tmen
t).
Sym
ptom
s in
clud
e: •La
ck o
f a s
trat
egic
and
focu
sed
appr
oach
to in
vest
men
t pro
mot
ion
(no
stra
tegi
c se
ctor
targ
etin
g,
insu
ffic
ient
ly a
naly
tical
app
roac
h to
iden
tific
atio
n of
str
ateg
ic s
ecto
rs
etc.
). In
vest
men
t una
ble
to e
stab
lish
back
war
d an
d fo
rwar
d lin
kage
s w
ith
dom
estic
firm
s, r
iski
ng is
olat
ing
FDI
from
the
rest
of t
he e
cono
my,
and
lim
ited
gove
rnm
ent i
nitia
tives
and
po
licie
s to
sup
port
suc
h lin
kage
s. •La
ck o
f aft
erca
re s
ervi
ces,
leav
ing
fore
ign
inve
stor
s al
one
to d
eal w
ith
a se
mi-u
nkno
wn
mar
ket.
1. A
n un
favo
urab
le b
usin
ess
and
inve
stm
ent c
limat
e m
eans
the
follo
win
g be
nefit
s ar
e no
t rea
lised
: •In
crea
sed
exte
rnal
inve
stm
ent i
n tr
adab
le s
ecto
rs d
irect
ly e
xpan
ds
an e
cono
my’
s pr
oduc
tive
capa
city
, w
hich
is re
flect
ed a
n ex
pans
ion
of jo
b cr
eatio
n ra
tes
and
econ
omic
gro
wth
. •In
crea
sed
inve
stm
ent f
low
s af
fect
ec
onom
ic g
row
th n
ot o
nly
beca
use
inve
stm
ent f
unct
ions
as
a m
easu
re
of in
crea
sed
capi
tal a
ccum
ulat
ion
but a
lso
beca
use
of th
e re
sulti
ng
tran
sfer
of t
echn
olog
y an
d sk
ills,
not
just
har
d sk
ills,
but
al
so e
ntre
pren
euri
al o
nes.
An
expa
nded
tran
sfer
of t
echn
olog
y ca
n be
tran
slat
ed in
to a
ris
e in
the
prod
uctio
n of
cap
ital g
oods
and
thus
m
ore
expo
rts.
•FD
I als
o he
lps
in th
e pr
oces
s of
te
chno
logi
cal p
rogr
ess,
mai
nly
by
mea
ns o
f “ca
pita
l dee
peni
ng”
that
co
mes
alo
ng w
ith th
e in
trod
uctio
n of
ne
w v
arie
ties
of c
apita
l goo
ds.
•Th
e in
itial
FD
I inv
estm
ent i
s m
arke
d as
is a
cre
dit i
nto
the
curr
ent
acco
unt.
Stea
dy F
DI i
nflo
ws
thus
ca
n he
lp to
low
er a
cre
dit a
ccou
nt
defi
cit.
•FD
I inf
low
s ca
n al
so in
crea
se c
apita
l ac
cum
ulat
ion
and
augm
ente
d hu
man
cap
ital t
hrou
gh e
duca
tion,
tr
aini
ng a
nd n
ew m
anag
emen
t. M
ore
prod
ucti
ve fo
reig
n fi
rms
stim
ulat
e in
dust
ry c
ompe
titi
on, w
hich
is
ofte
n us
eful
for d
omes
tic fi
rms.
Th
us, d
omes
tic fi
rms
with
fore
ign
inve
stm
ent h
ave
high
er-q
ualit
y ou
tput
, whi
ch r
equi
res
mar
kets
to
mat
ch th
is q
ualit
y, d
rivi
ng u
p pr
oduc
tion
sta
ndar
ds in
oth
er
com
petit
ive
dom
estic
firm
s an
d su
pple
men
tary
bus
ines
s. S
imila
r sp
illov
ers
can
be c
reat
ed th
roug
h su
pplie
r lin
kage
s be
twee
n FD
I and
lo
cal S
MEs
.
2. POLICY AREA DIAGNOSTIC
58 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
INV
ES
TM
ENT
FA
CIL
ITA
TIO
N (
cont
.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
2. L
ack
of o
r ine
ffic
ient
pol
icie
s ta
rget
ing
FDI
•Po
or r
esou
rce
allo
catio
n an
d m
anag
emen
t of i
nves
tmen
t at
trac
tion
polic
ies
have
a n
egat
ive
impa
ct n
ot o
nly
due
to th
e ov
eral
l fi
scal
bur
den
they
impo
se, b
ut a
lso
prev
ent a
dequ
ate
inve
stm
ents
that
ar
e m
ore
likel
y to
suc
ceed
com
ing
in
the
coun
try.
•Br
oad
FDI p
olic
ies
may
incr
ease
th
e ri
sk o
f a r
ace
to th
e bo
ttom
w
ith n
eigh
bour
ing
econ
omie
s or
co
mpe
titor
s du
e to
the
lack
of
long
-ter
m p
olic
y ap
proa
ches
. In
vest
men
ts b
ased
pur
ely
on
shor
t-te
rm fi
scal
hol
iday
s, w
ith
no p
re-s
elec
tion
mec
hani
sm, a
re
a no
ticea
ble
drai
n on
nat
iona
l bu
dget
s, a
nd th
e in
itia
l adv
anta
ges
such
as
new
jobs
may
qui
ckly
be
reve
rsed
whe
ther
bec
ause
the
inve
stin
g co
rpor
atio
n de
cide
s to
re
allo
cate
or b
ecau
se th
e co
mbi
ned
cost
s ex
ceed
the
perc
eive
d be
nefit
s of
the
inve
stm
ent.
•Af
terc
are
serv
ices
are
ess
entia
l to
build
a s
olid
rel
atio
n w
ith
exis
ting
in
vest
ors
and
incr
ease
trus
t am
ong
pros
pect
ive
ones
. Thu
s, g
ood
afte
rcar
e se
rvic
es m
ay fu
nctio
n as
a
pull
fact
or fo
r fut
ure
inve
stm
ents
, in
crea
sing
the
pros
pect
of f
utur
e,
mor
e va
luab
le e
xpor
ts.
2. POLICY AREA DIAGNOSTIC
Research, development and innovation (RDI) and Digital EconomyPolicy area indicators, structural obstacles and impact on competitiveness and growth
59ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
61ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 61ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
61ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 61ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
I. RE
SEAR
CH B
ASE
Gro
ss d
omes
tic
expe
ndit
ure
on r
esea
rch
and
deve
lopm
ent (
GER
D),
% o
f gro
ss d
omes
tic
prod
uct (
GD
P)M
easu
res
the
leve
l of e
xpen
ditu
re (
both
pub
lic a
nd p
riva
te) o
n re
sear
ch a
nd d
evel
opm
ent.
Inno
vatio
n ha
s co
nsid
erab
le p
ositi
ve e
xter
nalit
ies
for
the
econ
omy
and
soci
ety,
and
ther
efor
e its
fina
ncin
g is
nee
ded
to s
uppo
rt a
nd s
timul
ate
rese
arch
, dev
elop
men
t and
inno
vatio
n (R
DI)
act
iviti
es.
Sou
rce:
Eu
rop
ean
Co
mm
issi
on
, Eu
rost
at d
atab
ase
, htt
p:/
/ec.
euro
pa
.eu
/eu
rost
at/d
ata
/dat
aba
se.
Busi
ness
ent
erpr
ise
rese
arch
and
dev
elop
men
t (BE
RD
) exp
endi
ture
M
easu
res
the
amou
nt o
f bus
ines
s ex
pend
iture
on
RD
I in
mill
ions
of e
uros
or l
ocal
cur
renc
y. It
sig
nals
firm
s’ c
omm
itmen
t to
the
syst
emat
ic
gene
ratio
n an
d co
mm
erci
al a
pplic
atio
n of
new
idea
s, a
lthou
gh it
is n
ot a
dire
ct m
easu
re o
f inn
ovat
ion
perf
orm
ance
(qu
ality
of e
xpen
ditu
re).
Sou
rce:
Nat
ion
al s
tati
stic
s.
Num
ber o
f org
anis
atio
ns in
volv
ed in
Hor
izon
202
0H
oriz
on 2
020
is th
e bi
gges
t EU
res
earc
h an
d in
nova
tion
prog
ram
me
ever
with
nea
rly
EUR
80
billi
on o
f fun
ding
ava
ilabl
e ov
er 7
yea
rs (
2014
-20)
. A
solid
num
ber o
f elig
ible
app
licat
ions
from
the
econ
omy
sugg
est l
ocal
inno
vato
rs a
re a
war
e of
the
poss
ibili
ties
offe
red
by th
e EU
to s
uppo
rt
inno
vatio
n.
Sou
rce:
Nat
ion
al s
tati
stic
s.
RD
I per
sonn
el, p
er m
illio
n pe
ople
Mea
sure
s th
e nu
mbe
r of r
esea
rche
rs in
rel
atio
n to
the
popu
latio
n. A
n ad
equa
te n
umbe
r of r
esea
rche
rs a
re n
eede
d to
per
form
RD
I act
iviti
es.
Sou
rce:
Nat
ion
al s
tati
stic
s.
Pate
nt a
pplic
atio
ns, r
esid
ents
Mea
sure
s w
orld
wid
e pa
tent
app
licat
ions
file
d th
roug
h th
e Pa
tent
Coo
pera
tion
Trea
ty p
roce
dure
or w
ith a
nat
iona
l pat
ent o
ffic
e fo
r exc
lusi
ve
righ
ts fo
r an
inve
ntio
n –
i.e. a
pro
duct
or p
roce
ss th
at p
rovi
des
a ne
w w
ay o
f doi
ng s
omet
hing
or o
ffer
s a
new
tech
nica
l sol
utio
n to
a p
robl
em.
A pa
tent
pro
vide
s pr
otec
tion
for t
he in
vent
ion
to th
e ow
ner o
f the
pat
ent f
or a
lim
ited
peri
od, g
ener
ally
20
year
s. It
is a
rel
evan
t ind
icat
or o
f the
nu
mbe
r of d
isco
veri
es w
ith a
pra
ctic
al a
pplic
atio
n an
d co
mm
erci
al p
oten
tial.
Sou
rce:
Wo
rld
Ba
nk
, Dat
a B
an
k, h
ttp
://d
atab
an
k.w
orl
db
an
k.o
rg/.
II. IN
NOVA
TION
SUP
PORT
ORG
ANIS
ATIO
NS
Maj
or R
DI i
nfra
stru
ctur
e in
the
coun
try
(inc
ubat
ors,
acc
eler
ator
s, te
chno
logi
cal p
arks
etc
.)Su
ch in
fras
truc
ture
is c
ruci
al to
sta
rt-u
ps w
ith li
mite
d fin
anci
al c
apac
ity to
con
duct
bot
h th
eir b
usin
ess
and
RD
I act
iviti
es d
urin
g di
ffer
ent
phas
es o
f the
ir lif
e cy
cle.
It a
lso
has
the
effe
ct o
f put
ting
inno
vativ
e bu
sine
sses
in d
irect
con
tact
with
eac
h ot
her,
with
pos
itive
spi
llove
r eff
ects
.So
urc
e: N
atio
na
l sta
tist
ics.
Num
ber o
f sta
rt-u
ps a
ctiv
e in
incu
bato
rs/p
arks
Tota
l num
ber o
f act
ive
busi
ness
es in
incu
bato
rs a
nd te
chno
logi
cal p
arks
. Ind
icat
es th
e re
leva
nce
and
dem
and
for s
uch
serv
ices
in th
e ec
onom
y.So
urc
e: N
atio
na
l sta
tist
ics.
Serv
ices
off
ered
by
the
publ
ic s
ecto
r to
inno
vati
ve e
nter
pris
es
Mea
sure
s th
e ra
nge
of s
ervi
ces
the
publ
ic s
ecto
r off
ers
to in
nova
tive
busi
ness
es, b
eyon
d ha
rd in
fras
truc
ture
. Thi
s ca
n in
clud
e tr
aini
ng,
men
torin
g, in
nova
tion
prom
otio
n, in
vest
ors
netw
orki
ng a
nd m
atch
ing.
So
urc
e: N
atio
na
l sta
tist
ics.
RE
SE
AR
CH
, DE
VEL
OPM
ENT
AN
D I
NN
OV
AT
ION
(R
DI)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
1. In
suff
icie
nt fi
nanc
ing
for
inno
vatio
n. L
imite
d fu
nds
to c
ondu
ct
and
supp
ort R
DI a
ctiv
ities
acr
oss
the
spec
trum
, fro
m b
asic
rese
arch
to
app
lied
rese
arch
and
fina
l tes
ting.
Sy
mpt
oms
of th
is o
bsta
cle
incl
ude
one
or m
ore
of th
e fo
llow
ing:
•lo
w le
vels
of R
DI e
xpen
ditu
re (l
ow
GER
D as
a s
hare
of G
DP
com
pare
d to
re
leva
nt b
ench
mar
ks)
•R
DI i
s m
ostly
pub
licly
fund
ed w
ith
very
lim
ited
cont
ribut
ion
from
the
priv
ate
sect
or (p
rivat
e G
ERD,
BER
D,
and
SME
prod
uct i
nnov
atio
n ar
e lo
w
com
pare
d to
rele
vant
ben
chm
arks
) •pu
blic
RD
I pro
gram
mes
are
lim
ited
to s
hort
tim
e pe
riods
(1-2
yea
rs)
and
not r
enew
ed in
tim
e ca
usin
g di
srup
tion
in p
rogr
amm
e ac
tiviti
es •lim
ited
or n
on-e
xist
ent t
ax in
cent
ives
fo
r priv
ate
sect
or R
DI e
xpen
ditu
re o
r fo
r pub
lic p
rocu
rem
ent o
f inn
ovat
ion.
2. L
imite
d ha
rd a
nd s
oft
infr
astr
uctu
re. B
y “h
ard”
in
fras
truc
ture
we
mea
n th
e fa
cilit
ies
and
labo
rato
ries
in w
hich
inno
vatio
n ta
kes
plac
e, w
hile
“so
ft”
infr
astr
uctu
re
is m
ainl
y re
late
d to
the
skill
s ne
eded
to
impl
emen
t and
per
form
inno
vatio
n.
Thes
e in
clud
e th
e av
aila
bilit
y of
exp
ert
cons
ulta
nts
in to
pics
of R
DI,
busi
ness
de
velo
pmen
t, IP
law
s an
d ot
her.
3. L
imite
d in
ter-
inst
itutio
nal
co-o
rdin
atio
n: p
oorly
dev
elop
ed in
ter-
min
iste
rial R
DI p
olic
y co
-ord
inat
ion
and
mon
itorin
g an
d ev
alua
tion
prac
tices
, due
to a
lack
of d
edic
ated
st
ate-
leve
l str
ateg
ic d
ocum
ents
cle
arly
ou
tlini
ng g
over
nanc
e st
ruct
ures
an
d re
spon
sibi
litie
s ac
ross
diff
eren
t in
stitu
tions
. Sym
ptom
s of
this
obs
tacl
e in
clud
e on
e or
mor
e of
the
follo
win
g: •ov
erla
ppin
g R
DI s
uppo
rt a
ctiv
ities
ac
ross
diff
eren
t min
istr
ies
and
inst
itutio
ns •no
cle
ar g
over
nanc
e st
ruct
ure
for
inno
vatio
n-re
late
d ac
tiviti
es a
t the
st
ate
leve
l
1. a
nd 2
. Low
RD
I exp
endi
ture
re
duce
s th
e ra
te o
f inn
ovat
ion
in
good
s an
d se
rvic
es in
the
econ
omy.
Le
ss in
nova
tive
pro
duct
s im
ply
a le
ss c
ompe
titi
ve e
cono
my,
whi
ch in
tu
rn is
ref
lect
ed in
a tr
ade
defic
it an
d lo
w p
rodu
ctiv
ity, w
hich
in tu
rn fe
eds
into
low
wag
es. O
vera
ll, G
DP
grow
th
is s
low
ed.
3. a
nd 4
. Lac
k of
inst
itutio
nal
co-o
rdin
atio
n le
ads
to s
ubop
timal
ut
ilisa
tion
of s
carc
e pu
blic
res
ourc
es
in th
e fi
eld
of R
DI,
risk
ing
dupl
icat
ion
of e
ffor
t acr
oss
diff
eren
t ins
titut
ions
. Su
ppor
t may
not
cov
er th
e fu
ll lif
e cy
cle
of th
e in
nova
tion
proc
ess,
oft
en
faili
ng to
link
bas
ic r
esea
rch
and
deve
lopm
ent t
o th
e fin
al in
nova
tive
outp
ut, a
n in
nova
tive
prod
uct o
n th
e m
arke
t. Th
is a
lso
redu
ces
the
leve
l of
inno
vatio
n in
the
econ
omy.
5. a
nd 6
. Lac
k of
co-
oper
atio
n ac
ross
th
e p
riva
te s
ecto
r, pu
blic
sec
tor
and
acad
emia
pre
vent
s ef
fect
ive
know
ledg
e tr
ansf
er, l
eadi
ng to
m
isse
d op
port
unit
ies
for e
cono
mic
de
velo
pmen
t. Ba
sic
rese
arch
doe
sn’t
tran
slat
e in
to n
ew d
isco
veri
es, w
hile
pr
ivat
e bu
sine
sses
rem
ain
unaw
are
of
the
late
st r
esea
rch,
and
thus
can
not
prov
ide
insi
ght i
nto
its a
pplic
abili
ty to
th
e m
arke
t.
2. POLICY AREA DIAGNOSTIC
6362 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Priv
ate
sect
or s
elf-
sust
aina
ble
init
iati
ves
Spec
ial a
tten
tion
shou
ld b
e gi
ven
to p
riva
te s
ecto
r act
iviti
es a
imed
at s
uppo
rtin
g in
nova
tion,
incl
udin
g th
e pr
ovis
ion
of in
fras
truc
ture
and
se
rvic
es o
n a
mar
ket b
asis
. Whe
re th
ese
exis
t, st
ate
inte
rven
tion
can
have
a n
egat
ive
impa
ct, c
row
ding
out
sus
tain
able
mar
ket-
led
proj
ects
with
pu
blic
ly fi
nanc
ed a
ctiv
ities
. The
se fu
nds
coul
d be
bet
ter s
pent
on
area
s no
t cov
ered
by
priv
ate
prov
isio
n. T
here
fore
, an
initi
al m
appi
ng o
f all
activ
ities
com
ing
from
pri
vate
inst
itutio
ns c
an b
e be
nefic
ial (
busi
ness
ang
el n
etw
orks
, pri
vate
incu
bato
rs a
nd a
ccel
erat
ors,
pri
vate
sou
rces
of
RD
I fun
ding
, ven
ture
cap
itals
, etc
.).
Sou
rce:
Nat
ion
al s
tati
stic
s.
III. I
NCEN
TIVE
S FO
R RD
I
RD
I gra
nts
for b
usin
esse
sD
irect
fina
ncia
l sup
port
for R
DI g
ives
firm
s a
rele
vant
ince
ntiv
e to
con
duct
res
earc
h an
d in
trod
uce
inno
vativ
e go
ods
and
serv
ices
into
the
mar
ket,
such
as
vouc
her s
chem
es.
Sou
rce:
Nat
ion
al s
tati
stic
s.
Avai
labi
lity
of fi
scal
sup
port
for R
DI a
ctiv
itie
sIn
dire
ct fo
rms
of fi
nanc
ial s
uppo
rt to
RD
I in
the
priv
ate
sect
or c
an in
clud
e va
riou
s ta
x in
cent
ives
– fi
scal
form
s of
mon
etar
y su
ppor
t aim
ed a
t fa
cilit
atin
g R
DI a
ctiv
ities
con
duct
ed b
y th
e pr
ivat
e se
ctor
.So
urc
e: N
atio
na
l sta
tist
ics.
Pres
ence
of p
ublic
pro
cure
men
t for
inno
vati
onPu
blic
pro
cure
men
t can
pla
y a
rele
vant
rol
e in
dri
ving
dem
and
for i
nnov
ativ
e so
lutio
ns. P
rovi
sion
s ta
rget
ing
smal
l and
med
ium
-siz
ed e
nter
pris
es
(SM
Es),
or s
peci
fical
ly in
nova
tive
solu
tions
, can
hel
p bu
sine
sses
ach
ieve
the
econ
omie
s of
sca
le th
ey n
eed
to m
ake
thei
r inn
ovat
ions
sus
tain
able
an
d gi
ve th
em w
ide
publ
ic r
ecog
nitio
n.So
urc
e: N
atio
na
l sta
tist
ics.
IV. C
OMM
ERCI
ALIS
ATIO
N OF
RDI
Smal
l bus
ines
ses
intr
oduc
ing
prod
uct o
r pro
cess
inno
vati
ons
(% o
f tot
al fi
rms)
Mea
sure
s th
e sh
are
of in
nova
tive
SMEs
out
of t
he to
tal n
umbe
r in
the
econ
omy.
SM
Es a
re o
ften
mor
e fle
xibl
e th
an la
rger
firm
s, a
nd a
ble
to a
dopt
ne
w s
olut
ions
mor
e qu
ickl
y, in
bot
h th
eir p
rodu
ctio
n an
d th
eir p
roce
sses
. How
ever
, SM
Es m
ight
lack
the
finan
cial
inst
rum
ents
to fo
llow
up
on
thei
r inn
ovat
ive
idea
s; a
low
sha
re o
f inn
ovat
ive
SMEs
mig
ht s
igna
l the
nee
d to
inte
rven
e in
sup
port
of S
MEs
and
thei
r RD
I act
ivity
.So
urc
e: N
atio
na
l sta
tist
ics.
Inno
vati
ons
intr
oduc
ed b
y fi
rms
brok
en d
own
by ty
pe (
such
as
tech
nolo
gica
l, m
arke
ting
or o
rgan
isat
iona
l inn
ovat
ions
)M
easu
res
the
shar
e of
inno
vatio
n by
type
of i
nnov
atio
n. T
hese
incl
ude
je p
rodu
ct, p
roce
ss, o
rgan
isat
iona
l or m
arke
ting
inno
vatio
ns. P
ublic
su
ppor
t sho
uld
addr
ess
all t
ypes
of i
nnov
atio
n.So
urc
e: N
atio
na
l sta
tist
ics.
RE
SE
AR
CH
, DE
VEL
OPM
ENT
AN
D I
NN
OV
AT
ION
(R
DI)
(co
nt.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
•no
co-
ordi
natio
n bo
dy fo
r inn
ovat
ion
activ
ities
at t
he s
tate
leve
l •lim
ited
to n
o co
mm
unic
atio
n be
twee
n sc
ienc
e- a
nd e
cono
my-
rela
ted
min
istr
ies
and
inst
itutio
ns.
4. F
ragm
ente
d su
ppor
t and
act
iviti
es.
Lack
of c
o-or
dina
tion,
and
dep
ende
nce
on d
onor
and
ext
erna
l fun
ds, w
hich
are
lim
ited
in s
cope
and
tim
e, o
ften
lead
to
the
segm
enta
tion
of th
e in
nova
tion
proc
ess:
firm
s ar
e no
t sup
port
ed o
ver
the
entir
e cy
cle
of in
nova
tion,
from
th
e id
ea to
its
com
mer
cial
isat
ion,
and
th
eref
ore
thei
r inn
ovat
ions
oft
en d
ie
befo
re re
achi
ng th
e m
arke
t, ev
en a
fter
su
ppor
t in
the
initi
al p
hase
thro
ugh
priv
ate
and/
or p
ublic
cha
nnel
s.
5. L
ack
of in
form
atio
n an
d aw
aren
ess
abou
t inn
ovat
ion.
A la
ck o
f up-
to-d
ate
and
com
preh
ensi
ve c
hann
els
(Inte
rnet
, ne
wsp
aper
s, te
levi
sion
) offe
ring
conc
rete
in
form
atio
n an
d in
crea
sing
aw
aren
ess
amon
g th
e ge
nera
l pub
lic a
bout
in
nova
tion
redu
ces
the
gene
ral i
nclin
atio
n to
atte
mpt
to in
nova
te. I
t als
o m
eans
al
loca
ted
fund
s an
d re
sour
ces
ofte
n re
mai
n un
deru
sed,
redu
cing
thei
r im
pact
.
6. L
imite
d bu
sine
ss-a
cade
mia
co
llabo
ratio
n: jo
int i
nitia
tives
bet
wee
n pu
blic
rese
arch
bod
ies
and
busi
ness
es
are
limite
d, re
duci
ng th
e ca
paci
ty o
f bu
sine
sses
to in
nova
te. S
ympt
oms
of
this
obs
tacl
e in
clud
e on
e or
mor
e of
the
follo
win
g: •lim
ited
ince
ntiv
es fo
r aca
dem
ics
to
cond
uct r
esea
rch
of c
omm
erci
al v
alue
, or
in s
ome
case
s ev
en re
stric
tions
•no
con
veni
ent o
r ade
quat
e ve
hicl
es
for b
usin
esse
s to
see
k he
lp fr
om
rese
arch
inst
itutio
ns to
tack
le
busi
ness
pro
blem
s •no
ince
ntiv
es fo
r stu
dent
s to
eng
age
in k
now
ledg
e tr
ansf
er a
ctiv
ities
•no
ince
ntiv
es fo
r the
pro
mot
ion
of
on-c
ampu
s st
art-
up a
ctiv
ities
•lo
w s
hare
of s
cien
tific
pub
licat
ions
si
gnifi
cant
for e
cono
mic
act
ivity
.
2. POLICY AREA DIAGNOSTIC
63ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
I. SI
GNIF
ICAN
CE A
ND C
APAC
ITY
Perc
enta
ge o
f the
ICT
sect
or o
n G
DP
(%, %
gro
wth
by
ICT
sec-
tor)
Mea
sure
s IC
T’s
shar
e of
tota
l val
ue a
dded
and
its
grow
th o
r dec
line.
It in
dica
tes
the
cont
ribut
ion
of th
is s
ecto
r to
GDP
. So
urce
: Eu
rop
ean
Com
mis
sion
, Eu
rost
at d
atab
ase,
htt
p:/
/ec.
euro
pa.
eu/e
uro
stat
/dat
a/d
atab
ase
Perc
enta
ge o
f the
ICT
pers
onne
l in
tota
l em
ploy
men
tM
easu
res
the
shar
e of
em
ploy
men
t gen
erat
ed in
the
ICT
sect
or, i
ndic
atin
g th
e im
-por
tanc
e of
this
sec
tor t
o em
ploy
men
t cre
atio
n.
Sour
ce: E
uro
pea
n C
omm
issi
on, E
uro
stat
dat
abas
e, h
ttp
://e
c.eu
rop
a.eu
/eu
rost
at/d
ata
/dat
abas
e
Inve
stm
ent i
n te
leco
mm
unic
atio
ns in
fras
truc
ture
(% o
f GD
P)M
easu
res
the
leve
l of i
nves
tmen
t in
tele
com
mun
icat
ions
in th
e ec
onom
y. B
eing
a h
ighl
y te
chno
logi
cal s
ecto
r, it
is a
rele
vant
indi
cato
r of t
he e
cono
my’
s co
mm
itmen
t to
keep
ing
up w
ith it
s in
tern
atio
nal p
eers
, esp
ecia
lly in
the
field
of b
road
band
tele
-com
mun
icat
ion.
Sour
ce: N
atio
nal
sta
tist
ics
Inve
stm
ent i
n te
leco
ms
with
pri
vate
par
ticip
atio
n (c
urre
nt U
SD)
Mea
sure
s th
e va
lue
of te
leco
m p
roje
cts
that
hav
e re
ache
d fin
anci
al c
losu
re a
nd d
irect
-ly o
r ind
irect
ly s
erve
the
publ
ic, i
nclu
ding
ope
ratio
n an
d m
anag
emen
t con
trac
ts w
ith m
ajor
cap
ital e
xpen
ditu
re, g
reen
field
pro
ject
s (in
whi
ch a
priv
ate
entit
y or
pub
lic-p
rivat
e jo
int v
entu
re b
uild
s an
d op
erat
es a
ne
w fa
cilit
y), a
nd d
ives
titur
es. I
t is
an in
dica
tor o
f the
leve
l of i
nter
est a
mon
g pr
ivat
e in
vest
ors
in th
e ec
onom
y’s
tele
com
-mun
icat
ions
mar
ket.
Sour
ce: W
orld
Ban
k, O
pen
Dat
a, h
ttp
://d
atab
ank
.wor
ldba
nk
.org
/
Pene
trat
ion
rate
of f
ixed
tele
phon
y (%
)M
easu
red
as th
e ra
tio b
etw
een
the
num
ber o
f act
ive
fixed
tele
phon
e lin
es a
nd th
e po
pula
tion.
Diff
eren
ces
acro
ss e
cono
mie
s co
uld
sugg
est d
iffer
ent
mar
ket c
ondi
tions
for f
ixed
and
mob
ile te
leph
ony
(ope
nnes
s to
war
ds d
iffer
ent o
pera
tors
), m
akin
g it
mor
e co
nven
ient
for u
sers
to o
pt fo
r one
or t
he
othe
r.So
urce
: Nat
ion
al s
tati
stic
s
Pene
trat
ion
rate
of m
obile
tele
phon
y (%
)M
easu
red
as th
e ra
tio b
etw
een
the
num
ber o
f act
ive
mob
ile p
hone
s an
d th
e po
pula
-tio
n. A
hig
h sh
are
mig
ht b
e th
e re
sult
of s
peci
fic li
fest
yles
, low
pr
ices
for m
obile
ser
vice
s or
bet
ter i
nfra
stru
ctur
e co
mpa
red
to fi
xed
tele
phon
e lin
es.
Sour
ce: N
atio
nal
sta
tist
ics
Fixe
d br
oadb
and
pene
trat
ion
rate
(%)
Num
ber o
f fas
t Int
erne
t fix
ed li
nes
divi
ded
by th
e na
tiona
l pop
ulat
ion.
Acc
ess
to b
road
band
is re
leva
nt to
the
com
petit
iven
ess
of a
n ec
onom
y an
d its
en
terp
rises
, as
it al
low
s fa
ster
and
mor
e w
ides
prea
d co
llect
ion
and
diss
emin
atio
n of
info
rmat
ion
and
serv
ices
.So
urce
: Nat
ion
al s
tati
stic
s
Mob
ile w
irel
ess
broa
dban
d pe
netr
atio
n ra
te (%
)N
umbe
r of f
ast I
nter
net m
obile
line
s di
vide
d by
the
natio
nal p
opul
atio
n.
Sour
ce: N
atio
nal
sta
tist
ics
Perc
enta
ge o
f hou
seho
lds
with
Inte
rnet
acc
ess
at h
ome
(all
form
s of
Inte
rnet
usa
ge a
re in
clud
ed. T
he p
opul
atio
n co
nsid
ered
is a
ged
16 to
74)
Mea
sure
s In
tern
et p
enet
ratio
n at
a h
ouse
hold
leve
l. It
is a
lso
an in
dica
tor o
f how
tech
-sav
vy h
ouse
hold
s ar
e re
gard
ing
Inte
rnet
use
.So
urce
: Eu
rop
ean
Com
mis
sion
, Eu
rost
at d
atab
ase,
htt
p:/
/ec.
euro
pa.
eu/e
uro
stat
/dat
a/d
atab
ase
DIG
ITA
L EC
ON
OM
Y
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
1. L
imit
ed a
vaila
bilit
y of
ICTs
: th
e sp
read
of I
CT
infr
astr
uctu
re is
lim
ited
, and
ther
efor
e th
e po
pula
tion
do
es n
ot p
arti
cipa
te in
the
bene
fits
of
ICTs
. Sym
ptom
s of
this
obs
tacl
e in
clud
e on
e or
mor
e of
the
follo
win
g: •lo
w in
vest
men
t in
ICT
tech
nolo
gies
•lo
w b
road
band
pen
etra
tion
rate
•lo
w fr
eque
ncy
of in
tern
et u
se.
Stal
led
loca
l loo
p un
bund
ling
(LLU
). T
he le
ast r
eplic
able
el
emen
t in
the
esta
blis
hmen
t of a
co
nnec
tion
to a
n en
d-us
er lo
catio
n is
the
loca
l loo
p: th
e ac
cess
from
th
e lo
cal t
elep
hone
exc
hang
e to
th
e cu
stom
er’s
pre
mis
es (
also
ca
lled
“the
last
mile
”). A
cces
s ne
twor
ks r
epre
sent
ove
r hal
f of
the
inve
stm
ent b
y a
fixed
net
wor
k op
erat
or a
nd a
lthou
gh c
ompe
titiv
e ac
cess
tech
nolo
gies
are
em
ergi
ng,
the
copp
er a
cces
s ne
twor
k in
fras
truc
ture
is s
till d
iffic
ult
to d
uplic
ate.
Sym
ptom
s of
this
ob
stac
le in
clud
e on
e or
mor
e of
the
follo
win
g: •lim
ited
num
ber o
f alte
rnat
ive
prov
ider
s •hi
gh s
hare
of p
opul
atio
n w
ith n
o In
tern
et s
kills
.
2. L
imit
ed a
cces
s to
Fin
Tech
for
busi
ness
es r
educ
es th
e ac
cess
to
alte
rnat
ive
fund
ing
sour
ces
for
supp
ortin
g ca
sh fl
ow a
nd r
isk
capi
tal
need
s of
bus
ines
ses
(incl
udin
g st
art-
up a
nd s
cale
-up
com
pani
es).
The
mai
n
1. L
imit
ed a
vaila
bilit
y of
ICTs
ne
gati
vely
impa
cts
prod
ucti
vity
and
ov
eral
l GD
P gr
owth
, by
redu
cing
th
e co
ntrib
utio
n of
ICT
good
s an
d se
rvic
es to
tota
l val
ue a
dded
. It
also
has
a n
egat
ive
impa
ct o
n in
divi
dual
s’ li
ves.
Impr
oved
ICT
diff
usio
n ca
n he
lp a
ddre
ss s
ocia
l ch
alle
nges
, with
opp
ortu
nitie
s to
war
ds p
rom
otin
g in
clus
iven
ess;
m
itiga
te r
isks
of e
nerg
y sh
orta
ges,
le
adin
g to
a m
ore
incl
usiv
e so
ciet
y,
whi
ch in
turn
ben
efits
all
citiz
ens.
Acce
ss to
ICTs
allo
ws
fast
er a
nd
mor
e w
ides
prea
d co
llect
ion
and
diss
emin
atio
n of
info
rmat
ion
and
serv
ices
. The
mob
ility
, eas
e of
use
, fle
xibl
e de
ploy
men
t, an
d re
lativ
ely
low
and
dec
linin
g ro
llout
cos
ts o
f te
chno
logi
es, e
spec
ially
mob
ile a
nd
wire
less
one
s, e
nabl
es th
em to
rea
ch
rura
l pop
ulat
ions
with
low
leve
ls o
f in
com
e an
d lit
erac
y.
Seve
ral k
ey d
rive
rs o
f hou
seho
ld
inco
me
are
belie
ved
to b
e lin
ked
to In
tern
et a
cces
s sp
eed
and
the
avai
labi
lity
of In
tern
et a
cces
s in
ge
nera
l: •fa
ster
bro
adba
nd b
oost
s pe
rson
al
prod
ucti
vity
and
allo
ws
for m
ore
flexi
ble
wor
k ar
rang
emen
ts •hi
gher
spe
eds
also
ope
n up
po
ssib
iliti
es fo
r mor
e ad
vanc
ed
hom
e-ba
sed
busi
ness
es, r
epla
cing
or
sup
plem
entin
g or
dina
ry jo
bs •gr
eate
r spe
ed e
nabl
es p
eopl
e to
be
mor
e in
form
ed, b
ette
r edu
cate
d an
d so
cial
ly a
nd c
ultu
rall
y en
rich
ed –
ulti
mat
ely
lead
ing
to a
m
ore
rew
ardi
ng c
aree
r pat
h.
2. L
ack
FinT
ech
is p
artic
ular
ly
hind
erin
g de
velo
pmen
t and
gro
wth
of
digi
tal s
tart
-ups
. How
ever
, its
impa
ct
is m
uch
broa
der a
nd a
ffec
ts th
e ec
onom
y as
a w
hole
as
FinT
ech
has
a po
sitiv
e im
pact
on
incr
easi
ng th
e
2. POLICY AREA DIAGNOSTIC
6564 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Inte
rnet
acc
ess
in h
ouse
hold
s by
deg
ree
of u
rban
isat
ion
(% o
f all
hous
ehol
ds)
Mea
sure
s th
e pe
rcen
tage
of h
ouse
hold
s ha
ving
inte
rnet
acc
ess
base
d on
thei
r loc
atio
n (d
ense
ly-p
opul
ated
are
a, in
term
edia
te u
rban
ized
are
a, s
pars
ely
popu
late
d ar
ea).
It in
dica
tes
the
degr
ee o
f dig
ital d
ivid
e w
ithin
the
econ
omy.
Sour
ce: E
uro
pea
n C
omm
issi
on, E
uro
stat
dat
abas
e, h
ttp
://e
c.eu
rop
a.eu
/eu
rost
at/d
ata
/dat
abas
e
Ente
rpri
ses
with
bro
adba
nd a
cces
s (%
of e
nter
pris
es w
ith a
t lea
st 1
0 pe
rson
s em
ploy
ed)
Mea
sure
s th
e pe
rcen
tage
of e
nter
pris
es th
at h
ave
broa
dban
d ac
cess
, inc
ludi
ng fi
xed
and
mob
ile c
onne
ctio
ns.
Sour
ce: E
uro
pea
n C
omm
issi
on, E
uro
stat
dat
abas
e, h
ttp
://e
c.eu
rop
a.eu
/eu
rost
at/d
ata
/dat
abas
e
Ente
rpri
se h
avin
g re
ceiv
ed o
rder
s on
line
(% o
f ent
erpr
ises
with
at l
east
10
pers
ons
empl
oyed
)M
easu
res
the
perc
enta
ge o
f ent
erpr
ises
that
hav
e re
ceiv
ed o
rder
s on
line
in th
e la
st c
alen
dar y
ear.
This
impl
ies
that
thes
e en
terp
rises
hav
e a
cert
ain
degr
ee o
f ICT
ski
lls.
Sour
ce: E
uro
pea
n C
omm
issi
on, E
uro
stat
dat
abas
e, h
ttp
://e
c.eu
rop
a.eu
/eu
rost
at/d
ata
/dat
abas
e
Acce
ss to
Fin
Tech
for b
usin
esse
sFi
nTec
h de
scrib
es te
chno
logy
-ena
bled
inno
vatio
n in
fina
ncia
l ser
vice
s, re
gard
less
of t
he n
atur
e or
siz
e of
the
prov
ider
of t
he s
ervi
ces.
Wha
t is
the
shar
e of
ent
erpr
ises
that
hav
e ac
cess
to F
inTe
ch?
Wha
t is
the
pace
at w
hich
this
sha
re is
evo
lvin
g?
Sour
ce: N
atio
nal
sta
tist
ics
II. R
EGUL
ATOR
Y FR
AMEW
ORK
Entr
y re
gula
tion
Is fr
ee e
ntry
per
mitt
ed in
at l
east
one
mar
ket i
n th
e se
ctor
(i.e
. can
any
one
ente
r the
mar
ket,
prov
ided
they
mee
t lic
ensi
ng c
riter
ia)?
Do
law
s or
re
gula
tions
rest
rict,
in a
t lea
st o
ne m
arke
t in
the
sect
or, t
he n
umbe
r of c
ompe
titor
s al
low
ed to
ope
rate
a b
usi-n
ess
(e.g
. by
esta
blis
hing
a le
gal m
onop
oly
or d
uopo
ly, o
r a li
mite
d nu
mbe
r of f
ranc
hise
s or
lice
nses
)? Is
unb
undl
ing
of th
e lo
cal l
oop
requ
ired?
Is m
obile
pho
ne in
terc
onne
ctio
n m
anda
ted?
Sour
ce: O
ECD
, In
dic
ator
s of
Pro
du
ct M
arke
t R
egu
lati
on, N
atio
nal
sta
tist
ics
Free
flow
of d
ata
Are
ther
e ru
les
and
regu
latio
ns im
pedi
ng th
e fr
ee fl
ow o
f dat
a? Is
ther
e a
legi
slat
ive
fram
ewor
k on
acc
ess
to a
nd tr
ansf
er o
f dat
a, d
ata
port
abili
ty a
nd
liabi
lity
of n
on-p
erso
nal,
mac
hine
-gen
erat
ed d
igita
l dat
a? T
o w
hat e
xten
t is
the
exis
ting
legi
slat
ion
in th
is d
omai
n al
igne
d w
ith th
e EU
legi
slat
ion
in th
is
area
? So
urce
: Nat
ion
al le
gisl
atio
n, N
atio
nal
sta
tist
ics
Publ
ic o
wne
rshi
p (%
of s
hare
s)W
hat p
erce
ntag
e of
sha
res
does
the
gove
rnm
ent o
wn,
eith
er d
irect
ly o
r ind
irect
ly, i
n th
e la
rges
t firm
? Si
mpl
e av
erag
e ov
er fo
ur s
egm
ents
(fix
ed-li
ne
netw
ork,
fixe
d-lin
e se
rvic
es, m
obile
ser
vice
s, In
tern
et s
ervi
ces)
.So
urce
: OEC
D, I
nd
icat
ors
of P
rod
uct
Mar
ket
Reg
ula
tion
, Nat
ion
al s
tati
stic
s
Mar
ket s
truc
ture
How
man
y fir
ms
com
pete
in th
e sa
me
mar
ket?
Sim
ple
aver
age
over
two
segm
ents
(fix
ed-li
ne s
ervi
ces,
mob
ile s
ervi
ces)
. Wha
t is
the
perc
enta
ge m
arke
t sh
are
of n
ew e
ntra
nts
in th
e se
ctor
?So
urce
: OEC
D, I
nd
icat
ors
of P
rod
uct
Mar
ket
Reg
ula
tion
, Nat
ion
al s
tati
stic
s
DIG
ITA
L EC
ON
OM
Y (
cont
.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
sym
ptom
of t
his
obst
acle
is :
•lo
w te
chno
logy
-ena
bled
inno
vatio
n in
fina
ncia
l ser
vice
s.
3. L
ow c
apac
ity
of th
e na
tion
al
regu
lato
ry a
utho
rity
(N
RA)
to
effe
ctiv
ely
perf
orm
its
regu
lato
ry
func
tion
s. D
espi
te c
ontin
uing
al
ignm
ent o
f nat
iona
l ele
ctro
nic
com
mun
icat
ions
legi
slat
ion
to th
e EU
acq
uis,
the
curr
ent i
nstit
utio
nal
fram
ewor
k of
ten
falls
sho
rt o
f en
surin
g an
ade
quat
e le
vel o
f fin
anci
al
and
oper
atio
nal i
ndep
ende
nce
for
the
NR
A. S
ympt
oms
of th
is o
bsta
cle
incl
ude
one
or m
ore
of th
e fo
llow
ing:
•lim
ited
budg
et fo
r per
form
ing
its
dutie
s •lo
w n
umbe
r of e
mpl
oyee
s in
ad
min
istr
atio
n •go
vern
men
t int
erfe
renc
e in
its
reso
lutio
ns.
Des
pite
the
mar
ket b
eing
ope
ned
to
com
peti
tors
, the
incu
mbe
nt o
pera
tor
rem
ains
the
dom
inan
t ope
rato
r, es
peci
ally
in fi
xed-
line
tele
phon
y.
Even
whe
n th
e in
cum
bent
has
low
er
mar
ket s
hare
s, it
oft
en s
uppl
ies
100%
of
bits
trea
m c
onne
ctio
ns to
alte
rnat
ive
oper
ator
s in
the
who
lesa
le m
arke
t. Sy
mpt
oms
of th
is o
bsta
cle
incl
ude
one
or m
ore
of th
e fo
llow
ing:
•lo
w in
vest
men
t in
new
infr
astr
uctu
re •lo
w b
road
band
pen
etra
tion
rate
•hi
gh a
cces
s co
sts.
Dif
fere
nt fo
rms
of p
rice
con
trol
on
fixe
d-lin
e te
leph
ony
tari
ffs
for
incu
mbe
nt o
pera
tors
. In
econ
omie
s w
here
mon
opol
y pr
ovid
ers
kept
m
onth
ly r
enta
l and
loca
l cal
l cha
rges
lo
w in
ord
er to
mak
e ba
sic
serv
ice
mor
e af
ford
able
, thi
s w
as tr
aditi
onal
ly
subs
idis
ed b
y ex
cess
ive
pric
es o
n
com
petit
iven
ess
of th
e lo
cal m
arke
t, th
roug
h lo
wer
ing
barr
iers
to e
ntry
fo
r new
com
ers,
whi
le p
rese
rvin
g fa
ir co
mpe
titio
n, a
leve
l pla
ying
fiel
d an
d in
cent
ives
to in
nova
te.
3. L
ow a
dmin
istr
ativ
e ca
paci
ty
prev
ents
the
adeq
uate
mon
itor
ing
of o
pera
tors
wit
h si
gnif
ican
t mar
ket
pow
er, u
sual
ly th
e in
cum
bent
. Thi
s ef
fect
ivel
y pr
even
ts a
fair
open
ing
of
the
mar
ket t
o al
tern
ativ
e op
erat
ors,
re
duci
ng c
ompe
titi
on o
n th
e m
arke
t, an
d th
us m
aint
aini
ng h
igh
pric
es th
at le
ad to
low
er a
cces
s to
te
leco
mm
unic
atio
ns.
2. POLICY AREA DIAGNOSTIC
65ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Tele
com
mun
icat
ion
mar
ket r
efor
ms
(whe
re 1
= fu
ll st
ate
cont
rol,
4+ =
full
liber
alis
atio
n)Th
is E
BRD
indi
cato
r pro
vide
s a
quan
titat
ive
foun
datio
n fo
r ana
lysi
ng p
rogr
ess
in th
e re
form
of t
he te
leco
mm
unic
atio
ns m
arke
t. It
capt
ures
law
s, m
arke
t re
gula
tion
and
pric
e co
ntro
l fac
tors
to a
sses
s th
e sc
ore.
Sour
ce:
EBR
D,
Tra
nsi
tion
In
dic
ator
s, h
ttp
://w
ww
.ebr
d.c
om/w
hat
-we-
do
/eco
nom
ic-r
esea
rch
-an
d-d
ata
/dat
a/f
orec
asts
-mac
ro-d
ata-
tran
siti
on-
ind
icat
ors.
htm
l
Fixe
d br
oadb
and
Inte
rnet
mon
thly
acc
ess
fee
in e
uros
, inc
ludi
ng V
alue
-add
ed ta
x (V
AT) (
incu
mbe
nt v
s. a
ltern
ativ
e)Av
erag
e co
st o
f a m
onth
ly s
ubsc
riptio
n to
bro
adba
nd In
tern
et, p
er u
ser.
In g
ener
al, m
ore
com
petit
ive
tele
com
mun
icat
ions
mar
kets
will
hav
e lo
wer
ac
cess
fees
than
oth
-ers
, dep
endi
ng a
lso
on th
e di
ffusi
on a
nd q
ualit
y of
tele
com
mun
icat
ions
infr
astr
uctu
re in
the
coun
try
(hig
h m
aint
enan
ce c
osts
will
pr
obab
ly le
ad to
hig
her u
sage
cos
ts a
s w
ell).
Sour
ce: N
atio
nal
sta
tist
ics
Res
iden
tial c
harg
es fo
r: a
10-
min
ute
loca
l cal
l, a
10-m
inut
e fix
ed to
long
-dis
tanc
e ca
ll, a
10-
min
ute
fixed
to m
obile
cal
l and
a 1
0-m
inut
e fix
ed to
in
tern
atio
nal c
all i
n eu
ros,
incl
udin
g VA
T (i
ncum
bent
VS
alte
rnat
ive)
Pric
e is
an
indi
cato
r of o
penn
ess
of th
e m
arke
t. Ef
fect
ive
com
petit
ion
will
redu
ce p
rices
, and
the
rem
oval
of r
egul
ator
y an
d ph
ysic
al b
arrie
rs to
alte
rnat
ive
prov
ider
s sh
ould
allo
w th
em to
kee
p pr
ices
low
and
ena
ble
them
to m
ake
mor
e ag
gres
sive
pric
e of
fers
than
the
incu
mbe
nt o
r sta
te-o
wne
d op
erat
or.
Sour
ce: N
atio
nal
sta
tist
ics
III. D
IGIT
AL S
KILL
SIn
divi
dual
s’ le
vel o
f com
pute
r ski
lls (%
of t
he to
tal n
umbe
r of i
n-di
vidu
als
aged
16
to 7
4)U
sing
a s
elf-a
sses
smen
t app
roac
h, it
mea
sure
s w
heth
er in
divi
dual
s ha
ve c
arrie
d ou
t spe
cific
task
s re
late
d to
com
pute
r use
. Tas
ks in
clud
e th
e ab
ility
to
copy
or m
ove
files
and
fold
ers,
cop
y an
d pa
ste
tool
s, u
se b
asic
arit
hmet
ic fo
rmul
as in
spr
eads
heet
s, c
ompr
ess
files
, con
nect
and
inst
all n
ew d
evic
es,
and
writ
e a
com
pute
r pro
gram
me.
Sour
ce: E
uro
pea
n C
omm
issi
on, E
uro
stat
dat
abas
e, h
ttp
://e
c.eu
rop
a.eu
/eu
rost
at/d
ata
/dat
abas
e
Indi
vidu
als’
leve
l of i
nter
net s
kills
(% o
f the
tota
l num
ber o
f ind
i-vi
dual
s ag
ed 1
6 to
74)
Usi
ng a
sel
f-ass
essm
ent a
ppro
ach,
it m
easu
res
whe
ther
indi
vidu
als
have
car
ried
out s
peci
fic ta
sks
rela
ted
to in
tern
et u
se. T
asks
incl
ude
the
use
of
sear
ch e
ngin
es to
find
info
rmat
ion,
sen
ding
em
ails
with
att
achm
ents
, pos
ting
mes
sage
s to
cha
troo
ms,
us-
ing
the
inte
rnet
to m
ake
tele
phon
e ca
lls,
usin
g pe
er-to
-pee
r file
sha
ring
for e
xcha
ng-in
g m
ovie
s an
d m
usic
, etc
.So
urce
: Eu
rop
ean
Com
mis
sion
, Eu
rost
at d
atab
ase,
htt
p:/
/ec.
euro
pa.
eu/e
uro
stat
/dat
a/d
atab
ase
Activ
ities
per
form
ed o
ver t
he In
tern
et b
y in
divi
dual
s ov
er th
e la
st 1
2 m
onth
sTh
ese
can
incl
ude
findi
ng o
ut in
form
atio
n on
goo
ds a
nd s
ervi
ces,
hea
lth s
ervi
ces,
or p
ublic
ser
vice
s in
gen
eral
; eng
agem
ent w
ith p
ublic
aut
horit
ies;
e-
mai
ls; v
oice
ove
r Int
erne
t pro
toco
l (VO
IP) c
alls
; ins
tant
mes
sagi
ng; e
-trad
e; e
-ban
king
ser
vice
s; s
tudy
-ing;
and
kno
wle
dge-
rela
ted
activ
ities
. Thi
s is
an
indi
cato
r of g
ener
al In
tern
et li
tera
cy in
the
coun
try.
Sour
ce: N
atio
nal
sta
tist
ics
Freq
uenc
y of
inte
rnet
use
(% o
f ind
ivid
uals
age
d 16
to 7
4)M
easu
res
how
ofte
n in
divi
dual
s ac
cess
the
Inte
rnet
. It i
s an
indi
cato
r of t
he in
tegr
a-tio
n of
Inte
rnet
into
dai
ly li
fe a
s w
ell a
s th
e fa
mili
arity
of u
sers
with
th
e In
tern
et. T
he p
erce
ntag
es a
re p
rese
nted
bas
ed o
n w
heth
er u
sers
acc
ess
the
Inte
rnet
on
a da
ily b
ase,
at l
east
onc
e a
wee
k (b
ut n
ot e
very
day
) or a
t le
ast o
nce
in th
e la
st th
ree
mon
ths.
Sour
ce: E
uro
pea
n C
omm
issi
on, E
uro
stat
dat
abas
e, h
ttp
://e
c.eu
rop
a.eu
/eu
rost
at/d
ata
/dat
abas
e
ICT
in s
choo
l cur
ricu
laAs
sess
es IC
T cu
rric
ula
in s
choo
l, w
heth
er c
ompu
ters
and
Inte
rnet
acc
ess
are
in p
lace
, and
whe
ther
ther
e is
suf
ficie
nt p
rofic
ient
teac
hing
cap
acity
.So
urc
e: N
atio
na
l sta
tist
ics
DIG
ITA
L EC
ON
OM
Y (
cont
.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
natio
nal a
nd in
tern
atio
nal c
alls
. The
en
ding
of m
onop
olie
s ha
s m
eant
that
in
cum
bent
ope
rato
rs h
ave
to b
ring
thei
r tar
iffs
mor
e in
to li
ne w
ith th
e un
derl
ying
cos
ts o
f pro
vidi
ng th
eir
serv
ices
. Sym
ptom
s of
this
obs
tacl
e in
clud
e on
e or
mor
e of
the
follo
win
g: •lo
w lo
cal c
all p
rice
s fo
r the
in
cum
bent
ope
rato
r com
pare
d to
al
tern
ativ
es •hi
gh lo
ng-d
ista
nce
call
pric
es fo
r the
in
cum
bent
com
pare
d to
alte
rnat
ives
•hi
dden
cos
ts s
uch
as m
onth
ly fi
xed
fees
.
4. U
njus
tifi
ed o
r dis
prop
orti
onat
e da
ta lo
cati
on r
estr
icti
ons
refe
r to
rul
es o
r pra
ctic
es th
at s
peci
fy
a pa
rtic
ular
, oft
en g
eogr
aphi
cally
de
fined
, are
a w
here
spe
cific
dat
a ne
eds
to b
e co
llect
ed, p
roce
ssed
or
stor
ed. S
ympt
oms
of th
is o
bsta
cle
incl
ude
one
or m
ore
of th
e fo
llow
ing:
•ba
rrie
rs a
roun
d ac
cess
to a
nd
tran
sfer
of n
on-p
erso
nal m
achi
ne-
gene
rate
d da
ta •lim
ited
port
abili
ty o
f non
-per
sona
l da
ta •in
tero
pera
bilit
y of
dat
a •la
ck o
f sta
ndar
ds
5. U
nder
deve
lope
d IC
T sk
ills
in th
e po
pula
tion
: a la
rge
shar
e of
the
popu
latio
n ha
s lit
tle o
r no
unde
rsta
ndin
g of
ICTs
. Sym
ptom
s of
th
is o
bsta
cle
may
incl
ude:
•lo
w p
ublic
inve
stm
ent i
n IC
T ed
ucat
ion
•ab
senc
e or
lim
ited
num
ber o
f ICT
co
urse
s an
d tr
aini
ngs
in s
choo
l •ab
senc
e or
lim
ited
num
ber o
f ICT
co
urse
s an
d tr
aini
ngs
at w
ork.
4. F
ree
flow
of d
ata
is n
eces
sary
for
the
deve
lopm
ent a
nd u
se o
f inn
ovat
ive
data
tech
nolo
gies
and
ser
vice
s.
Smal
l and
med
ium
ent
erpr
ises
in
clud
ing
rese
arch
ers
and
inno
vato
rs
part
icul
arly
ben
efit
from
impr
oved
bu
sine
ss c
ondi
tions
. SM
Es c
an b
oth
bene
fit a
s pr
ovid
ers
and
user
s of
da
ta a
nd d
ata
tech
nolo
gies
and
se
rvic
es th
at c
an b
e us
ed fo
r the
co
llect
ion,
pro
cess
ing
and
stor
age
of
data
. Unj
ustif
ied
or d
ispr
opor
tiona
te
rest
rict
ions
of f
low
of d
ata
can
have
ne
gativ
e im
pact
on
econ
omic
gro
wth
, co
mpe
titiv
enes
s, in
nova
tion,
job
crea
tion
and
soci
etal
pro
gres
s in
ge
nera
l.
5. L
imite
d IC
T sk
ills
impl
y th
at
the
scho
ol c
urri
cula
are
not
wel
l de
velo
ped
enou
gh. S
tude
nts
fini
sh
scho
ol w
itho
ut r
elev
ant s
kills
th
at th
ey w
ould
nee
d in
the
labo
ur
mar
ket.
As a
con
sequ
ence
, the
se
stud
ents
will
be
less
pro
duct
ive
and
less
fam
iliar
with
ICTs
whe
n en
terin
g th
e la
bour
mar
ket,
whi
ch w
ill in
turn
ne
gativ
ely
impa
ct th
e pr
oduc
tivity
of
firm
s fo
r whi
ch th
ey w
ill w
ork.
2. POLICY AREA DIAGNOSTIC
6766 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
IV. E
-GOV
ERNM
ENT
E-G
over
nmen
t Dev
elop
men
t Ind
ex (
EGD
I)M
easu
res
the
read
ines
s an
d ca
paci
ty o
f nat
iona
l adm
inis
trat
ions
to u
se IC
T to
del
iver
pub
lic s
ervi
ces.
The
EG
DI is
bas
ed o
n an
exp
ert a
sses
smen
t su
rvey
of t
he o
nlin
e pr
esen
ce o
f all
Uni
ted
Nat
ions
Mem
ber S
tate
s, w
hich
ass
esse
s na
tiona
l web
site
s an
d ho
w e
-gov
ernm
ent p
olic
ies
and
stra
tegi
es a
re
appl
ied
in g
ener
al a
nd in
spe
cific
sec
-tors
for t
he d
eliv
ery
of e
ssen
tial s
ervi
ces.
Sou
rce:
Un
ited
Nat
ion
s E-
Go
vern
men
t S
urv
ey
E-Pa
rtic
ipat
ion
Inde
x (E
PI)
Ref
lect
s th
e e-
part
icip
atio
n m
echa
nism
s th
at a
re d
eplo
yed
by a
gov
ernm
ent a
s co
m-p
ared
to a
ll ot
her c
ount
ries.
Thi
s m
easu
re o
ffers
insi
ghts
on
the
avai
labi
lity
and
rele
vanc
e of
par
ticip
ator
y se
rvic
es a
vaila
ble
on g
over
nmen
t web
site
s.So
urc
e: U
nit
ed N
atio
ns
E-G
ove
rnm
ent
Su
rvey
Indi
vidu
als
usin
g th
e in
tern
et fo
r int
erac
tion
wit
h pu
blic
aut
hori
-tie
sM
easu
res
whe
ther
, with
in th
e la
st 1
2 m
onth
s, in
divi
dual
s us
ed in
tern
et to
inte
ract
with
pub
lic a
utho
ritie
s fo
r one
of t
he fo
llow
ing
reas
ons:
obt
aini
ng
info
rmat
ion
from
pub
lic a
utho
ritie
s’ w
ebsi
tes,
dow
nloa
ding
offi
cial
form
s, s
ubm
ittin
g co
mpl
eted
form
s.
Sou
rce:
Eu
rop
ean
Co
mm
issi
on
, Eu
rost
at d
atab
ase
, htt
p:/
/ec.
euro
pa
.eu
/eu
rost
at/d
ata
/dat
aba
se
DIG
ITA
L EC
ON
OM
Y (
cont
.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
6. L
imit
ed n
umbe
r of e
-gov
ernm
ent
serv
ices
: bot
h ci
tizen
s an
d en
terp
rise
s ca
nnot
con
sult
law
s,
decr
ees
and
natio
nal s
trat
egie
s on
th
e In
tern
et, o
r hav
e on
ly a
cces
s to
a
limite
d nu
mbe
r of t
hem
.Sy
mpt
oms
of th
is o
bsta
cle
may
in
clud
e:
•di
ffic
ulty
in a
cces
sing
gov
ernm
ent
info
rmat
ion
•cu
mbe
rsom
e bu
reau
crat
ic
proc
edur
es to
obt
ain
licen
ces,
in
form
atio
n an
d do
cum
enta
tion
•in
crea
sed
cost
s fo
r pri
vate
op
erat
ors
and
busi
ness
es.
Mor
eove
r, lim
ited
unde
rsta
ndin
g of
ICTs
in e
nter
pris
es n
egat
ivel
y im
pact
s th
eir p
rodu
ctiv
ity a
nd a
bilit
y to
ens
ure
effe
ctiv
e an
d ef
ficie
nt
com
mun
icat
ions
with
cus
tom
ers
and
supp
liers
, and
pre
vent
s th
em fr
om
acce
ssin
g re
gion
al a
nd g
loba
l val
ue
chai
ns. T
his
in tu
rn n
egat
ivel
y im
pact
s th
e co
mpe
titiv
enes
s of
the
econ
omy
as a
who
le.
6. T
he d
evel
opm
ent o
f e-g
over
nmen
t pl
atfo
rms
can
fost
er p
arti
cipa
tory
ap
proa
ches
to p
olic
y m
akin
g.
Invo
lvin
g st
akeh
olde
rs in
dec
isio
n m
akin
g, la
w a
dopt
ion
and,
pub
lic
stra
tegy
form
ulat
ion,
doe
s no
t onl
y se
rve
purp
oses
of t
rans
pare
ncy
and
acco
unta
bilit
y, b
ut it
als
o pr
ovid
es
ente
rpri
ses
and
indi
vidu
als
with
ea
sily
acc
essi
ble
info
rmat
ion
on
the
legi
slat
ive
stat
us q
uo in
thei
r re
spec
tive
fiel
ds, e
nsur
ing
that
ev
eryb
ody
is a
war
e of
the
curr
ent
situ
atio
n. T
his
in tu
rn c
an im
prov
e th
e bu
sine
ss e
nviro
nmen
t and
the
ease
of
doi
ng b
usin
ess,
whi
ch c
an b
oost
pr
oduc
tivity
and
gro
wth
.
2. POLICY AREA DIAGNOSTIC
67ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Education and skills Policy area indicators, structural obstacles and impact on competitiveness and growth
67ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
69ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 69ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
69ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 69ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
I. ED
UCAT
ION
ACCE
SS A
ND A
TTAI
NMEN
T
Part
icip
atio
n ra
te in
ear
ly c
hild
hood
edu
cati
on a
nd c
are
(ECE
C) (
% o
f 3-6
yea
r-ol
ds)
Mea
sure
s th
e sh
are
of c
hild
ren
aged
3 to
the
first
yea
r of c
ompu
lsor
y sc
hool
ing
atte
ndin
g EC
EC. E
arly
chi
ldho
od e
duca
tion
and
care
is e
ssen
tial
to b
uild
bas
ic s
kills
and
red
uce
ineq
ualit
ies.
The
re a
re th
ree
broa
d ra
tiona
les
for s
uppo
rtin
g ea
rly
child
hood
car
e an
d ed
ucat
ion.
Fir
st, i
t has
a
sign
ifica
nt e
cono
mic
and
soc
ial i
mpa
ct, r
aisi
ng a
n ec
onom
y’s
educ
atio
nal o
utco
me
and
bene
fitin
g th
e di
sadv
anta
ged
the
mos
t. Se
cond
, it
supp
orts
fam
ilies
and
con
trib
utes
to b
oost
ing
fem
ale
empl
oym
ent.
Third
, it c
an p
lay
a cr
ucia
l rol
e in
com
batin
g ch
ild p
over
ty a
nd h
elpi
ng
child
ren
over
com
e ed
ucat
iona
l dis
adva
ntag
e.So
urc
es:
Euro
pea
n C
om
mis
sio
n,
Euro
stat
dat
aba
se,
edu
cati
on
an
d t
rain
ing
htt
p:/
/ec.
euro
pa
.eu
/eu
rost
at/w
eb/e
du
cati
on
-an
d-t
rain
ing
; ed
uca
tio
n m
inis
trie
s.
Hig
hest
edu
cati
onal
att
ainm
ent (
peop
le a
ged
15 a
nd o
ver)
Mea
sure
s th
e ed
ucat
iona
l att
ainm
ent o
f the
who
le p
opul
atio
n br
oken
dow
n in
to fo
ur c
ateg
orie
s: le
ss th
an p
rimar
y, p
rimar
y, s
econ
dary
an
d te
rtia
ry (
plus
the
not d
efin
able
and
not
sta
ted
cate
gori
es).
Edu
catio
n is
an
impo
rtan
t det
erm
inan
t of e
cono
mic
gro
wth
. Hig
her l
evel
s of
ed
ucat
iona
l att
ainm
ent l
ead
to a
mor
e sk
illed
and
pro
duct
ive
wor
kfor
ce a
nd to
a m
ore
effic
ient
pro
duct
ion
of g
oods
and
ser
vice
s. T
his
in tu
rn
form
s th
e ba
sis
for f
aste
r eco
nom
ic g
row
th a
nd r
isin
g liv
ing
stan
dard
s.
Sou
rces
: In
tern
atio
na
l La
bo
ur
Org
an
izat
ion
(IL
O),
Key
In
dic
ato
rs o
f th
e La
bo
ur
Ma
rket
(K
ILM
) d
atab
ase
, w
ww
.ilo
.org
/glo
ba
l/st
atis
tics
-a
nd
-dat
aba
ses/
rese
arc
h-a
nd
-dat
aba
ses/
kil
m/l
an
g--e
n/i
nd
ex.h
tm;
ILO
(20
10),
A S
kil
led
Wo
rkfo
rce
for
Str
on
g, S
ust
ain
able
an
d B
ala
nce
d
Gro
wth
: A G
20 T
rain
ing
Str
ateg
y, w
ww
.oec
d.o
rg/g
20/s
um
mit
s/to
ron
to/G
20-S
kil
ls-S
trat
egy.
pd
f.
Part
icip
atio
n in
life
long
lear
ning
am
ong
25-6
4 ye
ar-o
lds
(%)
Mea
sure
s th
e sh
are
of 2
5-64
yea
r-ol
ds w
ho h
ave
take
n an
y fo
rm o
f life
long
lear
ning
(LL
L) p
rogr
amm
e, w
heth
er in
-job
trai
ning
or s
tate
-sp
onso
red
cour
ses.
Par
ticip
atio
n in
LLL
is a
n im
port
ant d
eter
min
ant o
f lab
our p
rodu
ctiv
ity: w
orke
rs n
eed
to m
aint
ain
and
upgr
ade
skill
s th
roug
h co
ntin
ued
lear
ning
to s
tay
in li
ne w
ith c
hang
es in
labo
ur m
arke
t dev
elop
men
ts a
nd n
eeds
. So
urc
es:
Euro
pea
n C
om
mis
sio
n,
Euro
stat
dat
aba
se,
edu
cati
on
an
d t
rain
ing
htt
p:/
/ec.
euro
pa
.eu
/eu
rost
at/w
eb/e
du
cati
on
-an
d-t
rain
ing
; ed
uca
tio
n m
inis
trie
s.
Avai
labi
lity
of o
n-th
e-jo
b tr
aini
ngIn
dica
tor b
ased
on
the
Wor
ld E
cono
mic
For
um (
WEF
) Glo
bal C
ompe
titiv
enes
s su
rvey
whi
ch r
efle
cts
firm
res
pons
es to
the
follo
win
g qu
estio
ns:
“In
your
cou
ntry
, how
ava
ilabl
e ar
e hi
gh-q
ualit
y, p
rofe
ssio
nal t
rain
ing
serv
ices
?” a
nd “
In y
our c
ount
ry, t
o w
hat e
xten
t do
com
pani
es in
vest
in
trai
ning
and
em
ploy
ee d
evel
opm
ent?
” (1
= n
ot a
t all;
7 =
to a
gre
at e
xten
t) fo
r 201
4-15
. Wei
ghte
d av
erag
e of
ove
r 13
213
surv
eys
in 1
34
econ
omie
s. T
his
indi
cato
r pro
vide
s in
sigh
ts o
n th
e av
aila
bilit
y of
opp
ortu
nitie
s fo
r on-
the-
job
skill
dev
elop
men
t and
upg
radi
ng w
hich
are
es
sent
ial t
o co
mpl
emen
t the
edu
catio
n sy
stem
, hel
ping
you
ng p
eopl
e ra
ise
thei
r ski
ll le
vel a
nd g
ain
wor
k ex
peri
ence
. So
urc
es: W
orl
d E
con
om
ic F
oru
m, G
lob
al C
om
pet
itiv
enes
s In
dex
Rep
ort
, ww
w3.
wef
oru
m.o
rg/d
ocs
/gcr
/201
5-20
16/G
lob
al_
Co
mp
etit
iven
ess_
Rep
ort
_201
5-20
16.p
df;
OEC
D (
2015
), A
dap
tin
g to
th
e C
ha
ng
ing
Face
of
Wo
rk, w
ww
.oec
d.o
rg/e
mp
loy
men
t/A
dap
tin
g-to
-th
e-ch
an
gin
g-fa
ce-
of-
wo
rk.p
df.
II. Q
UALI
TY O
F TH
E ED
UCAT
ION
SYST
EM A
ND S
KILL
S
1. R
esou
rces
Gov
ernm
ent e
xpen
ditu
re o
n ed
ucat
ion
(% o
f GD
P)M
easu
res
tota
l gen
eral
(lo
cal,
regi
onal
and
cen
tral
) gov
ernm
ent e
xpen
ditu
re o
n ed
ucat
ion
(cur
rent
, cap
ital a
nd tr
ansf
ers)
, exp
ress
ed a
s a
perc
enta
ge o
f tot
al G
DP.
It s
igna
ls a
sta
te’s
com
mitm
ent t
o th
e sy
stem
atic
impr
ovem
ent o
f the
edu
catio
n sy
stem
, alth
ough
it is
not
a d
irect
m
easu
re o
f bet
term
ent i
n its
elf (
qual
ity o
f exp
endi
ture
).So
urc
es:
Euro
pea
n C
om
mis
sio
n,
Euro
stat
dat
aba
se,
edu
cati
on
an
d t
rain
ing
htt
p:/
/ec.
euro
pa
.eu
/eu
rost
at/w
eb/e
du
cati
on
-an
d-t
rain
ing
; W
orl
d B
an
k, W
orl
d D
evel
op
men
t In
dic
ato
rs, h
ttp
://d
ata
.wo
rld
ba
nk
.org
/dat
a-ca
talo
g/w
orl
d-d
evel
op
men
t-in
dic
ato
rs; e
du
cati
on
min
istr
ies
EDU
CA
TIO
N A
ND
SK
ILLS
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
1. E
duca
tion
al a
ttai
nmen
t and
ski
lls
leve
ls a
re lo
w. A
ttai
nmen
t is
low
be
caus
e th
e re
turn
s on
edu
catio
n ar
e lo
w a
nd p
eopl
e do
not
hav
e th
e in
cent
ive
to r
emai
n in
sch
ool.
Sym
ptom
s in
clud
e:
•H
igh
rate
s of
ear
ly le
aver
s fr
om
educ
atio
n an
d tr
aini
ng a
t all
educ
atio
nal l
evel
s, n
egat
ivel
y af
fect
ing
over
all l
evel
s of
edu
catio
n at
tain
men
t •lo
w p
artic
ipat
ion
rate
s in
ear
ly
child
hood
edu
catio
n •hi
gh n
umbe
rs o
f stu
dent
s dr
oppi
ng
out a
fter
low
er s
econ
dary
sch
ool.
•hi
gher
than
ave
rage
sha
re o
f NEE
Ts •lo
w r
etur
ns a
cros
s di
ffer
ent l
evel
s of
ed
ucat
ion.
Lim
ited
life
long
lear
ning
op
port
unit
ies.
Sca
rcity
of l
ifelo
ng
lear
ning
and
trai
ning
opp
ortu
nitie
s pr
even
ts th
e ef
fect
ive
recy
clin
g of
peo
ple
in th
e w
orkf
orce
(or
pr
ospe
ctiv
e w
orkf
orce
). S
ympt
oms
incl
ude:
•ed
ucat
iona
l ins
titut
ions
pro
vidi
ng
lifel
ong
lear
ning
and
trai
ning
are
no
n-ex
iste
nt, s
carc
e or
har
d to
find
•pu
blic
em
ploy
men
t ser
vice
s la
rgel
y pr
ovid
e pa
ssiv
e m
easu
res
rath
er
than
act
ives
one
s, fo
cusi
ng o
n pr
ovid
ing
unem
ploy
men
t sub
sidi
es
and
supp
ortin
g ea
rly
retir
emen
t sc
hem
es in
stea
d of
trai
ning
and
ot
her e
mpl
oym
ent i
ncen
tives
•th
e pr
ivat
e se
ctor
is u
nabl
e or
un
will
ing
to ta
ke o
n th
e en
tire
burd
en o
f pro
vidi
ng a
dditi
onal
tr
aini
ng.
2. G
over
nmen
t spe
ndin
g on
ed
ucat
ion
is lo
w o
r sub
optim
al.
Gov
ernm
ent e
xpen
ditu
re o
n ed
ucat
ion
does
not
hav
e an
impa
ct o
n ov
eral
l ed
ucat
iona
l qua
lity
if sp
endi
ng is
in
adeq
uate
. Sym
ptom
s in
clud
e:
1. E
duca
tiona
l att
ainm
ent h
as a
cr
itica
l im
pact
on
econ
omic
gro
wth
, co
mpe
titiv
enes
s an
d so
cial
out
com
es:
•In
crea
sed
know
ledg
e an
d sk
ills
have
a d
irec
t ret
urn
in th
e fo
rm o
f in
crea
sed
prod
uctiv
ity.
An
adeq
uate
ed
ucat
ion
and
skill
s-de
velo
pmen
t sy
stem
tran
smits
the
know
ledg
e an
d co
mpe
tenc
ies
that
hel
p ge
nera
te
and
impl
emen
t the
new
idea
s w
hich
dr
ive
inno
vatio
n an
d te
chno
logi
cal
prog
ress
, with
a s
ubse
quen
t pos
itive
im
pact
on
expo
rts,
inve
stm
ent a
nd
cons
umpt
ion.
•In
con
tras
t, an
insu
ffic
ient
ly
educ
ated
wor
kfor
ce w
ill h
ave
a ne
gativ
e im
pact
on
inve
stm
ent
as th
e ec
onom
y be
com
es le
ss
attr
activ
e, e
spec
ially
in th
e kn
owle
dge-
and
cap
ital-i
nten
sive
se
ctor
s. P
rodu
ctiv
ity
per w
orke
r is
like
ly to
be
low
er, a
s w
ill b
e th
e va
lue
adde
d of
the
eco
nom
y’s
expo
rts.
•At
tain
men
t als
o ha
s a
dire
ct im
pact
on
labo
ur m
arke
t out
com
es,
affe
ctin
g no
t jus
t the
leve
l of
empl
oym
ent,
but
als
o w
orki
ng
cond
itio
ns, e
spec
ially
sin
ce h
ighe
r le
vels
of e
duca
tiona
l att
ainm
ent
are
asso
ciat
ed w
ith h
ighe
r sal
arie
s (E
duca
tion
and
labo
ur m
arke
ts,
Anal
ysin
g gl
obal
pat
tern
s w
ith th
e KI
LM, I
LO, 2
015)
. The
se in
turn
ha
ve a
dire
ct e
ffec
t on
inte
rnal
co
nsum
ptio
n as
hig
her i
ncom
es
tran
slat
e in
to m
ore
disp
osab
le
inco
me,
and
pov
erty
red
uctio
n an
d in
equa
lity,
as
inco
me
ineq
ualit
ies
fall
whe
n th
ere
is a
larg
e po
ol o
f ed
ucat
ed w
orke
rs in
ade
quat
ely-
rem
uner
ated
pos
ition
s.
2. In
adeq
uate
res
ourc
es d
evot
ed
to th
e ed
ucat
ion
syst
em h
ave
impl
icat
ions
for c
ompe
titiv
enes
s,
grow
th a
nd s
ocia
l out
com
es:
•G
reat
er p
ublic
spe
ndin
g on
all
educ
atio
nal l
evel
s ha
s a
posi
tive
im
pact
on
educ
atio
n at
tain
men
t an
d qu
alit
y (p
artic
ular
ly in
prim
ary
and
seco
ndar
y ed
ucat
ion)
and
it c
an
help
boo
st o
vera
ll ec
onom
ic g
row
th
2. POLICY AREA DIAGNOSTIC
7170 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Aver
age
mon
thly
teac
her’
s sa
lary
(%
of a
vera
ge s
alar
y)M
easu
res
the
aver
age
mon
thly
sal
ary
of te
ache
rs in
prim
ary
and
seco
ndar
y ed
ucat
ion
as a
per
cent
age
of th
e av
erag
e na
tiona
l sal
ary.
Com
parin
g th
e sa
lari
es o
f pro
fess
iona
ls in
the
educ
atio
n se
ctor
to a
vera
ge s
alar
ies
help
s as
sess
whe
ther
teac
hing
can
be
cons
ider
ed a
n at
trac
tive
care
er,
part
icul
arly
bec
ause
it is
one
of t
he w
ays
in w
hich
tale
nted
pot
entia
l can
dida
tes
can
be a
ttra
cted
to th
e se
ctor
. It a
lso
indi
cate
s w
heth
er te
ache
rs
are
suff
icie
ntly
rew
arde
d an
d en
joy
enou
gh s
uppo
rt in
thei
r wor
k.
Sou
rces
: Eu
rop
ean
Co
mm
issi
on
, Eu
rost
at d
atab
ase
, ed
uca
tio
n a
nd
tra
inin
g, h
ttp
://e
c.eu
rop
a.e
u/e
uro
stat
/web
/ed
uca
tio
n-a
nd
-tra
inin
g;
edu
cati
on
min
istr
ies.
Pupi
l-te
ache
r rat
io in
pri
mar
y an
d se
cond
ary
educ
atio
n (h
eadc
ount
bas
is) a
nd a
vera
ge c
lass
room
siz
eH
igh
pupi
l-tea
cher
rat
ios
tend
to a
ffec
t the
sta
ndar
d of
edu
catio
n by
low
erin
g its
qua
lity
(tea
cher
s ha
ve to
o m
any
stud
ents
as
to d
edic
ate
a re
ason
able
tim
e to
eac
h of
them
to im
prov
e or
cor
rect
thei
r ski
lls) a
nd m
ay r
epre
sent
und
erfu
ndin
g of
the
syst
em. O
n th
e ot
her h
and,
low
pup
il-te
ache
r rat
ios
may
als
o ha
ve n
egat
ive
impa
cts
if th
e to
tal t
each
ers’
pay
roll
is to
o bu
rden
som
e: m
isus
ing
reso
urce
s by
pay
ing
(low
er) s
alar
ies
to
too
man
y st
aff m
embe
rs.
Aver
age
clas
sroo
m s
ize
can
also
be
help
ful t
o ga
uge
the
leve
l of m
isus
e or
und
erfu
ndin
g of
pub
lic r
esou
rces
to e
duca
tion.
Hig
h av
erag
e cl
ass
size
s de
note
an
infr
astr
uctu
re n
eed
in th
e ed
ucat
ion
syst
em, w
hile
an
exce
ssiv
ely
low
ave
rage
cla
ss s
ize
also
den
otes
a m
ism
anag
emen
t of
reso
urce
s, w
ith h
alf-
empt
y bu
ildin
gs th
at s
till i
ncur
all
the
prev
ious
mai
nten
ance
cos
ts.
Sou
rce:
Un
ited
Nat
ion
s E
du
cati
on
, Sci
enti
fic
an
d C
ult
ura
l Org
an
izat
ion
(U
NE
SC
O) I
nst
itu
te f
or
Sta
tist
ics.
2. L
abou
r mar
ket r
espo
nsiv
enes
s
PISA
ave
rage
sco
res
in 2
006,
200
9 an
d 20
12PI
SA (
Prog
ram
me
for I
nter
natio
nal S
tude
nt A
sses
smen
t) is
a tr
ienn
ial i
nter
natio
nal s
urve
y w
hich
eva
luat
es e
duca
tion
syst
ems
wor
ldw
ide
by te
stin
g th
e sk
ills
and
know
ledg
e of
15-
year
-old
stu
dent
s. T
hree
key
sub
ject
s ar
e ex
amin
ed: r
eadi
ng, m
athe
mat
ics
and
scie
nce.
Bei
ng a
st
anda
rdis
ed s
urve
y, P
ISA
test
s ar
e no
t dire
ctly
link
ed to
the
scho
ol c
urri
culu
m. I
nste
ad, t
hey
are
desi
gned
to a
sses
s to
wha
t ext
ent s
tude
nts
at
the
end
of c
ompu
lsor
y ed
ucat
ion
can
appl
y th
eir k
now
ledg
e to
rea
l-life
situ
atio
ns a
nd a
re e
quip
ped
for f
ull p
artic
ipat
ion
in s
ocie
ty. A
n in
crea
se
of 5
0 PI
SA p
oint
s in
edu
catio
nal a
chie
vem
ent c
an tr
ansl
ate
into
an
extr
a 1%
of e
cono
mic
gro
wth
in th
e lo
ng r
un.
Sou
rces
: OEC
D, C
om
pet
itiv
enes
s in
So
uth
Ea
st E
uro
pe
; OEC
D (
2014
), P
ISA
201
2 R
esu
lts
htt
p:/
/dx
.do
i.o
rg/1
0.17
87/9
7892
642
0878
0-e
n.
Not
e: D
ata
for
Bo
snia
an
d H
erze
gov
ina,
Ko
sovo
* a
nd
th
e Fo
rmer
Yu
gosl
av R
epu
bli
c o
f M
aced
on
ia a
re n
ot
ava
ilab
le s
ince
th
ey h
ave
nev
er
pa
rtic
ipat
ed i
n t
he
surv
ey.
Perc
enta
ge o
f fir
ms
repo
rtin
g th
at a
n in
adeq
uate
ly e
duca
ted
wor
kfor
ce is
a “
maj
or o
r ver
y se
vere
obs
tacl
e”Th
e Bu
sine
ss E
nviro
nmen
t and
Ent
erpr
ise
Perf
orm
ance
Sur
vey
(BEE
PS),
join
tly c
arri
ed o
ut b
y th
e W
orld
Ban
k an
d th
e Eu
rope
an B
ank
for
Rec
onst
ruct
ion
and
Dev
elop
men
t (EB
RD
). T
his
indi
cato
r ide
ntifi
es th
e sh
are
of fi
rms
findi
ng th
e w
orkf
orce
’s a
ctua
l and
pro
spec
tive
skill
s an
d ed
ucat
ion
unsa
tisfy
ing
to s
uch
an e
xten
t tha
t it i
s a
maj
or o
r sev
ere
obst
acle
to th
eir e
very
day
func
tioni
ng.
Sou
rce:
EB
RD
, BE
EP
S h
ttp
://e
brd
-bee
ps.
com
/dat
a/.
Shar
e of
em
ploy
ers
havi
ng d
iffi
cult
y in
filli
ng jo
b va
canc
ies,
and
har
dest
-to-
fill j
obs
by c
ateg
ory
Iden
tifie
s 1)
the
prop
ortio
n of
em
ploy
ers
havi
ng d
iffic
ulty
filli
ng p
ositi
ons;
2) w
hich
jobs
are
diff
icul
t to
fill b
y ca
tego
ry, s
uch
as s
kille
d tr
ade
wor
kers
, eng
inee
rs, t
echn
icia
ns, i
nfor
mat
ion
tech
nolo
gy (
IT) s
taff
; 3) a
nd th
e re
ason
s w
hy, b
ased
on
surv
eys
cond
ucte
d am
ong
hirin
g m
anag
ers.
Em
ploy
ers
can
also
be
aske
d ab
out t
he im
pact
tale
nt s
hort
ages
hav
e on
thei
r org
anis
atio
ns a
nd w
hat s
teps
they
are
taki
ng to
add
ress
th
em.
Sou
rce:
Ma
np
ow
er G
rou
p, T
ale
nt
Sh
ort
age
Su
rve.
EDU
CA
TIO
N A
ND
SK
ILLS
(co
nt.
)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
•O
vera
ll lo
w le
vels
of g
over
nmen
t ex
pend
iture
, pro
vidi
ng in
suff
icie
nt
reso
urce
s fo
r the
nee
ds o
f the
ed
ucat
ion
syst
em. G
over
nmen
t ex
pend
iture
as
a sh
are
of G
DP
is
low
er th
an c
ompa
rato
r cou
ntri
es.
•M
ism
anag
ed g
over
nmen
t exp
ense
s m
ean
reso
urce
s ar
e no
t dire
cted
to
war
ds th
e ri
ght p
rior
ities
(e
.g. h
igh
curr
ent e
xpen
ditu
res,
in
adeq
uate
str
ateg
ic p
lann
ing
and
corr
espo
ndin
g ex
pend
iture
pl
anni
ng).
3. T
he e
duca
tion
sys
tem
is n
ot
resp
onsi
ve to
the
need
s of
the
labo
ur m
arke
t or u
nabl
e to
pro
vide
a
sati
sfac
tori
ly q
ualif
ied
wor
kfor
ce.
The
educ
atio
n sy
stem
is n
ot c
reat
ing
a w
orkf
orce
equ
ippe
d w
ith th
e sk
ills
need
ed b
y th
e pr
ivat
e se
ctor
, be
they
of
a m
ore
tech
nica
l nat
ure
(e.g
. a la
ck
of m
inin
g en
gine
ers
or p
hysi
cist
s) o
r ot
her,
soft
er s
kills
suc
h as
Eng
lish
and
othe
r for
eign
lang
uage
s. S
ympt
oms
of th
is o
bsta
cle
incl
ude
one
or m
ore
of
the
follo
win
g:
•Ed
ucat
iona
l att
ainm
ent i
s ou
t of
bal
ance
with
the
need
s of
the
econ
omy,
i.e.
ther
e ar
e to
o m
any
or n
ot e
noug
h pe
ople
with
the
righ
t le
vel o
f qua
lific
atio
ns.
•Sc
ores
for P
ISA
and
othe
r in
tern
atio
nal a
sses
smen
ts o
f the
ed
ucat
ion
syst
em a
re lo
wer
than
co
mpa
rato
rs.
•Te
achi
ng c
urri
cula
and
met
hods
are
in
adeq
uate
or o
ld fa
shio
ned,
lagg
ing
behi
nd th
e st
ate
of th
e ar
t. Th
e pr
ivat
e se
ctor
has
ver
y lim
ited
inpu
t in
to c
urri
culu
m d
esig
n. •Th
e go
vern
men
t doe
s no
t con
duct
an
alys
es o
f the
ski
lls n
eede
d by
th
e m
arke
t to
use
whe
n de
finin
g its
edu
catio
n st
rate
gy. E
mpl
oyer
su
rvey
s ha
ve n
ot b
een
rece
ntly
ca
rrie
d ou
t or n
ot r
egul
arly
eno
ugh
(Doe
s H
ighe
r Gov
ernm
ent S
pend
ing
Buy
Bette
r Res
ults
in E
duca
tion
and
Hea
lthca
re, I
MF,
199
9).
•In
con
tras
t, un
ders
pend
ing
on th
e ed
ucat
ion
syst
em h
as im
med
iate
co
nseq
uenc
es o
n th
e qu
ality
of t
he
educ
atio
n sy
stem
, as
a re
sult
of
inad
equa
te te
achi
ng r
esou
rces
(n
umbe
rs a
nd q
ualit
y of
teac
hers
, te
achi
ng/le
arni
ng te
chno
logy
, etc
.) .
•R
esou
rce
mis
man
agem
ent c
an a
lso
affe
ct th
e ou
tcom
es o
f the
edu
catio
n sy
stem
, esp
ecia
lly w
hen
a la
rge
shar
e of
pub
lic fi
nanc
ing
is d
edic
ated
to
cur
rent
exp
endi
ture
s, n
amel
y sa
larie
s. In
this
cas
e, s
igni
fican
t fin
anci
al r
esou
rces
will
not
ne
cess
arily
mea
n an
impr
ovem
ent
in th
e qu
alit
y of
edu
catio
n.
•M
ism
anag
emen
t of r
esou
rces
in
edu
catio
n an
d sk
ills
help
s to
pe
rpet
uate
ineq
ualit
y, s
ince
this
ca
n tr
ansl
ate
into
onl
y th
ose
who
ca
n af
ford
it b
eing
abl
e to
acc
ess
high
-qua
lity
educ
atio
n.
3.
An
educ
atio
n sy
stem
that
is
unre
spon
sive
to la
bour
mar
ket n
eeds
ha
s co
nsid
erab
le n
egat
ive
impa
ct o
n co
mpe
titiv
enes
s an
d gr
owth
: •It
gene
rate
s an
inad
equa
tely
ed
ucat
ed w
orkf
orce
with
a d
irect
im
pact
on
the
quan
tity
and
qual
ity
of in
vest
men
t in
the
econ
omy.
If
com
pani
es c
anno
t fin
d w
orke
rs
wit
h th
e sk
ills
they
nee
d, th
ey
are
mor
e lik
ely
to c
hoos
e no
t to
inve
st. T
his
in tu
rn h
as im
plic
atio
ns
for g
row
th a
nd in
nova
tion
amon
g do
mes
tic e
nter
pris
es a
nd th
e ab
ility
of
the
econ
omy
to a
ttra
ct fo
reig
n di
rect
inve
stm
ent (
FDI)
. Thi
s pa
rtic
ular
ly a
ffec
ts in
vest
men
t in
know
ledg
e-in
tens
ive
and
high
er
valu
e-ad
ded
indu
stri
es, w
hich
ha
s im
plic
atio
ns fo
r the
val
ue
adde
d in
the
econ
omy
and
the
pros
pect
s fo
r str
engt
heni
ng p
rodu
ct
soph
istic
atio
n an
d m
ovin
g up
the
valu
e ch
ain.
•Pr
onou
nced
ski
lls m
ism
atch
es
in th
e ec
onom
y ca
n le
ad
to c
onsi
dera
ble
stru
ctur
al
unem
ploy
men
t. Lo
ng-t
erm
2. POLICY AREA DIAGNOSTIC
71ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Estim
ated
co-
oper
atio
n le
vels
bet
wee
n vo
cati
onal
edu
cati
on a
nd tr
aini
ng (
VET)
pro
vide
rs a
nd b
usin
ess
Idea
lly, a
n in
dica
tor t
hat w
ould
per
mit
auth
oriti
es a
sses
s to
wha
t ext
ent V
ET in
stitu
tions
wor
k w
ith th
e bu
sine
ss c
omm
unity
(to
impr
ove
curr
icul
a, p
rovi
de in
tern
ship
s an
d tr
aini
ngs
to s
tude
nts
etc.
) and
whe
ther
eff
icie
nt p
olic
y m
easu
res
are
in p
lace
to fa
cilit
ate
such
co-
oper
atio
n.
The
OEC
D’s
Com
petit
iven
ess
in S
outh
Eas
t Eur
ope:
A P
olic
y O
utlo
ok d
evel
oped
a q
ualit
ativ
e in
dica
tor t
o sc
ore
perf
orm
ance
s st
artin
g fr
om a
ba
selin
e of
0 (
no e
xist
ing
fram
ewor
k w
hats
oeve
r for
the
polic
y to
pic
conc
erne
d) to
5 (
exis
ting
fram
ewor
k, m
onito
ring
stru
ctur
es in
pla
ce, a
nd
cont
inuo
us c
orre
ctiv
e m
easu
res
and
inde
pend
ent i
mpa
ct e
valu
atio
n pr
esen
t).
Sou
rce:
O
ECD
, C
om
pet
itiv
enes
s in
S
ou
th
East
Eu
rop
e,
Lab
ou
r M
ark
et
Ali
gn
men
t S
ub
-dim
ensi
on
(p
. 12
2),
htt
p:/
/dx
.do
i.o
rg/1
0.17
87/9
7892
642
5052
9-en
; (ta
ble
: htt
p:/
/dx
.do
i.o
rg/1
0.17
87/8
8893
3322
966
).
Earl
y le
aver
s fr
om e
duca
tion
and
trai
ning
am
ong
18-2
4 ye
ar-o
lds
(%)
Mea
sure
s ea
rly
scho
ol le
aver
s (i.
e. th
ose
who
leav
e fo
rmal
sch
oolin
g or
trai
ning
with
no
offic
ially
rec
ogni
sed
dipl
oma)
as
a sh
are
of a
ll sc
hool
le
aver
s. T
his
indi
cato
r can
be
used
to fo
rese
e la
ter s
ubop
timal
con
ditio
ns in
the
labo
ur m
arke
t for
thos
e w
ith n
o of
ficia
lly r
ecog
nise
d ed
ucat
iona
l at
tain
men
t or o
nly
low
er q
ualif
icat
ions
, who
are
mor
e lik
ely
to e
nd u
p in
sub
optim
al jo
b ca
tego
ries
. Sim
ilarl
y, h
igh
shar
es o
f dro
p-ou
ts a
re a
lso
an in
dica
tor o
f an
educ
atio
nal s
yste
m th
at is
not
res
pons
ive
enou
gh to
the
need
s of
the
stud
ent p
opul
atio
n, a
s w
ell a
s su
gges
ting
the
abse
nce
of
a st
uden
t-ce
ntre
d ap
proa
ch in
the
curr
icul
a.
Sou
rces
: E
uro
pea
n C
om
mis
sio
n,
Euro
stat
dat
aba
se,
can
did
ate
cou
ntr
ies
an
d p
ote
nti
al
can
did
ates
, h
ttp
://e
c.eu
rop
a.e
u/e
uro
stat
/dat
a/
dat
aba
se?n
od
e_co
de
=cp
c;
Euro
pea
n
Co
mm
issi
on
, Eu
rost
at
dat
aba
se,
edu
cati
on
a
nd
tr
ain
ing
htt
p:/
/ec.
euro
pa
.eu
/eu
rost
at/w
eb/
edu
cati
on
-an
d-t
rain
ing
; ed
uca
tio
n m
inis
trie
s.
Rat
e of
you
ng p
eopl
e no
t in
empl
oym
ent,
edu
cati
on o
r tra
inin
g (N
EETs
), 1
5 -3
4 ye
ar-o
lds
Mea
sure
s th
e le
vel o
f you
ng p
eopl
e w
ho a
re d
isen
gage
d fr
om th
e la
bour
mar
ket,
educ
atio
n or
trai
ning
, who
cou
ld p
oten
tially
be
mob
ilise
d to
jo
in th
e la
bour
mar
ket.
Youn
g N
EETs
may
suf
fer f
rom
hig
her r
isks
of l
abou
r de-
activ
atio
n fr
om a
ver
y ea
rly
stag
e, e
ven
at th
e m
omen
t the
y fir
st
ente
r the
labo
ur m
arke
t, th
us b
eing
pus
hed
to c
ondi
tions
of u
nder
empl
oym
ent a
nd jo
b in
secu
rity
, inf
orm
al e
mpl
oym
ent,
and
mar
gina
lisat
ion
and
dise
ngag
emen
t. Th
is m
easu
re c
an b
e us
ed to
iden
tify
stru
ctur
al d
efic
ienc
ies
or e
ven
abse
nces
in th
e ed
ucat
ion
and
skill
s sy
stem
s. T
he s
hare
of
NEE
Ts th
us p
rove
s us
eful
in id
entif
ying
an
educ
atio
n an
d sk
ills
syst
em th
at la
cks
the
capa
city
to s
ucce
ssfu
lly (r
e)ac
tivat
e th
ese
youn
g pe
ople
in
the
labo
ur m
arke
t.
Sou
rce:
Eu
rop
ean
Co
mm
issi
on
, Eu
rost
at d
atab
ase
.
3. N
atio
nal q
ualif
icat
ions
fram
ewor
k
Curr
ent s
tate
of n
atio
nal f
ram
ewor
k le
gisl
atio
nQ
ualif
icat
ions
fram
ewor
ks a
re d
esig
ned
to s
et c
rite
ria
for t
he k
now
ledg
e an
d sk
ills
that
sho
uld
be a
ttai
ned
at a
ny g
iven
edu
catio
n le
vel.
Ther
efor
e th
ey a
re a
imed
at r
aisi
ng th
e st
anda
rds
and
qual
ity a
cros
s al
l lev
els
of th
e ed
ucat
ion
syst
em. W
ell-
deve
lope
d na
tiona
l qua
lific
atio
ns fr
amew
orks
ca
n m
ake
educ
atio
n sy
stem
s m
ore
tran
spar
ent.
So
urc
e: O
ECD
, Co
mp
etit
iven
ess
in S
ou
th E
ast
Eu
rop
e.
4. E
ntre
pren
euri
al le
arni
ng
Prom
otio
n of
ent
repr
eneu
rial
lear
ning
and
ent
erpr
ise
skill
sAs
sess
es th
e ex
tent
to w
hich
ent
repr
eneu
rial
lear
ning
is fo
ster
ed in
edu
catio
n. E
ntre
pren
euri
al le
arni
ng r
epre
sent
s al
l for
ms
of e
duca
tion
and
trai
ning
with
the
goal
of e
nhan
cing
ent
repr
eneu
rial
spi
rit a
nd a
ctiv
ity. T
his
is a
cri
tical
mea
ns o
f cre
atin
g a
mor
e fle
xibl
e w
orkf
orce
.
Sou
rce:
OEC
D, C
om
pet
itiv
enes
s in
So
uth
Ea
st E
uro
pe.
EDU
CA
TIO
N A
ND
SK
ILLS
(co
nt.
)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
for t
he s
tate
to b
e ab
le to
est
imat
e th
e sk
ills
the
labo
ur m
arke
t nee
ds
and
mak
e th
em a
vaila
ble
in th
e sh
ort
or m
ediu
m te
rm.
•Th
e pr
ivat
e se
ctor
iden
tifie
s hu
man
ca
pita
l as
a m
ajor
con
stra
int o
n th
e ec
onom
y. A
sig
nific
ant p
ropo
rtio
n of
em
ploy
ers
find
it pa
rtic
ular
ly
diff
icul
t to
fill s
ome
cate
gori
es o
f job
va
canc
ies.
•Th
e ed
ucat
ion
syst
em d
oes
not
activ
ely
fost
er tr
aini
ng in
the
priv
ate
sect
or: P
riva
te s
ecto
r em
ploy
ers
do n
ot h
ave
a sa
y in
cur
ricu
la a
nd
teac
hing
met
hods
and
thus
pre
fer
to c
herr
y-pi
ck p
rosp
ectiv
e w
orke
rs
rath
er th
an ta
ke o
n th
e bu
rden
of
tran
smitt
ing
the
skill
s ne
eded
in
thei
r sec
tor.
•St
uden
ts d
o no
t rec
eive
en
trep
rene
uria
l edu
catio
n an
d en
terp
rise
ski
lls a
re n
ot p
rom
oted
at
all
leve
ls o
f edu
catio
n.
Entr
epre
neur
ial l
earn
ing
is
not f
ully
inco
rpor
ated
into
the
educ
atio
n sy
stem
, and
ther
e ar
e fe
w c
olla
bora
tive
effo
rts
betw
een
univ
ersi
ties,
bus
ines
ses
and
the
publ
ic s
ecto
r to
prom
ote
entr
epre
neur
ial l
earn
ing.
and
pers
iste
ntly
hig
h st
ruct
ural
un
empl
oym
ent h
as c
onsi
dera
ble
impl
icat
ion
for l
ong-
term
gro
wth
as
it le
ads
to d
eter
iora
tion
of s
kills
, di
scou
rage
d w
orke
rs e
tc.
•Sk
ills
mis
mat
ches
can
als
o re
sult
in s
ubop
timal
em
ploy
men
t ou
tcom
es s
uch
as p
eopl
e ta
king
jo
bs fo
r whi
ch th
ey a
re e
ither
ov
er- o
r und
er-q
ualif
ied.
Thi
s ha
s a
clea
r im
pact
on
labo
ur p
rodu
ctiv
ity,
whi
ch in
turn
aff
ects
wag
es a
nd
cons
umpt
ion.
Alo
ng w
ith s
truc
tura
l un
empl
oym
ent,
unde
rem
ploy
men
t al
so h
as c
onsi
dera
ble
nega
tive
impa
ct o
n so
cial
out
com
es s
uch
as
soci
al e
xclu
sion
, pov
erty
trap
s an
d in
equa
lity.
•An
inad
equa
te (
or a
bsen
t) li
felo
ng
lear
ning
sys
tem
s w
ill r
eleg
ate
a si
gnif
ican
t sha
re o
f tho
se w
illin
g to
w
ork
to in
form
al e
mpl
oym
ent.
•An
edu
catio
n sy
stem
whi
ch is
un
resp
onsi
ve to
labo
ur m
arke
t ne
eds
will
als
o le
ad to
hig
h le
vels
of
yout
h un
empl
oym
ent,
as g
radu
ates
st
rugg
le to
find
jobs
that
mat
ch th
e sk
ills
they
obt
aine
d in
the
educ
atio
n sy
stem
.
2. POLICY AREA DIAGNOSTIC
Employment and labour marketPolicy area indicators, structural obstacles and impact on competitiveness and growth
73ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
75ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 75ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
75ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 75ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
I. GE
NERA
L IN
DICA
TORS
Empl
oym
ent r
ate
of 1
5-ye
ar-o
lds
and
over
Mea
sure
s th
e ex
tent
to w
hich
ava
ilabl
e la
bour
res
ourc
es (
i.e. t
he la
bour
forc
e) a
re b
eing
util
ised
in th
e fo
rmal
sec
tor.
Calc
ulat
ed a
s th
e ra
tio o
f th
e em
ploy
ed to
the
wor
king
-age
pop
ulat
ion.
Em
ploy
men
t rat
es a
re s
ensi
tive
to th
e ec
onom
ic c
ycle
, but
in th
e lo
nger
term
they
are
sig
nific
antly
af
fect
ed b
y go
vern
men
ts’ h
ighe
r edu
catio
n an
d in
com
e su
ppor
t pol
icie
s an
d by
pol
icie
s th
at fa
cilit
ate
the
empl
oym
ent o
f wom
en a
nd
disa
dvan
tage
d gr
oups
. So
urc
es: E
uro
pea
n C
om
mis
sio
n, E
uro
stat
dat
aba
se, L
abo
ur
Forc
e S
urv
ey;
Inte
rnat
ion
al L
abo
ur
Org
an
izat
ion
, Key
In
dic
ato
rs o
f th
e La
bo
ur
Ma
rket
(d
atab
ase
).
Labo
ur fo
rce
part
icip
atio
n ra
te (
% o
f tot
al p
opul
atio
n) a
nd fe
mal
e pa
rtic
ipat
ion
rate
(%
of f
emal
e po
pula
tion
age
d 15
and
ove
r)M
easu
res
the
labo
ur fo
rce
as a
per
cent
age
of th
e w
orki
ng-a
ge p
opul
atio
n, a
nd a
s a
perc
enta
ge o
f the
fem
ale
wor
king
-age
pop
ulat
ion.
Sou
rces
: Wo
rld
Ba
nk
, Wo
rld
Dev
elo
pm
ent
Ind
icat
ors
(W
DI)
; nat
ion
al s
tati
stic
s o
ffic
es.
Une
mpl
oym
ent r
ate
of 1
5-ye
ar-o
lds
and
over
Mea
sure
s th
e nu
mbe
r of u
nem
ploy
ed p
eopl
e as
a p
erce
ntag
e of
the
labo
ur fo
rce,
whe
re th
e la
tter
con
sist
s of
the
unem
ploy
ed p
lus
thos
e in
pai
d or
sel
f-em
ploy
men
t. U
nem
ploy
ed p
eopl
e ar
e th
ose
who
rep
ort t
hat t
hey
are
with
out w
ork,
that
they
are
ava
ilabl
e fo
r wor
k an
d th
at th
ey h
ave
take
n ac
tive
step
s to
find
wor
k in
the
last
four
wee
ks. W
hen
unem
ploy
men
t is
high
, som
e pe
ople
bec
ome
disc
oura
ged
and
stop
look
ing
for w
ork;
th
ey a
re th
en e
xclu
ded
from
the
labo
ur fo
rce.
Thi
s im
plie
s th
at th
e un
empl
oym
ent r
ate
may
fall,
or s
top
risi
ng, e
ven
thou
gh th
ere
has
been
no
unde
rlyi
ng im
prov
emen
t in
the
labo
ur m
arke
t.So
urc
es: E
uro
pea
n C
om
mis
sio
n, E
uro
stat
dat
aba
se, L
abo
ur
Forc
e S
urv
ey;
Inte
rnat
ion
al L
abo
ur
Org
an
izat
ion
, Key
In
dic
ato
rs o
f th
e La
bo
ur
Ma
rket
(d
atab
ase
).
Long
-ter
m u
nem
ploy
men
t rat
e (1
2 m
onth
s +
)R
efer
s to
peo
ple
who
hav
e be
en u
nem
ploy
ed fo
r 12
mon
ths
or m
ore.
The
long
-ter
m u
nem
ploy
men
t rat
e sh
ows
the
prop
ortio
n of
the
long
-ter
m
unem
ploy
ed a
s a
shar
e of
all
unem
ploy
ed. L
ong-
term
une
mpl
oym
ent i
s of
par
ticul
ar c
once
rn fo
r pol
icy
mak
ers,
as
high
rat
es o
f lon
g-te
rm
unem
ploy
men
t ind
icat
e th
at la
bour
mar
kets
are
ope
ratin
g in
effic
ient
ly.
Sou
rces
: Eu
rop
ean
Co
mm
issi
on
, Eu
rost
at d
atab
ase
, Lab
ou
r Fo
rce
Su
rvey
; In
tern
atio
na
l Lab
ou
r O
rga
niz
atio
n, K
ey I
nd
icat
ors
of
the
Lab
ou
r M
ark
et (
dat
aba
se).
Yout
h un
empl
oym
ent r
ate
(15-
24 y
ear-
olds
)M
easu
res
the
prop
ortio
n of
15-
24 y
ear-
olds
in th
e to
tal w
orkf
orce
, who
do
not h
ave
a jo
b an
d ar
e av
aila
ble
and
activ
ely
look
ing
for w
ork,
i.e.
the
num
ber o
f tho
se u
nem
ploy
ed d
ivid
ed b
y th
e to
tal (
all a
ges)
of p
eopl
e in
the
labo
ur m
arke
t (em
ploy
ed p
lus
unem
ploy
ed).
So
urc
es: E
uro
pea
n C
om
mis
sio
n, E
uro
stat
dat
aba
se, L
abo
ur
Forc
e S
urv
ey;
Inte
rnat
ion
al L
abo
ur
Org
an
izat
ion
, Key
In
dic
ato
rs o
f th
e La
bo
ur
Ma
rket
(d
atab
ase
).
Youn
g pe
ople
not
in e
mpl
oym
ent,
edu
cati
on o
r tra
inin
g (N
EET)
(15-
19 y
ear-
old
men
, 15-
19 y
ear-
old
wom
en,
20-2
4 ye
ar-o
ld m
en,
20-2
4 ye
ar-o
ld w
omen
, %)
Mea
sure
s th
e sh
are
of y
oung
peo
ple
who
are
NEE
T, a
s a
perc
enta
ge o
f the
tota
l num
ber o
f you
ng p
eopl
e in
the
corr
espo
ndin
g ag
e gr
oup,
by
gend
er. Y
oung
peo
ple
who
are
nei
ther
in e
mpl
oym
ent n
or in
edu
catio
n or
trai
ning
are
at r
isk
of b
ecom
ing
soci
ally
exc
lude
d –
indi
vidu
als
with
in
com
e be
low
the
pove
rty-
line
and
lack
ing
the
skill
s to
impr
ove
thei
r eco
nom
ic s
ituat
ion
(OEC
D d
ata,
htt
ps:/
/dat
a.oe
cd.o
rg/y
outh
inac
/you
th-
not-
in-e
duca
tion-
or-e
mpl
oym
ent-
neet
.htm
). N
EETs
are
con
side
red
at r
isk
as th
ey a
re jo
bles
s an
d in
activ
e an
d ha
ve li
ttle
acc
ess
to le
arni
ng
oppo
rtun
ities
. So
urc
es: E
uro
pea
n C
om
mis
sio
n, E
uro
stat
dat
aba
se, L
abo
ur
Forc
e S
urv
ey;
Inte
rnat
ion
al L
abo
ur
Org
an
izat
ion
, Key
In
dic
ato
rs o
f th
e La
bo
ur
Ma
rket
(d
atab
ase
).
EMPL
OY
MEN
T A
ND
LA
BO
UR
MA
RK
ET
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
1. L
abou
r mar
ket r
igid
itie
s ar
e hi
gh.
Labo
ur m
arke
t rig
iditi
es in
crea
se th
e di
ffic
ulty
of e
nter
ing
and
exiti
ng fo
rmal
em
ploy
men
t. Th
ey c
an b
e ca
used
by:
•co
stly
and
com
plic
ated
hiri
ng a
nd
firin
g pr
oced
ures
•lim
itatio
ns o
n pa
rt-t
ime
cont
ract
s an
d ov
eral
l fle
xibi
lity
in w
orki
ng
arra
ngem
ents
•hi
gh la
bour
taxe
s an
d co
ntrib
utio
ns,
whi
ch a
re o
ften
not
pro
gres
sive
m
eani
ng th
ey im
pose
a h
eavi
er
burd
en a
t low
er w
age
leve
ls.
2. H
igh
leve
ls o
f inf
orm
al
empl
oym
ent.
Sym
ptom
s in
clud
e: •a
larg
e sh
are
of th
e w
orki
ng-a
ge
popu
latio
n is
em
ploy
ed e
ither
full
time
or p
art t
ime
in th
e in
form
al
sect
or c
ompa
red
to r
elev
ant
benc
hmar
ks •la
rge
num
bers
of f
irms
repo
rt u
nfai
r co
mpe
titio
n fr
om th
e in
form
al
sect
or in
the
BEEP
s su
rvey
.
3. P
ublic
labo
ur in
stitu
tions
are
wea
k.Pu
blic
em
ploy
men
t ser
vice
s an
d la
bour
in
spec
tora
tes
lack
the
capa
city
to p
rovi
de
qual
ity s
uppo
rt. S
ympt
oms
incl
ude:
•ve
ry h
igh
staf
f wor
kloa
ds (
up to
600
jo
bsee
kers
for e
ach
PES
offic
er),
se
riou
sly
cons
trai
ning
eff
ectiv
e em
ploy
men
t pol
icie
s (O
ECD,
201
6).
4. H
igh
leve
ls o
f ski
lls m
ism
atch
es
resu
ltin
g in
hig
h st
ruct
ural
(yo
uth)
un
empl
oym
ent.
The
edu
catio
n sy
stem
is
not
res
pons
ive
to th
e ne
eds
of th
e la
bour
mar
ket o
r una
ble
to p
rovi
de a
sa
tisfa
ctor
ily q
ualif
ied
wor
kfor
ce.
Sym
ptom
s of
this
obs
tacl
e in
clud
e on
e or
mor
e of
the
follo
win
g:
•Ed
ucat
iona
l att
ainm
ent i
s ou
t of
bal
ance
with
the
need
s of
the
econ
omy,
i.e.
ther
e ar
e to
o m
any
or n
ot e
noug
h pe
ople
with
the
righ
t le
vel o
f qua
lific
atio
ns.
1. R
igid
labo
ur m
arke
ts d
isco
urag
e in
vest
men
t and
form
al jo
b cr
eati
on,
inhi
bit e
ffic
ient
res
ourc
e al
loca
tion
an
d en
cour
age
info
rmal
ity.
2. In
form
al e
mpl
oym
ent i
s as
soci
ated
w
ith:
•La
ck o
f pro
tect
ion
in th
e ev
ent o
f no
n-pa
ymen
t of w
ages
, com
puls
ory
over
time
or e
xtra
shi
fts,
lay-
offs
w
ithou
t not
ice
or c
ompe
nsat
ion,
un
safe
wor
king
con
ditio
ns a
nd th
e ab
senc
e of
soc
ial b
enef
its s
uch
as p
ensi
ons,
sic
k pa
y an
d he
alth
in
sura
nce
(ILO
, htt
p://
ww
w.il
o.or
g/gl
obal
/top
ics/
empl
oym
ent-
prom
otio
n/in
form
al-e
cono
my/
lang
--en
/inde
x.ht
m).
•Lo
ss o
f bud
get r
even
ues
due
to
redu
ced
taxe
s an
d so
cial
sec
urity
co
ntrib
utio
ns p
aid
to th
e st
ate,
w
hich
red
uces
the
avai
labi
lity
and
qual
ity o
f pub
lic g
oods
and
se
rvic
es. T
his
inva
riab
ly le
ads
to
a hi
gh ta
x bu
rden
on
regi
ster
ed
wor
kers
(W
orld
Ban
k, P
olic
ies
to
Red
uce
Info
rmal
Em
ploy
men
t. An
In
tern
atio
nal S
urve
y, 2
011)
. •In
form
al fi
rms
have
a r
elat
ive
adva
ntag
e, e
spec
ially
whe
n la
bour
cos
ts, t
axes
or s
ocia
l co
ntrib
utio
ns a
re to
o hi
gh, c
reat
ing
unfa
ir co
mpe
titio
n fo
r ent
erpr
ises
op
erat
ing
in th
e fo
rmal
sec
tor.
3. W
eak
publ
ic in
stit
utio
ns
•Pu
blic
em
ploy
men
t ser
vice
s do
not
ef
fect
ivel
y lin
k jo
b se
eker
s to
job
mar
kets
, or p
rovi
de tr
aini
ng a
nd
othe
r em
ploy
men
t inc
entiv
es.
•La
bour
insp
ecto
rate
s ca
nnot
id
enti
fy a
nd e
ffec
tive
ly s
anct
ion
info
rmal
em
ploy
men
t, w
hich
in
turn
res
ults
in th
e gr
owth
of p
oor
qual
ity jo
bs w
ith in
suff
icie
nt s
ocia
l pr
otec
tion,
the
narr
owin
g of
the
tax
base
, etc
.
2. POLICY AREA DIAGNOSTIC
7776 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Info
rmal
em
ploy
men
t rat
eM
easu
res
empl
oym
ent i
n a
dive
rsifi
ed s
et o
f eco
nom
ic a
ctiv
ities
that
are
not
reg
ulat
ed o
r pro
tect
ed b
y th
e st
ate.
Bas
ed o
n th
e Eu
rope
an B
ank
for R
econ
stru
ctio
n an
d D
evel
opm
ent (
EBR
D),
Bus
ines
s En
viro
nmen
t and
Ent
erpr
ise
Perf
orm
ance
Sur
vey
(BEE
PS) i
ndic
ator
on
firm
s re
port
ing
info
rmal
sec
tor c
ompe
titio
n as
an
obst
acle
to th
eir o
pera
tions
.So
urc
es: N
atio
na
l sta
tist
ics
off
ices
; EB
RD
, BE
EP
S.
Empl
oym
ent p
rote
ctio
n le
gisl
atio
n fo
r reg
ular
con
trac
ts a
nd fo
r reg
ular
and
fixe
d-te
rm c
ontr
acts
Qua
litat
ive
indi
cato
rs u
sed
in th
e 20
16 O
ECD
Com
petit
iven
ess
Out
look
. Bot
h ar
e co
mpo
sed
of fo
ur s
ub-in
dica
tors
: 1) r
egul
atio
n of
indi
vidu
al
dism
issa
l of w
orke
rs w
ith r
egul
ar c
ontr
acts
; 2) a
dditi
onal
res
tric
tions
on
colle
ctiv
e di
smis
sal;
3) r
egul
atio
n of
sta
ndar
d fix
ed-t
erm
con
trac
ts;
and
4) r
egul
atio
n of
tem
pora
ry w
ork
agen
cy e
mpl
oym
ent.
Empl
oym
ent p
rote
ctio
n le
gisl
atio
n (E
PL) i
s de
sign
ed to
incr
ease
job
secu
rity
by
prov
idin
g w
orke
rs w
ith s
afeg
uard
s ag
ains
t ris
ks li
ke th
e lo
ss
of e
arni
ngs
and
the
obso
lesc
ence
of t
heir
job-
spec
ific
skill
s an
d ex
peri
ence
. How
ever
, EPL
can
som
etim
es c
onst
rain
firm
s so
muc
h th
at it
di
scou
rage
s jo
b cr
eatio
n an
d th
e ef
ficie
nt r
eallo
catio
n of
res
ourc
es.
Sou
rces
: OEC
D (
2016
), C
om
pet
itiv
enes
s O
utl
oo
k; O
ECD
, In
dic
ato
rs o
f E
mp
loy
men
t P
rote
ctio
n (
dat
aba
se).
Tax
wed
ge a
s a
% o
f an
empl
oyer
’s g
ross
wag
eTh
e “t
ax w
edge
” is
def
ined
as
the
shar
e of
tax
and
soci
al s
ecur
ity c
ontr
ibut
ions
by
empl
oyer
s an
d em
ploy
ees
over
tota
l lab
our c
osts
. The
hig
her
the
wed
ge th
e m
ore
likel
y it
is th
at e
nter
pris
es w
ill h
ire w
orke
rs in
form
ally
. Hig
h ta
x w
edge
s al
so c
ontr
ibut
e to
the
over
all l
abou
r cos
t and
thus
af
fect
s th
e la
bour
cos
t com
petit
iven
ess
of th
e ec
onom
y.
Sou
rces
: Nat
ion
al s
tati
stic
s o
ffic
es, m
inis
trie
s o
f fi
na
nce
.
II. L
ABOU
R GO
VERN
ANCE
Publ
ic e
mpl
oym
ent s
ervi
ces
(PES
s)Q
ualit
ativ
e in
dica
tor u
sed
in th
e O
ECD
201
6 Co
mpe
titiv
enes
s O
utlo
ok to
ass
ess
the
effic
ienc
y an
d ef
fect
iven
ess
of th
e PE
Ss b
y lo
okin
g at
thei
r op
erat
iona
l str
uctu
re a
nd c
apac
ity. N
atio
nal e
mpl
oym
ent a
genc
ies
cate
r prim
arily
to o
ffic
ially
reg
iste
red
jobs
eeke
rs a
nd p
eopl
e w
ho, t
houg
h cu
rren
tly e
mpl
oyed
, are
at r
isk
of in
volu
ntar
y jo
b lo
ss d
ue to
thei
r em
ploy
er’s
eco
nom
ic d
iffic
ultie
s.
Sou
rce:
OEC
D, C
om
pet
itiv
enes
s O
utl
oo
k.
Prog
ram
mes
targ
etin
g yo
uth
unem
ploy
men
tQ
ualit
ativ
e in
dica
tor u
sed
in th
e O
ECD
201
6 Co
mpe
titiv
enes
s O
utlo
ok to
exa
min
e th
e ef
fect
iven
ess
and
scop
e of
pro
gram
mes
spe
cific
ally
ta
rget
ing
yout
h un
empl
oym
ent.
It m
easu
res
whe
ther
ther
e ar
e co
-ord
inat
ed, s
trat
egic
gov
ernm
ent p
rogr
amm
es to
pro
mot
e yo
uth
empl
oym
ent,
how
wid
ely
they
hav
e be
en im
plem
ente
d, h
ow w
ell t
hey
co-o
rdin
ate
with
edu
catio
nal i
nstit
utio
ns a
nd h
ow m
uch
they
are
con
trib
utin
g to
de
crea
sing
the
yout
h un
empl
oym
ent r
ate.
So
urc
e: O
ECD
, Co
mp
etit
iven
ess
Ou
tlo
ok
.
Prog
ram
mes
to r
educ
e in
form
al e
mpl
oym
ent
Empl
oym
ent i
n th
e in
form
al s
ecto
r inc
lude
s al
l job
s in
info
rmal
sec
tor e
nter
pris
es o
r all
pers
ons
who
, dur
ing
a gi
ven
refe
renc
e pe
riod
, wer
e em
ploy
ed in
at l
east
one
info
rmal
sec
tor e
nter
pris
e, ir
resp
ectiv
e of
thei
r sta
tus
in e
mpl
oym
ent a
nd w
heth
er it
was
thei
r mai
n or
a s
econ
dary
job
(ILO
, 200
0). T
his
qual
itativ
e in
dica
tor u
sed
in th
e O
ECD
201
6 Co
mpe
titiv
enes
s O
utlo
ok e
xam
ines
the
effe
ctiv
enes
s an
d sc
ope
of p
rogr
amm
es
spec
ifica
lly ta
rget
ing
info
rmal
em
ploy
men
t.So
urc
e: O
ECD
, C
om
pet
itiv
enes
s O
utl
oo
k;
ILO
(20
00
), R
eso
luti
on
co
nce
rnin
g st
atis
tics
of
emp
loy
men
t in
th
e in
form
al
sect
ori
n:
Cu
rren
t In
tern
atio
na
l. R
eco
mm
end
atio
ns
on
Lab
ou
r S
tati
stic
s.
EMPL
OY
MEN
T A
ND
LA
BO
UR
MA
RK
ET
(co
nt.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
•Sc
ores
for t
he P
rogr
amm
e fo
r In
tern
atio
nal S
tude
nt A
sses
smen
t (P
ISA)
and
oth
er in
tern
atio
nal
asse
ssm
ents
of t
he e
duca
tion
syst
em a
re lo
wer
than
com
para
tors
. •Te
achi
ng c
urri
cula
and
met
hods
are
in
adeq
uate
or o
ld fa
shio
ned.
•Th
e go
vern
men
t doe
s no
t con
duct
an
alys
es o
f the
ski
lls n
eede
d by
th
e m
arke
t to
use
whe
n de
finin
g its
ed
ucat
ion
stra
tegy
. •Th
e pr
ivat
e se
ctor
iden
tifie
s hu
man
ca
pita
l as
a m
ajor
con
stra
int o
n th
e ec
onom
y. A
sig
nific
ant p
ropo
rtio
n of
em
ploy
ers
find
it pa
rtic
ular
ly
diff
icul
t to
fill s
ome
cate
gori
es o
f job
va
canc
ies.
•Th
e ed
ucat
ion
syst
em d
oes
not
activ
ely
fost
er tr
aini
ng in
the
priv
ate
sect
or.
•En
trep
rene
uria
l lea
rnin
g is
no
t ful
ly in
corp
orat
ed in
to th
e ed
ucat
ion
syst
em, a
nd th
ere
are
few
col
labo
rativ
e ef
fort
s be
twee
n un
iver
sitie
s, b
usin
esse
s an
d th
e pu
blic
sec
tor t
o pr
omot
e en
trep
rene
uria
l lea
rnin
g.(I
f the
se a
re e
xpla
ined
in d
etai
l in
Educ
atio
n an
d sk
ills
polic
y ar
ea ta
ble,
on
ly g
ener
al re
fere
nce
to th
e ke
y ob
stac
les
shou
ld b
e m
ade
here
, in
one
or tw
o se
nten
ces)
.
5. L
abou
r mob
ility
is h
ampe
red
by
non-
phys
ical
bar
rier
sAd
min
istr
ativ
e pr
oced
ures
for h
iring
fo
reig
n w
orke
rs a
re n
umer
ous
and
com
plic
ated
by:
•la
rge
num
bers
of d
ocum
ents
nee
ded
to c
ertif
y a
fore
ign
qual
ifica
tion
•la
ck o
f agr
eem
ents
with
oth
er
econ
omie
s to
ack
now
ledg
e ea
ch
othe
rs’ q
ualif
icat
ions
•hi
gh fe
es r
equi
red
to c
ertif
y a
fore
ign
qual
ifica
tion.
4. S
kills
mis
mat
ches
hav
e a
cons
ider
able
neg
ativ
e im
pact
on
com
petit
iven
ess
and
grow
th.
•An
unr
espo
nsiv
e ed
ucat
ion
syst
em
gene
rate
s an
inad
equa
tely
edu
cate
d w
orkf
orce
that
has
a d
irec
t im
pact
on
the
quan
tity
and
qua
lity
of
inve
stm
ent i
n th
e ec
onom
y. T
his
in
turn
has
impl
icat
ions
for g
row
th a
nd
inno
vatio
n of
dom
estic
ent
erpr
ises
an
d th
e ex
tern
al c
ompe
titiv
enes
s of
th
e ec
onom
y in
att
ract
ing
fore
ign
dire
ct in
vest
men
t (FD
I). T
his
part
icul
arly
aff
ects
inve
stm
ent i
n kn
owle
dge-
inte
nsiv
e an
d hi
gher
va
lue-
adde
d in
dust
ries
, whi
ch
has
impl
icat
ions
for t
he v
alue
ad
ded
in th
e ec
onom
y an
d th
e pr
ospe
cts
for s
tren
gthe
ning
pro
duct
so
phis
ticat
ion
and
mov
ing
up th
e va
lue
chai
n. •Pr
onou
nced
ski
lls m
ism
atch
es
in th
e ec
onom
y ca
n le
ad
to c
onsi
dera
ble
stru
ctur
al
unem
ploy
men
t.
•Sk
ills
mis
mat
ches
can
als
o re
sult
in
subo
ptim
al e
mpl
oym
ent o
utco
mes
su
ch a
s pe
ople
taki
ng jo
bs fo
r w
hich
they
are
eit
her o
ver-
or
unde
r-qu
alif
ied.
•An
inad
equa
te (
or a
bsen
t) li
felo
ng
lear
ning
sys
tem
will
rel
egat
e a
sign
ific
ant s
hare
of t
hose
will
ing
to
wor
k to
info
rmal
em
ploy
men
t. •An
edu
catio
n sy
stem
whi
ch is
un
resp
onsi
ve to
labo
ur m
arke
t ne
eds
will
als
o le
ad to
hig
h le
vels
of
yout
h un
empl
oym
ent,
as g
radu
ates
st
rugg
le to
find
jobs
that
mat
ch
the
skill
s ob
tain
ed in
the
educ
atio
n sy
stem
. (I
f the
se a
re e
xpla
ined
in d
etai
l in
Educ
atio
n an
d sk
ills
polic
y ar
ea ta
ble,
on
ly g
ener
al re
fere
nce
to th
e ke
y ob
stac
les
shou
ld b
e m
ade
here
, in
one
or tw
o se
nten
ces)
.
2. POLICY AREA DIAGNOSTIC
77ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
III. S
KILL
S
Perc
enta
ge o
f fir
ms
repo
rtin
g th
at a
n in
adeq
uate
ly e
duca
ted
wor
kfor
ce is
a “
maj
or o
r ver
y se
vere
obs
tacl
e” to
the
firm
The
BEEP
S su
rvey
, joi
ntly
car
ried
out
by
the
Wor
ld B
ank
and
the
EBR
D, id
entif
ies
the
shar
e of
firm
s fin
ding
the
skill
s an
d ed
ucat
ion
pres
ent
in th
e ec
onom
y’s
(pro
spec
tive
or a
ctua
l) w
orkf
orce
uns
atis
fyin
g to
suc
h an
ext
ent a
s to
mak
e it
a m
ajor
or s
ever
e ob
stac
le fo
r the
com
pany
’s
ever
yday
func
tioni
ng.
Sou
rce:
EB
RD
, B
EE
PS
dat
ase
ts, h
ttp
://e
brd
-bee
ps.
com
/dat
a/.
Shar
e of
em
ploy
ers
havi
ng d
iffi
cult
y in
filli
ng jo
b va
canc
ies,
and
har
dest
-to-
fill j
obs
by c
ateg
ory
Surv
eys
cond
ucte
d am
ong
hirin
g m
anag
ers
to id
entif
y: 1
) the
pro
port
ion
of e
mpl
oyer
s ha
ving
diff
icul
ty in
filli
ng p
ositi
ons;
2) j
obs
that
are
diff
icul
t to
fill
by c
ateg
ory,
e.g
. ski
lled
trad
e w
orke
rs, e
ngin
eers
, tec
hnic
ians
, inf
orm
atio
n te
chno
logy
(IT)
sta
ff; a
nd 3
) the
reas
ons
behi
nd th
ese
diff
icul
ties.
Em
ploy
ers
can
also
be
aske
d ab
out t
he im
pact
tale
nt s
hort
ages
are
hav
ing
on th
eir o
rgan
isat
ions
and
wha
t ste
ps th
ey a
re ta
king
to a
ddre
ss th
em.
Sou
rce:
Ma
np
ow
er G
rou
p, T
ale
nt
Sh
ort
age
Su
rvey
.
Estim
ated
co-
oper
atio
n le
vels
bet
wee
n vo
cati
onal
edu
cati
on a
nd tr
aini
ng (
VET)
prov
ider
s an
d bu
sine
ss
Idea
lly, a
n in
dica
tor t
hat w
ould
per
mit
auth
oriti
es to
ass
ess
to w
hat e
xten
t VET
inst
itutio
ns w
ork
with
the
busi
ness
com
mun
ity (
to im
prov
e cu
rric
ula,
to p
rovi
de in
tern
ship
s an
d tr
aini
ngs
to s
tude
nts
etc.
) and
whe
ther
eff
icie
nt p
olic
y m
easu
res
are
in p
lace
to fa
cilit
ate
such
co-
oper
atio
n.
The
OEC
D’s
Com
petit
iven
ess
in S
outh
Eas
t Eur
ope:
A P
olic
y O
utlo
ok d
evel
oped
a q
ualit
ativ
e in
dica
tor t
o sc
ore
perf
orm
ance
s st
artin
g fr
om a
ba
selin
e of
0 (
no e
xist
ing
fram
ewor
k w
hats
oeve
r for
the
polic
y to
pic
conc
erne
d) to
5 (
exis
ting
fram
ewor
k, m
onito
ring
stru
ctur
es in
pla
ce, a
s w
ell
as c
ontin
uous
cor
rect
ive
mea
sure
s an
d in
depe
nden
t im
pact
eva
luat
ion
pres
ent)
. So
urc
e: O
ECD
, C
om
pet
itiv
enes
s in
So
uth
Ea
st E
uro
pe
: A
Po
licy
Ou
tlo
ok
, La
bo
ur
Ma
rket
Ali
gn
men
t S
ub
-dim
ensi
on
(p
. 12
2),
htt
p:/
/dx
.do
i.o
rg/1
0.17
87/8
8893
3322
966.
IV. L
ABOU
R M
OBIL
ITY
Out
war
d m
igra
tion
of y
oung
and
hig
hly
skill
ed p
eopl
eM
easu
res
the
econ
omy’
s ca
paci
ty to
ret
ain
tale
nted
peo
ple
on a
sca
le fr
om 1
(no
t at a
ll –
the
best
and
bri
ghte
st le
ave
to p
ursu
e op
port
uniti
es
abro
ad) t
o 7
(to
a gr
eat e
xten
t – th
e be
st a
nd b
righ
test
sta
y an
d pu
rsue
opp
ortu
nitie
s in
the
coun
try)
. Hig
her s
alar
ies,
bet
ter e
mpl
oym
ent
pros
pect
s an
d be
tter
em
ploy
men
t con
ditio
ns a
broa
d ar
e th
e m
ain
driv
ers
of “
brai
n dr
ain”
. The
re is
a s
tron
g di
rect
cor
rela
tion
betw
een
econ
omie
s’ s
alar
ies
and
thei
r ran
king
s fo
r tal
ent r
eten
tion
in th
e G
CI.
Sou
rce:
Wo
rld
Eco
no
mic
Fo
rum
, GC
I.
Inw
ard
mig
rati
on o
f you
ng a
nd h
ighl
y sk
illed
fore
igne
rsM
easu
res
the
econ
omy’
s ca
paci
ty to
att
ract
tale
nted
peo
ple
on a
sca
le fr
om 1
(no
t at a
ll) to
7 (
to a
gre
at e
xten
t – a
ttra
cts
the
best
and
bri
ghte
st
from
aro
und
the
wor
ld).
Apa
rt fr
om g
ener
al e
mpl
oym
ent c
ondi
tions
(su
ch a
s sa
lari
es a
nd e
mpl
oym
ent p
rosp
ects
), a
n ec
onom
y’s
dom
inan
t and
m
ore
dyna
mic
indu
stri
es p
lay
an im
port
ant r
ole
in a
ttra
ctin
g sk
illed
wor
kers
. So
urc
e: W
orl
d E
con
om
ic F
oru
m, G
CI.
Num
ber o
f wor
k pe
rmit
s is
sued
to fo
reig
n w
orke
rsSe
rves
as
a m
easu
re o
f lab
our m
obili
ty. G
reat
er la
bour
mob
ility
allo
ws
a m
ore
effic
ient
allo
catio
n of
reso
urce
s an
d is
an
impo
rtan
t driv
er o
f inn
ovat
ion.
So
urc
es: I
nte
rio
r m
inis
trie
s; n
atio
na
l em
plo
ym
ent
agen
cies
; reg
ion
al c
o-o
per
atio
n c
ou
nci
ls.
Rec
ogni
tion
of f
orei
gn q
ualif
icat
ions
A
qual
itativ
e in
dica
tor u
sed
in th
e O
ECD
201
6 Co
mpe
titiv
enes
s O
utlo
ok in
Sou
th E
ast E
urop
e th
at a
sses
ses
the
prov
isio
n fo
r rec
ogni
sing
fore
ign
cred
entia
ls. I
t gau
ges
whe
ther
ther
e is
a c
o-or
dina
ted,
hol
istic
gov
ernm
ent a
ppro
ach
to la
bour
mig
ratio
n, h
ow w
idel
y it
has
been
impl
emen
ted
and
how
wel
l all
stak
ehol
ders
are
incl
uded
in th
e pr
oces
s.
Sou
rce:
OEC
D, C
om
pet
itiv
enes
s O
utl
oo
k.
EMPL
OY
MEN
T A
ND
LA
BO
UR
MA
RK
ET
(co
nt.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
Hig
h ra
tes
of s
truc
tura
l (yo
uth)
un
empl
oym
ent r
esul
t in:
•Fo
rgon
e pr
oduc
tion,
whi
ch in
turn
bu
rden
s th
e pu
blic
fina
nces
by
incr
easi
ng s
ocia
l spe
ndin
g on
be
nefi
ts fo
r the
jobl
ess
and
can
unde
rmin
ing
soci
al c
ohes
ion
(OEC
D,
2016
). •Yo
ung
peop
le b
ecom
e de
pend
ent
on s
uppo
rt s
yste
ms,
whi
ch r
educ
es
the
econ
omy’
s lo
ng-t
erm
gro
wth
po
tent
ial.
•In
itial
failu
re o
n th
e la
bour
mar
ket
can
have
a p
rofo
und
influ
ence
on
late
r wor
king
life
. Get
ting
off t
o a
good
sta
rt fa
cilit
ates
you
ng p
eopl
e’s
inte
grat
ion
into
the
labo
ur m
arke
t an
d la
ys th
e fo
unda
tion
for a
goo
d ca
reer
, whi
le it
can
be
diff
icul
t to
catc
h up
aft
er a
n in
itial
failu
re.
•Br
ain
drai
n ca
n ha
ve a
pro
foun
dly
nega
tive
effe
ct, w
ith
skill
s sh
orta
ges
redu
cing
the
over
all
qual
ity
of h
uman
cap
ital
in th
e ec
onom
y, w
hich
in tu
rn h
as
impl
icat
ions
for c
ompe
titiv
enes
s an
d in
vest
men
t and
rea
l GD
P gr
owth
.
5. L
imite
d la
bour
mob
ility
res
ults
in
inef
ficie
nt a
lloca
tion
of r
esou
rces
. A
geog
raph
ical
ly m
obile
wor
kfor
ce,
whe
ther
dom
estic
or c
ross
-bor
der,
mea
ns w
orke
rs fr
om r
egio
ns w
ith
an o
vers
uppl
y of
labo
ur c
an m
ove
to th
e re
gion
s w
hich
nee
d. W
ithou
t th
is m
obili
ty, l
abou
r is
inef
ficie
ntly
al
loca
ted,
hin
derin
g pr
oduc
tivity
and
in
com
e ge
nera
tion.
2. POLICY AREA DIAGNOSTIC
Social inclusion, poverty reduction and equal opportunities Policy area indicators, structural obstacles and impact on competitiveness and growth
79ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
81ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 81ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
81ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 81ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
I. PO
VERT
Y AN
D IN
COM
E IN
EQUA
LITY
Gin
i coe
ffic
ient
Th
e G
ini c
oeff
icie
nt c
alcu
late
s th
e ra
tio o
f cum
ulat
ive
shar
es o
f the
pop
ulat
ion
arra
nged
acc
ordi
ng to
inco
me,
to th
e cu
mul
ativ
e sh
are
of to
tal
inco
me
rece
ived
by
them
. The
hig
her t
he fi
gure
, the
mor
e un
equa
l the
eco
nom
y is
. So
urc
e: W
orl
d B
an
k G
rou
p.
Ineq
ualit
y of
inco
me
dist
ribu
tion
Calc
ulat
es th
e ra
tio o
f tot
al in
com
e re
ceiv
ed b
y th
e to
p 20
% o
f the
eco
nom
y’s
popu
latio
n by
inco
me
(top
qui
ntile
) to
that
rec
eive
d by
the
low
est
20%
of t
he p
opul
atio
n by
inco
me
(bot
tom
qui
ntile
).So
urc
e: E
uro
pea
n C
om
mis
sio
n, E
uro
stat
dat
aba
se, h
ttp
://e
c.eu
rop
a.e
u/e
uro
stat
/dat
a/d
atab
ase
.
Pers
iste
nt r
isk
of p
over
ty r
ate
Calc
ulat
es th
e sh
are
of p
eopl
e liv
ing
in h
ouse
hold
s w
ith a
n in
com
e be
low
the
risk
-of-
pove
rty
thre
shol
d (s
et a
t 60%
of t
he m
edia
n eq
ualis
ed
disp
osab
le in
com
e) in
the
curr
ent y
ear a
nd in
at l
east
two
of th
e pr
eced
ing
year
s (b
roke
n do
wn
by g
ende
r).
Sou
rce:
Eu
rop
ean
Co
mm
issi
on
, Eu
rost
at d
atab
ase
, htt
p:/
/ec.
euro
pa
.eu
/eu
rost
at/d
ata
/dat
aba
se.
At r
isk
of p
over
ty b
efor
e so
cial
tran
sfer
s, %
of t
he p
opul
atio
nCa
lcul
ates
the
shar
e of
peo
ple
livin
g in
hou
seho
lds
with
an
inco
me
belo
w th
e ris
k-of
-pov
erty
thre
shol
d be
fore
taki
ng in
to a
ccou
nt s
ocia
l tra
nsfe
rs (b
roke
n do
wn
by a
ge a
nd g
ende
r, m
ost f
requ
ent a
ctiv
ity s
tatu
s, h
ouse
hold
type
, and
tenu
re s
tatu
s, p
lus
illus
trat
ive
valu
es o
f the
risk
-of-p
over
ty th
resh
old)
.So
urc
e: E
uro
pea
n C
om
mis
sio
n, E
uro
stat
dat
aba
se, h
ttp
://e
c.eu
rop
a.e
u/e
uro
stat
/dat
a/d
atab
ase
.
At r
isk
of p
over
ty a
fter
soc
ial t
rans
fers
, % o
f the
pop
ulat
ion
Calc
ulat
es th
e sh
are
of p
eopl
e liv
ing
in h
ouse
hold
s w
ith a
n in
com
e be
low
the
risk
-of-
pove
rty
thre
shol
d af
ter t
akin
g in
to a
ccou
nt s
ocia
l tra
nsfe
rs
(bro
ken
dow
n by
age
and
gen
der,
mos
t fre
quen
t act
ivity
sta
tus,
hou
seho
ld ty
pe, a
nd te
nure
sta
tus,
plu
s ill
ustr
ativ
e va
lues
of t
he r
isk-
of-p
over
ty
thre
shol
d).
Sou
rce:
Eu
rop
ean
Co
mm
issi
on
, Eu
rost
at d
atab
ase
, htt
p:/
/ec.
euro
pa
.eu
/eu
rost
at/d
ata
/dat
aba
se.
Mat
eria
l dep
riva
tion
inde
xM
easu
res
the
shar
e of
mat
eria
lly d
epri
ved
peop
le in
the
econ
omy.
It c
over
s th
e sh
are
of p
eopl
e w
hose
livi
ng c
ondi
tions
are
gre
atly
con
stra
ined
by
a la
ck o
f res
ourc
es a
nd c
anno
t aff
ord
at le
ast f
our o
f the
follo
win
g: 1
) to
pay
rent
or u
tility
bill
s; 2
) to
keep
thei
r hom
e ad
equa
tely
war
m; 3
) to
pay
une
xpec
ted
expe
nses
; 4) t
o ea
t mea
t, fis
h or
a p
rote
in e
quiv
alen
t eve
ry s
econ
d da
y; 5
) a w
eek’
s ho
liday
aw
ay fr
om h
ome;
6) a
car
; 7) a
w
ashi
ng m
achi
ne; 8
) a c
olou
r TV;
or 9
) a te
leph
one.
Sou
rce:
Eu
rop
ean
Co
mm
issi
on
, Eu
rost
at d
atab
ase
, htt
p:/
/ec.
euro
pa
.eu
/eu
rost
at/d
ata
/dat
aba
se.
Pove
rty
gap
inde
xM
easu
res
the
inte
nsity
or d
epth
of p
over
ty, d
efin
ed a
s th
e av
erag
e po
vert
y ga
p in
the
popu
latio
n as
a p
ropo
rtio
n of
the
pove
rty
line
(a p
erso
n is
con
side
red
poor
if h
is o
r her
con
sum
ptio
n or
inco
me
leve
l fal
ls b
elow
som
e m
inim
um le
vel n
eces
sary
to m
eet b
asic
nee
ds –
this
min
imum
le
vel o
f per
cap
ita e
xpen
ditu
re is
ref
erre
d to
as
the
pove
rty
line)
. Thi
s in
dica
tor r
efle
cts
the
dept
h of
pov
erty
as
wel
l as
its in
cide
nce.
It is
oft
en
desc
ribed
as
mea
surin
g th
e re
sour
ces
need
ed p
er c
apita
to e
limin
ate
pove
rty,
or r
educ
e th
e nu
mbe
r of p
eopl
e liv
ing
belo
w th
e po
vert
y lin
e to
ze
ro, t
hrou
gh p
erfe
ctly
targ
eted
cas
h tr
ansf
ers.
Sou
rce:
Nat
ion
al s
tati
stic
s.
Soci
al p
rote
ctio
n ex
pend
itur
e, %
of g
ross
dom
esti
c pr
oduc
t (G
DP)
M
easu
res
the
exte
nt to
whi
ch e
xpen
ditu
re p
ower
is d
istr
ibut
ed th
roug
h so
cial
pro
tect
ion
(soc
ial b
enef
its, w
hich
con
sist
of t
rans
fers
, in
cash
or
in k
ind,
to h
ouse
hold
s an
d in
divi
dual
s to
rel
ieve
them
of t
he b
urde
n of
a d
efin
ed s
et o
f ris
ks o
r nee
ds).
Whe
n be
nchm
arke
d ag
ains
t com
para
tor
econ
omie
s, it
indi
cate
s ho
w w
ell t
he g
over
nmen
t sup
port
s so
cial
pro
tect
ion
com
pare
d to
rel
evan
t pee
rs.
Sou
rce:
Eu
rop
ean
Co
mm
issi
on
, Eu
rost
at d
atab
ase
, htt
p:/
/ec.
euro
pa
.eu
/eu
rost
at/d
ata
/dat
aba
se.
SO
CIA
L IN
CLU
SIO
N, P
OV
ERT
Y R
EDU
CT
ION
AN
D E
QU
AL
OPP
OR
TU
NIT
IES
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
1. P
over
ty a
nd in
com
e in
equa
lity
rate
is h
igh
and/
or c
onti
nuou
sly
incr
easi
ng. S
ympt
oms
incl
ude:
•a
high
and
ris
ing
Gin
i coe
ffic
ient
fo
r the
eco
nom
y •th
e ra
tio
of to
tal i
ncom
e re
ceiv
ed
by th
e to
p 20
% o
f the
pop
ulat
ion
com
pare
d to
the
bott
om 2
0% b
y in
com
e is
pro
gres
sive
ly in
crea
sing
•a
high
sha
re o
f peo
ple
livi
ng b
elow
th
e na
tion
al m
edia
n in
com
e ra
te •a
larg
e w
orki
ng-p
oor p
opul
atio
n w
ith a
n in
com
e be
low
60%
of t
he
natio
nal m
edia
n •lo
w o
r ins
uffi
cien
t mea
sure
s ai
med
at r
educ
ing
pove
rty,
suc
h as
m
inim
um w
ages
or t
rans
fers
•na
tion
al fi
scal
pol
icie
s no
t hel
ping
to
red
uce
ineq
ualit
y an
d po
ssib
ly
even
fost
erin
g it
, par
ticul
arly
whe
n re
dist
ribut
ion
is in
effe
ctiv
e du
e to
- no
or s
carc
e w
ealth
and
pro
pert
y ta
xes
- lac
k of
pro
gres
sive
inco
me
taxa
tion
- too
man
y op
port
uniti
es fo
r tax
av
oida
nce
and
evas
ion
•so
cial
tran
sfer
s ai
med
at r
educ
ing
pove
rty
are
larg
ely
non-
inco
me-
base
d an
d th
eref
ore
inef
ficie
ntly
di
strib
uted
and
do
not s
uffic
ient
ly
targ
et th
e po
ores
t seg
men
t of t
he
popu
latio
n •a
larg
e pr
opor
tion
of t
he
popu
lati
on a
re m
ater
iall
y de
priv
ed
unde
rfun
ded
and
bare
ly fu
ncti
onal
pr
ogra
mm
es fo
r wag
e em
ploy
men
t (s
uppl
emen
ting
exis
ting
livel
ihoo
ds
in r
ural
are
as),
sel
f-em
ploy
men
t, so
cial
sec
urity
and
urb
an p
over
ty
alle
viat
ion
•un
empl
oym
ent b
enef
its,
sta
te-
assi
stan
ce p
rogr
amm
es fo
r job
hu
ntin
g an
d he
alth
ben
efit
s fo
r th
e po
or a
nd u
nem
ploy
ed b
arel
y ex
ist o
r see
m in
effe
ctiv
e at
red
ucin
g
1. In
com
e in
equa
litie
s un
derm
ine
the
econ
omy’
s pe
rfor
man
ce in
the
long
term
. The
rel
atio
nshi
p be
twee
n th
e tw
o is
indi
rect
: Ex
cess
ive
ineq
ualit
y ha
mpe
rs
grow
th. A
s an
Inte
rnat
iona
l M
onet
ary
Fund
(Ca
uses
and
Co
nseq
uenc
es o
f Inc
ome
Ineq
ualit
y:
A G
loba
l Per
spec
tive,
201
5) s
tudy
ha
s sh
own
“[i]
f the
inco
me
shar
e of
the
top
20 p
erce
nt (
the
rich
) in
crea
ses,
then
GD
P gr
owth
act
ually
de
clin
es o
ver t
he m
ediu
m te
rm,
sugg
estin
g th
at th
e be
nefit
s do
no
t tri
ckle
dow
n. In
con
tras
t, an
in
crea
se in
the
inco
me
shar
e of
th
e bo
ttom
20
perc
ent (
the
poor
) is
ass
ocia
ted
with
hig
her G
DP
grow
th.”
Thi
s al
so s
tren
gthe
ns
the
assu
mpt
ion
that
impr
ovin
g th
e in
com
es o
f the
poo
r and
the
mid
dle
clas
s m
atte
rs th
e m
ost f
or
grow
th v
ia a
num
ber o
f int
er-r
elat
ed
econ
omic
, soc
ial,
and
polit
ical
ch
anne
ls.
Ineq
ualit
y no
tice
ably
aff
ects
ed
ucat
ion
outc
omes
and
ski
lls.
Hig
h an
d su
stai
ned
leve
ls o
f in
equa
lity,
esp
ecia
lly in
equa
lity
of o
ppor
tuni
ty (
i.e. i
nequ
ality
at
trib
uted
to v
aria
bles
bey
ond
our c
ontr
ol) c
an e
ntai
l lar
ge
soci
al c
osts
. Roo
ted
ineq
ualit
y of
op
port
unity
can
neg
ativ
ely
affe
ct
an in
divi
dual
’s e
duca
tiona
l and
w
ork
choi
ces.
In a
dditi
on, g
ener
ally
, lo
w-s
kille
d w
orke
rs a
re fa
r mor
e lik
ely
to b
e un
empl
oyed
than
thos
e w
ith h
ighe
r edu
catio
n. B
y th
e sa
me
toke
n, h
igh
leve
ls o
f ine
qual
ity
can
affe
ct a
n ec
onom
y’s
over
all
hum
an c
apit
al e
ndow
men
t, m
akin
g it
a le
ss a
ttra
ctiv
e pl
ace
for
inve
stm
ent.
In
equa
lity
also
aff
ects
labo
ur
mar
ket o
utco
mes
. Li
mit
ed
skill
s an
d ed
ucat
ion
ham
per
2. POLICY AREA DIAGNOSTIC
8382 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Hea
lth
expe
ndit
ure,
% o
f GD
P M
easu
res
the
shar
e of
GD
P sp
ent o
n he
alth
car
e pr
otec
tion.
Whe
n be
nchm
arke
d ag
ains
t com
para
tor e
cono
mie
s, it
indi
cate
s ho
w w
ell t
he
gove
rnm
ent s
uppo
rts
the
heal
th s
ecto
r com
pare
d to
rel
evan
t pee
rs.
Sou
rce:
Eu
rop
ean
Co
mm
issi
on
, Eu
rost
at d
atab
ase
, htt
p:/
/ec.
euro
pa
.eu
/eu
rost
at/d
ata
/dat
aba
se.
Self
-rep
orte
d un
met
nee
ds fo
r med
ical
exa
min
atio
n (b
y se
x, a
ge, d
etai
led
reas
on, i
ncom
e qu
intil
e, la
bour
sta
tus,
edu
cati
onal
att
ainm
ent
leve
l, d
egre
e of
urb
anis
atio
n)
Indi
cate
s th
e sh
are
of th
e po
pula
tion
aged
16
and
over
rep
ortin
g un
met
nee
ds fo
r med
ical
car
e du
e to
var
ious
rea
sons
(to
o ex
pens
ive,
too
far t
o tr
avel
, wai
ting
list,
etc.
). S
elf-
repo
rted
unm
et n
eeds
con
cern
a p
erso
n’s
own
asse
ssm
ent o
f whe
ther
he
or s
he n
eede
d m
edic
al e
xam
inat
ion
or
trea
tmen
t (ex
clud
ing
dent
al c
are)
, but
did
not
hav
e it
or d
id n
ot s
eek
it be
caus
e of
thes
e re
ason
s.
Sou
rces
: Eu
rop
ean
Co
mm
issi
on
, Eu
rost
at d
atab
ase
, htt
p:/
/ec.
euro
pa
.eu
/eu
rost
at/d
ata
/dat
aba
se; n
atio
na
l sta
tist
ics.
Pens
ion
expe
ndit
ure
(% o
f GD
P)M
easu
res
the
shar
e of
GDP
spe
nt o
n pe
nsio
ns. P
ensi
ons
com
pris
e pa
rt of
the
perio
dic
cash
ben
efits
und
er th
e di
sabi
lity,
old-
age,
sur
vivo
rs a
nd
unem
ploy
men
t fun
ctio
ns. T
he “p
ensi
ons”
agg
rega
te is
def
ined
as
the
sum
of t
he fo
llow
ing
soci
al b
enef
its: d
isab
ility
pen
sion
, ear
ly re
tirem
ent d
ue to
redu
ced
capa
city
to w
ork,
old
-age
pen
sion
, ant
icip
ated
old
-age
pen
sion
, par
tial p
ensi
on, s
urvi
vors
’ pen
sion
, and
ear
ly re
tirem
ent b
enef
it fo
r lab
our m
arke
t rea
sons
. So
urc
es: E
uro
pea
n C
om
mis
sio
n, E
uro
stat
dat
aba
se, h
ttp
://e
c.eu
rop
a.e
u/e
uro
stat
/dat
a/d
atab
ase
; nat
ion
al s
tati
stic
s.
Long
-ter
m g
row
th in
pen
sion
exp
endi
ture
, % o
f GD
P (2
010-
60)
Mea
sure
s fo
reca
sted
incr
ease
in p
ublic
pen
sion
exp
endi
ture
ove
r the
per
iod
2010
-60.
The
indi
cato
r is
a m
easu
re o
f the
sus
tain
abili
ty o
f an
econ
omy’
s pe
nsio
n sy
stem
. Pen
sion
cos
ts m
ake
up a
larg
e pa
rt o
f pub
lic e
xpen
ditu
re a
nd a
re a
maj
or fa
ctor
in th
e pr
esen
t and
med
ium
- to
long
er-t
erm
pub
lic b
udge
t pos
ition
. Sus
tain
able
pen
sion
sch
emes
nee
d a
fisca
l and
fina
ncia
l bal
ance
bet
wee
n re
venu
es a
nd li
abili
ties
and
the
ratio
of w
orke
rs/c
ontr
ibut
ors
to p
ensi
oner
s/be
nefic
iari
es.
Sou
rce:
Nat
ion
al s
tati
stic
s.
At r
isk
of p
over
ty r
ate
for p
eopl
e ag
ed 6
5 an
d ov
erM
easu
res
the
perc
enta
ge o
f thi
s po
pula
tion
grou
p w
ith d
ispo
sabl
e in
com
es b
elow
the
risk-
of-p
over
ty th
resh
old,
. Thi
s in
com
e-ba
sed
mea
sure
is li
able
to
over
estim
ate
the
rela
tive
pove
rty
rate
am
ong
olde
r peo
ple
sinc
e it
does
not
take
into
acc
ount
the
wea
lth o
f pen
sion
ers,
giv
en th
e re
lativ
ely
high
er s
hare
of
hous
e ow
ners
and
hig
her p
rivat
e sa
ving
s am
ong
this
gro
up, o
r the
val
ue o
f non
-mon
etar
y be
nefit
s su
ch a
s fre
e or
sub
sidi
sed
heal
th c
are
and
tran
spor
t.So
urc
es: E
uro
pea
n C
om
mis
sio
n, E
uro
stat
dat
aba
se, h
ttp
://e
c.eu
rop
a.e
u/e
uro
stat
/dat
a/d
atab
ase
; nat
ion
al s
tati
stic
s.
II. G
ENDE
R IN
CLUS
ION
1. G
ener
al
Soci
al In
stit
utio
ns a
nd G
ende
r Ind
ex –
SIG
IM
easu
res
the
leve
l of d
iscr
imin
atio
n ag
ains
t wom
en in
soc
ial i
nstit
utio
ns (f
orm
al a
nd in
form
al la
ws,
soc
ial n
orm
s, a
nd p
ract
ices
). A
s un
derl
ying
dr
iver
s of
gen
der i
nequ
ality
, dis
crim
inat
ory
soci
al in
stitu
tions
per
petu
ate
gend
er g
aps
in a
reas
of d
evel
opm
ent s
uch
as e
duca
tion,
em
ploy
men
t an
d he
alth
, and
hin
der p
rogr
ess
tow
ards
rig
hts-
base
d so
cial
tran
sfor
mat
ion.
Sou
rce:
OEC
D, S
IGI.
Gen
der-
Rel
ated
Dev
elop
men
t Ind
ex (
GD
I)M
easu
res
gend
er g
aps
in h
uman
dev
elop
men
t by
acco
untin
g th
e di
spar
ities
bet
wee
n w
omen
and
men
in th
ree
basi
c di
men
sion
s of
hum
an
deve
lopm
ent:
hea
lth, k
now
ledg
e an
d liv
ing
stan
dard
s, u
sing
the
sam
e co
mpo
nent
indi
cato
rs a
s in
the
Hum
an D
evel
opm
ent I
ndex
(HD
I).
The
GD
I gi
ves
the
ratio
of t
he H
DI c
alcu
late
d fo
r fem
ales
as
a pe
rcen
tage
of t
he H
DI c
alcu
late
d fo
r mal
es u
sing
the
sam
e m
etho
dolo
gy a
s in
the
over
all H
DI.
Sour
ce: U
nit
ed N
atio
ns
Dev
elop
men
t Pro
gra
mm
e (U
ND
P), H
ym
an D
evel
opm
ent R
epor
t, h
ttp
://h
dr.
un
dp
.org
/en
/con
ten
t/ge
nd
er-d
evel
opm
ent-
ind
ex-g
di.
SO
CIA
L IN
CLU
SIO
N, P
OV
ERT
Y R
EDU
CT
ION
AN
D E
QU
AL
OPP
OR
TU
NIT
IES
(co
nt.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
inco
me
disp
ariti
es •la
ck o
f job
-rel
ated
sta
te
mec
hani
sms
for s
kills
att
ainm
ent
spec
ifica
lly d
edic
ated
to th
e po
ores
t pe
rcen
tiles
of t
he p
opul
atio
n •an
inef
fici
ent h
ealt
h ca
re s
yste
m,
i.e. t
here
is a
dis
crep
ancy
bet
wee
n in
vest
men
ts in
hea
lth c
are
and
the
expe
cted
out
com
es
•to
tal h
ouse
hold
hea
lth
expe
ndit
ure
can
be c
onsi
dera
ble,
esp
ecia
lly
for t
he p
oor:
tran
spor
tatio
n co
sts
and
info
rmal
pay
men
ts r
epre
sent
a
rela
tivel
y bi
g sh
are
of to
tal h
ealth
ex
pend
iture
and
con
stitu
te a
larg
er
shar
e fo
r the
poo
r tha
n th
e ri
ch
•th
e su
stai
nabi
lity
of th
e pe
nsio
n sy
stem
is q
uest
iona
ble
give
n:
- dem
ogra
phic
age
ing,
com
bini
ng a
st
eady
incr
ease
in li
fe e
xpec
tanc
y w
ith a
dec
line
in th
e pr
opor
tion
of
peop
le o
f wor
king
age
, inc
reas
ing
the
rela
tive
num
ber o
f tho
se r
etire
d- h
igh
man
dato
ry c
ontr
ibut
ion
rate
s th
at r
aise
som
e re
venu
e,
but a
lso
lead
to ta
x ev
asio
n am
ong
indi
vidu
als
and
empl
oyer
s,
som
etim
es r
esul
ting
in a
net
fall
in
reve
nue
to th
e pe
nsio
n sy
stem
- eff
orts
to lo
wer
pen
sion
co
ntri
buti
ons
are
ham
pere
d by
th
e le
vel o
f pen
sion
exp
endi
ture
s to
be
finan
ced.
2. G
ende
r dis
pari
ties
are
per
sist
ent
and
deep
ly e
mbe
dded
in th
e ec
onom
y w
ith li
mite
d in
itiat
ives
to e
mpo
wer
w
omen
and
boo
st th
eir e
cono
mic
and
po
litic
al s
tatu
s. T
hese
dis
pari
ties
can
be m
anife
sted
in m
ultip
le w
ays.
Ove
rall,
wom
en a
re s
yste
mat
ical
ly
excl
uded
from
full
part
icip
atio
n in
so
cial
, pol
itica
l and
eco
nom
ic li
fe:
•lo
w s
core
s fo
r ind
icat
ors
mea
suri
ng w
omen
’s in
clus
ion
in
the
econ
omy’
s so
cial
, pol
itic
al a
nd
indi
vidu
als’
abi
lity
to g
ain
a st
rong
fo
otho
ld in
the
labo
ur m
arke
t. A
disa
dvan
tage
ous
posi
tion
in th
e la
bour
mar
ket p
erpe
tuat
es th
e vi
ciou
s cy
cle
of in
equa
lity
and
limite
d so
cial
mob
ility
.
Ineq
ualit
y fo
ster
s un
prod
ucti
ve
and
rent
-see
king
beh
avio
ur.
Ineq
ualit
y of
out
com
es w
ill p
ush
indi
vidu
als
to d
iver
t the
ir ef
fort
s to
war
ds s
ecur
ing
favo
ured
trea
tmen
t an
d pr
otec
tion,
res
ultin
g in
res
ourc
e m
isal
loca
tion,
cor
rupt
ion,
and
ne
potis
m, w
ith a
tten
dant
adv
erse
so
cial
and
eco
nom
ic c
onse
quen
ces.
Pove
rty
incr
ease
s th
e co
st o
f th
e w
elfa
re s
yste
m. P
oor l
ivin
g co
nditi
ons
as a
res
ult o
f pov
erty
an
d de
priv
atio
n af
fect
the
heal
th
and
wel
l-bei
ng o
f the
pop
ulat
ion
and
incr
ease
the
expe
nses
of t
he w
elfa
re
syst
em, p
artic
ular
ly th
ose
rega
rdin
g th
e na
tiona
l hea
lthca
re s
ervi
ces.
Inef
fici
ent h
ealt
h ca
re s
yste
ms
impe
de g
row
th p
rosp
ects
indi
rect
ly
by ta
king
up
sign
ifica
nt b
udge
t ex
pend
iture
s th
at d
o no
t ful
ly
tran
slat
e in
to e
xpec
ted
outc
omes
.
A fin
anci
ally
sus
tain
able
pen
sion
sy
stem
is in
disp
ensa
ble
if it
is to
mee
t its
key
pur
pose
, whi
ch is
to p
rote
ct
olde
r peo
ple
from
pov
erty
and
to a
llow
th
em to
enj
oy d
ecen
t liv
ing
stan
dard
s an
d ec
onom
ic in
depe
nden
ce w
hen
agei
ng. P
ensi
ons
affe
ct p
ublic
bud
gets
an
d la
bour
sup
ply
in m
ajor
way
s an
d th
ese
impa
cts
mus
t be
cons
ider
ed in
pe
nsio
n po
licy.
Pov
erty
and
inco
me
ineq
ualit
y ha
mpe
r inv
estm
ents
, and
he
nce
grow
th, b
y fu
ellin
g ec
onom
ic,
fina
ncia
l, a
nd p
olit
ical
inst
abili
ty.
2. POLICY AREA DIAGNOSTIC
83ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Gen
der E
mpo
wer
men
t Mea
sure
(G
EM)
Seek
s to
mea
sure
rel
ativ
e fe
mal
e ec
onom
ic a
nd p
oliti
cal p
ower
. It c
onsi
ders
gen
der g
aps
in p
oliti
cal r
epre
sent
atio
n, a
nd in
pro
fess
iona
l and
m
anag
emen
t pos
ition
s in
the
econ
omy,
as
wel
l as
in in
com
es.
Sou
rce:
Wo
rld
Ba
nk
Gro
up
.
Gen
der G
ap In
dex
(GG
I)M
easu
res
the
follo
win
g di
men
sion
s: 1
) eco
nom
ic p
artic
ipat
ion
(mal
e an
d fe
mal
e un
empl
oym
ent l
evel
s, le
vels
of e
cono
mic
act
ivity
, and
re
mun
erat
ion
for e
qual
wor
k); 2
) eco
nom
ic o
ppor
tuni
ty (
dura
tion
of m
ater
nity
leav
e, n
umbe
r of w
omen
in m
anag
eria
l pos
ition
s, a
vaila
bilit
y of
go
vern
men
t-pr
ovid
ed c
hild
care
, wag
e in
equa
litie
s be
twee
n m
en a
nd w
omen
); 3
) pol
itica
l em
pow
erm
ent (
num
ber o
f fem
ale
min
iste
rs, s
hare
of
seat
s in
par
liam
ent,
wom
en h
oldi
ng s
enio
r leg
isla
tive
and
man
ager
ial p
ositi
ons,
num
ber o
f yea
rs a
fem
ale
has
been
hea
d of
sta
te);
and
4) h
ealth
an
d w
ellb
eing
(ef
fect
iven
ess
of g
over
nmen
ts’ e
ffor
ts to
red
uce
pove
rty
and
ineq
ualit
y, a
dole
scen
t fer
tility
rat
e, p
erce
ntag
e of
bir
ths
atte
nded
by
skill
ed h
ealth
sta
ff, a
nd m
ater
nal a
nd in
fant
mor
talit
y ra
tes)
.So
urc
e: U
nit
ed N
atio
ns
Eco
no
mic
Co
mm
issi
on
fo
r Eu
rop
e (U
NEC
E),
Gen
der
Sta
tist
ics.
2. E
duca
tion
Gen
der P
arit
y In
dex
(GPI
), b
y ed
ucat
ion
leve
lM
easu
res
the
rela
tive
acce
ss to
edu
catio
n fo
r men
and
wom
en, t
he n
umbe
r of s
tude
nts
ente
ring
tert
iary
edu
catio
n, th
e pr
opor
tion
of s
tude
nts
stud
ying
abr
oad
and
the
shar
e of
stu
dent
s tr
ansi
tioni
ng fr
om s
choo
l to
wor
k, a
s a
ratio
of g
irls
to b
oys.
Sou
rce:
Un
ited
Nat
ion
s E
du
cati
on
al,
Sci
enti
fic
an
d C
ult
ura
l O
rga
niz
atio
n (
UN
ES
CO
); U
N M
ille
nn
ium
Dev
elo
pm
ent
Go
als
In
dic
ato
rs
htt
p:/
/un
stat
s.u
n.o
rg/u
nsd
/md
g/M
etad
ata
.asp
x?I
nd
icat
orI
d=
9.
Educ
atio
nal a
ttai
nmen
t by
gend
erLo
oks
at th
e hi
ghes
t lev
el o
f edu
catio
n co
mpl
eted
by
an in
divi
dual
. The
re a
re th
ree
leve
ls: b
elow
upp
er-s
econ
dary
, upp
er s
econ
dary
and
tert
iary
at
tain
men
t. U
pper
sec
onda
ry e
duca
tion
typi
cally
follo
ws
com
plet
ion
of lo
wer
sec
onda
ry s
choo
ling.
Low
er s
econ
dary
edu
catio
n co
mpl
etes
th
e pr
ovis
ion
of b
asic
edu
catio
n, u
sual
ly in
a m
ore
subj
ect-
orie
nted
way
and
with
mor
e sp
ecia
lised
teac
hers
. Thi
s in
dica
tor i
s m
easu
red
as a
pe
rcen
tage
of t
he 2
5-64
yea
r-ol
d po
pula
tion;
for t
ertia
ry, u
pper
sec
onda
ry, a
nd lo
wer
sec
onda
ry, w
ith d
ata
disa
ggre
gate
d by
gen
der.
Sou
rce:
OEC
D, e
du
cati
on
al a
tta
inm
ent
[ad
ult
ed
uca
tio
n le
vel]
(in
dic
ato
r); N
atio
na
l Sta
tist
ics
htt
ps:
//d
ata
.oec
d.o
rg/e
du
att/
adu
lt-e
du
cati
on
-le
vel.
htm
.
Popu
lati
on a
chie
ving
at l
east
a fi
xed
leve
l of p
rofi
cien
cy in
lite
racy
and
num
eric
al s
kills
, by
age
grou
p an
d ge
nder
(%
).Th
e pe
rcen
tage
of y
oung
peo
ple
(15-
24 y
ear-
olds
) and
adu
lts (
aged
15
year
s an
d ab
ove)
who
ach
ieve
or e
xcee
d a
give
n le
vel o
f pro
ficie
ncy
in 1
) lit
erac
y; a
nd 2
) num
erac
y.So
urc
e: U
NE
SC
O.
3. E
mpl
oym
ent
Empl
oym
ent/
unem
ploy
men
t rat
e by
gen
der a
nd a
ge (
%)
Calc
ulat
es th
e pe
rcen
tage
of e
mpl
oyed
/une
mpl
oyed
peo
ple
out o
f the
tota
l lab
our f
orce
, by
gend
er a
nd a
ge. T
he la
bour
forc
e is
the
tota
l num
ber
of p
eopl
e em
ploy
ed a
nd u
nem
ploy
ed. U
nem
ploy
ed p
eopl
e co
mpr
ise
thos
e ag
ed 1
5 to
74
who
wer
e: 1
) with
out w
ork
durin
g th
e re
fere
nce
wee
k; 2
) cu
rren
tly a
vaila
ble
for w
ork,
i.e.
wer
e av
aila
ble
for p
aid
empl
oym
ent o
r sel
f-em
ploy
men
t bef
ore
the
end
of th
e tw
o w
eeks
follo
win
g th
e re
fere
nce
wee
k; a
nd 3
) act
ivel
y se
ekin
g w
ork,
i.e.
had
take
n sp
ecifi
c st
eps
in th
e fo
ur w
eek
peri
od e
ndin
g w
ith th
e re
fere
nce
wee
k to
see
k pa
id e
mpl
oym
ent
or s
elf-
empl
oym
ent o
r who
foun
d a
job
to s
tart
late
r, i.e
. with
in a
per
iod
of, a
t mos
t, th
ree
mon
ths.
Sou
rce:
Eu
rop
ean
Co
mm
issi
on
, Eu
rost
at d
atab
ase
, htt
p:/
/ec.
euro
pa
.eu
/eu
rost
at/d
ata
/dat
aba
se.
Labo
ur fo
rce
part
icip
atio
n ra
te b
y ge
nder
(%
of t
otal
pop
ulat
ion)
M
easu
res
the
labo
ur fo
rce
part
icip
atio
n ra
te o
f men
vs.
wom
en a
s a
perc
enta
ge o
f the
tota
l pop
ulat
ion.
Lab
our f
orce
par
ticip
atio
n ra
te is
the
prop
ortio
n of
the
popu
latio
n ag
es 1
5 an
d ol
der w
ho a
re e
cono
mic
ally
act
ive:
all
peop
le w
ho s
uppl
y la
bour
for t
he p
rodu
ctio
n of
goo
ds a
nd s
ervi
ces
durin
g a
spec
ified
per
iod.
Wom
en a
re m
ore
likel
y th
an m
en to
be
inac
tive
(mai
nly
due
to e
xter
nal r
easo
ns, n
amel
y a
heav
ier f
amily
bur
den
than
men
, so
cial
att
itude
s th
at p
lace
wom
en in
the
role
of h
omem
aker
etc
.), s
o w
ill s
yste
mat
ical
ly s
how
low
er la
bour
par
ticip
atio
n ra
tes
than
men
.
Sou
rce:
In
tern
atio
na
l Lab
ou
r O
rga
niz
atio
n (
ILO
).
SO
CIA
L IN
CLU
SIO
N, P
OV
ERT
Y R
EDU
CT
ION
AN
D E
QU
AL
OPP
OR
TU
NIT
IES
(co
nt.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
econ
omic
dyn
amic
s (S
IGI,
GEM
, G
GI)
•di
scri
min
ator
y at
titu
des
are
still
pr
eval
ent i
n id
eas
abou
t app
ropr
iate
be
havi
our f
or w
omen
, res
tric
tions
on
thei
r ind
epen
denc
e, a
nd th
eir
aptit
udes
.
Ther
e ar
e di
ffer
ence
s in
acc
ess
to
educ
atio
n an
d sk
ills:
•ed
ucat
ion
and
skill
s at
tain
men
t di
ffer
con
side
rabl
y de
pend
ing
on
gend
er
•lo
w s
core
s/ra
nkin
g po
siti
on in
the
Gen
der P
arit
y In
dex.
Labo
ur m
arke
t par
ticip
atio
n an
d em
ploy
men
t rat
es d
iffer
: •Th
e ge
nder
div
isio
n of
labo
ur
with
in th
e ec
onom
y is
hig
h, w
ith
uneq
ual g
ende
r dis
trib
utio
n be
twee
n se
ctor
s an
d oc
cupa
tions
. The
re a
re
high
leve
ls o
f wom
en in
so-
calle
d “f
emin
ine”
car
eers
suc
h as
teac
hing
an
d nu
rsin
g.
•A
larg
e ge
nder
em
ploy
men
t ga
p –
the
degr
ee to
whi
ch th
e pr
opor
tion
of m
en o
f wor
king
age
in
empl
oym
ent e
xcee
ds th
at o
f wom
en.
Wom
en a
re u
nabl
e to
acc
ess
the
sam
e em
ploy
men
t opp
ortu
nitie
s,
earn
the
sam
e sa
lari
es, o
r ris
e up
th
e ra
nks
and
take
on
high
er le
vels
of
res
pons
ibili
ties
as m
en d
o. •W
omen
’s la
bour
par
tici
pati
on
rate
s ar
e m
uch
low
er th
an m
en’s
, or
wom
en a
re m
ore
likel
y th
an m
en
to e
nd u
p in
(in
volu
ntar
y) p
art-
time
posi
tions
. Wom
en a
re m
ore
likel
y to
be
affe
cted
by
time-
rela
ted
unde
rem
ploy
men
t, an
d ob
liged
to
acc
ept (
invo
lunt
ary)
par
t-tim
e po
sitio
ns.
•In
equa
litie
s in
the
dom
esti
c/un
paid
sec
tor,
with
wom
en
dedi
catin
g su
bsta
ntia
lly m
ore
time
to h
ouse
hold
act
iviti
es th
an m
en.
Hig
h in
com
e in
equa
lity
may
in
crea
se s
ocio
-pol
itic
al in
stab
ility
, pr
imar
ily
by fu
ellin
g so
cial
di
scon
tent
(po
litic
al a
nd s
ocia
l un
rest
, crim
inal
ity e
tc.)
Soci
o-po
litic
al in
stab
ility
has
an
impa
ct
on th
e po
litic
al a
nd e
cono
mic
en
viro
nmen
t by
incr
easi
ng th
e le
vel o
f per
ceiv
ed u
ncer
tain
ty,
whi
ch in
turn
red
uces
(pr
ospe
ctiv
e)
inve
stm
ents
.
2. T
he e
cono
mic
em
pow
erm
ent
of w
omen
is a
pre
requ
isite
for
sust
aina
ble
deve
lopm
ent.
The
UN
203
0 Ag
enda
for S
usta
inab
le
Dev
elop
men
t (Tr
ansf
orm
ing
our W
orld
: The
203
0 Ag
enda
for
Sust
aina
ble
Dev
elop
men
t. U
nite
d N
atio
ns, 2
015)
rea
ffirm
ed th
e un
iver
sal c
onse
nsus
on
the
cruc
ial
impo
rtan
ce o
f gen
der e
qual
ity a
nd it
s co
ntrib
utio
n to
the
achi
evem
ent o
f the
17
Sus
tain
able
Dev
elop
men
t Goa
ls.
Gen
der e
qual
ity a
nd e
mpo
wer
ed
wom
en a
re c
atal
ysts
for m
ultip
lyin
g de
velo
pmen
t eff
orts
. Inv
estm
ents
in
gend
er e
qual
ity y
ield
hig
her r
etur
ns
on a
ll de
velo
pmen
t inv
estm
ents
. In
con
tras
t, ge
nder
ineq
ualit
y an
d la
ck o
f wom
en’s
em
pow
erm
ent w
ill
nega
tivel
y af
fect
eco
nom
ic g
row
th
and
deve
lopm
ent b
ecau
se it
lead
s to
th
e pr
oduc
tive
capa
citie
s of
a la
rge
segm
ent o
f the
eco
nom
y’s
popu
latio
n be
ing
unde
ruse
d:
Lack
of a
dequ
ate
jobs
for w
omen
le
ads
to in
crea
sed
cost
s to
the
publ
ic fi
nanc
es, b
oth
dire
ctly
be
caus
e of
the
need
to p
rovi
de
larg
er s
ocia
l ben
efits
, and
indi
rect
ly,
thro
ugh
redu
ced
inco
me
from
la
bour
taxa
tion.
2. POLICY AREA DIAGNOSTIC
8584 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
Shar
e of
par
t-tim
e (v
olun
tary
or i
nvol
unta
ry) e
mpl
oym
ent,
by
gend
er a
nd a
ge g
roup
In
dica
tes
the
shar
es o
f vol
unta
ry a
nd in
volu
ntar
y pa
rt-t
ime
wor
k am
ong
part
-tim
e w
orke
rs, a
s w
ell a
s th
e ra
tio o
f vol
unta
ry a
nd in
volu
ntar
y pa
rt-
time
wor
k, a
nd la
bour
forc
e an
d th
e ge
nder
com
posi
tion
of (v
olun
tary
and
invo
lunt
ary)
par
t-tim
e w
orke
rs. A
hig
h sh
are
of in
volu
ntar
y pa
rt-t
ime
empl
oym
ent d
enot
es a
wid
espr
ead
phen
omen
on o
f tim
e-re
late
d un
dere
mpl
oym
ent.
So
urc
es:
OEC
D (
Inci
den
ce o
f in
volu
nta
ry p
art
-tim
e w
ork
ers:
htt
ps:
//st
ats.
oec
d.o
rg/I
nd
ex.a
spx
?Dat
aSet
Co
de
=IN
VP
T_I
); I
LO W
om
en a
t w
ork
, Tre
nd
s (2
016
).
Tim
e sp
ent i
n pa
id a
nd u
npai
d w
ork
for e
mpl
oyed
per
sons
by
gend
erTh
is in
dica
tor p
rovi
des
an in
sigh
tful
glim
pse
of h
ow fa
mily
/hom
e dy
nam
ics
affe
ct e
mpl
oyed
wom
en a
nd m
en. E
ven
whe
n em
ploy
ed fu
ll tim
e w
omen
tend
to b
ear t
he b
runt
of d
omes
tic a
nd fa
mily
res
pons
ibili
ties
(i.e.
unp
aid
wor
k), t
hus
dire
ctly
aff
ectin
g th
eir w
ork
and
earn
ing
patt
erns
. So
urc
es: O
ECD
(T
ime
spen
t in
pa
id a
nd
un
pa
id w
ork
, by
sex
: htt
p:/
/sta
ts.o
ecd
.org
/in
dex
.asp
x?q
uer
yid
=54
757)
; IL
O W
om
en a
t w
ork
, Tre
nd
s (2
016
).
Gla
ss c
eilin
g in
dex
Rat
es e
cono
mie
s on
wom
en’s
cha
nces
of e
qual
trea
tmen
t at w
ork.
It c
ombi
nes
data
on
high
er e
duca
tion,
labo
ur-f
orce
par
ticip
atio
n, p
ay,
child
care
cos
ts, m
ater
nity
rig
hts,
bus
ines
s-sc
hool
app
licat
ions
and
rep
rese
ntat
ion
in s
enio
r job
s.
Sou
rces
: Mu
ltip
le (
OEC
D, I
LO, E
uro
pea
n C
om
mis
sio
n).
4. E
ntre
pren
eurs
hip
Shar
e of
wom
en e
ntre
pren
eurs
in th
e ec
onom
y (%
)Ca
lcul
ates
the
perc
enta
ge o
f wom
en e
ntre
pren
eurs
in th
e to
tal e
cono
my.
A h
ighe
r sha
re te
nds
to in
dica
te w
omen
’s g
reat
er e
ngag
emen
t and
mor
e so
lid p
rese
nce
in th
e ec
onom
ic fa
bric
of s
ocie
ty.
Sou
rce:
ILO
.
III. E
THNI
C IN
CLUS
ION
Educ
atio
nal a
ttai
nmen
t by
ethn
icit
yM
easu
res
the
high
est l
evel
of e
duca
tion
com
plet
ed b
y an
indi
vidu
al fr
om a
spe
cific
eth
nic
grou
p an
d co
mpa
res
it to
the
educ
atio
nal a
ttai
nmen
t le
vel o
f the
maj
ority
gro
up in
the
econ
omy.
Sou
rce:
Nat
ion
al s
tati
stic
s.
Econ
omic
act
ivit
y w
ithi
n et
hnic
gro
ups
(% e
mpl
oyed
, une
mpl
oyed
, ina
ctiv
e)
Mea
sure
s th
e di
ffer
ent s
hare
s of
em
ploy
men
t, un
empl
oym
ent a
nd in
activ
ity p
er e
thni
c gr
oup.
Mem
bers
of e
thni
c m
inor
ities
are
mor
e pr
one
to
end
up e
ither
une
mpl
oyed
or (
even
mor
e lik
ely)
inac
tive.
In c
ontr
ast,
mem
bers
of t
he e
thni
c m
ajor
ity w
ill e
njoy
not
ably
hig
her e
mpl
oym
ent r
ates
, ac
com
pani
ed b
y lo
wer
une
mpl
oym
ent a
nd in
activ
ity r
ates
.
Sou
rce:
Nat
ion
al s
tati
stic
s.
Leve
l of e
thni
c te
nsio
nsM
easu
res
the
leve
l of t
ensi
ons
betw
een
diff
eren
t eth
nic
grou
ps in
the
econ
omy
on a
sca
le o
f 1-1
0. In
crea
sed
leve
ls o
f int
er-e
thni
c m
istr
ust,
acco
mpa
nied
by
fear
and
com
petit
ion
amon
g et
hnic
gro
ups
can
incr
ease
the
likel
ihoo
d of
grie
vanc
e-ba
sed
mob
ilisa
tion
for c
ivil
conf
lict,
as w
ell a
s th
ey h
ave
an a
dver
se im
pact
on
the
stab
ility
of t
he s
tate
in g
ener
al, b
ut a
lso
spec
ific
stat
e ad
min
istr
ativ
e bo
dies
con
trol
led
by th
e et
hnic
maj
ority
. So
urc
es: E
uro
pea
n S
oci
al S
urv
ey; U
NE
SC
O (
dat
a o
n S
ou
th E
ast
Eu
rop
e); U
nit
ed N
atio
ns
Dev
elo
pm
ent
Pro
gra
mm
e (U
ND
P).
Med
ian
hous
ehol
d in
com
e by
rac
e/et
hnic
ity
Mea
sure
s th
e in
com
e le
vels
by
ethn
icity
in th
e ec
onom
y an
d pr
ovid
es a
n in
dica
tion
of th
e su
cces
s of
eff
orts
to e
limin
ate
ethn
ic d
ispa
ritie
s in
ac
cess
to e
mpl
oym
ent a
nd e
duca
tion,
as
wel
l as
in th
e re
duct
ion
of in
com
e ga
ps –
ulti
mat
ely
help
ing
in r
educ
ing
pove
rty
disp
ariti
es b
etw
een
race
s/et
hnic
ities
.So
urc
e: N
atio
na
l Sta
tist
ics.
SO
CIA
L IN
CLU
SIO
N, P
OV
ERT
Y R
EDU
CT
ION
AN
D E
QU
AL
OPP
OR
TU
NIT
IES
(co
nt.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
•N
egat
ive
mot
herh
ood
wag
e ga
ps
and
fath
erho
od p
ay p
rem
ium
s pe
rsis
t due
to th
e (im
pose
d) h
eavi
er
role
of w
omen
in r
epro
duct
ive
labo
ur.
•D
iscr
epan
cies
bet
wee
n ge
nder
s pe
rsis
t in
unem
ploy
men
t,
econ
omic
act
ivit
y an
d re
mun
erat
ion
for e
qual
wor
k.
Ther
e is
sys
tem
atic
dis
crim
inat
ion
agai
nst w
omen
in th
e w
orkp
lace
: •lo
w s
core
s/ov
eral
l ran
king
in th
e G
GI
•a
high
sco
re o
n th
e gl
ass
ceili
ng
inde
x •a
larg
e pa
y ga
p be
twee
n w
omen
an
d m
en a
s w
ell a
s a
cons
ider
able
ga
p in
occ
upan
cy o
f man
ager
ial
posi
tion
s.
Men
and
wom
en h
ave
uneq
ual
acce
ss to
fina
nce
and
inve
stm
ent
oppo
rtun
ities
: •a
low
sha
re o
f wom
en
entr
epre
neur
s in
the
econ
omy
com
pare
d to
men
•w
omen
are
rel
egat
ed to
sm
all a
nd
(mor
e lik
ely)
mic
ro-e
nter
pris
es
due
to li
mite
d ac
cess
to c
redi
t and
in
vest
men
t opp
ortu
nitie
s.
Wom
en a
re u
nabl
e to
acc
ess
posi
tions
of
pol
itica
l pow
er:
•pr
onou
nced
gen
der i
nequ
alit
ies
in p
olit
ical
pow
er –
the
prop
ortio
n of
sea
ts h
eld
by w
omen
in n
atio
nal
parli
amen
ts a
nd lo
cal g
over
nmen
ts
is lo
w; t
here
are
har
dly
any
wom
en
pres
iden
ts, o
r as
min
iste
rs in
the
natio
nal C
abin
ets.
3. In
clus
ion
of s
ome
or a
ll et
hnic
m
inor
itie
s is
a m
ajor
cha
lleng
e.
Not
all
ethn
ic g
roup
s en
joy
equa
l ec
onom
ic o
ppor
tuni
ties
and/
or
polit
ical
rig
hts.
Som
e et
hnic
gro
ups
Gre
ater
labo
ur fo
rce
part
icip
atio
n by
wom
en le
ads
to a
bet
ter
allo
cati
on o
f fem
ale
wor
kers
ac
ross
occ
upat
ions
and
eco
nom
ic
sect
ors
and
thus
furt
her c
ontr
ibut
es
to e
cono
mic
gro
wth
.
Low
er la
bour
par
tici
pati
on r
ates
am
ong
wom
en im
ply
they
hav
e fe
wer
em
ploy
men
t opp
ortu
niti
es
from
thei
r ver
y en
try
into
the
labo
ur
mar
ket,
as w
ell a
s lit
tle jo
b va
riat
ion
late
r, ov
er ti
me,
ulti
mat
ely
affe
ctin
g th
eir e
arni
ng c
apac
ity a
nd e
cono
mic
se
curi
ty, w
hich
in tu
rn h
as a
ne
gativ
e im
pact
on
the
econ
omy.
Low
ent
repr
eneu
rshi
p le
vels
am
ong
wom
en, a
nd th
eir r
eleg
atio
n to
mic
ro-e
nter
pris
es a
nd le
ss
prof
itabl
e ac
tiviti
es, e
xclu
de th
em
from
ent
erin
g th
e m
ore
prod
uctiv
e an
d pr
ofita
ble
sect
ors
of th
e ec
onom
y, r
esul
ting
in th
e un
deru
se
of th
eir p
rodu
ctiv
e po
tent
ial.
3. T
he in
effe
ctiv
e in
clus
ion
of e
thni
c m
inor
itie
s in
to th
e so
cial
fabr
ic h
as
econ
omic
sig
nific
ance
:Th
e hi
gher
pol
itic
al r
isk
deri
ved
from
eth
nic
excl
usio
n, s
egre
gatio
n an
d re
sulti
ng te
nsio
ns tr
ansl
ates
in
hig
her c
ost o
f cap
ital,
low
er
pros
pect
ive
inve
stm
ents
, and
the
econ
omy
over
all b
ecom
ing
a le
ss
attr
activ
e in
vest
men
t des
tinat
ion.
Rec
urre
nt jo
b di
scri
min
atio
n di
scou
rage
s m
embe
rs o
f eth
nic
min
orit
ies
from
inve
stin
g in
ed
ucat
ion
and
skill
s, r
educ
ing
in
thei
r cha
nces
of o
btai
ning
a b
ette
r fo
otho
ld in
the
labo
ur m
arke
t. As
su
ch, t
heir
prod
uctiv
e po
tent
ial
risk
s be
ing
unde
ruse
d, li
miti
ng th
e gr
owth
pot
entia
l of t
he e
cono
my.
2. POLICY AREA DIAGNOSTIC
85ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
SO
CIA
L IN
CLU
SIO
N, P
OV
ERT
Y R
EDU
CT
ION
AN
D E
QU
AL
OPP
OR
TU
NIT
IES
(co
nt.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
may
suf
fer f
rom
one
or m
ore
of th
e fo
llow
ing
disa
dvan
tage
s: •la
ck o
f edu
cati
on (
incl
udin
g hi
gher
th
an a
vera
ge s
hare
s of
illit
erac
y) a
nd
trai
ning
; lac
k of
lang
uage
ski
lls (
i.e.
diff
icul
ties
in s
peak
ing
the
natio
nal,
vehi
cula
r lan
guag
e of
the
ethn
ic
maj
ority
); lo
wer
att
ainm
ent l
evel
s th
an th
e et
hnic
maj
ority
•la
ck o
f kno
wle
dge/
unfa
mili
arit
y w
ith
the
lega
l and
adm
inis
trat
ive
wor
king
s of
the
stat
e •la
ck o
f phy
sica
l mob
ility
from
en
clav
es a
nd c
once
ntra
tion
in
depr
ived
are
as •co
nstr
aine
d ac
cess
to fi
nanc
e an
d in
vest
men
t due
to in
abili
ty to
mee
t co
llate
ral r
equi
rem
ents
, etc
. •lim
ited
acc
ess
to p
olit
ical
pow
er
with
min
ority
gro
ups
unde
r-re
pres
ente
d in
gov
ernm
ent,
parli
amen
t etc
.
Hig
h le
vels
of e
thni
c te
nsio
n
The
leve
l of t
ensi
on b
etw
een
diff
eren
t eth
nic
grou
ps in
the
econ
omy
is h
igh
and
ofte
n in
crea
sing
.
Lack
of p
olic
ies
on a
ffir
mat
ive
actio
n,
non-
disc
rim
inat
ion
and
dive
rsit
y m
anag
emen
t; o
r, if
they
do
exis
t,
ther
e is
litt
le e
ffec
tive
info
rmat
ion
abou
t cur
rent
pol
icie
s fo
r inc
lusi
on o
r it
is n
ot a
dequ
atel
y tr
ansm
itted
:
Min
oriti
es a
re o
ften
una
war
e of
sp
ecif
ic m
easu
res
and
legi
slat
ion
aim
ed a
t sup
port
ing
them
so
they
do
not
take
adv
anta
ge o
f the
m, e
ven
whe
n th
ese
mea
sure
s ar
e in
pla
ce.
Pers
iste
nt c
ultu
ral d
iscr
imin
atio
n ag
ains
t min
orit
ies,
incl
udin
g by
pu
blic
aut
hori
ties,
dis
suad
es th
em
furt
her f
rom
rea
chin
g ou
t to
publ
ic
inst
itutio
ns fo
r sup
port
.
Stro
ng d
ivis
ions
alo
ng e
thni
c an
d cu
ltur
al li
nes
are
mor
e lik
ely
to
lead
to p
oliti
cal v
iole
nce
as w
ell a
s fr
eque
nt b
reak
dow
ns o
f law
and
or
der.
2. POLICY AREA DIAGNOSTIC
86 ECONOMIC REFORM PROGRAMME : DIAGNOSTIC TOOL © OECD 2018
SO
CIA
L IN
CLU
SIO
N, P
OV
ERT
Y R
EDU
CT
ION
AN
D E
QU
AL
OPP
OR
TU
NIT
IES
(co
nt.)
Indi
cato
rs
of s
tate
of p
lay
Stru
ctur
al
obst
acle
sIm
pact
on
com
peti
tive
ness
an
d gr
owth
Ther
e is
a p
ersi
tent
“ge
nera
tion
al
pove
rty
trap
”, b
y w
hich
mem
bers
of
min
oriti
es a
re u
nabl
e to
bre
ak th
e vi
ciou
s cy
cle
of il
liter
acy-
pove
rty-
excl
usio
n ov
er ti
me
and
over
ge
nera
tions
. Thi
s re
sults
in li
mite
d ac
cess
to e
duca
tion
and
heal
th, w
ith
a ne
gativ
e im
pact
on
futu
re c
aree
r pr
ospe
cts,
inte
grat
ion
into
soc
iety
an
d liv
ing
stan
dard
s.
Lack
of l
egal
reg
istr
atio
n/ac
cess
to
citi
zens
hip
M
embe
rs o
f eth
nic
min
oriti
es a
re
mor
e lik
ely
to la
ck a
dec
lare
d re
side
ncy,
or a
re n
ot e
ven
incl
uded
in
the
regi
ster
of b
irth
s, o
r lac
k an
of
ficia
l ide
ntity
num
ber.
Lack
of p
rope
r doc
umen
tati
on
limit
s ac
cess
to p
ublic
ser
vice
s,
incl
udin
g ed
ucat
ion,
hea
lth,
pens
ions
and
soc
ial b
enef
its. T
his
also
mea
ns th
e st
ate
is u
nabl
e to
tr
ack
min
ority
gro
ups
in o
rder
to
activ
ely
enga
ge in
thei
r inc
lusi
on.
2. POLICY AREA DIAGNOSTIC