in South East Europe 2008

1. in South East Europe 2008 Pierre Guislain Director, Investment Climate Department and General Manager FIAS July 14th, 2008 Bitola

2. Doing Business project 2008 • Update of 2007 • Add 3 countries • Reformer’s Club: • 11 case studies 2007 2009 • Starting a business • Dealing with licenses • Employing workers • Registering property • Getting credit • Protecting investors • Paying taxes • Trading across borders • Enforcing contracts • Closing a business • Update of 2008 • Research program on regulation and business opportunities for women • FDI indicator

3. South East Europe countries among the world’s top reformers in DB 2008 1.Egypt 2.Croatia 3.Ghana 4.Macedonia FYR 5.Georgia 6.Colombia 7.Saudi Arabia 8.Kenya 9.China 10.Bulgaria Starting a business        Dealing with licenses       Employing workers Registering property      Getting credit        Protecting investors   Paying taxes    Trading across borders     Enforcing contracts   Closing a business   

4. Subnational Doing Business project • Expands Doing Business indicators beyond the most populous city 1. Diagnostic tool 2. Reform instrument • Creates baseline • Allows local and global benchmarking • Puts regulatory reform on political agenda • Links national and local reform efforts • Comparisons within cities are strong drivers of reform • Uncovers bottlenecks and local good practices • Promotes peer to peer learning • Actively involves local governments and other reform stakeholders 1. Diagnostic tool 2. Reform instrument 3. M&E device 3. M&E device • Measures progress over time • Creates an incentive to maintain reform effort even when governments change • High media appeal

5. Doing Business in South East Europe Prizren Priština Šibenik Osijek Varaždin Zagreb 22 cities covered, 6 of which are also covered by the global Doing Business report • Indicators: • Starting a Business • Registering Property • Construction Licenses • Enforcing Contracts Zrenjanin Kruševac Užice Vranje Belgrade Banja Luka Mostar Sarajevo * Pljevlja Nikšić Podgorica Bitola Skopje Shkodra Vlora Tirana *Under UN Security Council Resolution 1244 (1999), Kosovo is administered by the United Nations Interim Administration Mission in Kosovo (UNMIK).

6. Where is it easiest doing business in South East Europe?

7. Starting a business in Albania takes 6 procedures and 7 days ✘ September 2007 October 2007 18 13 2 0

8. Time to start a business (days) Denmark (6 days) Slovakia (25 days) Slovenia (60 days)

9. Days to deal with construction licenses United States (40 days) OECD average (153 days) Ukraine (429 days)

10. High number of pre-construction procedures across SEE

11. Land registries- main bottleneck to registering property 350 300 250 307 days 150 100 100 days 50 0 Mostar 8 procedures, 145 days Sarajevo 7 procedures, 331 days Time to register property in Bosnia and Herzegovina (days) Apply for registration at the land registry Others

12. Days to enforce a contract Regional average 573 days to enforce a contract SEE Average World’s best Hong Kong- 211 days World’s slowest Timor Leste- 1800 days

13. Cost to enforce a contract (% of the claim) Uganda (45%) Regional average Latin America (31%) Germany (12%)

14. A hypothetical city “Zlatnic” would rank 9th out of 178 economies if regional best practices were adopted

15. Doing Business in Mexico 2006, 2007 and 2008: sustained development results • Great initial impact: Political support for reform efforts has continued even after two rounds of local elections and one presidential election since first benchmark.

16. Priorities for Reform in South East Europe • Business Registration • Eliminate minimum capital requirement • Allow business start-up online • Property Registration • Introduce fixed fees • Make registries electronic • Construction Licensing • Consolidate project clearances • Make licensing applications and processing electronic • Contract Enforcement • Introduce/improve case management system • Improve enforcement

17. Business entry reforms = more businesses Business Density (registered firms per capita) Business Entry (new firms in % of registered firms) Most difficult Most difficult Easiest Easiest Countries ranked by ease of doing business, quintiles Source: Doing Business database

18. …Which means more formal employment Informal Sector (% of GDP) Unemployment (% of labor force) Most difficult Most difficult Easiest Easiest Countries ranked by ease of doing business, quintiles Source: Doing Business database, WDI

19. www.doingbusiness.org/SEE

20. World Bank Group supports reforms in areas covered by the Subnational Doing Business Project World Bank ● FIAS/IFC Advisory Services

21. Building on our sub-national competitiveness work • Ongoing • Institutionalizing reform • Streamlining procedures and regulatory reform process • Building capacity of sustainable implementation within municipalities • Network of policy makers • Building constituencies for reform • Facilitating peer-to-peer learning • Capacity building and introduction of good practice discussion • Linking with the networks outside the region • Planned • Possible scale-up and roll-out • Second round of municipalities • New countries as interests grows across the region

22. Thank you/ Hvala/ Faleminderit/ Blagodaram Doing Business http://subnational.doingbusiness.org

23. Extra Slides.

24. Top 30 on the Ease of Doing Business — 2007 75. Macedonia, FYR 81. Montenegro 86. Serbia 97. Croatia 105. Bosnia and Herzegovina 136. Albania

25. Subnational Doing Business has projects all around the globe Countries: 32 Cities: 230 2005 2006 2007 2008

26. Cost to register property (% of property value) Slovenia (2%) Italy (0.6%)

27. Potential for improvement in ranking within the region DB 2008 ranking After adopting all best practices Canada – 7 Ireland – 8 Australia – 9 Global Rank: 9 Poland – 74 Russia – 106 Ukraine – 139 South East Europe ranks: 75 - 136

28. Doing Business subnational series Doing Business