1. 1 Doing Business 2010: Reforming through Difficult Times Overview Dahlia Khalifa dkhalifa@worldbank.org

2. Doing Business – Overview Launched 8 years ago. Goal: to provide an objective basis for understanding and improving the regulatory environment for business. From 5 indicator sets in 133 economies to 10 in 183 economies. The objective: efficient regulations, accessible to all, and simple in their implementation. Focus on regulations relevant to the life cycle of a small to medium-sized domestic business based on standardized case DO NOT measure all aspects of the business environment.

3. Doing Business indicators – 10 areas of business regulation Property rights Investor protection Access to credit Entry Administrative burden Flexibility in hiring Recovery rate Reallocation of assets

4. How does it work? Doing Business methodology… Time and Motion indicators Time and motion indicators Starting a business Dealing with construction permits Registering property Paying taxes Trading across borders Enforcing contracts Closing a business

5. Legal scoring indicators: Rwanda companies law again drives change Extent of Disclosure Approval of related- party transactions Disclosure requirements Extent of Director Liability Ability to hold interested party liable Available remedies Ease of Shareholder Suit Information available during trial Access to company documents 1.Based on a standardized case 2.Establishes indices with scoring scale 3.Gather all the relevant laws, regulations 4.Assigns value based on laws, regulation 5.Main index is often a function of underlying indices Rwanda’s new companies law strengthens investor protection Scoring (legal) indicators Employing workers Protecting investors Getting credit

6. 6 Where we get our data Survey design: Originally developed in consultation with academic advisers Business case with assumptions on legal form size, location, nature of operations Survey collection: over 8,000 local professionals advising on legal and regulatory requirements Lawyers, judges, accountants, freight-forwarders, architects, government officials) Mostly pro bono Global and regional alliances (Allen & Overy, Lex Mundi, PWC, Law Society, Union of Notaries...) Data collection and verification: Word & online surveys collection Follow up through conference calls, written correspondence, country visits) Review of applicable laws and regulations Reform corroboration: Information update round with country offices Reform update review through ED offices

7. JAN – MAY MAY- JUNE JULY - SEPT A twelve month project cycle Data analysis and government feedback -Coding of 52,000 data points with Excel - 287 reforms recorded Publication/writing Report production - 12,000 copies sold Media prep -5,739 articles -and mentions Final data / contributors list -8,000 contributors - interaction with 183 governments Surveys - generation - 12,000 sent Translations Website - 2 million visits last year Data collection -Conference calls & VC’s -written correspondence - Travel to 43 countries in DB10 Dec- Jan Feb- May June- Aug Sept- Nov Note: refers to Doing Business 2010 cycle Launch - 58 launch events in 25 countries June 1st cutoff date for reform 7

8. Doing Business 2010: Reforming through Difficult Times 183 economies

9. 1. Singapore16. Finland 2. New Zealand17. Mauritius 3. Hong Kong, China18. Sweden 4. United States19. Korea, Rep. 5. United Kingdom20. Bahrain 6. Denmark21. Switzerland 7. Ireland22. Belgium 8. Canada23. Malaysia 9. Australia24. Estonia 10. Norway25. Germany 11. Georgia26. Lithuania 12. Thailand27. Latvia 13. Saudi Arabia28. Austria 14. Iceland29. Israel 15. Japan30. Netherlands Top 30 on the ease of Doing Business 2010

10. Key findings in this year’s report Against backdrop of global financial and economic crisis, record number of reforms recorded: 287 reforms in 131 countries; 20% more than in the year before. Focus on SMEs for job creation. Regulatory ease of starting, operating and closing a business influences how well firms can cope and adjust. Reforms more likely in developing economies: Two-thirds of reforms in low- and lower-middle-income economies. Rwanda first Sub-Saharan African country to become top reformer: Reforms in 7 of the 10 areas; from143 to 67 in aggregate ranking. 2 regions stand out for reform pace in 2008/9: Eastern Europe and Central Asia (sixth year in a row) and Middle East and North Africa

11. The top 10 reformers in 2008/09 Economy Starting a business Dealing with construction permits Employing workers Registering property Getting credit Protecting investors Paying taxes Trading across borders Enforcing contracts Closing a business Rwanda Kyrgyz Republic Macedonia FYR Belarus United Arab Emirates Moldova Colombia Tajikistan Egypt, Arab Rep. Liberia

12. Percentage of countries with at least one positive reform 96% 89% 75% 71% 63% 59% 63% High Income OECD Eastern Europe and Central Asia Sub-Saharan Africa Middle East and North Africa Latin America and Caribbean South Asia East Asia and Pacific Eastern Europe and Central Asia reformed the most, followed by Middle East and North Africa

13. Ease of Doing Business – by Region

14. 287 reforms in 131 economies in 2008/09 made it easier to do business

15. Reforms gained momentum in Developing Economies

16. Broad reform programs more common in developing economies Following a longer-term agenda aimed at increasing the competitiveness of their firms. Continually pushing forward and staying proactive. Following a clear direction in their policy agenda while responding to new economic realities.

17. Some Insights by Indicator

18. Big improvements in starting a business since 2004

19. One-stop shops and risk-based systems popular in construction permitting

20. Increased investor protections in Africa as a result of new company laws

21. In bankruptcy, creditors recover more in high income OECD economies Global Average

22. Peer-learning and benchmarking: completed reforms motivated or informed by DB About 270 reforms since 2004 270 127 reforms in 2008/9 Reform task forces in over 30 countries At the Prime Minister’s or President’s level (e.g. Colombia, Burkina Faso, India) At the ministerial level (e.g. Rwanda, Egypt, Kenya, Liberia, Sierra Leone, Kazakhstan, Saudi Arabia) Using Doing Business to learn from and cooperate with others Peer-learning events in El Salvador (Central America), Mauritius (Small Island States), Abu Dhabi (Arab World). Ease of Doing Business action plan for 21 members of Asia-Pacific Economic Cooperation (APEC).

23. Learning from others “What I like about Doing Business … is that it creates a forum for exchanging knowledge. It’s no exaggeration when I say I checked the top ten in every indicator and we just asked them “What did you do”? If there is any advantage to starting late in anything, it’s that you can learn from others.” Dr Mahmoud Mohieldin, Egypt’s Minister of Investment, and Doing Business 2010 top reformer

24. Growing body of research drawing on Doing Business 405 articles published in peer-reviewed academic journals, about 1,140 working papers Some findings of recent research:  Higher entry costs significantly reduce output per worker and skilled employment. (Barseghyan (2008), Freund and Bolacky (2008), Dulleck et al (2006))  Women are particularly affected by regulation and its impact on entrepreneurship. (Ardagne and Lusagi (2009))  Economy’s governance structure and natural resources influence motivation for reform (Amin and Djankov, 2009) 24

25. Thank you. For more information: www.doingbusiness.org