Luis Aldo Sánchez-Ortega 3rd Regional Competitiveness Conference in South East Europe 2008 Luis Aldo Sánchez-Ortega 3rd Regional Competitiveness Conference in Southeast Europe Przno, May 20-22, 2008 1 1

Why expand Doing Business to the subnational level? Extends Doing Business indicators beyond the most populous city to other cities Combines the media appeal of Doing Business with a strategy to actively involve local governments in reform process It creates demand for other WB/IFC products and converts WB/IFC BEE teams into reform facilitators Diagnostic tool Reform instrument M&E instrument Creates baseline Allows locations to compete locally and globally Entry point in countries averse to international comparisons Puts regulatory reform on political agenda Comparisons within countries are strong drivers of reform Uncovers bottlenecks and local good practices Promotes peer to peer learning Measures progress over time Creates an incentive to maintain reform effort even when governments change Refresher of the Subnational DB product. Same DB methodology Activities to engage national and local governments in the project. It is different from other BEE products that have clear phases: diagnostic, design and implementation.

Doing Business in SEE… covering 16 cities Albania: Shkodra Vlora Bosnia and Herzegovina: Banja Luka Mostar Croatia: Osijek Šibenik Varaždin Macedonia: Bitola Montenegro: Nikšić Pljevlje Kosovo: Priština Prizren Serbia: Kruševac Užice Vranje Zrenjanin

Doing Business in SEE… measuring 4 indicators Benchmarking the ease doing business in the SEE region Selected indicators: Starting a business Dealing with construction licenses Registering property Enforcing contracts Why these indicators? Because these are areas where local governments have administrative and legislate competence Research agenda: - Impact of subnational reforms on

Subnational Doing Business has projects all around the globe Countries: 32 In total we covered 230 cities in 32 countries… Global Doing Business report covers 178 citiesSubnational DB reports 2005 The Proyect started covering 24 cities in 3 countries: México (12) + Pakistan (4) + India (8) 2006 The second year we added 9 new countries and 40 cities: México (+17)+ OECS (6) + Brazil (12)+ Bangladesh (3) 2007 In 2007 we added 4 more countries and 12 new cities: Egypt (2) + Morocco (7)+ Pakistan (+1) + India (+2) 2008 By 2008 we expanded Subnational DB reports in 23 countries and 154 cities: Pakistan (+6) + India (+5) + Abu Dhabi (1) + Argentina (9) + China (29) + Colombia (12) + Italy (1) + NYC (5) + Nigeria (10) + Phillipiones (20) + Russia (9) + SEE (16) + Ukraine (7) + Zanzíbar (1) + Egypt (3) + UAE (5) + Indonesia (+15) In total we covered 230 cities in 39 countries… Global Doing Business report covers 178 cities FY08: Morocco, Egypt, Colombia, China, Nigeria, Philippines, Central Asia, Russia, FY09: South East Europe, Mexico update, India, Pakistan, Indonesi, Turkey, Colombia update, Nigeria update, Egypt update, Philippines update, China update Cities: 230 2007 2005 2006 2008

Hypothetical city ranking Subnational DB uncovers best practices within a country Countries/Regions Global ranking DB 2008 Hypothetical city ranking South East Europe 75-136 9 India 134 79* Pakistan 76 52 OECS 27-85 14* Colombia 66 35 México 43 33* Egypt 126 106 Morocco 129 113 China 83 67 SEE – 7 economies (including Kosovo), OECS – 6 islands. For the indicators not measured at the subnationl level, the indicator of the most populous city is used. India- “from hate to love” story HATE: When the DB reports came out in 2004 and 2005, India was ranked one of the worst locations to Do Business in South Asia (a long way from China and Mexico as well)– yet, it had one of the best records on investment, growth, and poverty reduction. The Govt of India was furious Some obvious reasons for this –having a huge internal market of over a billion people meant that India did indeed work differently from smaller economies 2007 Sub-national indicators in 12 cities showed major regional variations between Indian cities If India adopted the best practices from amongst all of these 12 cities – then its ranking could improve 55 places (ranking better than China) LOVE: the Govt of India has now requested a Permanent Technical Advice team from the World Bank to help it reach its stated objective of improving 55 places in the Doing Business indicators as quickly as possible. South East Europe- hypotetical city of Zlatnic ranking 3rd among EU countries and 9th among 178 economies of Global DB! common vision for the region: growing regional cooperation, implementation of critical reforms to improve governance and investment climates, and eventual integration in the European Union (EU) to improve the business environment across SEE, national and municipal policymakers do not need to look beyond the region if the hypothetical city Zlatnic were to adopt the best existing practices from SEE, it would rank 9 among the 178 economies measured by Doing Business 2008! with these exisiting best regulations in place, entrepreneurs in SEE would face a business environment similar to that of Ireland and better than 24 other EU countries. Why does it all matter?!- Higher rankings on the ease of doing business are associated with more growth, more jobs and a smaller share of the economy in the informal sector. *2007 data

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. Capacity-building strategy: methodology transferred to local think-tank with support from Mexican Government and FIAS quality control Led to reform assistance requests to IFC from 3 states. Doing Business in Mexico 2006, the first report in the Doing Business in Mexico series measured commercial regulations in 12 states. The results and recommendations of the study engendered competition amongst states for best Doing Business performance and an important exchange of lessons and experiences across all levels of governments. During the following year, the Mexican authorities requested FIAS/IFC to cover the whole country in a new study that would provide a complete picture of the ease of doing business in all 31 states and Mexico City. The second study Doing Business in México 2007 found that 9 out of the 12 states benchmarked the previous year introduced reforms. The third report, Doing Business in Mexico 2008, will be launched in October, 2008. It is produced in partnership with the Federal Regulatory Improvement Commission (COFEMER), the Ministry of Economy, the Association of Mexican State Secretaries of Economy (AMSDE), and with the Mexican Institute for Competitiveness (IMCO), a local think tank. Mexico is the first country where the transfer of the Doing Business methodology to a local institution is being piloted, so that annual benchmarkings become sustainable with IFC's quality control. Preliminary results show that political support for reform efforts has continued even after two rounds of local elections and one presidential election since 2005 (29/31 states reformed including legal reforms). 7

http://Subnational.doingbusiness.org Detailed information in 5 languages 2nd phase: Merge global and SDB databases General description Launching conference presentations Names of all the people involved in SBD projects Links to specific country subnational websites Languages: As of today, we have subnational DB websites in 5 languages: English, Spanish, French, Chinese and Arabic. Soon we will have Russian. It is important to mention that detailed list of procedures are in these languages available for government public officials and public in general who does not speak English. General description of Subnational and regional DB projects: Just mention it Data Analysis: Direct access from SDB website to 178 economies data. By the second half of this year we will complete the 2nd phase of the subnational website projects which means that we will merge the global and subnational data: 408 economies data will be available with just one click. Presentations: Subnational launching conference presentations and SDB project presentations now available Meet the team: Bios of the DC SDB Team and a list of all the WB/IFC/FIAS staff who is involved in a subnational project Contact us and Get alerts links: Clients, private sector, academia and public in general can ask questions, make comments and subscribe to SDB website and receive alerts of any SDB event Subnational reports: Each subnational and regional report has its own country/regional website (NEXT SLIDE) Services for clients and public in general

http://Subnational.doingbusiness.org Country reports’ general description Rankings Data analysis Main findings Subnational and regional reports’ general description: Just mention it Rankings: Based on our experience, having rankings in the main country website encourage local governments to reform Main findings: Data analysis: Friendly direct links to specific indicators and cities’ data (including detailed list of procedures) Download reports: Free download of reports in local language and English. Here you can also find press releases of the launching of the reports. Reform Simulator: With this tool, governments, private sector, academia and public in general can simulate reforms at the national level. When the 2nd phase is complete, subnational cities will be able to simulate reforms at the global level too!!! National reform simulator Free reports in local language and English

http://subnational.doingbusiness.org Doing Business 10