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Augusto Lopez Claros Director Global Indicators & Analysis November 22, Brussels Benchmarking as a Development Tool: Benchmarking as a Development Tool:

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Presentation on theme: "Augusto Lopez Claros Director Global Indicators & Analysis November 22, Brussels Benchmarking as a Development Tool: Benchmarking as a Development Tool:"— Presentation transcript:

1 Augusto Lopez Claros Director Global Indicators & Analysis November 22, Brussels Benchmarking as a Development Tool: Benchmarking as a Development Tool: Promoting Better Business Regulation in EU Candidate and Potential Candidate Countries

2 2 Global Indicators and Analysis Department (GIA) Generate and disseminate actionable and comparable data and indicators, as well as research and analysis, as key knowledge products - to inform the agenda for financial sector and private sector development, underpin policy dialogue, catalyze action, and engender research. Objectives Doing Business: 11 indicator sets, 183 economies. Sub-National Doing Business: Driven by client demand – 27 reports on over 300 cities in 54 economies in 5 years. Complements national DB studies. Drives municipal/regional reforms – almost 200 reforms in a large number of countries over 5 years. Investing Across Borders: Pilot launched in 2010 covering 87 economies. Concept to be fine-tuned, country coverage expanded. Underpins FDI advisory work. Women, Business and the Law: Path-breaking database and analysis of gender barriers to womens economic participation in 128 economies. Launched 2010 – dissemination ongoing. Enterprise Surveys: 130k + firms surveyed. All regions covered. Complements DB, with broader scope. Basis for Investment Climate Assessments, IC reform programs. Over 300 research papers using ES data. Current products

3 Proposal Investment Climate Indicators in EU Candidate and Potential Candidate Countries

4 Deliverables Data dashboard To track performance over time At the national level At the subnational level (municipal and state) At the regional level To spur competition for reform To promote transparency Period regional, national and subnational reports To compare primary micro level data Over time Across a number of locations in the same country Across countries/regions

5 Subnational Doing Business Investing Across Borders Women, Business and the Law Enterprise Surveys Building Blocks

6 Doing Business in South East Europe 2008 Created a baseline for 15 subnational cities in addition to the 7 cities representing their respective economies in the annual report Doing Business in South East Europe 2011 Updates benchmarks for 18 cities in 6 economies (all but Croatia) previously measured Tracks business reforms in these cities Adds a new economy (Moldova) and 4 new cities from Albania, FYR Macedonia and Moldova (Eastern Neighborhood) MOLDOVA 8 economies and 26 cities surveyed Both reports cover 4 indicators Starting a business Dealing with construction permits Registering property Enforcing contracts 6 Doing Business in South East Europe

7 Skopje (FYR Macedonia) and Banja Luka (Bosnia and Herzegovina) most improved in the areas benchmarked No single city or economy outperforms the others in all areas The best overall improvement of the region is in the starting a business area Dealing with construction permits remains expensive in the region There is rich variation in performance by indicators across economies and even among cities within the same economy Cities can learn from existing good practices across the region to become more competitive nationally, regionally and globally Remarkable progress in regulatory reform across the region results in significant time and cost savings for entrepreneurs 7 What are the key findings?

8 Procedures (number) Time (days)Cost (% of GNI pc) SEE Average 2008 SEE Average EU Average Skopje (FYR Macedonia) Pljevlja (Montenegro) 8 South East Europes business entry averages improved significantly

9 The number of procedures varies from 15 in Pljevlja and Skopje to 30 in Chisinau Pre-construction clearances take up the most time SEE is one of the most expensive regions in the world: the average cost is 1,134% of income per capita 9 Dealing with construction permits is expensive

10 Time (days) Property transfer tax (% of property value) 10 Wide variation in property registration across the region

11 Measure progress over time Expand the subnational and regional analysis to cover other areas such as Paying Taxes, Trading across Borders, Getting Electricity and Closing a Business Support regional peer-to-peer learning events to disseminate good practices and motivate the replication of successful business reforms from the region and internationally 11 Ia. Doing Business in South East Europe 2013

12 EU average Turkey EU accession countries average 12 Indicator Worlds top ranked EUs top ranked Turkey Starting a businessNew ZealandIreland (13)61 Dealing with construction permits Hong Kong SAR, China Denmark (10)155 Registering propertySaudi ArabiaLithuania (7)44 Enforcing contractsLuxembourgLuxembourg (1)51 Ease of doing business Turkey and EU rankings on the ease of doing business 2010/11

13 4 Doing Business indicators: Starting a business Dealing with construction permits Registering property Enforcing contracts 13 Ib. Doing Business in Turkey regional centers: Istanbul, Marmara Ankara, Central Anatolia Izmir, Aegean Mersin, Mediterranean Gaziantep, South-eastern Anatolia Malatya, Eastern Anatolia Samsun, Black Sea

14 14 II. Investing Across Borders (IAB): Overview OverviewObjectives The IAB indicators focus on FDI regulation, and follow the Doing Business methodology for data collection. The first report on 87 economies was launched in July 2010 and a second report is planned for June IAB 2012 will cover 5 topics (see next slide) Respond to information requests for benchmarks on FDI regulations by governments, private sector, development partners and academics. Facilitate policy dialogue by identifying good practices and sharing of reform experiences Stimulate reforms Inform reform advisory work, research and analysis

15 Investing across sectors Starting a foreign investment Hiring skilled expatriates Converting and transferring currency Arbitrating and mediating disputes Foreign equity ownership restrictions in: Primary sectors: Mining, oil and gas; agriculture and forestry Manufacturing: Electronics; food processing; basic chemicals Services: Telecommunications; banking; insurance; transportation; etc. Rules and process of starting a foreign business Land-related legal rights and information access Rules for Special Economic Zones (pilot/research section) Rules and process of employing skilled expatriates Process of appealing a rejected application for a work permit Rules and process for obtaining a spousal work permit Restrictions on the membership of the Board of Directors Rules for currency convertibility and repatriation Process of obtaining and servicing a foreign loan, and repatriating dividends Restrictions on holding bank accounts Strength of arbitration and mediation laws Strength of arbitration and mediation institutions Extent of judicial assistance Ease of arbitration process Ease of enforcement process 15 Topics of IAB 2012 (Proposed publication date June 2012)

16 16 IAB 2012 country coverage EU member statesEU candidates and potential candidates Included in IAB: Austria, Bulgaria, Czech Republic, France, Greece, Ireland, Poland, Romania, Slovakia, Spain, United Kingdom Not included in IAB: Belgium, Cyprus, Denmark, Estonia, Finland, Germany, Hungary, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovenia, Sweden Included in IAB: Albania, Bosnia and Herzegovina, Croatia, Kosovo, Macedonia FYR, Montenegro, Serbia, Turkey Not included in IAB: Iceland

17 EconomySelected IAB indicators Economy score Highest global score Selected reform recommendations Investing across sectors Turkey Maximum foreign equity ownership allowed in: - Consider abolishing FDI ownership limits. - Increase competition in strategic sectors. (See for more specific information.) - Electricity transmission and distribution 0%100% - Airlines and port operation49%100% - Television broadcasting0%100% Starting a foreign business Bosnia and Herzegovina Number of days to establish a foreign-owned subsidiary 83 days4 days - Eliminate and/or simplify specific procedures. (See for more specific information.) Accessing industrial land BulgariaTime to lease public land (days) Streamline and regularize the process of leasing public land. (See for more specific information.) Montenegro Strength of lease rights index (0- 100) Strengthen various investor lease rights. (See for more specific information.) Arbitrating commercial disputes Albania Ease of arbitration process index (0-100) Strengthen investor rights and overall legal and institutional regime for arbitration. (See for more specific information.) Kosovo Extent of judicial assistance (0- 100) Sample bottlenecks IAB 2010 data in selected economies

18 Objective: The Women, Business and the Law (WBL) dataset and report focuses on how easy or difficult is it for women to get jobs or start and run businesses. Using quantitative and objective data, it examines where laws differentiating between men and women way affect womens opportunities and incentives to work. 18 III. Women, Business & the Law (WBL): Topic Areas IndicatorCoverage 1Accessing Institutions Explores womens legal ability to interact with public authorities and the private sector in the same way as men 2Using PropertyAnalyzes womens ability to access and use property based on their capacity to own, manage, control and inherit property. 3Getting a JobExamines restrictions on womens working hours and industries; work-related maternity, paternity and parental leave benefits; and retirement and pensionable ages 4Providing Incentives to Work Covers personal income tax liabilities, including credits and deductions available to women relative to men and examines public provisions of childcare and education 5Building CreditIdentifies minimum loan thresholds in private credit bureaus and registries that collect information from microfinance institutions 6Going to CourtConsiders the ease and affordability of justice by examining womens access to small claims courts and womens capacity to file cases in a court of law

19 Women, Business and the Law 2012 Indicators: The report objectively measures legal gender differentiations in 141 economies worldwide within six categories: It does not capture the full extent of the gender gap, nor does it indicate the relative importance of each aspect covered. 19 What the WBL report measures

20 20 Gender disparities in Turkey as measured by WBL Turkey has no laws preventing sexual harassment in the workplace, while all EU countries have legislation that explicitly prohibits sexual harassment in the workplace. Nor does Turkey have laws explicitly making it illegal to ask a womans marital status during a job interview. Nine EU member countries prohibit such questioning. Workplace incentives In Turkey, the retirement age is 60 for men. This is lower than the retirement age in most of the current EU countries which ranges from 67 in Denmark and Germany to 60 in France. In Turkey, the retirement age is 58 for women. Most EU member states have equalized their retirement ages and Turkey will equalize retirement ages by 2048 Retirement In Turkey, women are entitled to 112 days of paid maternity leave and are paid 66% of their wages by the government during this time. The average in the EU is 140 days of paid maternity leave. Ten EU countries pay maternity wages at 100%, however the UK pays 28% of wages and Ireland pays 44%. Turkey does not offer any paid or unpaid paternity or parental leave. In all EU countries there are laws establishing the public provision of childcare, or the state subsidizes childcare for children under the age of primary education. This is not the case in Turkey. Parental Benefits

21 The gender gap in Turkey remains huge Turkey (ranked 122 out of 135 countries worldwide) occupies the last place among European countries in the Global Gender Gap 2011 report. The country performs particularly poorly in measures of political empowerment of women and variables which capture measures of economic participation and opportunity. In the latter category, Turkey ranks among the 10 worst performers in the world. Source: World Economic Forum Global Gender Gap Report

22 IV. Enterprise Surveys: the world's most comprehensive company-level data Current coverageProposed work program EU countries (sample size): Bulgaria (270), Czech Republic (270), Estonia (270), Hungary (270), Latvia (270), Lithuania (270), Poland (540), Romania (540), Slovakia (270), Slovenia (270) EU candidate countries (sample size): Croatia (360), FYR of Macedonia (360), Montenegro (150), Turkey (1320) Expand samples in main BEEPs Small follow-up modules (every 6 months) to measure effects of reforms and economic changes Incorporate other EU countries: Greece, Portugal, Spain, Ireland. The Business Environment and Enterprise Performance Surveys (BEEPs) generate indicators of the overall business environment including infrastructure, regulation, corruption, finance, labor practices, competition, etc. 22

23 Analyze the 11 Doing Business (DB) indicators as well as the 5 Investing Across Borders (IAB) indicators and the 6 Women, Business & the Law (WBL) indicators plus firm data from the Enterprise Surveys (ES) Provide an in-depth analysis of the business environment in the EU accession countries and their comparative performance vis-à-vis the 27 EU member countries and other selected countries (e.g. China, India, Brazil) Synthesis report brings 4 indicator groups into one package analyzing business environment from 3 perspectives: Domestic firms and entrepreneurs (DB & ES) Foreign firms (IAB) Gender (WBL) 23 V. Synthesis report: comparing the accession countries to the EU and the rest of the world

24 24 VI. Economy profile and data dashboard Economy-specific report analyzing the business environment through 4 indicator sets: Doing Business / subnational Doing Business Investing across Borders Women Business and the Law Enterprise Surveys

25 25 Dashboard: Albania Albania

26 26 Proposed Timeline Doing Business in Turkey – subnational DB study measuring the largest business centers from 7 main regions of the country Investing Across Borders update Web-based dashboard and/or economy profiles 2012 Doing Business in South East Europe – subnational DB study covering 7 economies and over 20 subnational cities Women Business and the Law update Synthesis report Web-based dashboard and/or economy profiles 2013

27 Initial 2-year agreement extendable for another 7-year period Initial period: Renewal period: 2014 – 2020 Cost estimates ( ) ComponentResources ( in Euro)Output I. Subnational Doing Business1.6 million2 reports: Turkey and SEE II. Investing Across Borders0.8 millionIAB data update III. Women, Business & the Law0.5 millionWBL data update IV. Enterprise SurveysTBDAdditional coverage V. Synthesis report0.4 million Regional report covering EU members and EU candidate countries VI. Economy profiles or dashboard: all indicators 0.2 million Web-based comparisons or economy profile reports Total3.5 million 27 Institutional arrangements and budget

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