Regulatory Reforms in Africa, Eastern Europe and Latin America
Melissa Johns Investment Policy Specialist, World Bank
November 21, 2006
Doing Business 2007: How to reform
Poor countries regulate most
4
5
6
7
8
9
10
11
12
0 50 100 150 200
Doing Business Rank 2007
GN
I p
er C
apit
a
Sub-Saharan Africa is more difficult to do business in than any other region
OECD EastAsia
EastEurope
LatinAmerica
MiddleEast
SouthAsia
Africa
Average ease of Doing Business in 2007
…ICEIDA partner countries span the range
42
67
89
107
140
Namibia Nicaragua Sri Lanka Uganda Mozambique
Doing Business 2007 ranking
Reforms among ICEIDA partner countries
Nicaragua– Lowered the cost to register property– Private credit bureau opened– Faster customs clearance for exporting
Mozambique– Simplified processes to obtain the municipal license – Draft commercial code, labor code
Uganda– Moved new company registration out of the courts
Sri Lanka– Negative reform: new taxes levied, higher rates
Namibia– No reforms
Reform trends in Africa
11
4
1
14
1 1
8
5 5
1
Entry
Lice
nsin
g
Labo
r
Prop
erty
Credi
t- L
egal ri
ghts
Credi
t - i
nfor
mat
ion
Inve
stor
sTa
x
Trad
e
Contra
cts
Bank
rupt
cy
Reforms in 2005/06 by regulatory area
0
Reform trends in Latin America & the Caribbean
7
1
2
4
1
7
3
4 4 4
3
Entry
Lice
nsin
g
Labo
r
Prop
erty
Credi
t - le
gal r
ight
s
Credi
t - i
nfor
mat
ion
Inve
stor
sTa
x
Trad
e
Contra
cts
Bank
rupt
cy
Reforms in 2005/06 by regulatory area
Iceland’s investment partners are reforming
Ranking on Doing Business indicators, number of reforms 2005/06
Georgia China India Ukraine Russia
37
6
96
128134
93
2245
Ukraine business start-up procedures 2005
1. Notarize company charter and execute premises (if needed)2. Open a temporary bank account for initial capital3. Transfer registration fee to the Registry's account4. Register at the Registration Office5. Register at the State Statistics Committee6. Register with the Pension Fund7. Register with the Employment Fund 8. Register with the Social Insurance Fund 9. Register with the Industrial Accidents Fund 10.Register at the Tax Police 11.Register for Profit Tax, VAT at Tax Authority, get VAT
number12.Approval of Ministry of Internal Affairs to prepare a company
seal13.Prepare a seal14.Open a permanent bank account15.Notify the District Tax Inspectorate of the opening of the
permanent bank account
Ukraine business start-up procedures 2006
1. Notarize company charter and execute premises (if needed)
2. Open a temporary bank account for initial capital3. Transfer registration fee to the Registry's account4. Register at the Registration Office5. Register at the State Statistics Committee6. Register for Profit Tax and VAT at Tax Authority, get a VAT
number7. Approval of Ministry of Internal Affairs to prepare a
company seal8. Prepare a seal9. Open a permanent bank account10.Notify the District Tax Inspectorate of the opening of the
permanent bank account
Reform trends in Eastern Europe
11
65 5 5
6
2
14
3
5 5
Entry
Lice
nsin
g
Labo
r
Prop
erty
Credi
t- L
egal ri
ghts
Credi
t - i
nfor
mat
ion
Inve
stor
sTa
x
Trad
e
Contra
cts
Bank
rupt
cy
Reforms in 2005/06 by regulatory area
48 reforms informed by Doing Business
• Simpler business entry in Brazil, Bulgaria, Burkina Faso, El Salvador, Ethiopia, Indonesia, Jordan, Madagascar, Peru, Serbia and Montenegro, Syria, Timor-Leste, Yemen
• Faster court enforcement in Jordan, Serbia and Montenegro, Poland
• Fewer licenses and approvals required in Poland, Niger, Netherlands
• Improved investor protections in Mexico
• Credit information improvements in Afghanistan, Georgia, Chengdu (China), Panama,
Eastern Europe ranks first, Africa third in reforms
89%82%
67%61% 58%
35%
25%
EastEurope
OECD Africa MiddleEast
LatinAmerica
EastAsia
SouthAsia
Percentage of countries with at least one reform, 2005/06
List of top worldwide reformers − 2005/06
CountryStarting
a business
Dealing with
licenses
Employing workers
Registering property
Getting credit
Protecting investors
Paying taxes
Trading across
borders
Enforcing contracts
Closing a business
Georgia √ √ √ √ √ √
Romania √ √ √ √ √ √
Mexico √ √ √
China √ √ √ √
Peru √ √ √ √ X
France √ √ √ √ √
Croatia √ √ √
Guatemala √ √ √
Ghana √ √ √
Tanzania √ √ √ √
Reforms affecting Doing Business indicators on:
Large improvements are possible - Africana is #12
The hypothetical country “Africana” has the ease of:
• Entry in Seychelles (#42)• Licensing (construction) in Swaziland (#16)• Employing workers in Uganda (#8)• Registering property in Sudan (#29)• Getting credit in Kenya (#33)• Protecting investors in South Africa (#9)• Paying taxes in Mauritius (#11)• Trade in Cape Verde (#20)• Enforcing contracts in Ghana (#50)• Closing a business in Botswana (#22)
South Africa: Africa’s top performer
2932
42
48
76
83 84
9497
South Africa Mauritius Namibia Botswana Swaziland Kenya Seychelles Ghana Ethiopia
Doing Business 2007 ranking
South Africa also leads other major developing countries
2329
43
93
121
Korea South Africa Mexico China Brazil
Doing Business 2007 ranking
South Africa was surpassed on reform intensity within the region
CountryStarting
a business
Dealing with
licenses
Employing workers
Registering property
Getting credit
Protecting investors
Paying taxes
Trading across
borders
Enforcing contracts
Closing a business
Tanzania √ √ √ √
Ghana √ √ √Nigeria √ √ √Rw anda √ √ √
Burundi √ √
Kenya √ √
Lesotho √ √
Mali √ √
Mauritius √ √
Niger √ √
South Africa √
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