WORLD BANK GROUP SUPPORT TO BUSINESS ENTRY REFORMS Andrei Mikhnev

Karim O. Belayachi

What kind of support we provide

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To improve regulatory requirements for setting up a formal business we provide assistance on:

Legal Solution• drafting new or amending existing laws and regulations

Institutional Solution• identifying the role and authority of state agencies• building their capacity

Procedural Solution• business process reengineering

Technological Solution• automation of processes through ICT

Recent trends in business registration reforms

Simplification of regulatory requirements for registering a business

Integrating registration functions of various government agencies

Using ITC to make registration procedures effective and efficient

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WBG Business EntryReform Projects

We support business entry reforms in 50 countries

How do we support business entry reforms?

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1. Diagnostic and analytical work• Doing Business• Enterprise Surveys• Entrepreneurship Database

1. Advisory services

2. Lending

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Doing Business indicators

• Update of 2008

• Add 3 countries

• Reformer’s Club: 16 case studies

2008 2009• Starting a business• Dealing with construction permits• Employing workers• Registering property• Enforcing contracts• Getting credit• Trading across borders• Protecting investors• Paying taxes• Closing a business

• Add Using infrastructure

• Research program on regulation and business opportunities for women

2010

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Starting a Business: the indicator

•All procedures for an entrepreneur to start up and formally operate an industrial or commercial business

• Pre-registration

• Registration

• Post-registration

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Top 20 on the ease of Starting a Business, 2009

1. New Zealand 11. Jamaica

2. Canada 12. Macedonia, former Yugoslav Republic of

3. Australia 13. Azerbaijan4. Georgia 14. France5. Ireland 15. Hong Kong, China6. United States 16. Denmark7. Mauritius 17. Iceland8. United Kingdom 18. Finland9. Puerto Rico 19. Tonga10. Singapore 20. Belgium

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Reforms inspired/informed by Doing Business

Africa, 19

East Asia, 8

East Europe, 22

Latin America, 16

Middle East, 10

South Asia, 2OECD, 3 80 Completed Reforms

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Ongoing reforms inspired/informed by Doing Business

94 Ongoing Reforms

Africa, 40

East Asia, 5East Europe, 19

Latin America, 14

South Asia, 2

Middle East, 11

OECD, 3

11

Poland Belarus

Antigua & BarbudaColombiaDominica

El SalvadorGrenada

GuatemalaGuyana

HaitiHondurasSt. KittsSt. Lucia

AlbaniaMacedonia

ArmeniaAzerbaijan

Kyrgyz Rep.India

Bangladesh

MozambiqueKenya

RwandaBurundi

DRCMadagascar

Central African Rep.

SenegalSao Tome

Zambia

Burkina FasoCote d’Ivoire

GhanaLiberia

MaliMauritania

JordanKuwait, Iran

Lebanon, Saudi Arabia, UAE

Yemen

Greece

Singapore

Lao PDRCambodiaIndonesiaVanuatu

Timor LesteTonga

Vietnam

DB Reform Unit Advisory: requests received

1220052006200720082009

Countries: 42

Cities: 272

Subnational Doing Business

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• Expands Doing Business indicators beyond the most populous city

2. Reform instrum

ent

1. Diag

nosti

c too

l

3. M&E device

• Creates baseline• Allows locations to

compete locally and globally

• Entry point in countries averse to international comparisons

• Puts regulatory reform on political agenda

1. Diagnostic tool • Comparisons within cities

are strong drivers of reform • Uncovers bottlenecks and

local good practices• Promotes peer to peer

learning

2. Reform instrument

3. M&E device•Measures progress over time

•Creates an incentive to maintain reform effort even when governments change

Subnational Engagement

Actively involves local governmentsand other reform stakeholders

High media appeal

Initiate reform process

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Subnational Doing Business in AFRICA

NigeriaFirst subnational DB reportDB in Nigeria 2008 launched May 2008Second round started in January 2009

KenyaFirst subnational DB report has started in October 2009

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Visibility of DB Report increases governments’ willingness to reform; DB tight deadlines help focus actions and increase speed of reforms

DB triggers several factors that are needed for successful reforms: Identify a “champion” to drive reforms; establish reform

committees; identify technical leaders and working groups; get inputs from the private sector

Start with simple reforms: focus on administrative changes first, while preparing the ground for long-term reforms

Conclusions: Doing Business triggers reforms

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For more information visit: www.doingbusiness.org

Entrepreneurship Database

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Objectives• To understand the universe of private enterprises around

the globe• To study the impact of regulatory, political, and

macroeconomic institutional changes• To understand what drives entrepreneurs to graduate

from the informal to the formal sectorIndicators

• Business Entry Rate• New Business Density• Total Business Density

Results (3-year average)

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Tota

l and

New

Bus

ines

s D

ensi

tyEn

try R

ates

8.11%6.61%

8.57% 7.73% 7.75%

10.28%

0%2%4%6%8%

10%12%

Africa & Middle East

Asia Easter Europe&

Central Asia

Latin America &

Caribbean

Developing Industrialized

0.61% 1.03%

2.43%1.48% 1.39%

5.48%

0.05% 0.06% 0.24% 0.18% 0.13%0.58%

0%1%2%3%4%5%6%

Africa & Middle East

Asia Easter Europe&

Central Asia

Latin America &

Caribbean

Developing Industrialized

Business Density Entry Rate Density

Ease of Doing business

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0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

0 50 100 150 200

Entry

rate

des

nity

Ease of Starting a Business ranking

http://econ.worldbank.org/research/entrepreneurship.

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