Emerging Trends and Challenges in Business Environment Reform Donor Committee for Enterprise Development Montreux 12 September 2006

Focus of Work in 2006 Donor Guidance Asia Regional Consultation Research Inventory

“We recognise that reforming the business environment is one of the most important areas in the global development agenda for donors and governments” Committee of Donor Agencies for Small Enterprise Development Cairo Conference, “Conference Outcomes”

Donor Guidance The overall purpose is to provide guidance to donor agencies to improve their support for business environment reform processes in developing countries, which lead to economic growth and poverty reduction.

Guidance Qualities Compiles lessons learned about what works and does not work in business environment reform for enterprise development Provides general but practical, operational guidance for donor staff in the field and at headquarters Provides a framework of basic good practice principles that support a diversity of approaches and priorities Highlights issues that remain unresolved and where there is not yet a consensus on good practice

Unique Guidance Aimed specifically at the international donor community at head-quarter and field levels – although it is envisaged that programme partners will also find it useful Strong emphasis on practical guidance and lessons learned Focus on business environment reform for enterprise development – in keeping with other products of the DCED Highlight key challenges, debates and priorities for donor supported business environment reform Identify other practical resources donor agencies can obtain

Guidance Structure Objectives of Business Environment Reform Deals with the purpose of business environment reform and how such efforts can contribute to the achievement of development goals that are beyond private sector development alone (e.g., poverty reduction, MDGs) Functional Areas of Business Environment Reform Focuses on specific areas of business environment reform that are of most relevance. Unlike other guides or manuals on specific topics that have been prepared (e.g., business registration reform) the guidance here will focus on the role of donor agencies Business Environment Reform Processes Attends to the ways donor agencies can effectively manage reform processes, work with key stakeholders and programme partners, monitor progress and measure impact

Trends and Issues Pre-Cairo Conference Increasing volume of work being done by donor agencies in BE reform Wide range of assessment tools, but still some concern regarding what was being assessed and how effectively Great challenges in designing and implementing BE reform programmes Growing recognition of the importance of the business environment within the broader investment climate – issues of specific concern

Concern regarding the relevance of firm size Sub-national reforms Donor co-ordination and collaboration Why are some countries reforming faster than others? Representation and PPD M&E and measuring the impact of donor-supported BE reforms

Trends and Issues Post-Cairo Conference Volume of donor-supported BE reform grows Assessment tools used and referred to more widely More guidance in how to undertake reforms M&E and impact measurement is still an issue, but agencies addressing this at earlier stages and testing new approaches Donor co-ordination and collaboration Sector development and BE reform

Role of the State in business environment reform – including the role of the “developmental” state and promotional policies and programmes Reforms that lead to poverty reduction and pro- poor growth The political economy of reform: Currently positioned as “managing business environment reforms”, but who does this managing? What role do donor agencies play in managing reform processes? Where is the critical focal point for guidance? Business environment reform for indigenous enterprise development...?

Political economy of reform Drivers of change Maintaining the status quo Challenges to effective PPD Institutional self-interest and change Public and corporate governance Improving trade regimes Sub-national BE reforms What role for multi-national enterprises?

Challenges, debates and other controversies need to be discussed and developed in an effort to achieve a MULTI-DONOR AGENDA for business environment reform. This is the primary purpose of Donor Guidance.

Asia Regional Consultation The purpose is to improve the effectiveness of donor supported reform efforts by bringing together representatives of donor agencies and their development partners involved in the assessment and reform of the business environment for enterprise development.

Conference Objectives 1Contribute to a multi-agency agenda on business reform that prioritises the interests, approaches and challenges of donor agencies in business environment 2Document good practice and principles in business environment reform occurring in the Asia region and feed this into the generic set of guiding principles 3Discuss efforts being taken by donor agencies to improve donor co-ordination and collaboration/harmonisation in the Asia region

Conference Themes Regional Priorities for Business Environment Reform Priority Issues: Product Market Factors Trade Facilitation Sector development Lessons to Learn From Business Environment Reform in Asia Managing Successful Business Environment Reforms in Asia Priority Issues: Drivers of change in the reform process Public Private Dialogue (PPD) Public and Private Governance Developing a common agenda for business environment reform

Hot Topics Hot Topic 1: Increasing the impact of business environment reform on poverty reduction Hot Topic 2: Sustaining business environment reform efforts Hot Topic 3: Reforming the business environment in specific industry sectors Hot Topic 4: Donor co- ordination processes and structures Hot Topic 5: Sub-national business environment reform

Conference Papers COUNTRIES COVERED Afghanistan Bangladesh Cambodia China India Indonesia Laos Mongolia Pakistan Philippines Thailand Vietnam Plus regional and sub-regional overviews and comparisons 43 Papers to be presented 13 Agencies presenting

Research Inventory The inventory will contain data on recently completed, current and planned policy research work being compiled by member agencies. By the end of 2006, the inventory will be produced as an information product for general circulation and downloading from the Donor Committee website, which can be updated in future.

DONOR AGENCY CONTACT PERSON TELEPHONE DATE PAST RESEARCH INTO BUSINESS ENVIRONMENT REFORM NAME OF RESEARCH PROJECT/COUNTRIES COVERED/DATE/WEBSITE ACCESS CURRENT RESEARCH INTO BUSINESS ENVIRONMENT REFORM NAME OF RESEARCH PROJECT/COUNTRIES COVERED/EXPECTED COMPLETION DATE/CONTACT PERSON FUTURE RESEARCH – BUSINESS ENVIRONMENT REFORM NAME OF PROPOSED RESEARCH PROJECT/COUNTRIES COVERED/PROPOSED DATE/CONTACT PERSON Research Inventory

Thank You