Augusto Lopez Claros

1
Augusto Lopez Claros
Director Global Indicators and Analysis
Department World Bank Group
June 28, Vienna
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What does Doing Business measure?

• 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 city
• Is 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.
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What do subnational and regional reports add?
Diagnostic tool
? Expand the data beyond the economys largest
business city and/or focus on regions with
similar legal and regulatory frameworks

• Create a baseline
• Pinpoint bottlenecks and provides information on
  good practices within the same economy and/or
  region that can easily be replicated
• Capture reforms

Reform instrument

• Allow specific locations to compete locally and
  globally
• Promote peer to peer learning
• Motivate a reform process by engaging local
  governments and reforms stakeholders

ME device

• Measure progress over time through repeated
  benchmarking
• Create an incentive to maintain reform effort
  even when governments change

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Doing Business in South East Europe 2011

• 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

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What locations does the report cover?
MOLDOVA Chisinau Balti MONTENEGRO Podgorica P
ljevlja Nikšic SERBIA Belgrade Zrenjanin Krušev
ac Užice Vranje
ALBANIA Tirana Shkodra Vlora Durres BOSNIA AND
HERZEGOVINA Sarajevo Banja Luka Mostar KOSOVO
Pristina Prizren FYR MACEDONIA
Skopje Bitola Tetovo
? 7 economies and 22 cities
Largest business city New city
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What are the key findings?

• Remarkable progress in regulatory reform across
  the region results in significant time and cost
  savings for entrepreneurs

• 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

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It is easier to do business in the 19 cities
previously measured
Number of cities that introduced or benefited
from business reforms since 2008
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Most improvedBanja Luka and Skopje
Reforms in 4 DB areas resulted in significant
time savings for domestic entrepreneurs
Banja Luka (Bosnia and Herzegovina)
Skopje (FYR Macedonia)
Time (days)
Time (days)
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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
Albania Shkodra 8 3 9 11
Albania Tirana 10 NO PRACTICE 16 18
Albania Vlora 7 9 10 10
Bosnia and Herzegovina Banja Luka 18 3 21 15
Bosnia and Herzegovina Mostar 20 13 22 20
Bosnia and Herzegovina Sarajevo 19 9 19 19
Kosovo Pristina 22 17 18 21
Kosovo Prizren 21 6 14 22
FYR Macedonia Bitola 2 12 3 5
FYR Macedonia Skopje 1 2 15 9
FYR Macedonia Tetovo 3 3 6 3
Moldova Balti 13 8 1 4
Moldova Chisinau 17 19 1 2
Montenegro Niksic 5 1 6 17
Montenegro Pljevlja 4 6 4 7
Montenegro Podgorica 6 18 20 16
Serbia Belgrade 11 21 16 11
Serbia Krusevac 16 20 10 11
Serbia Uzice 12 16 10 6
Serbia Vranje 14 13 5 7
Serbia Zrenjanin 14 13 6 1
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South East Europes business entry averages
improved significantly
SEE Average 2008
26
22.3
SEE Average 2011
17
15
13
10
8
EU Average 2011
6
5.7
Skopje (FYR Macedonia)
3
3
1.5
Pjevlja (Montenegro)
Time (days)
Cost ( of GNI pc)
Procedures (number)
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Starting a business Consolidating requirements
at OSS made starting a business much faster in
Skopje
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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

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Delays in property registration mainly due to
land registries and cadastres
Time
14
Fixed property transfer fees in Kosovo make
registering property affordable
Property transfer tax
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Tetovo and Zrenjanin have the fastest commercial
dispute resolutions
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A city adopting regional best practices would
rank 6th globally
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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

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Thank you !
www.doingbusiness.org /SEE