The Business Environment for Women in ECA Sarosh Sattar World Bank Expanding Women’s Opportunities through Entrepreneurship Europe and Central Asia Brussels, October 23, 2008 The Business Environment for Women in ECA Sarosh Sattar World Bank

Presentation’s Goals What is the general business context in ECA? Does it apply equally to men and women? How have women been impacted? What is unique about women entrepreneurs?

The Business Environment in ECA

One way to assess the business environment: Doing Business indicators 2007 2008 2009 Starting a business Dealing with licenses Employing workers Registering property Enforcing contracts Getting credit Trading across borders Protecting investors Paying taxes Closing a business Update of 2007 data Add 3 countries Reformer’s Club: - 11 case studies Add Not paying bribes Add Using infrastructure Research program on regulations and business opportunities for women

Eastern Europe and Central Asia reformed the most … Countries with at least one positive reform in 2007/2008 (%) Key message #4 ECA reforming the quickest. Eastern Europe and Central Asia – 62 reforms in 23 of the 25 countries, 25% of the total recorded worldwide. Fastest reforming region. Source: DB 2008

Eastern Europe and Central Asia reformed the most … 4 ECA countries are among the top reformers Eastern Europe and Central Asia reformed the most … Key message #4 ECA reforming the quickest. Eastern Europe and Central Asia – 62 reforms in 23 of the 25 countries, 25% of the total recorded worldwide. Fastest reforming region. Source: DB 2009

Ease of Doing Business Rankings   Economy World 1 Georgia 15 Macedonia, FYR 71 2 Estonia 22 16 Czech Republic 75 3 Lithuania 28 17 Poland 76 4 Latvia 29 18 Belarus 85 5 Azerbaijan 33 19 Albania 86 6 Slovakia 36 20 Montenegro 90 7 Hungary 41 21 Serbia 94 8 Armenia 44 Moldova 103 9 Bulgaria 45 23 Croatia 106 10 Romania 47 24 Bosnia and Herzegovina 119 11 Slovenia 54 25 Russian Federation 120 12 Turkey 59 26 Uzbekistan 138 13 Kyrgyz Republic 68 27 Ukraine 145 14 Kazakhstan 70 Tajikistan 159

Is this the same for women entrepreneurs?

Top 30 on the ease of doing business, 2009 1. Singapore 16. Saudi Arabia 2. New Zealand 17. Sweden 3. United States 18. Bahrain 4. Hong Kong, China 19. Belgium 5. Denmark 20. Malaysia 6. United Kingdom 21. Switzerland 7. Ireland 22. Estonia 8. Canada 23. Korea 9. Australia 24. Mauritius 10. Norway 25. Germany 11. Iceland 26. Netherlands 12. Japan 27. Austria 13. Thailand 28. Lithuania 14. Finland 29. Latvia 15. Georgia 30. Israel

…and higher shares of female entrepreneurs and women in the labor force There are more women entrepreneurs when the ease of doing business is greater Female Entrepreneurs (% of entrepreneurs) Message #7: Higher rankings associated with higher shares of female entrepreneurs and employees. Easiest Most difficult Countries ranked by ease of doing business, quintiles Source: Doing Business database, ILO

What has been the impact on women?

There are few women at the top in private businesses

Occupational Segregation Source: LiTS Data

The consequences are Women owned firms are smaller scaled operations in terms of sales revenues but … … they generate more profit per unit of sales revenue have higher returns to scale which means that women would gain more from increasing their firm size This could be because women are capital constrained concentrated in industries with small firm size

Closing Remarks

Questions we are trying to tackle are …. Why do women concentrate in certain sectors (services rather than manufacturing)? Is the capital constraint self-imposed or does it reflect bias in the financial system? Do lower entrepreneurship rates among women reflect personal choice or other constraints? What encourages women to take the step into entrepreneurship?

Analytical tools WEF Global Gender Gap Report WBG Enterprise Surveys Business Environment and Enterprise Performance Survey (BEEPS) WBG Doing Business Project Doing Business Gender Law Library WEF GGG Report: Global Gender Gap Index 2007 was the result of collaboration between WEF and faculty at Harvard University and University of California, Berkeley, and covers 128 countries. Looks at gaps, not absolute figures. Looks at four areas: economic participation and opportunity, political empowerment, educational attainment and health and survival. Report meant to serve as a framework for the WEF’s Gender Parity Group, which will be composed of 100 influential leaders (50 men and 50 women), as well as a bench-marking tool for policy makers. Sweden (1), Norway (2), Finland (3) and Iceland (4) once again top the rankings in the latest Report. All countries in the top 20 made progress relative to their scores last year – some more so than others. Latvia (13) and Lithuania (14) made the biggest advances among the top 20, gaining six and seven places respectively, driven by smaller gender gaps in labour force participation and wages. BEEPS: joint initiative of the European Bank for Reconstruction and Development (EBRD) and the World Bank Group (the World Bank). Feedback from enterprises on the state of the private sector in countries, from interviews with firms in manufacturing and services. BEEPS will re-visit previously interviewed establishments in order to compile comprehensive panel data so researchers can track progress. The 2005 round of the BEEPS consisted of 9,655 interviews Doing Business can be thought of as a compilation of indicators about various government policies, rules, and procedures, while The BEEPS can be thought of as a compilation of indicators about what firms are saying about the ways that government policies, rules, and procedures are implemented in practice. E.g. the formal rules and procedures may appear benign, while non-transparent implementation may cause firms considerable difficulty. So important to analyse second generation issues of implementation etc. The World Bank Enterprise Surveys began in 2002. capture business perceptions on the biggest obstacles to enterprise growth, the relative importance of various constraints to increasing employment and productivity, and the effects of a country’s business environment on its international competitiveness. Country surveys are performed approximately every three years for most countries. The survey is completed by managing directors, accountants, human resource managers and other company staff. The Doing Business data are based on the knowledge of a few experts in each country for a narrow set of questions whereas the Enterprise Survey data are based on answers to several hundred questions by hundreds of firms in each country. Covers 27 European and Central Asian countries. The Doing Business Gender Law Library is a collection of national legal provisions impacting women's economic status in 181 economies. Was launched by WB and IFC October 10, 2008. The database facilitates comparative analysis of legislation, serves as a resource for research, and contributes to reforms. Laws are searchable by six Doing Business indicators, 15 additional categories which distinguish between men and women, and legislation type.

The End

More women work in the public sector

…though high proportion of women work full-time

Business Friendly Regulation Leads to More Registered Businesses and Start-ups Business entry (new firms in % of registered firms) Business density (registered firms per capita) Message #1: As reforms pick up more business start up. Georgia now has 15 registered business out of 100 (like Malaysia). Note: above trends are global, not ECA specific (same for next slide) Easiest Most difficult Easiest Most difficult Countries ranked by ease of doing business, quintiles Countries ranked by ease of doing business, quintiles Source: Doing Business database