WORLD BANK GROUP LAC Trade Training Peruvian Delegation October 21, 2010 LOGISTICS PERFORMANCE INDEX AND DOING BUSINESS INDICATORS Souleymane COULIBALY ECA Regional Trade Coordinator Geneva, June 14 th, 2011

The Logistics Performance Index and Doing Business Report 2 Two separate but complementary reports

The Logistics Performance Index Measures the trade logistics efficiency of a country Fundamental premise: Efficient logistics drives economic performance 3

The Doing Business Report Provides measures of the ease of doing business (regulations) for local firms in a given country Fundamental premise: economic activity requires effective regulations in all areas of setting up and operating a business 4

Agenda 2. Overview of Doing Business Overview of LPI LPI Results: CIS countries 5. Want to Learn More? 4. DB Results: CIS Countries

1. Overview LPI

The Logistics Performance Index First report in 2007, every three years Source of data is suppliers of logistics services (freight forwarders, express carriers) Rates logistical performance on a scale of 1 to 5 7

8 LPI: Key messages Trade logistics is an important element of national competitiveness A country’s performance is only as good as its weakest link The LPI dataset can be used to identify key bottlenecks in your own country

Efficiency of the clearance process Quality of trade and transport infrastructure Ease of arranging competitively priced shipments Logistics competence and quality of logistics services Ability to track and trace shipments Timeliness of shipment delivery The LPI measures six dimensions of country performance: What are efficient logistics? 9

10 Why Logistics Matter: Result when a low income country reaches LPI of middle income average Indicator/policy area Increase in trade (%) Logistics Performance Index15.2 All trade barriers reduced to 10%8.4 Regulatory reform measures7.4 Tariffs reduced to 5%5.7

Key Policy Implications: Expand the traditional development agenda beyond customs reform and infrastructure to be comprehensive—processes, services, and infrastructure. Increase border agency coordination Partner with the private sector Reform must be tailored to each country’s circumstances 11

The Logistics Performance Index 12

13 2. Overview Doing Business 2011

14 The Doing Business Report First report in Sept 2003, yearly Covers 183 countries Surveys in-country specialists with knowledge of regulatory system Provides a basis for measuring, understanding and improving the regulatory environment for business creates methodology and a database for policy makers

15 The Doing Business Report Doing Business does not measure all aspects such as: macroeconomic stability corruption level of labor skills proximity to markets, regulations specific to foreign investment or financial markets

16 Doing Business indicators – 11 areas of business regulation (9 included in the ranking)

17 Doing Business – Trading Across Borders index What are best practices? Paper-free electronic data interchange (EDI) system Risk - based inspection systems (less than 10% of cargo physically inspected) Electronic Single Window for obtaining trade documents and approvals

The Doing Business Report 18

LPI and DB – separate but complementary LPIDB Source of data 3 rd country providers of Logistics services In-country entities with knowledge of business regulations ConceptPerformance outcomes Analytic breakdown in component procedures FrequencyEvery 3 years since 2007Yearly since 2003 Significance Several indices of logistics performance Metric of broader business regulatory environment. Countries Both indices provide basic input for policy-makers. Neither are in-depth analysis.

20 3. LPI Results: CIS countries

LPI 2010 – performance varies around the world Countries are improving around the world No data Logistics friendly Logistics unfriendly Partial performers Consistent performers 21

More than income: the “logistics gap” With the right investment and policies, lower income countries can also be high performers 22

Overperformers and underperformers 23

CountryLPI Rank South Africa28 Malaysia29 Poland30 Lebanon33 Latvia37 Turkey39 Brazil41 Lithuania45 Argentina48 Chile49 TOP 10 COUNTRIES LOWER MIDDLE INCOME CountryLPI Rank China27 Thailand35 Philippines44 India47 Tunisia61 Honduras70 Ecuador71 Indonesia75 Paraguay76 Syrian Arab Republic80 TOP 10 COUNTRIES LOW INCOME CountryLPI Rank Vietnam53 Senegal58 Uganda66 Uzbekistan68 Benin69 Bangladesh79 Congo, Dem. Rep.85 Madagascar88 Kyrgyz Republic91 Tanzania95 TOP 10 COUNTRIES UPPER MIDDLE INCOME LPI 2010 Ranks 24

25 countries achieved significant improvement in LPI 25

25 countries achieved significant improvement in LPI  LICs: Afghanistan, Chad, Haiti, Myanmar, Niger, Tajikistan, Tanzania, and Uzbekistan  LMICs: China, Djibouti, Honduras, Philippines, and Syria  UMICs: Brazil, Colombia, Costa Rica, Dominican Republic, Kazakhstan, Lebanon, Mexico, Poland, Russian Federation, and Uruguay  HICs: Saudi Arabia and the Czech Republic Source: Logistics performance survey data, 2010 and countries improved between 2007 and

LPI Scores by Region 27

LPI Scores 28

% of the highest performer 29 LPI 2007 Highest performerSingapore100 Lowest performerAfghanistan7% LPI 2010 Highest performerGermany100% Lowest performerSomalia11%

Performance in the 6 areas of the LPI Average LPI Score

Infrastructure quality 31

Quality of services I 32 TRANSPORT SERVICES

Quality of services II 33

Border clearance procedures / corruption 34

Positive trends in logistics performance since

36 4. Doing Business Results: CIS Countries 4. Doing Business Results: CIS Countries

Top 30 economies on the ease of Doing Business 2009/ Singapore16. Korea, Rep. 2. Hong Kong SAR, China17. Estonia 3. New Zealand18. Japan 4. United Kingdom19. Thailand 5. United States20. Mauritius 6. Denmark21. Malaysia 7. Canada22. Germany 8. Norway23. Lithuania 9. Ireland24. Latvia 10. Australia25. Belgium 11. Saudi Arabia26. France 12. Georgia27. Switzerland 13. Finland28. Bahrain 14. Sweden29. Israel 15. Iceland30. Netherlands

Eastern Europe and Central Asia is the second best performing region in 2008/09 38 CIS economies: 12Georgia 13Kyrgyz Republic 48Armenia 54Azerbaijan 59Kazakhstan 68Belarus 89Moldova 123Russian Federation 139Tajikistan 145Ukraine 150Uzbekistan

Kazakhstan improved the most in the ease of doing business in 2009/10 Economy Starting a business Dealing with construction permits Registering property Getting credit Protecting investors Paying taxes Trading across borders Enforcing contracts Closing a business Kazakhstan Rwanda Peru Vietnam Cape Verde Tajikistan Zambia Hungary Grenada Brunei Darussalam 39

Percentage of countries with at least one positive reform in 2009/10 84% 61% 63% 75% 59% 47% 67% OECD high Income Eastern Europe and Central Asia Sub-Saharan Africa Middle East and North Africa Latin America and Caribbean South Asia East Asia and Pacific Worldwide the pace of reforms making business easier remains strong: 216 in 117 economies. Eastern Europe and Central Asia again with the most improvements in the ease of doing business in 2009/10, followed by East Asia and Pacific 40

90% of the economies in the ECA region improved their business environment While 85% of economies worldwide improved business regulation over the last 5 years. 41

21 of 25 economies in Eastern Europe & Central Asia improved business regulations this year 6 economies eased trading across borders in the region 42

43 33 economies reformed making it easier to trade across borders in 2009/10

44 Implementation of electronic systems most popular trade facilitation reforms in 2009/10 Bahrain Belarus Brunei Egypt Israel Kazakhstan Latvia Lithuania Nicaragua Pakistan Peru Philippines Swaziland Tunisia U.A.E Zambia Armenia Guyana Kazakhstan Peru Burkina Faso Cambodia Kazakhstan Montenegro Rwanda Spain Angola Bahrain Kenya Nicaragua Pakistan Saudi Arabia Armenia Egypt Ethiopia Fiji Grenada Mali Peru West Bank & Gaza EDI system implementation Risk based inspections Customs administration Document reduction Port procedures List of economies that made trading easier by types of reforms

45 Time to export and import in Eastern Europe & Central Asia: still long, but improving Note: Time to trade includes the 4 processes discussed in previous slide Traders in the region typically still face delays over twice as long as in OECD high income economies But, average time to export and import in the region dropped over the years by 5 days for exporting and 6 days for importing

46 Eastern Europe and Central Asia economies also made improvements in number of required documents Traders in OECD high income economies require less than 5 documents on average to export and import Whereas traders in Eastern Europe and Central Africa still require on average 2-3 additional documents

47 Emphasis on trade facilitation in many developing economies Note: shows number of cumulative reforms easing trade across borders since DB2007 (counted as 1 reform per reforming economy per year)

48 The trade facilitation reforms impacted lower income countries the most days days -2.9 days days

49 New EDI system Improved risk-based inspections Payment deferrals of import duties and taxes Peru: the economy that most eased trade in 2009/10

50 5. Want to Learn More?

Contact Us Washington Office 1818 H Street NW Washington DC Contact: The World Bank Group International Trade Department 51

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