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Financial & Private Sector Development Augusto Lopez Claros Director Global Indicators and Analysis Department World Bank Group June 28, Vienna.

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Presentation on theme: "Financial & Private Sector Development Augusto Lopez Claros Director Global Indicators and Analysis Department World Bank Group June 28, Vienna."— Presentation transcript:

1 Financial & Private Sector Development Augusto Lopez Claros Director Global Indicators and Analysis Department World Bank Group June 28, Vienna

2 Financial & Private Sector Development Doing Business Benchmarks 183 economies Focuses on regulations relevant to the life cycle of a small to medium-sized domestic business in the largest business city Is based on standardized case scenarios The objective: efficient regulations, accessible to all, and simple to implement Doing Business DOES NOT measure all aspects of the business environment such as macroeconomic stability, corruption, level of labor skills, proximity to markets, or of regulation specific to foreign investment or financial markets. What does Doing Business measure?

3 Financial & Private Sector Development What do subnational and regional reports add? Diagnostic Tool 1 M&E Device 3 Reform Instrument 2 Diagnostic tool Create a baseline Pinpoint bottlenecks and provides information on good practices within the same economy and/or region that can easily be replicated Capture reforms Reform instrument Allow specific locations to compete locally and globally Promote peer to peer learning Motivate a reform process by engaging local governments and reforms stakeholders M&E device Measure progress over time through repeated benchmarking Create an incentive to maintain reform effort even when governments change ► Expand the data beyond the economy’s largest business city and/or focus on regions with similar legal and regulatory frameworks 3

4 Financial & Private Sector Development Doing Business in South East Europe 2008 Created a baseline for 15 subnational cities in addition to the 7 cities representing their respective economies in the annual report Doing Business in South East Europe 2011 Updates benchmarks for 18 cities in 6 economies (all but Croatia) previously measured Tracks business reforms in these cities Adds a new economy (Moldova) and 4 new cities from Albania, FYR Macedonia and Moldova Data is current as of January 2011 Both reports cover 4 indicators Starting a business Dealing with construction permits Registering property Enforcing contracts Doing Business in South East Europe 2011

5 Financial & Private Sector Development What locations does the report cover? ALBANIA Tirana* Shkodra Vlora Durres BOSNIA AND HERZEGOVINA Sarajevo* Banja Luka Mostar KOSOVO Pristina* Prizren FYR MACEDONIA Skopje* Bitola Tetovo MOLDOVA Chisinau* Balti MONTENEGRO Podgorica* Pljevlja Nikšić SERBIA Belgrade* Zrenjanin Kruševac Užice Vranje * Largest business city New city ► 7 economies and 22 cities 5

6 Financial & Private Sector Development What are the key findings? It is easier do to business in all cities previously measured Skopje (FYR Macedonia) and Banja Luka (Bosnia and Herzegovina) most improved in the areas benchmarked No single city or economy outperforms the others in all areas The best overall improvement of the region is in the starting a business area Dealing with construction permits remains expensive in the region Cities can learn from existing good practices across the region to become more competitive nationally, regionally and globally  Remarkable progress in regulatory reform across the region results in significant time and cost savings for entrepreneurs

7 Financial & Private Sector Development It is easier to do business in the 19 cities previously measured Number of cities that introduced or benefited from business reforms since 2008

8 Financial & Private Sector Development Banja Luka (Bosnia and Herzegovina) Most improved—Banja Luka and Skopje Skopje (FYR Macedonia) Time (days) Reforms in 4 DB areas resulted in significant time savings for domestic entrepreneurs

9 Financial & Private Sector Development Good practices are found across South East European cities and economies EconomyCity Ease of starting a business Ease of dealing with construction permits Ease of registering property Ease of enforcing contracts Albania Durres Shkodra83911 Tirana10NO PRACTICE1618 Vlora7910 Bosnia and Herzegovina Banja Luka Mostar Sarajevo199 Kosovo Pristina Prizren FYR Macedonia Bitola21235 Skopje12159 Tetovo3363 Moldova Balti13814 Chisinau Montenegro Niksic51617 Pljevlja4647 Podgorica Serbia Belgrade Krusevac Uzice Vranje Zrenjanin141361

10 Financial & Private Sector Development South East Europe’s business entry averages improved significantly Procedures (number) Time (days)Cost (% of GNI pc) SEE Average 2008 SEE Average EU Average Skopje (FYR Macedonia) Pjevlja (Montenegro)

11 Financial & Private Sector Development Starting a business: Consolidating requirements at OSS made starting a business much faster in Skopje

12 Financial & Private Sector Development Dealing with construction permits is expensive The number of procedures varies from 15 in Pljevlja and Skopje to 30 in Chisinau Pre-construction clearances take up the most time SEE is one of the most expensive regions in the world: the average cost is 1,134% of income per capita

13 Financial & Private Sector Development Delays in property registration mainly due to land registries and cadastres Time

14 Financial & Private Sector Development Fixed property transfer fees in Kosovo make registering property affordable Property transfer tax

15 Financial & Private Sector Development Tetovo and Zrenjanin have the fastest commercial dispute resolutions

16 Financial & Private Sector Development A city adopting regional best practices would rank 6 th globally

17 Financial & Private Sector Development Why does it matter? Easier business entry means more new firms: evidence from empirical research Mexico Impact of the reduction of registration procedures through the introduction of One- Stop Shops and the elimination of federally required procedures  Increase in the number of new firms of about 6%  Increase in employment by 2.6%  Consumer Price Index decrease by 1% due to competitive pressures of new entrants Colombia Impact of the introduction of One-Stop Shops in 6 cities:  Increase of 5.2% in the number of new firms India Impact of the elimination of License Raj in 16 states over 64 industries:  Increase in the number of new firms by 6%

18 Financial & Private Sector Development Thank you ! /SEE


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