Augusto Lopez Claros - PowerPoint Presentation

Augusto Lopez Claros Director Global Indicators and Analysis DepartmentWorld Bank Group June 28, Vienna

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 cityIs 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?

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 C apture reforms Reform instrument Allow specific locations to compete locally and globally Promote peer to peer learningMotivate a reform process by engaging local governments and reforms stakeholders M&E device Measure progress over time through repeated benchmarkingCreate 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

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

What locations does the report cover? ALBANIA Tirana* Shkodra Vlora Durres BOSNIA AND HERZEGOVINA Sarajevo* Banja LukaMostar KOSOVO Pristina* Prizren FYR MACEDONIA Skopje* Bitola Tetovo MOLDOVAChisinau*BaltiMONTENEGROPodgorica*Pljevlja NikšićSERBIA Belgrade*ZrenjaninKruševacUžice Vranje * Largest business city New city ► 7 economies and 22 cities 5

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

It is easier to do business in the 19 cities previously measured Number of cities that introduced or benefited from business reforms since 2008

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

Good practices are found across South East European cities and economies Economy City Ease of starting a business Ease of dealing with construction permits Ease of registering property Ease of enforcing contracts Albania Durres 9 11 13 14 Shkodra 8 3 9 11 Tirana 10 NO PRACTICE16 18Vlora 7 91010 Bosnia and HerzegovinaBanja Luka18 32115 Mostar201322 20Sarajevo19 91919 Kosovo Pristina 22 171821 Prizren 21 6 14 22 FYR Macedonia Bitola 2 12 3 5 Skopje 1 2 15 9 Tetovo 3 3 6 3 Moldova Balti 13 8 1 4 Chisinau 17 19 1 2 Montenegro Niksic 5 1 6 17 Pljevlja 4 6 4 7 Podgorica 6 18 20 16 Serbia Belgrade 11 21 16 11 Krusevac 16 20 10 11 Uzice 12 16 10 6 Vranje 14 13 5 7 Zrenjanin 14 13 6 1

South East Europe’s business entry averages improved significantly Procedures (number) Time (days) Cost (% of GNI pc) SEE Average 2008 SEE Average 2011 10 8 26 17 22.3 13 6 EU Average 2011 15 5.7 Skopje (FYR Macedonia) 3 3 1.5Pjevlja (Montenegro)

Starting a business: Consolidating requirements at OSS made starting a business much faster in Skopje

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

Delays in property registration mainly due to land registries and cadastres Time

Fixed property transfer fees in Kosovo make registering property affordable Property transfer tax

Tetovo and Zrenjanin have the fastest commercial dispute resolutions

A city adopting regional best practices would rank 6 th globally

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%

Thank you ! www.doingbusiness.org /SEE