doing business 2012 doing business in a more transparent world augusto lopez-claros director, global...
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Doing Business 2012Doing Business in a More Transparent World
Augusto Lopez-ClarosDirector, Global Indicators and Analysis
Geneva Press Club – Geneva, Switzerland
November 23, 2011
1
What does Doing Business measure?
Doing Business indicators:
Focus on regulations relevant to the life cycle of a small to medium-sized domestic business.
Are built on standardized case scenarios.
Are measured for the most populous city in each country.
Are focused on the formal sector.
DO 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.
2
Start-up Expansion Operations Insolvency
Starting a businessMinimum capital requirement,
procedures, time and cost
Registering propertyProcedures, time and cost
Getting creditCredit information systems
Movable collateral laws
Protecting investorsDisclosure and liability in related party transactions
Enforcing contractsProcedures, time and cost to resolve a commercial dispute
Dealing with construction permits
Procedures, time and cost
Paying taxesPayments, time and Total Tax
Rate
Trading across bordersDocuments, time and cost
Getting electricity Procedures, time and cost
Employing workers (annex)
Resolving insolvency (formerly Closing a business)
Time, cost and recovery rate
Doing Business indicators – 11 areas of business regulation (9 included in the DB2011 ranking; 10 in DB2012)
EntryProperty rights
Investor protectionAccess to credit
Administrative burden Flexibility in hiring
Recovery rateReallocation of assets
3
What's new in Doing Business 2012?
2007175 economies
2008178 economies
2009181 economies
2010183 economies
2011183 economies
2012183 economies
Starting a business
Dealing with construction permits
Employing workers
Registering property
Getting credit
Protecting investors
Paying taxes
Trading across borders
Enforcing contracts
Resolving Insolvency (formerly Closing a business)
Update of 2007
Add 3 countries
Reformer’s Club, and 16 case studies
New “About DB” chapter
Trends analysis DB04-DB09
Most popular reforms
Most effective reforms
Lessons learned
Add 3 new countries (Bahamas, Bahrain, Qatar)
Methodology change in Getting Credit (Legal Rights)
Business regulation and reform in the context of the global crisis
EWI and social protection
Worker Protection: Researching ILO core labor standards
Piloting a new infrastructure indicator
Add Cyprus, Kosovo
New metric on 5-year change at country level
Focus on reform results
Getting Electricity: added 36 countries and indicator level ranking
Methodology review for Employing Workers indicator
Getting Electricity included in overall ranking
New metric on an economy’s distance to the frontier
Illustration of variability of performance across indicators
Access to information data
4 case studies on regulatory reform
E-chapters for indicators
Threshold applied to the TTR in Paying Taxes
4
1. Singapore 16. Georgia2. Hong Kong SAR, China 17. Thailand3. New Zealand 18. Malaysia
4. United States 19. Germany
5. Denmark 20. Japan6. Norway 21. Latvia7. United Kingdom 22. Macedonia, FYR8. Korea, Rep. 23. Mauritius9. Iceland 24. Estonia10. Ireland 25. Taiwan, China11. Finland 26. Switzerland 12. Saudi Arabia 27. Lithuania13. Canada 28. Belgium14. Sweden 29. France15. Australia 30. Portugal
Top 30 economies for the ease of doing business in 2010/11
5
Progress in narrowing the distance to the frontier 2005-11
6
New metric on ‘distance to the frontier’: tracking economies’ progress over time
…captures the absolute improvement that countries have made over time, and…also provides information on how far countries have been away from the “frontier” – a measure based on the most efficient business regulatory practices observed by the Doing Business Project across countries and over time.
SGP
USA
CAN
FIN
ISL
DEU
BEL
MYS
ISR
PRI
THA
CHL
ATG
NAM
HU
NBL
ZBG
RM
NG
VCT
SVN
WSM
ARM
KNA
MD
VKI
RSY
CVN
MPN
GG
RCSW
ZKA
ZM
ARTZ
APR
YN
ICG
TMU
RYAZ
EU
GA
LSO
DZA
BOL
BRA
BTN
ZWE
MO
ZKH
MSU
RVE
NCM
RRW
AG
INST
PCI
VAG
OG
NB
BFA
TMP
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
Distance to Frontier, 2005-2011
2005
2011
Georgia, biggest improver
Rwanda
Nar
row
ing
the
Dis
tanc
e to
the
Fron
tier f
rom
200
5 to
201
1 (p
erce
ntag
e po
ints
)
7
New metric on dispersion: an economy’s performance across different areas of business regulation can vary significantly
8
Globally, the pace of reforms making business easier remains strong in 2010/11: 245 in 125 economies
While in 2005/2006 only 33% of the economies of Sub-Saharan Africa implemented business regulation reforms, in 2010/2011 78% of the economies reformed
9
Stronger legal institutions and property right protections are associated with more efficient regulatory processes
Economies in Sub-Saharan Africa and South Asia are the most likely to have both weaker legal institutions and more complex regulatory processes
10
Economies worldwide increasingly focused reform efforts on legal institutions and property rights protections
Reform increasing efficiency of regulatory processes are those in the areas of starting a business, dealing with construction permits, getting electricity, registering property, paying taxes and trading across borders.
Reform strengthening legal institutions are those in the areas of getting credit, protecting investors, enforcing contracts and resolving insolvency.
11
Reforms making it easier to start a business were once again most common in 2010/11 – and have shown results over time in reduced delays…
12
…and in lower costs
13
All regions have reduced the time it takes to transfer property between local firms
Registering property now takes on average nearly as many days in Eastern Europe & Central Asia (33) and Middle East & North Africa (34) as it does in OECD high income economies (33).
14
Developing economies around the world have reduced delays for exporting and importing through seaport
Middle East & North Africa has experienced the biggest cumulative drop in the time for trading across borders
Sub-Saharan African economies have reformed 52 times in trading across borders, also reducing time, but exporters in the region still face delays over 3 times longer than in OECD high income economies
15
Tajikistan Sweden
The complexity and time it takes to get an electricity connection varies significantly among economies
16
Easier access to fee schedules and lower fees tend to go hand in hand
The rise in e-government initiatives around the world provides an opportunity to increase access to information and transparency.
17
Paying taxes: High tax rates do not always lead to high tax revenue or good public services
18
Change in ranking DB11
to DB12Starting a Business
Dealing with construction
permits
Getting electricity
Registering property
Getting credit
Protecting investors
Paying taxes
Trading across
borders
Enforcing contracts
Resolving insolvency
Morocco 11594 (-21) √ √ √
Moldova 9981 (-18) √ √ √ √
Macedonia, FYR 3422 (-12) √ √ √ √
São Tomé and Principe
174163 (-11)
√ √ √ √
Latvia 3121 (-10) √ √ √ √
Cape Verde 129119 (-10)
√ √ √
Sierra Leone 150141 (-9) √ √ √ √
Burundi 177169 (-8) √ √ √ √
Solomon islands 8174 (-7) √ √ √ √
Korea, Rep. 158 (-7) √ √ √
Armenia 6155 (-6) √ √ √ √ √
Colombia 4742 (-5) √ √ √
Economies improving the most in the ease of doing business in 2010/11
19
Among large emerging economies, China has made the greatest strides in closing the gap to the frontier
2005 2006 2007 2008 2009 2010 20110.30
0.35
0.40
0.45
0.50
0.55
0.60
China Nigeria India Russian Federation Brazil
DB reforms
14 9 19 17 10
Nar
row
ing
the
Dis
tanc
e to
the
Fron
tier f
rom
200
5 to
201
1 (p
erce
ntag
e po
ints
)
20
Efficient Product Market Regulation in OECD correlate with ease of Doing Business
0 20 40 60 80 100 120 140 1600
0.5
1
1.5
2
2.5
3
3.5
OECD Product Market Regulation Indicator and Doing Business Rank 2011
Doing Business Rank
OEC
D P
rodu
ct M
arke
t Re
gula
tion
The positive correlation is statistically significant at the 95% level. Significance holds when controlling for income per capita.
21
World Economic Forum Competitiveness Index and Doing Business 2011
0 20 40 60 80 100 120 140 160 180 2000
20
40
60
80
100
120
140
160
WEF Global Competitiveness Rank and Doing Business Rank 2011
Doing Business Rank
WEF
Glo
bal C
ompe
titive
ness
Ran
k
The positive correlation is statistically significant at the 95% level. Significance holds when controlling for income per capita.
22