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2010 ANNUAL REviEwFiAS: THE MULTiDONOR iNvESTMENT CLiMATE PROGRAM

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FiAS 2010 ANNUAL REviEw

Through the FIAS program, the World Bank Group and donor partners assist developing countries

and transition economies in reforming their business environments, with an emphasis on regulatory

simplification and investment generation. FIAS projects aim to deliver tangible results leading to

measurable improvements in the investment climates of client countries. The FIAS program is managed

by the Investment Climate Department under the joint oversight of the International Finance Corporation

(IFC), the Multilateral Investment Guarantee Agency (MIGA), and the World Bank (IBRD). For more

information, visit www.wbginvestmentclimate.org.

©2010 The World Bank Group1818 H Street NWWashington DC 20433Telephone: 202-473-1000Internet: www.worldbank.org

All rights reserved.

This volume is a product of the staff of the World Bank Group. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent.

The World Bank Group does not guarantee the accuracy of the data included in this work.

Rights and Permissions

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Cover photo credit: Garment factory at the Parc Industriel Mêtropolitain, Port-au-Prince, Haiti; February 2010 (Etienne Kechichian)

CONTENTS

FIAS Results at a Glance 2

Message from the Director 6

Maintaining the Momentum for Change—FIAS FY10 Results 8

Operational Highlights 15

Knowledge Management and Learning 29

Financial Results and Resource Use 35

Annexes 42Annex 1: Reforms and Results Supported by FIAS in FY10 42

Annex 2: Other Reforms and Results Supported by FIAS in FY10 82

Annex 3: Active and Closed Projects 90

Annex 4: Acronyms and Abbreviations 96

2 2010 FiAS ANNUAL REPORT

FiAS RESULTS AT A GLANCE

In FY10, our clients in 45 countries achieved 177 investment climate results and 52 reforms. Sixty-two

percent of the FY10 results were achieved in the world’s poorest countries, where 77 percent of expen-

ditures for client-facing project implementation were made.

FIAS PROJECT IMPLEMENTATION EXPENDITURES

Client-Facing 7% East Asia and the Pacific

16% Europe and Central Asia

8% Latin America and the Caribbean

3% Middle East and North Africa

42% Sub-Saharan Africa

3% World

Non-Client-Facing

21% KM/Product Developement

Percent of FIAS FY10 Project Implementation Expenditures

100% = $18.5m

FIAS RESULTS BY REGION

■ 14% East Asia and the Pacific [25]

■ 12% Europe and Central Asia [21]

■ 19% Latin America and the Caribbean [34]

■ 7% Middle East and North Africa [13]

■ 1% South Asia [1]

■ 47% Sub-Saharan Africa [83]

Percent of FIAS FY10 Results

100% = 177 results

Sub-Saharan Africa accounted for the largest share of project expenditures (42 percent) and 53 percent of client-facing project expenditures.

Almost half (47 percent) of the results occurred in Sub-Saharan Africa (83), followed by Latin America and the Caribbean (34), East Asia and the Pacific (25), and Europe and Central Asia (21), Middle East and North Africa (13), and South Asia (1).

FIAS REFORMS BY REGION

■ 12% East Asia and the Pacific [6]

■ 19% Europe and Central Asia [10]

■ 15% Latin America and the Caribbean [8]

■ 14% Middle East and North Africa [7]

■ 0% South Asia [0]

■ 40% Sub-Saharan Africa [21]

Percent of FIAS FY10 Reforms

100% = 52 reforms

This year FIAS contributed to 42 reforms on Doing Business topics, 41 of which are reported in Doing Business 2011. In addition, FIAS support led to 10 reforms in areas not covered by the Doing Business report. (See Annex 1 for a detailed breakdown of reforms by country.)

Focus on Priority Client Groups • IDA 77% • Sub-Saharan Africa 53% • Fragile and Conflict-Affected States 31%As a share of client-facing project expenditures, base; $14.5m

3HiGHLiGHTS

FIAS RESULTS BY REGION AND COUNTRY FY10 (* indicates IDA country)

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East Asia and the Pacific

China 2 2Indonesia 1 1Papua New Guinea* 1 1 2Solomon Islands* 2 1 1 1 5Timor-Leste* 1 1Tonga* 2 1 3 6Vanuatu* 2 1 1 4 8

EAST ASIA AND THE PACIFIC TOTAL 7 6 3 1 8 25

Europe and Central Asia

Kazakhstan 2 1 3 6Latvia 1 1Macedonia, FYR 1 1Montenegro 2 1 2 1 6Romania 1 1Serbia 1 1Tajikistan* 1 2 2 5

EUROPE AND CENTRAL ASIA TOTAL 1 2 5 3 1 8 1 21

Latin America and the Caribbean

Brazil 9 9Colombia 1 1 7 9Guatemala 1 1Haiti* 1 1 1 3Mexico 2 2 4Paraguay 2 2Peru 1 2 1 2 6

LATIN AMERICA AND THE CARIBBEAN TOTAL 2 6 10 2 1 6 7 34

Middle East and North Africa

Iran, Islamic Republic of 1 2 3Jordan 2 2Lebanon 1 1Syrian Arab Republic 1 2 1 4United Arab Emirates 1 1Yemen, Republic of* 1 1 2

MIDDLE EAST AND NORTH AFRICA TOTAL 6 2 1 1 3 13South Asia Nepal* 1 1SOUTH ASIA TOTAL 1 1

Sub-Saharan Africa

Burkina Faso* 4 4Cameroon* 2 1 3Congo, Democratic Republic of* 2 1 3 6

Ghana* 1 1Guinea-Bissau* 1 1Kenya* 6 6Liberia* 8 8Malawi* 1 1Mali* 2 1 1 2 6Mozambique* 4 4Nigeria* 2 7 3 12Rwanda* 1 3 1 1 7 13São Tomé and Principe* 5 5Senegal* 1 1 2Sierra Leone* 4 2 6Togo* 1 1Zambia* 1 3 4

SUB-SAHARAN AFRICA TOTAL 1 6 6 14 1 2 1 3 7 20 22 83GRAND TOTAL 7 7 7 8 2 25 3 3 17 6 4 10 3 45 30 177

.


In FY10, the I77 project level results achieved with FIAS support contributed to 52 higher level investment climate reforms. Forty-two of these reforms are on Doing Business topics and are shown by country and topic on the left hand side of the table. The remaining 10 investment climate reforms are shown on the right hand side of the table. (See Annex 1 for more details on individual results and reforms.)

FIAS REFORMS BY REGION AND COUNTRY FY10

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East Asia and the Pacific

Indonesia 0 √ 1 1Papua New Guinea 0 √ 1 1Timor-Leste 0 √ 1 1Tonga 0 √ √ 2 2Vanuatu √* 1 0 1

EAST ASIA AND THE PACIFIC TOTAL 1 1 2 1 1 1 5 6

Europe and Central Asia

Kazakhstan √ √ √ 3 0 3Latvia √ 1 0 1Macedonia, FYR √ 1 0 1Montenegro √ √ 2 0 2Romania √ 1 0 1Tajikistan √ √ 2 0 2

EUROPE AND CENTRAL ASIA TOTAL 2 1 2 4 1 10 0 10

Latin America and the Caribbean

Brazil 0 √ 1 1Haiti √ 1 0 1Mexico √ √ 2 0 2Paraguay √ 1 0 1Peru √ √ √ 3 0 3

LATIN AMERICA AND THE CARIBBEAN TOTAL 3 1 3 7 1 1 8


Iran, Islamic Republic of √ √ 2 0 2Jordan √ 1 0 1Lebanon √ 1 0 1Syrian Arab Republic √ √ 2 0 2United Arab Emirates √ 1 0 1

MIDDLE EAST AND NORTH AFRICA TOTAL 5 2 7 0 7

Sub-Saharan Africa

Burkina Faso √ 1 0 1Cameroon √ 1 0 1Congo, Democratic Republic of √ √ √ 3 0 3

Ghana √ 1 0 1Guinea-Bissau 0 √ 1 1Kenya √ 1 √ √ √ 3 4Malawi √ 1 0 1Mali √ √ √ 3 0 3Mozambique √ 1 0 1Rwanda √ √ √ 3 0 2Sierra Leone √ 1 0 1Zambia √ 1 0 1

SUB-SAHARAN AFRICA TOTAL 2 1 3 1 2 5 3 19 1 1 1 1 4 23GRAND TOTAL 7 1 2 7 1 2 3 15 4 42 2 1 1 1 3 1 0 10 52

*Note: Reform on Doing Business topic but affects only foreign businesses and therefore not captured in Doing Business report.

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REFORMS INSPIRED BY SUBNATIONAL Doing Business REPORTSSubnational Doing Business reports were produced in FY10 for Colombia, Nigeria, and Pakistan. They measure reforms that local governments have implemented since previous rounds of benchmarking. The previous rounds were in 2008 (for Colombia and Nigeria) and 2007 (for Pakistan). These governments implemented a number of Doing Business reforms as follows: Colombia (40); Nigeria (14); and Pakistan (10).

IMPROVEMENTS IN DOING BUSINESS INSPIRED BY DOING BUSINESS SUBNATIONAL REPORTS

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Colombia—Subnational Doing Business 2 12 12 4 10 40

Nigeria—Subnational Investment Climate 5 3 6 14

Pakistan—Subnational Doing Business 3 2 4 1 10

GRAND TOTAL 8 5 12 8 16 5 10 64

In FY10, donors, clients, and the World Bank Group contributed $32.4 million to FIAS, roughly equivalent to the contributions received in FY09. Expenditures reached $28.7 million in FY10, a 13 percent decrease over FY09 expenditures, reflecting a conscious decision to contain costs.

FY10 FUNDING AND EXPENDITURESSources of Funds In US$ thousandsWorld Bank Group Contributions (Core Funding) 6,600

World Bank Group Contributions (Project-Specific) 2,262

Donor Contributions (Core) 5,343

Donor Contributions (Programmatic) 7,466

Donor Contributions (Project-Specific) 8,868

Client Contributions 1,830

Balance Carry-Forward from FY09 14,899

TOTAL AVAILABLE FUNDS 47,268

Uses of Funds In US$ thousands

Staff Costs (incl. consultants) 18,815

Operational Travel Costs 5,227

Indirect Costs (incl. office and operating) 4,713

TOTAL USES OF FUNDS 28,755

BALANCE CARRY-FORWARD FY11 18,513


MESSAGE FROM THE DiRECTOR

I am pleased to present the FIAS Annual Review for fiscal year 2010, the third year of our current strategy cycle. Throughout the past years our partnership supported increasing client demand and yielded strong results, as the following examples illustrate:

�� FIAS-funded activities supported 177 investment climate results achieved by our clients in 45 countries, with 62 percent of the FY10 results achieved in IDA countries and almost half (47 percent) in Sub-Saharan Africa. These results contributed to 52 higher-level reforms.

�� In FY10, FIAS supported the implementation of entry reforms that significantly reduced time and cost of business registration in 15 countries, including Haiti, Kazakhstan, Peru, and Tajikistan.

�� In Kenya, FIAS-supported business licensing reforms saved private firms $62 million.

�� FIAS supported implementation of trade logistics reforms in seven countries in FY10 which led to significant cost savings. For instance, a midsize pharmaceutical firm in Colombia saved over $3.5 million in one year; for the industry as a whole, this represents a savings of over $25 million.

�� Subnational Doing Business reports were launched in FY10 in Kenya, the Russian Federation, Indonesia, Colombia, Nigeria, and Pakistan, leading to vigorous domestic debates on the relative performance of various cities and the importance of a good investment climate.

Additional highlights of our achievements and results in FY10 are covered in the remainder of this Annual Review. I am also pleased to share our good results on development effectiveness (76 percent), as measured by IFC’s Development Impact Department. This indicates that three-quarters of investment climate advisory projects resulted in significant and adequate outcomes. This reflects further improvement in portfolio management and a continued and deliberate effort to deliver tan-gible, measurable results.

True to its original roots as an FDI advisory service, FIAS also launched the Investing Across Borders report, a new bench-marking study providing objective and verifiable data on laws and regulations affecting cross-border investment in 87 countries. The report allows comparisons of the degree of openness of 33 different sub-sectors of the economy and the soundness of the dispute settlement regime available to foreign investors, among other criteria. We expect that the report will provide impetus for further reform and increased demand for FIAS advice on FDI regulation.

Some may wonder why investment climate reforms matter and how they affect development. By unshackling entrepreneur-ship, removing unnecessary barriers and unlocking opportunities, these reforms contribute to growth and job creation. In today’s crisis context, investment climate reforms should be most attractive for governments: they are inexpensive to carry out

Pierre Guislain

7MESSAGE FROM THE DiRECTOR

and generate sustainable impact. They allow countries to position themselves better in what is becoming an increasingly competitive global economy, making themselves more attractive to domestic and inward investment and more effective participants in global and regional trade, and enabling domestic firms to become part of broader supply chains.

Investment climate reforms are also a powerful tool for the democratization of business and economic activity. Indeed, simpler business regulations are especially relevant to the poor—the small entrepreneur who is not part of the establishment, does not have connections and cannot hire expensive lawyers to navigate the labyrinth of complex regulations that prevail in many countries, in particular the poorest ones. In this sense, the FIAS program makes a significant contribution to the inclusiveness agenda that the World Bank Group and many donors pursue as a development priority.

This was a year of consolidation during which we refocused our program in a more programmatic and results-driven way, learning from results achieved in the first two years of the strategy cycle. We grew in some areas, including business taxa-tion and trade logistics, and scaled back activities in others, such as stand-alone investment promotion and business entry, refining our results and impact measures along the way. We also explored new areas where investment climate expertise is in high demand, be it in the context of our crisis response, in the area of agribusiness and food security, or related to the green growth and climate change agenda.

The solid results in FY10 were achieved on the basis of an overall expenditure level that was lower than in FY09, in part because we were able to move some of our costs to other World Bank and IFC units with whom we collaborate closely, but also because we made a deliberate decision not to grow faster than our financial base.

We are pleased with the results we have achieved but recognize that there are still many challenges ahead, with a large number of countries that do not offer an acceptable business environment for investors, and other countries that have intro-duced reforms without material impact on the new investments they need to grow and create jobs.

We look forward to tackling these issues in the fourth and final year of the current cycle. Working closely with our partners, clients and other stakeholders, we are preparing the strategy for the next cycle, building on what has been achieved together so far and the goals we set ourselves for the future.

I would like to invite you to visit our new Web site (www.wbginvestmentclimate.org) which will become the main platform for sharing knowledge on investment climate-related topics as well as offering access to interactive tools, such as our tax, business licensing, and gender reform toolkits.

I wish to conclude by expressing my gratitude to all our development partners for the excellent support—financial and operational—we received throughout FY10, and look forward to our continued collaboration.


MAiNTAiNiNG THE MOMENTUM FOR CHANGE—FiAS FY10 RESULTS

Through the multidonor FIAS program, the World Bank Group and its partners continued to assist developing

countries and transition economies in improving their business environments, with an emphasis on regulatory

simplification and investment generation. FIAS also continued to play an essential role in the development of

investment climate products that are implemented by the Investment Climate Business Line (part of IFC Advisory

Services) and other World Bank Group units. This was another year of strong performance for the FIAS program.

SUSTAINING RESULTS

During FY10, the third year of the FY08–11 strategy cycle, FIAS supported the achievement of investment climate results1 in 45 countries, and via its role in product incubation and development, supported programs in a further 70 countries. This year, FIAS-funded projects supported 177 investment climate results compared with 2272 in FY09 and 108 in FY08. This amounts to a total of 512 results in the investment climate of client countries, well over the 400 set as the target for this strategy cycle. The magnitude of the results, although fewer in number than in the previous year, indicates that the momentum for reform remains strong despite uncertainties in the global economic environment. (Summaries of each of the 177 results, grouped by country, are presented in Annex 1.)

Almost half (47 percent) of the recorded results occurred in Sub-Saharan Africa (83), followed by Latin America and the Caribbean (34), East Asia and the Pacific (25), and Europe and Central Asia (21). Only one FIAS-supported result was recorded in South Asia, despite the portfolio’s significance in that region. Programs such as the Bangladesh Investment Climate Facility do not receive FIAS funding; however, they do receive signifi-cant amounts of technical support from FIAS [see box on information and communication technologies (ICT), p. 22 for examples].

Results were concentrated in the following areas: starting a business (45), trade logistics (30), dealing with construc-tion permits (25), investment policy and promotion (17), registering property (10), business taxation (8), access to finance, alternative dispute resolution, and business licens-ing and regulatory governance (7 each). Of the 177 results reported by FIAS this year, 20 were specifically achieved working with subnational governments.

MEASURING REFORMS Over the past three years FIAS has developed a robust results framework based on solid reporting of project-level investment climate results. This has led to intensive learning about how these project-level results contribute to higher-level investment climate reforms. In FY10, FIAS actively engaged in defining a methodology for aggre-gating results into higher level reforms (see Annex 1 for description). The approach includes all investment climate reforms whether they are tracked in the Doing Business report or are on topics not covered by the report.

In FY10, the 177 results achieved by FIAS-supported projects contributed to 52 reforms, including four subna-tional reforms. Of the 52 reforms, 41 were captured by the Doing Business 2011 report. Ten investment climate reforms are in topic areas not covered by the Doing Business 2011 report and have been captured by the

1 A result is a change implemented by a client with support from a FIAS-supported project that significantly improves the investment climate in a given country, region, or sector. These changes are tangible achievements brought about with FIAS assistance and for which there is wide technical and expert consensus regarding their relevance in inducing private sector-led development.

2 The FY09 result total is higher than reported in last year’s annual report (224). Five results associated with alternative dispute resolution have been added to the total, but two have been

reclassified as knowledge management results, leaving a net gain of three.

9OvERviEw

new aggregation methodology (see Annex 1 for detailed information and country breakdown). FIAS supported five of the Doing Business 2011 top-ten reformers: Kazakhstan (the top reformer), Rwanda, Peru, Tajikistan, and Zambia. (See feature boxes throughout this Annual Review for more on key reforms achieved.) Over the three years of the strat-egy cycle, FIAS has contributed to 149 reforms reported in the Doing Business reports.

FIAS also supports investment climate reforms at the subnational level. The diagnostic work carried out in the subnational Doing Business reports involves the measure-ment of business regulations and their enforcement across multiple locations within a country. The reports follow the same methodology used in the global Doing Business reports, allowing FIAS to report on reforms influenced by

the subnational Doing Business project. These 64 reforms for FY10—in Colombia, Nigeria, and Pakistan—are sum-marized on page 5.

SUPPORTING ThE wORLD’S POOREST COUNTRIES

FIAS continued to focus on the countries where assistance is needed most. Sixty-two percent of the FY10 results were achieved in 25 of the world’s poorest countries.3 Seventeen of the IDA countries where results have been achieved are in Sub-Saharan Africa. The others include Haiti (see box), Nepal, Papua New Guinea, the Solomon Islands, Timor-Leste, Tonga, Vanuatu, and the Republic of Yemen.

3 Members of the International Development Association (IDA). Eligibility for IDA is restricted to countries with a gross national income per capita of less than $1,095.

Efforts to attract investors to Haiti have been the focus of a project supported by FIAS and MIGA, the Netherlands, and the Wallonia region of Belgium since 2009. The project created a strong foundation for a quick response to the earthquake that ravaged the country on January 12, 2010. The massive quake left over 300,000 casualties and widespread destruction. As soon as commercial flights resumed to Port-au-Prince in February, an assessment team was on the ground quantifying the damages to the Parc Industriel Mêtropolitain, which hosts 90 percent of Haiti’s light manufacturers and is the country’s main formal employer.

An immediate post-quake objective in reestablishing Haiti’s economy was to get people back in their jobs. Before the earthquake, about 23,000 people worked in light manufac-turing, providing for an estimated 175,000 family members. After the quake, Haiti’s worst in 200 years, the private sector showed amazing resilience; even the Palm Apparel S.A. factory, which had collapsed with 500 workers inside, resumed operations within six weeks under tarps and with multi-shifts to meet production deadlines. Yet a key risk was that perceptions of the impact of the earthquake would lead U.S. buyers to move their production from Haiti, conclud-ing that its plants would not be able to deliver on time.

Investment Generation Groundwork Enables Quick Response in haiti

Post-earthquake strategy. The existing project was adaptedto deliver early investments, avoid company closures and job losses, and sustain leads on potential investments pursued before the disaster. An image-rebuilding campaign—aimed at U.S. gar-ment buyers—explained that Haiti was back in business and that local sourcing was key to its recovery. An investors’ conference, supported by the project and organized by the Inter-American Development Bank and the Clinton Foundation in October 2009 helped in targeting garment-industry investors. Potential foreign investors in the project’s $61 million pipeline of active leads were persuaded to continue their due diligence, and three firms returned to Haiti for site visits before the end of March.

Results. The damage assessment of Parc Industriel Mêtropolitain helped the government secure funding in March at the United Nations Haiti International Donor Conference in New York for park reconstruction, saving 2,500 existing jobs. An additional 2,280 jobs were created in the garment sector as a result of new orders that helped full production gaps. FIAS also supported Haiti in enacting legislation to help streamline business start-up. Companies are now allowed to go directly to the official gazette “Le Moniteur” for publication of their bylaws, which reduced the number days required for business registration from 150 to 60.


Sub-Saharan AfricaSub-Saharan Africa is an important focus of FIAS activities. The number of countries working on investment climate reform continues to increase. In FY10, FIAS was active in 19 countries in the region, and various scoping missions were undertaken in an additional 17 countries. In FY10, several countries achieved their first results in this strategy cycle, including Cameroon, the Democratic Republic of Congo, Guinea-Bissau, Malawi, São Tomé and Principe, Togo, and Zambia. At the same time, a discernable core of active reformers in Africa continues to draw on FIAS expertise, deepening reform efforts in Burkina Faso, Kenya, Liberia, Rwanda, Senegal, and Sierra Leone (see box).

FIAS’ work in Sub-Saharan Africa is supported with dedi-cated funding from Ireland, Italy, the Netherlands, Sweden, Switzerland, the United Kingdom, the United States, and the European Commisssion.

Fragile and conflict-affected statesFIAS supported results in 13 conflict-affected countries in FY10. Among them, the Democratic Republic of Congo reformed its building permit system to streamline processes, reducing costs for builders (see box, p. 12). FIAS support has also been instrumental in developing a pilot site for a special economic zone (SEZ) near Kinshasa and in establish-ing the required institutional infrastructure. In haiti, with

Marie Bob-Kandeh recalls her days selling sugar, tomatoes, and onions from a basket in the streets of Freetown, Sierra Leone. “I started out hawking on my head,” she says. “I had to leave very early in the morning and then I would walk all day.” Now, as a result of reforms achieved with FIAS support, she has her own formal business, a shop named Rehoboth that sustains her family. “My business is my own,” she says. “That’s why I call it Rehoboth, a biblical word; it’s my business, so it’s my freedom.”

Bob-Kandeh and countless people like her are the beneficia-ries of a FIAS-supported initiative to reform Sierra Leone’s investment climate. Under this program, FIAS support helped the government make the process of registering a business cheaper and faster for entrepreneurs, refurbish the registration center, and encourage private sector commercial initiatives and sustainable economic growth.

“Now that I have registered Rehoboth, I have the op-portunity to apply for contracts,” says Bob-Kandeh, 51, who also serves as secretary general of the Market Women’s Association. “I couldn’t do that before.”

Results. Since 2004, the World Bank Group has advised the government of Sierra Leone on ways to spur business and investment. Much of the investment climate work to date has focused on the Removing Administrative Barriers to Investment program, known as RABI, a six-year, multi-phased collaboration by the government and the private sector to remove impediments to business formation and

Creating New Businesses and Changing Lives in Sierra Leone

investment. In 2009, Sierra Leone was deemed the quickest and easiest place to start a business in West Africa and placed among the top five countries in Sub-Saharan Africa for inves-tor protection. The staff involved in the implementation of the RABI program received an IFC Project Team Award in FY10 for its contributions in setting standards as a pilot for IFC’s work in conflict-affected countries.

In FY10, FIAS supported reforms in tax simplification, tourism sector development, and investment and export promotion. As a result of one of two FIAS pilots geared to tax simplification in a conflict-affected environment, the government reduced the time businesses need to pay taxes by 10 percent (less than the time required in 2008), increased the number of business tax returns by 27 percent (over the number filed in 2008), and increased tax collection by 15 percent (over the volume of tax collection in 2009). A new goods and services tax was introduced to replace seven differ-ent sales taxes.

The country’s investment and export agency, SLIEPA, held an investor conference in London in November 2010 that con-tributed to an increased pipeline of investor prospects (from 31 to 232), active leads (from 27 to 129), and companies making site visits (from 23 to 65). An international competi-tive tendering process for the Cape Sierra Hotel is nearing completion with support from FIAS and IFC’s Public-Private Partnership Advisory Services in revising the bid structure and attracting pre-qualified leads.

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dedicated funding from the Netherlands, FIAS was active in helping the government simplify approvals for new company start-up, cutting months off the time necessary to formally register a firm. FIAS-supported work in Southern Sudan is a good example of an effective program in a fragile situa-tion (see box). To encourage future reforms of the business environment and promote their implementation at the local level, a subnational Doing Business city profile of Juba, the regional capital of Southern Sudan, is currently ongoing. The city profile covers all 10 Doing Business indicators.

The FIAS program continued to leverage the knowledge and lessons learned from its extensive operational experi-ence in fragile and conflict-affected states. The Rough

Guide to Investment Climate Reform in Conflict-Affected Countries—published in FY09 and publicly introduced in FY10—has become a well-used field resource. In May 2010, the guide was featured at a public knowledge-exchange event in Washington, D.C., along with similar and related post-conflict work sponsored by the United States Agency for International Development (USAID). Experience from FIAS projects—especially the key lesson of supporting economic and investment climate-related work as integral to the peace-building process—is help-ing to shape a new World Bank Group-wide approach to work in conflict-affected states and inform the forthcoming World Development Report 2011: Conflict, Security and Development.

After two decades of a devastating war that claimed two million lives, Sudan, particularly Southern Sudan, is show-ing signs of recovery. A new regional economy is emerging in the south—in many instances starting from scratch. A new legal framework for investors is being established, and a number of new institutions are in place to support investors. Although challenges remain, Southern Sudan is on a path to reconstruction and development supported by increased investments and a joint IFC and IDA “rapid-growth” program. A rapid diagnostic of the investment climate supported by FIAS has led to reforms in several areas:

�� Legal framework. Eight laws have been enacted enabling business entry, operations, and exit. Another nine that allow basic registration, contract, agency, property rights, and insolvency are ready to enact.

�� Business entry. The business registry was strengthened and registration reinstated following suspension in December 2005. Businesses can incorporate within a day. About 8,000 businesses—most domestic and small or medium-size—have been registered since July 2006. A business-registration campaign resulted in an additional 1,100 businesses within the first six months of 2010.

�� Investment policy and promotion. The new Investment Promotion Act 2009 established the Southern Sudan Investment Authority, resulting in the targeted, proactive pursuit of potential investors and re-investors.

A Transformed Investment Climate in Post-Conflict Southern Sudan

�� Public-private dialogue. The establishment of the Southern Sudan Business Forum enables consensual policy development. Through its working groups, the forum has helped revise the Micro Finance Policy being developed by the Bank of Southern Sudan and drafted and promulgated the Investment Promotion Act 2009.

�� Trade logistics. As a result of improvements in the Customs Chamber since 2008, Sudan has significantly reduced the number of days traders need to complete import-export procedures. The time needed to import was reduced from 83 days in 2007 to 46 days in 2010, and the time to export from 56 days in 2007 to 32 days in 2010. The 2009 Customs Amendment Act was approved by the Council of Ministers. The customs clearing system has been automated and this will lead to even greater time and cost reductions. The system links 21 regional offices and the Tax Chamber, and it allows for electronic approvals and the submission of electronic manifests.

Development impact. The joint World Bank/IFC program has led to significant improvements in the legal and regula-tory environment for investors, helping revitalize commercial activity and secure investment. At least three large producers, including Southern Sudan Beverages Limited (a subsidiary of SAB Miller), form a manufacturing base non-existent in 2005. Five new commercial banks serve all of Southern Sudan’s ten states. At least four commercial airlines offer daily flights from East Africa, and five cellular phone operators—all new market entrants since 2006—serve an estimated 5 million Southern Sudanese subscribers.


ThE NExT FRONTIER: MEASURING IMPACT

This year FIAS also embarked on an ambitious program to better measure the impact of investment climate reforms on key factors such as creation of new firms, investment, exports, and job creation. This work responds to requests from client governments and donors for measures of impact that can inform their decisions on the best policies to implement or fund. FIAS finalized and has started to roll out a methodology to assess firm savings generated by projects due to reduced compliance time and costs. FIAS

completed a literature review on the impact of business entry reforms which provides compelling evidence on the benefits of these types of reforms, analyzed the impact of selected existing and past projects, and launched a num-ber of ex-post evaluations which will provide rich learning and evidence in the coming years.

FIAS, in collaboration with other partners, has supported reforms that are likely to have a positive effect on the creation of new firms, investment, and job creation (see box, p. 13).

After many years languishing at the bottom of the Doing Business rankings, the government of the Democratic Republic of Congo has initiated investment climate reform with FIAS support.

Of the 286 recommendations delivered by an economic roundtable convened by Prime Minister Antoine Gizenga in September 2008, 50 targeted the country’s business climate. The prime minister had urged government and private sector roundtable participants to focus on reforms that would draw the Congolese out of poverty, consolidate the government’s effort in building peace and national unity, promote good governance, safeguard macroeconomic stability, and support the competitiveness of the private sector. Faced with a daunting reform agenda, the government requested FIAS assistance beginning with areas covered by the Doing Business report.

Doing Business results. The country has improved its Doing Business overall ranking on ease of doing business from 182 out of 183 countries in the 2010 report to 177 in the 2011 report. For company registration, the government no longer requires a company seal, a copy of the criminal record, residence certificates, and non-public servant status

The Democratic Republic of Congo Initiates Investment Climate Reform

of the company manager. As a result, business start-up can be accomplished in 84 days. Costs have been reduced as well (from 848 to 735 percent of per capita income). Since the official publication of the new measures, the company registry has seen an increase of 20 percent in company registrations.

The government also reduced the cost of issuing a construction permit by 40 percent and set a 60-day time limit for the Ministry of Planning and Housing to issue building permits, which previously required 180 days. Overall, the time a company needs to obtain the required construction permits decreased from 248 to 128 days; cost decreased from 4,506 to 2,692 percent of per capita income. The cost to register a property was reduced from 6 to 3 percent of the property value.

While the path to reform remains challenging and the Democratic Republic of Congo is still among the bottom 10 countries in the Doing Business ease of doing business ranking, reforms achieved in 2010 are a noticeable step toward a more comprehensive program to transform the country’s business environment and stimulate private sector growth.

13OvERviEw

4 Subramanian, Uma, William Anderson, and Kihoon Lee (forthcoming 2010). “Reducing Time to Increase Trade: Results from an Export Logistics Model.”

An extensive literature review on business entry reforms revealed evidence of impact in four key areas. First, a significant reduction of registration time and cost—often supported by the introduction of a well functioning one-stop shop—is associated with a 5 to 6 percent increase in the creation of new firms. Second, a large percentage of new firms survive and grow. Third, new firms increase competition, forcing incumbents to become more efficient or to exit the market, and boosting overall productivity and investment. Finally, entry reforms have greater impact when coupled with other investment climate reforms, particularly reforms that increase the flexibility of the labor market. A simulation based on the findings in the literature shows that in Bogota, Colombia, the introduction of a one-stop shop is associated with the creation of 9,760 new firms and 75,810 new jobs. Seven years after the reform, the simulation forecasts that 4,768 of the new entrants will continue to operate and employ 64,439 workers.

Business entry. FIAS helped Belarus reduce time and cost of entry from 69 to 48 days and from 26.1 to 8.8 percent of gross national income per capita from 2006 to 2007 by introducing a one-stop shop. Firm registration increased by 76 percent (from 6,823 to 12,011) between 2006 and 2007, and by 28 percent between 2007 and 2008. Based on the findings in the literature, 5 to 6 percent of the increase can be directly linked to the introduction of the one-stop shop. In FY10, FIAS supported the implementation of entry reforms in 15 countries, including Haiti, Kazakhstan, Peru, and Tajikistan, all countries where firm registration and growth are expected in the coming years.

Property registration. Between 2007 and 2008, FIAS helped Burkina Faso reduce the time and cost firms must spend to transfer property, from 182 to 136 days and

The Impact of Investment Climate Projects: Evidence from the Literature and the Field

from 15.1 to 13.4 percent of the property value. The time needed to register a business was further reduced to 59 days in 2009. During the same period, first time registration of land titles grew from 428 to 2,030. In FY10, FIAS supported the implementation of property registration reforms in Mali (resulting in a reduction of the property transfer tax from 15 to 7 percent of the property value) and in Peru (resulting in a reduction of time needed to transfer property from 14 to 7 days). FIAS also supported work in Nigeria and the Democratic Republic of Congo.

Secured transactions. In the past three years, FIAS helped China change the legal framework for secured transactions and establish an online registry for accounts receivable that allowed firms to use receivables as collateral. Since the introduction of the reform, Chinese financial institutions have lent $960 billion using accounts receivables as collateral, 45 percent of which has been loaned to micro, small, and medium-size firms. FIAS and the Investment Climate Business Line jointly with the Access to Finance Business Line have an active secured transactions portfolio comprising projects in more than 10 countries.

Trade logistics. In the past two years, FIAS helped Colombia reduce the time and cost traders must spend to import and export by enabling electronic submission of customs documents and implementing a single window system. The new system allows a private company or individual to issue and sign the certificate of origin on behalf of the Ministry of Trade where requested in places other than Bogota. Evidence from research4 shows that a 10 percent reduction in the time traders spend importing and exporting in Colombia would increase trade by $740 million, in addition to the direct cost savings that firms would incur. In the past two years, FIAS supported implementation of trade logistics reforms in seven countries.


ShARP INCREASE IN DEvELOPMENT EFFECTIvENESS, CLIENT SATISFACTION AND INTERNAL RECOGNITION REMAIN hIGh

In FY10, projects supported by FIAS and the Investment Climate Business Line as a whole showed a dramatic improvement in development effectiveness ratings (see chart).5 The annual rating for the Investment Climate Business Line jumped 29 percentage points from 48 per-cent in FY08 to 77 percent in FY10 (76 percent for FIAS projects). Investment climate projects, having lagged the IFC as a whole in terms of effectiveness, now comfortably exceed the score for IFC overall. The IFC development effectiveness indicator measures five dimensions: strategic relevance, outputs, outcomes, impacts, and efficiency, and gives greater weighting to outcomes and impact. The FY10 rating indicates that over three-quarters of the invest-ment climate projects completed in FY10 led to significant and adequate outcomes.

Similarly, the client satisfaction indicator for the IFC Investment Climate Business Line shows very high overall levels of client satisfaction (greater than 85 percent) over

the past three years, with Investment Climate Business Line performance rated slightly above that of the IFC overall. Clients continue to appreciate the quality of the advice and implementation support provided by FIAS and the business line.

FIAS and the Investment Climate Business Line continued to receive strong internal recognition for the quality of projects and their results. The team that produced Gender Dimensions of Investment Climate Reform received an IFC Corporate Award in FY10 for creating a practical tool focused on implementation of business reforms to benefit female entrepreneurs. Another corporate award recipient was the U.K.-funded Removing Administrative Barriers to Investments project in Sierra Leone (see box, p. 10). The team working on alternative dispute resolution (ADR) in Pakistan received a 2010 IFC CEO Gender Award in rec-ognition of its initiatives to support women’s participation in business, alleviate their legal issues, and promote their business rights. Investment climate projects also received three of four team awards presented by the Finance and Private Sector Vice-Presidency. The winners were the China Secured Transactions project, Doing Business in india 2009, and the Rwanda Investment Climate Reform Program.

5 In this and previous years, the IFC Investment Climate Business Line measures have been used as a proxy for FIAS performance on the basis that the implementation and management of FIAS-funded projects are largely conducted by IFC Investment Climate Business Line staff. This assumption can be tested by looking at the development effectiveness of Investment Climate Business Line projects overall and FIAS-funded projects specifically. For FY10, the development effectiveness ratings were 77 percent for the Investment Climate Business Line and 76 percent for FIAS-funded projects, demonstrating that this is a reasonable proxy measure.

FY08-10 DEVELOPMENT EFFECTIVENESS RATINGS

Investment Climate Business Line

■ Investment Climate Business Line

■ IFC Overall

0

10

20

30

40

50

60

70

80

FY08 FY09 FY10

48%

67%

52%58%

77%

64%

FY08-10 CLIENT SATISFACTION

Investment Climate Business Line

■ Investment Climate Business Line

■ IFC Overall

0

20

40

60

80

100

FY08 FY09 FY10

92%

77%

89% 88% 88% 87%

15OPERATiONAL HiGHLiGHTS

OPERATiONAL HiGHLiGHTS

This has been another year of strong performance for the FIAS program. FIAS supports work in two broad practice areas—Investment Generation and Regulatory Simplification—advising clients on aspects of reform implementation across its product lines. The main FIAS products continue to mature, showing strong value and results even in uncertain economic times. At the same time, FIAS has been responsive to a changing environment with continuing refinement and evolution of the current portfolio of investment climate products, including the development and piloting of new products and tools, and the consolidation of key knowledge. This evolution can be seen in the following areas:

�� Effective use of comparative benchmarking to catalyze change

�� Strong performance from established offerings

�� Hub for innovation and incubation

�� Facilitating productive partnerships, and

�� Increasing the use of programmatic approaches.

EFFECTIvE USE OF COMPARATIvE BENChMARKING TO CATALYZE ChANGE

The success and influence of Doing Business in catalyz-ing investment climate reforms in all regions of the world graphically illustrates the power of comparative bench-marking. Quantitative data and benchmarking can help stimulate policy debate and action, both by exposing potential challenges and identifying where policymakers might look for lessons and good practices. Indicators can also provide a basis for analyzing how different policy approaches—and different policy reforms—can contribute to broader desired outcomes such as foreign direct invest-ment (FDI), competitiveness, and growth.

In FY10 FIAS continued to develop comparative bench-marking tools to assist clients in analyzing key dimensions of the investment climate and setting baselines from which reform progress can be measured. The flagship Investing Across Borders (IAB) 2010 report and database (www.

investingacrossborders.org) were launched in early July 2010 in Vienna, Austria, providing objective data on laws and regulations affecting FDI that can be compared across 87 countries. The project was made possible through the financial support of Austria’s Federal Ministry of Finance.

The IAB indicators complement existing measures that track the quality of business environments. They examine and quantify the laws, regulations, and practices affecting how foreign companies invest across sectors, start businesses, access industrial land, and arbitrate commercial disputes. The data generated by IAB provides a starting point for governments looking to boost their global competitive-ness in attracting FDI, a particularly important catalyst for growth and job creation during times of economic crisis.

The report finds that overly restrictive and outdated laws are an impediment to FDI and their poor implementation creates additional costs for investors. For example, in Angola and Haiti excessive red tape means it can take half a year to establish a subsidiary of a foreign company. In Canada, Georgia, and Rwanda, this can be done in less than a week. Leasing industrial land in Nicaragua and Sierra Leone typically requires half a year as opposed to less than two weeks in Armenia, the Republic of Korea, and Sudan. In Pakistan, the Philippines, and Sri Lanka it can take up to two years to enforce an arbitration award.

IAB is planned to be a periodic flagship product, cover-ing a gradually increasing number of countries—beyond the project’s initial scope of 87 economies—and pos-sibly more topics. It does not measure all aspects of the business environment that matter to foreign investors. For example, IAB does not measure security, macroeconomic stability, market size and potential, corruption, skill levels, or infrastructure quality; nor does it measure all aspects of FDI regulation.

FIAS in conjunction with MIGA, continued to benchmark the capabilities of investment promotion intermediaries in providing information to investors and will publish the third Global Investment Promotion Benchmarking (GIPB) report in 2011.


Doing Business in nigeria 2010: Local Regulatory Refrom Strengthens the Business Environment

The Subnational Doing Business product exemplifies a successful FIAS-supported comparative benchmarking tool that has been used around the world. Six subnational Doing Business reports were issued in FY10, showing how government regulations and their implementation ease or constrain business activity in a number of selected loca-tions within a country or region. These reports included: Kenya (covering 11 cities), Russia (10 cities), Indonesia (14 cities), Colombia (21 cities), Nigeria (37 cities), and Pakistan (13 cities).

For Colombia, Nigeria, and Pakistan, this was the second study to track reforms from the baseline established in the first report. A second round of benchmarking is underway in the Philippines and South East Europe, to be launched in FY11. In Pakistan, all six cities benchmarked in the 2007 South Asia report and again in Doing Business in Pakistan 2010 implemented two or more national-level reforms, and three cities implemented two or more local-level reforms. The results show that national reforms implemented at the local level have benefited entrepre-neurs in Lahore and Peshawar, where electronic and online services reduced the time to start a business to two

days. Advanced data systems reduced the time to import into Karachi by half between 2006 and 2009.

In some countries, FIAS offers parallel advisory support to help local governments implement reforms. One such case is Nigeria, where the impact of FIAS-supported technical assistance is reflected in the reforms measured by the sub-national Doing Business reports. The Nigeria Investment Climate Program, implemented in partnership with the World Bank and with support from DfID, piloted reforms in tax, land, and investor information in four states—Kano, Kaduna, Lagos, and Cross River. Technical support on the land pilot led specifically to a reduction in the time and cost firms must spend in obtaining a construction permit in three cities and a reduction in the time and cost to register property in two cities, including Lagos. In addition, IFC guidance in improving interagency coordination on land issues increased information sharing, particularly related to planning. Innovative approaches to planning, zoning, and land grants were also introduced. The technical as-sistance, benchmarked and measured in Doing Business in Nigeria 2010 yielded 14 reforms (see box).

In June 2010 the Nigerian government released Doing Business in Nigeria 2010, the result of a study comparing business regulations across all 36 states and the capital, Abuja. The report focuses on municipal, state, and national regulations that affect four stages in the life of a small to medium-size domestic firm: starting a business, dealing with construction permits, registering property, and enforcing contracts.

Comparing states within the same country is a strong driver for reform. The report finds that Nigerian states have been actively reforming to encourage business activity since the publication of Doing Business in Nigeria 2008—8 of 11 states previously benchmarked showed improvement in at least one area. As a result of FIAS-supported advisory program, a total of 14 reforms were recorded, 11 dealing with property registration and construction permits.

Governor Ibrahim Shekarau of Kano, which ranked in the top-10 states for ease of doing business in both the 2008 and 2010 reports, said at the report launch in Abuja that it will “build confidence of both businesses and citizens in the

country. More states should participate in the process.” The report ranks Kano as top reformer; the state has introduced reforms in three areas since publication of the 2008 report.

The report finds wide variation in local business regulation across the country, and ample room for further reform. It suggests that if Nigeria adopted nationwide all of its states’ best practices identified in this report, the country would rank 72nd of 183 countries globally—53 places ahead of Nigeria’s ranking in the global Doing Business 2010 report.

In Nigeria, secure property titles exist for less than 5 percent of the land area, contributing to the large informal sector (90 percent of businesses). Since the 2008 report, 5 of the 11 states measured have cut the time to approve construction permits by enforcing statutory time limits. In Enugu, the building plan approval is now issued in 18 days rather than the 67 required in 2008. Delegating the governor’s power to grant consent on property transfers has significantly lessened the time needed to register property across the country. For example, in Borno, it takes only two days; in Kebbi, where the governor signs off, it takes six months.


STRONG PERFORMANCE FROM ESTABLIShED OFFERINGS

In uncertain economic times, investment climate reforms are a cost-effective way to support the growth of private firms and create jobs. Investment climate reforms em-power firms by cutting red tape and lowering the cost of doing business. Simpler business regulations are espe-cially important for smaller businesses—and, in particular, businesses owned and operated by women—that lack the connections and resources to navigate the maze of licenses and regulations typically found in developing countries.

In FY10, the FIAS program has ramped up its efforts to address gender disparities in its projects by focusing on very practical applications. The recently published prac-titioners’ guide, Gender Dimensions of Investment Climate Reform, provides step-by-step guidance for policymakers and practitioners on integrating gender dimensions into investment climate products and projects. The guide was launched both as an internal resource and as a “global public good” in March 2010 by World Bank Group President Robert Zoellick. The staff involved in the produc-tion of the practitioners’ guide received an IFC Project Team Award in FY10. The guide was called “an innova-tive, cost-effective, replicable, and scalable tool that pres-ents concrete solutions to increasing women’s participation in the private sector.”

Sixteen projects in five regions have integrated a gender dimension in their project design and implementation in the areas of ADR, public-private dialogue (PPD), business operations, and SEZs. Several are showing promising early results (see box).

The FIAS business entry and business operations prod-ucts have continued to deliver strong results, which often involve simplifying processes for business registration and licensing, saving time and money for smaller businesses and encouraging informal enterprises to join the formal sector. In FY10, FIAS supported the implementation of business entry reforms in 15 countries.

FIAS continues to support the government of vietnam in improving its business licensing regime. In FY10, the government issued a resolution adopting team recom-mendations for reform of 14 priority licenses related to mining, banking, customs, and investment. These reforms

are expected to save the private sector an estimated $9 million per year in time and administrative costs. An addi-tional 16 licenses related to advertising, transportation, and renewable energy are under review. In addition, FIAS supported the introduction of the Standard Cost Model (SCM) to help regulators measure the cost burdens of administering Vietnam’s ministries and ministerial agencies. The SCM has been adopted and is now widely applied to quantify (in monetary terms) the benefits of removing or simplifying administrative procedures.

Since March 2010, FIAS has supported Zambia’s Ministry of Commerce, Trade and Industry on aspects of business licensing and Doing Business reforms. In July 2010, the government announced the wholesale streamlining of the 517 business licenses that exist in Zambia, including the abolition of 170 business licenses deemed unnecessary. By July 2010, 19 laws had been enacted or amended

Gender Inclusion in Investment Climate Reform: FY10 highlights

Examples of the operational application of the practitioners’ guide to Gender Dimensions of Investment Climate Reform include:

Cambodia. As a part of a PPD program, a business women’s forum was held to identify women entrepreneurs’ constraints in business and include their perspectives in policymaking. A key achievement, based on the forum’s recommendations, has been the reduction of import duties on silk yarns (from 7 to 0 percent) and the suspension of value-added tax (VAT) for a period of three years. Both measures directly affect 20,000 women silk weavers whose livelihoods depend on this economic activity.

Pakistan. In Karachi, the alternative dispute resolution program targeted women business owners through a “mediation week” which resulted in the release of $1.5 million tied up in family business cases in three days instead of the 10–15 years required for the litigation process. This program has been replicated in other provinces.

Vanuatu. The first Vanuatu Women in Business organization was created in April 2010 to represent women’s interests in the business community and put forward a gender perspective in discussions with the government on business regulation. A gender-sensitive business start-up guide is being produced and the Doing Business Task Force is committed to pursue a women’s help desk after the new Companies Act passes.


and 72 licenses streamlined, including 38 local govern-ment business permits. Progress was made on three dimensions measured by Doing Business—starting a business, registering property, and paying taxes. The government also introduced a small claims court and a one-stop border post between Zambia and Zimbabwe, the first of its kind among countries in the Southern African Development Community.

In Kazakhstan, business entry reforms were a central part of the overall reform program (see box).

Doing Business 2011 Top-Reformer Kazakhstan Tackles Bold Reform Agenda

Over the past decade, Kazakhstan has made a radical shift away from its reliance on extractive industries toward a more open and diversified economy. In developing a business cli-mate that can attract foreign investment, promote competi-tiveness, and encourage new firm creation, the government has been careful not to overlook smaller businesses, which had struggled under a centrally planned economy and more recently suffered the impacts of the financial crisis.

Creating a leadership mechanism for reform. Prime Minister Karim Masimov took the challenge of Doing Business reform into his own hands, beginning in 2008 when he created five specialized working groups on seven topics un-der Deputy Prime Minister Yerbol Orynbayev. The working groups were tasked with delivering reform proposals within set timeframes and strict reporting requirements. With FIAS support, technical advice was provided on specific indicators and helped the working groups develop a comprehensive reform plan with a clear set of targets and priorities.

Realizing results in the medium term. Kazakhstan has imple-mented bold reforms, earning top reformer status in Doing Business 2011 and improving its overall ranking on ease of doing business from 74th in Doing Business 2010 to 59th in the 2011 report. By June 2010, the working groups had delivered a second round of reforms to encourage new firm start-up, reducing the minimum paid-in capital requirement from about $900 to less than a dollar. The government eliminated notariza-tion fees, reducing the cost of setting up a business from 5 to 1 percent of per capita income. It created a one-stop shop for construction permits and started to enforce a risk-based system for permits, allowing enforcement agencies to focus on larger building applications and hence eliminating, on average, 20 days in the process.

Among other reforms, the government modernized the law on Joint Stock Companies and the law on Accounting and Financial Reports. The new legislation strengthens disclosure requirements between interested parties to a transaction. Other provisions of the law will push private companies to comply with internationally accepted reporting standards, improving governance practices in the private sector.

FIAS-supported work in trade logistics has achieved signifi-cant success in less than three years gaining traction and credibility by delivering results. After a strong start with demonstrated results in four pilot countries—Burkina Faso, Colombia, Liberia, and Rwanda—the deployment of the trade logistics product has rapidly spread to cover over 20 countries in five regions.

In FY10, trade logistics results were achieved in seven countries, including two conflict-affected countries. The results covered areas such as streamlining to reduce the costs of trade transactions, risk-based approaches for inspections, and automation to reduce paper-based trade. The product is now scaling up and consolidating in its next phase to meet rising demand from a number of countries. It will expand its advisory reach, align its focus closer to corporate priorities such as agribusiness, food security, post-conflict countries, and climate change, develop knowledge management tools to facilitate broader decentralized rollout, and develop cutting-edge approaches to support reform and monitor results.

Since 2008, significant results have been achieved in Colombia. The time traders spend to import and export goods has decreased from 20 and 24 days, respectively, in 2008 to 14 days in 2010 for each process. Traders have witnessed a 30 percent decrease in the time it takes to process approvals needed for transactions through the single window system. Reducing the time businesses spend complying with trade procedures helps bring about considerable direct cost savings to firms from reduced inventory holdings and reduced carrying charges in transit. Even conservative partial estimates from a field case study show direct cost savings around $3.5 million for a midsize firm with $150 million in revenue.

As a frontier, post-conflict country, Liberia is slowly recovering from decades of violence and institutional neglect. The recovery is accelerating, and the Liberian government is making great strides toward stabilizing the country and laying the groundwork for development. In November 2007, one of the first trade logistics advisory service pilots began in Liberia as part of a larger IFC investment climate program (see box).


Post-Conflict Liberia Shows Strong Results in Improving Trade Logistics

With $10 in her pocket, Choko Harris began selling palm oil off a table on the street in Liberia. That was 1982. Today she owns two stores and employs nine family members, selling plastic goods that she procures during regular trips to China and Thailand.

The growth and profitability of her business depend on how quickly she can clear her imported goods through Monrovia’s Freeport: “Clearing customs used to be hard, it could take almost three months to get the goods from the container with lots of people asking for money for various things,” she says. Liberia imports the majority of its products, including food and staples. Import costs are high because many products are shipped great distances—from China, for instance—to arrive through the port of Monrovia and its Freeport.

With support from FIAS and additional project-specific co-financing from Sweden, the Liberian government has overhauled its trade logistics system and processes to reduce port delays and address a battery of fees, including those charged in multiple inspections. At the close of FY10, Liberia had achieved 21 trade logistics improvements in

30 months, including: a centralized facility at the Freeport, providing a single location for clearing cargo; a preliminary, risk-based inspections regime that eliminates 100 percent inspections of imports; the introduction of a new automated system for customs data; and streamlined import-export proce-dures, such as fewer required signatures for import clearance.

Reduced import costs can translate into lower consumer prices for imported food and other essentials in Liberia. The introduction of reforms such as reduced clearance fees for rice and the elimination of pre-shipment inspections for low-value shipments are essential in keeping the prices of staples low. These reforms also allow Liberia’s nascent export sector to gain market strength.

The client response in Liberia has been favorable. “The post-conflict issues we face everyday are considerable, but we are nevertheless devoted to an ambitious reform plan…,” said Finance Deputy Minister Elfrieda Steward Tamba, adding that the trade logistics advisory support “gives me real optimism as we continue our collaborative efforts to make Liberia a reference point for trade efficiency in the region.”

The business taxation product works with client countries to simplify tax regulation and reduce the burden on busi-ness in paying taxes. These initiatives include streamlining tax instruments (such as VAT, income tax, and turnover tax-es) and improving tax administration through customized interventions that reduce the number of procedures and costs for businesses, introduce self-assessment techniques, and strengthen tax auditing. To help encourage more tax participation, client governments often design tax systems for smaller businesses that encourage them to formalize by reducing compliance costs. FIAS-supported tax initiatives also prioritize reform of the legal framework, which often requires a legislative review and drafting to ensure laws are clear and transparent and contain minimal opportuni-ties for discretion or rent-seeking.

In FY10, in addition to the eight results (see Annex 1) from FIAS-supported tax programs, the business taxation product contributed to the overall investment climate results of several projects led by IFC regions. These include a project in the state of Bihar in India (see box, next page) and a project in the Republic of Yemen, where a new

income tax was drafted, approved by Parliament, and will be rolled out in 2011. The new law rationalizes the tax rate from 35 to 20 percent, removes fiscal incentives, eliminates distortions and ambiguity, and provides for minimum data standards and protection.

In vietnam, FIAS supported the General Department of Taxation in its May 2010 issuance of a new decree on goods and services that allows eligible businesses to print, issue, and manage their own VAT invoices. These were previously issued and sold by the local tax offices. As a result, businesses will spend less time and money paying their taxes and incur less risk of forgery in VAT transactions. In Georgia, the government passed a new tax code in 2010 that introduces a simplified tax regime, protects the tax base through transparent transfer-pricing provisions, and strengthens taxpayer rights by creating a tax ombudsman.

FIAS published a series of papers on the effectiveness of fiscal incentives in attracting investments and advised governments through workshops on this topic in over 50


countries. In light of the new G20 mandate on tax and development, a tax transparency advisory component (covering both domestic and international aspects) was

added to the business taxation product, a reflection of increasing demand for FIAS-supported work in this area in conjunction with other parts of the World Bank Group.

Simplifying the Taxation Regime in the Indian State of Bihar

The government of the Indian state of Bihar has begun implementing reforms to its business tax regime recom-mended as part of a joint initiative supported by FIAS, IFC, the World Bank, and DfID. The reforms were announced in the state’s annual budget in February 2010, have been drafted into legislation, and are being operationalized.

The Bihar program encourages micro and small informal businesses to join the formal economy—thus widening the tax base—and fosters good governance. It focuses on reducing the costs and time that small businesses must spend in paying taxes and making it easier for larger firms to comply through online filing and payment.

“It’s common sense that many more small entrepreneurs will register and come forward to pay taxes if procedures are simplified and well-communicated,” says Pramod Kumar, a clothing retailer based in Bihar’s Danapur district.

Making tax compliance simple. In FY10 the investment climate team advised the government to free up resources for better tax administration and efficient services and set up one-stop service centers. The key recommendation was to segment taxpayers into two groups: small (with turnover below 4 million rupees, around $90,000) and medium or large (turnover of $90,000 and more). The small firms would be required to pay a one-time, annual, lump sum tax payment ($225), with no routine scrutiny or inspection, and file a simple, one-page return. The larger firms would follow an information technology (IT) solutions-based regime: mandatory e-filing, e-payment, online issuance of forms to permit interstate trade at a lower tax rate, route permits, and IT-based tax administra-tion and enforcement.

The team also recommended ways to improve the effi-ciency of the tax administration—in registration, filing of returns, payment of tax, issuance of refunds, scrutiny and audit, and appeals—which can also substantially reduce the tax compliance burden on businesses.

Setting the baseline. The team’s recommendations were based on the results of a survey of over 1,000 business

taxpayers and 280 tax accountants, one of the key diagnostic tools used to set the context and baseline for reform. Almost two-thirds of survey respondents said the process of paying taxes is more onerous than the tax itself. The survey also revealed that half of businesses liable to pay VAT are not reg-istered and continue to remain informal; thus the taxpayer base is very narrow. This is clearly reflected in Bihar’s wide skew in tax payment distribution: 81 percent of registered dealers under the VAT law contribute only 0.87 percent to the total.

Results. Gaining acceptance for the proposed reform amid strong resistance from tax officials was a significant achievement of FY10. The government passed legislation introducing a new tax regime for small business and issued the order for implementing it.* The immediate result is expected to be an $8 million savings in private sector compliance costs in the first year of implementation (FY11). Electronic tax filing—which rolls out throughout the year—is expected to save the private sector an additional $7 million. The project also targets reduced corruption, which is an important project achievement, although less tangible and more difficult to quantify as a direct impact. Through the simplified regime for small businesses and electronic filing and payments for large taxpayers, the project has reduced taxpayer interaction with tax officials, thus limiting their opportunities for discretionary behavior and rent seeking.

Sharing knowledge. Another success in FY10 was fostering peer-to-peer learning. In May 2010 the team led a workshop on business tax administration and e-governance that was attended by representatives from six Indian states, including Kerala, Karnataka, and West Bengal. They shared experi-ences with over 100 Bihar commercial tax officials, business people, bankers, and accountants. The workshop was seen as key to successful tax reform, particularly in garnering support for electronic filing and related initiatives. Senior tax officials from “good practice” states shared how they overcame various obstacles—such as the lack of a strong IT background and resistance to change among tax officials—to deliver round-the-clock service that is accurate and prevents revenue leakages.

* These results are reported as part of the Investment Climate Business Line results.


Similarly, another long-established FIAS product that helps client countries capitalize on their reform successes is investment law and policy, which supports the effective promotion for both new investment and expansion and diversification of existing investors. The investment policy and promotion product accounted for about 10 percent of all FIAS results in FY10, supporting the implementa-tion of results in eight countries. The product helps clients develop a capacity to focus on attracting investment in competitive sectors, creating greater numbers of new in-vestment leads, and becoming more effective at translating needs into actual investment decisions. FIAS commenced new projects in this area in Brazil, Haiti, India (Rajasthan), and Southern Sudan during FY10. The Investment Law Reform handbook was produced, consolidating some twenty years of experience in designing and implementing FDI policy and regulation.

FIAS continued its shift from delivering standalone invest-ment promotion programs to a more integrated approach in which the product contributes to broader country programs and complements industry-focused and SEZ proj-ects, as well as work in post-conflict and fragile countries.

The investment policy and promotion product supported the generation of new investment leads in Brazil and haiti, while improvements in the services and assistance offered to private investors were achieved in various coun-tries: China (new industrial transfer support centers), Papua New Guinea (investor tracking and information system), and the Solomon Islands (Foreign Investment Registrar’s database). Other countries made important institutional changes that will enhance the clarity and quality of facilita-tion services offered to investors, for example, the vanuatu Investment Promotion Agency separated promotional and regulatory functions so investors will receive a better and more focused service. Similarly, Guinea-Bissau implement-ed a new investment code.

hUB FOR INNOvATION AND INCUBATION

A key feature of the FIAS program is to develop, test, and then roll out new and more effective approaches and tools for investment climate reform. These innovations are directly related to client needs and are often developed in partnership with other agencies. Examples of innovation,

incubation, and global rollout are reflected in the follow-ing achievements in FY10.

The new restructuring and insolvency product rolled out in FY10 and FIAS received requests from the governments of 12 countries. FIAS-supported work contributed to the enactment of major reforms in Latvia and Romania that expedite the treatment of settlements in formal, as well as informal, bankruptcy and restructuring processes. In both cases, the work was conducted through a partnership between FIAS and World Bank regional teams. In Latvia, the Ministry of Justice’s approval of the recommended corporate debt restructuring guidelines is a major step toward improving the country’s procedures for restructuring corporate debt. The guidelines are expected to contribute to an increase in the resolution of insolvency cases out of court, which can reduce the time and transaction cost of insolvency cases and increase the rate of successful busi-ness turnaround. Several Latvian companies have already benefited from out-of-court arrangements that allowed them to stay in business and keep their workers’ jobs.

In Romania, the Parliament supported the enactment of two amendments that provide for expedited formal bankruptcy cases (“pre-packs”) and promote and facili-tate the development and use of out-of-court restructuring mechanisms. The purpose of these provisions is to not only allow corporate workouts to take place outside of court, but also to allow the formal restructuring law to recognize these out-of-court workouts immediately at the start of insolvency proceedings. These reforms can be expected to directly impact the approximately 16,000 companies that file for formal insolvency proceedings per year in Romania as well as the $5.9 billion of non-performing loans. Currently in Romania, some $1.6 billion in stake-holder value is lost in insolvency proceedings as a result of proceedings that are too lengthy and expensive relative to those of the region’s top performers.

As client governments move into their second and third rounds of investment climate reforms, they are increasingly seeking assistance in implementing information communication technology applications to improve government-to-business service delivery (see examples in box, next page). By introducing online information dissemination and processing tools, FIAS-supported work has helped to increase transparency,


reduce the time and effort required to obtain licenses and permits, eliminate opportunities for petty corruption, and streamline regulatory compliance, thus reducing regulatory risk and uncertainty for business. A focus on ICT and staying current with the fast-changing technological landscape can:

�� Enhance efficiency and quality of regulatory oversight and reduce compliance costs—through improved information-sharing across government and better decision-support tools.

�� Improve access to government services for small and micro firms—with improved online information and transactions enabled through mobile devices.

�� Enable government to interact more effectively and transparently with the private sector—utilizing Web 2.0 technologies and social media to facilitate the reform dialogue, reduce corruption, and deliver actionable information through mapping and other database technologies.

�� Improve the sustainability of government-to-business service delivery—utilizing cloud computing and software-as-a-service to reduce risks and costs, and creating new or expanded revenue streams through information technology-enabled services.

�� Enable businesses to participate in the digital econo-my—by eliminating barriers to moving key regulatory, trade, payment, and health-related transactions online.

Electronic Applications Inspire New Era in Investment Climate Reform

Three years ago, a visit to the Registrar of Joint Stock

Companies in Bangladesh to register a business was a

daunting prospect for any entreprenuer given the number

of steps involved, long processing times, and lack of clear

guidance and information on how to navigate and comply

with the system. It was an equally challenging task for

registry staff to review manual applications, verify the

information submitted, and maintain paper records for

thousands of transactions.

With support from FIAS and the Bangladesh Investment

Climate Fund, the task of registering a business in

Bangladesh has become a more direct, streamlined, and

automated process conducted online through a Web

portal. In addition, the Bangladesh Board of Investment

has established a business regulation and licensing

e-registry, which provides one-stop access to a searchable

database of over 5,000 business-related regulations as well

as information on applying for specific business licenses,

which were previously only available in paper form and

not readily accessible by businesspeople.

The FIAS program has supported many client

governments such as Bangladesh in deploying ICT

applications designed to make relevant regulatory

information available in a searchable format and facilitate

online registration with company registries, tax authorities,

and other licensing agencies. These ICT solutions include

online business registries, Web portals offering information

on business regulations and licensing, single window

systems to facilitate import and export transactions, and

investment portals providing access to site selection data

and information on investment opportunities to prospective

investors.

In Kenya, for example, FIAS supported the Minstry of

Finance in establising an e-registry which enables businesses

to quickly identify licenses needed to operate in their

industries or conduct specific business activities as well as

the associated costs and requirements. Previously, businesses

were forced to navigate the processes of more than 40

agencies at the national and subnational levels. FIAS has also

assisted many investment promotion intermediaries (IPIs)

in establishing or improving their web presence, including

national IPIs in Rwanda and Sierra Leone (supported by

FIAS and Private Enterprise Partnership Africa), as well as

regional IPIs in Brazil and Nigeria.


The 2007–08 food crisis demonstrated the vulnerability of poorer countries to spikes in demand for basic foodstuffs. Recent export bans and price increases point to recurring systemic problems that need to be addressed. FIAS has committed to ramping up assistance in investment genera-tion for the agribusiness sector. The scaling up of FIAS’ engagement on agribusiness began in FY10 and entailed both the development of the agribusiness global product and the establishment of regional investment climate advisory platforms on agribusiness in partnership with IFC Advisory Services. An example is the partnership with the IFC Investment Climate Advisory Services in Europe and Central Asia. Building upon the early successes in Ukraine (see box), where FIAS helped harmonize food safety regulation with European Union standards, FIAS is currently supporting the launch and progressive rollout of agribusiness reform advisory programs in Belarus, Moldova, Tajikistan, and Ukraine in partnership with the investment climate country teams, the Access to Finance and Sustainable Business Advisory Business Lines of IFC, and the World Bank Group.

Tourism-sector work in development for the past 18 months has begun to yield innovative approaches with the potential for significant development impacts. The tourism sector is important in most client countries, and for some, such as a few Pacific islands, it is the dominant economic sector. A new regional integrated Pacific tourism strategy is a first for IFC, supported by FIAS. The strategy takes a programmatic approach, dovetailing a range of estab-lished competencies to focus on delivering new invest-ments, employment, and improved business operations. In India, a new project is underway targeting tourism growth in two of India’s poorest and most populated states, Bihar and Uttar Pradesh. This project, implemented in col-laboration with the IFC Advisory Services regional team, establishes a platform for enterprise creation and targeted investment generation.

FIAS took the initiative in piloting IFC integration by em-bedding a tourism sector policy and planning specialist in the IFC tourism investment team. This has yielded valuable intelligence on specific barriers to entry for IFC’s investment clients, particularly in difficult destinations for investors such as fragile and conflict-affected countries. This tight connec-tion to the investment team has increased its understand-

ing of investment climate work and the role it can play in addressing investment barriers to entry.

New analytical work has begun to define FIAS’ contri-bution to emerging global challenges such as climate change. The quality of the investment climate will play a key role in terms of attracting much needed private invest-ment into the low-carbon economy. Large-scale private investments in renewable energy and energy efficiency in developing countries are constrained by market and information failures, regulatory barriers, and weak investor incentives. During FY10, consultations were held with

Investment Climate Agribusiness Reform in Ukraine: Early Results

FIAS joined forces with IFC Advisory Services in Ukraine in early 2010 to launch an industry-specific reform initiative aimed at addressing micro-level regulatory and policy constraints to agribusiness development, with a primary focus on the harmonization of product standards, certification, and food safety regulation within international and European Union best practice.

As a result of the World Bank Group engagement, the Cabinet of Ministers abolished the requirement of mandatory certification of food products by the State Committee for Technical Regulations and Consumer Policy, with the exception of tobacco, alcohol, and baby food.

The mandatory certification of food products represented an unnecessary regulatory requirement for food processors, which are already subject to regular food safety controls by sanitary and veterinary authorities. An initial diagnostic study carried out by the team identified compulsory certification as the single most burdensome requirement, accounting for 10 percent of the overall food safety regulatory burden borne by food producers in the dairy sector alone. This measure unlocked $7.5 million annually for the dairy sector in terms of reduced costs for businesses to comply with regulations. Nevertheless, there remains much work to be done.

Ukraine was chosen as a pilot country due to its growth and export potential in agribusiness and ability to play a global role in food security, given the sheer quantity of arable land and significant opportunity for dramatically improving yields.


clients, external experts, and groups across the World Bank and IFC to identify specific opportunities in which investment climate reforms would have a catalytic impact in stimulating private “green” investment. Two areas of focus were identified, based partly on existing areas of ex-pertise in construction permits, competition policy, and tax reform. These two areas are energy efficiency in buildings and the regulatory environment for renewable energy in developing countries.

Globally, buildings account for 40 percent of final energy use and 30 percent of greenhouse gas emissions. In the next two decades, with the building stock in emerging economies set to double, increased energy efficiency in buildings has the largest potential for cost-effective greenhouse gas mitigation. This is partly because energy efficiency in buildings lies on the left hand side (negative cost) of the well-known McKinsey Marginal Abatement Cost curve for greenhouse gas emissions. Initial pilot work with the city of Jakarta, Indonesia, shows high levels of interest in this topic. Given the rapid rates of projected urban growth, the implementation of mandatory codes for building energy efficiency for new commercial buildings in Jakarta would mitigate the same level of greenhouse gas emissions as currently emitted by Ireland. In the area of renewable energy in developing countries, there are significant business environment constraints including the revenue potential implied by different levels of “feed-in” tariffs offered to independent power producers. Also, barriers prevent private providers from entering energy markets and selling power from renewable sources to national grids. The next step will be to develop additional pilot projects in developing countries.

FACILITATING PRODUCTIvE PARTNERShIPS

Partnerships are key to the success of the FIAS program. These partnerships are multidimensional, incorporating financing, knowledge sharing, joint project design and implementation as well as staff exchanges. In FY10, the FIAS program was enriched through four main types of partnerships, those with client governments, donors, World Bank Group units, and international organizations.

Partnerships with Client GovernmentsA key determinant of a successful investment climate reform intervention is strong support and ownership on the client side. All FIAS-supported work that takes place at the country level involves a partnership with the client government. This is increasingly manifested through client contributions, either financial or in kind. FIAS has continued to generate relatively modest, but increasing client contributions, from a range of its advisory services clients, in particular from middle-income countries. Several activities are fully client funded, including a large invest-ment generation project in Brazil (see box) and several Doing Business reform advisory interventions in the Middle East and North Africa.

Partnerships with DonorsDonor interest, engagement, and support are key features of the FIAS program. Since the beginning of the FY08-11 strategy cycle, the FIAS program has received financial contributions from 14 donor countries, including Australia, Austria, France, Iceland, Ireland, Italy, Luxembourg, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States, as well as the European Commission. Additional contribu-tions were received from Japan, the Netherlands, Spain, Sweden and Wallonia (Belgium) via IFC’s Technical Assistance Trust Funds system, and under project-specific reimbursable agreements from Germany and ANIMA (the Euro-Mediterranean Network of Investment Promotion Agencies).

Donors also continued to make significant staff resources available to the FIAS program via staff exchanges. During FY10, staff members from Agence Française de Développement (AfD), DfID, the Italian Ministry of Foreign Affairs, the Korean Ministry of Knowledge Economy, and Spain’s Institute for Foreign Trade worked on FIAS-funded projects; two additional assignments were sponsored by Sweden and Switzerland under the World Bank Group’s Junior Professional Officer program. These important con-tributions from the broad-based group of FIAS donors help build even stronger partnerships with our donor partners.


In New Role, Brazilian National Agency Mentors States to Generate FDI

A FIAS-supported project is linking Brazil’s national and

state investment promotion agencies in a coordinated

national network to target and attract FDI. In its first

year, the client-funded project has produced results using

a “train the trainer” approach—FIAS trained Apex-Brasil,

the Brazilian Federal Export and Investment Promotion

Agency, in coaching the state agencies toward an ultimate

result of attracting investment into the country’s frontier.

In parallel, FIAS also trained the agencies in two pilot

frontier states, Para and Pernambuco.

When the project opened in May 2010, Apex-Brasil

had not confirmed an investment since it was created in

2003. The national and state efforts to attract FDI were

weak and lacked clear focal points, resulting in investor

confusion, duplicated efforts, limited tracking of leads,

and few, if any, results, especially in Brazil’s north and

northeast states.

Training the trainer. In requesting assistance, the national

agency agreed to fully fund the network’s development,

focus assistance on the two pilot states, and extend the

project to 25 others, thus greatly leveraging a limited

intervention. Using FIAS methodology and guided by

best practice, Apex-Brasil developed its first sector strategy,

a partnership framework, a system for responding to

investors’ inquiries and managing site visits, and a Web-

based Wiki as its investor information backbone. It also

updated its online presence, with support from MIGA,

and developed a platform to track inquiries.

Apex-Brasil has reported that “the productivity of the

team is improving…more staff are focusing on servicing

investors.” Inquiries from investors have increased, some

of which have led to high-profile investments in national

priority sectors, reinforcing the national agency’s leadership

role as coach and mentor. Apex-Brasil has begun coaching

the agencies in Ceara, another frontier state, and São Paulo.

A good start at the state level. SEDECT in Para and

AD Diper in Pernambuco have created Web sites geared

to investors and are facilitating potential investments,

coordinating within their states and with Apex-Brasil to

access information, respond to investors, and handle site

visits. Both agencies have reported high satisfaction with

the assistance and their progress. SEDECT Foreign Trade

Director Fátima Gonçalves has said her agency now has

“systems in place to deal with investor inquiries and site

visits.” Group Manager Virginia Boschetti of INUR, a

Uruguayan investor, said in March 2010 that SEDECT

“… provided all information and meetings that we

needed,” adding, “We would not have visited Para if not for

SEDECT.” Both state agencies have developed a pipeline

and some encouraging interest in their locations. In Para, Var

BV has announced it will build a $30 million sawdust and

wood recycling plant to export bio-mass bricks.

Early investments through Apex-Brasil. The national agency

supported two recent investment decisions: Infosys’ center

for information technology and business process outsourcing

in Minas Gerais and HCL’s software development center

in Rio Grande do Sul. “Apex-Brasil’s deep knowledge of

regulatory frameworks, economic, social, and cultural

aspects, and valuable information on the industry led to

our choice of Brazil as the starting point for HCL’s Latin

American operations,” says Shami Khorana, president of

HCL America. Apex-Brasil also helped secure projects

from General Electric and IBM, both to build research and

development centers.

In addition to financial and staff contributions, several donors maintained close technical relationships with FIAS. Examples include participation in product-specific advisory panels for tax simplification, secured transac-tions, trade logistics, and alternative dispute resolution. Donors also cooperate with FIAS through joint program design and implementation activities. Examples include DfID’s participation in Sierra Leone and the East African

Community program; the Netherlands and the European Commission in Kenya; and Sweden in Liberia. The government of France, the Investment Climate Facility for Africa, and other World Bank Group units are helping to modernize uniform commercial laws affecting 16 African countries through support for OHADA (the Organization for the Harmonization of Business Law in Africa). The successful investment climate reform program in Tajikistan


is an example of effective donor cooperation involving the World Bank, IFC, the FIAS program and six other donors (see box).

Other types of partnerships include participation in knowl-edge sharing, learning, and training events including product-related “deep dive” learning events and seminars organized in conjunction with the annual World Bank Group Financial and Private Sector Development Week. The ongoing close cooperation between FIAS and its donor and development partners continues to foster the

mutual exchange of investment climate-related knowledge and best practices; it provides a stimulating environment to discuss new trends and developments and to learn from and be inspired by the experiences and expertise of FIAS’ partners.

Partnerships across the world Bank GroupFIAS-supported work increasingly involves units across the World Bank Group. This means that a greater range of relevant expertise can be brought to bear on investment

A Cooperative Donor Effort Supports Tajikistan’s Reform Success

Companies in Tajikistan have faced severe challenges as

a result of the country’s civil war, which claimed up to

100,000 lives and destroyed the weak economic infra-

structure. Industrial and agricultural production fell into

sharp decline, resulting in high rates of unemployment

and mass emigration. The government identified private

sector development as a key priority to create jobs and

generate economic growth, focusing on a broad reform

package that has earned the country Doing Business top-10 reformer status for two years in a row. Tajikistan’s

achievement is all the more remarkable given the country’s

global ranking in the Doing Business 2009 report was

the lowest among those economies in Eastern Europe

and Central Asia (159th of 181 economies measured by

Doing Business).

The news of reform is encouraging young people like

Sherali—a Tajik construction worker who immigrated

to Russia five years ago in search of work—to return to

Tajikistan. “My brother has just registered his import-

export company and now he needs someone to build a

warehouse to store merchandise,” he says. “Maybe I can

open my own construction business, too?” Sherali is one

of an estimated one million Tajiks who currently work

abroad.

Since 2008, the government has developed a more pro-

grammatic approach and quickened reform implementa-

tion, using Doing Business as the catalyst and its indicators

to track progress. In late 2008, FIAS supported a reform

program that resulted in five positive reforms in Doing Business 2010 and two in the 2011 report.

A cooperative effort. Tajikistan used a comprehensive,

pragmatic approach to business regulation reform. Given the

country’s limited capacity, reforms were suggested in areas

where donor activity could complement the government

effort. The establishment of the one-stop shop (Single State

Register) that allows companies to register with the state,

tax authorities, and social security simultaneously is one

example. A World Bank project designed the one-stop shop

model and negotiated the reforms needed to implement it

with the government, the European Commission financed

its implementation, and the USAID Business Environment

Improvement project greatly contributed to the passage of

reforms necessary to establish the one-stop shop. A dedicated

working group coordinated by the IFC Business Enabling

Environment project—funded by DfID and the Swiss

State Secretariat for Economic Affairs—ensured smooth

implementation.

More results. Tajikistan also strengthened investor protec-

tions and increased transparency in corporate matters with

the assistance of the IFC Central Asia Corporate Governance

Project. The amended Law on Joint Stock Companies,

passed in January 2010, requires detailed disclosure of

transactions involving a conflict of interest and substantially

expands minority shareholders’ access to all corporate

documents.

Additional reforms are expected in the near future. With

the support of the IFC Central Asia Financial Infrastructure

Project and the European Bank for Reconstruction and

Development, Tajikistan’s first credit bureau was registered in

April 2010 and is expected to begin operations later this year.

The USAID project supports another ongoing reform effort

targeting improvements in the issuance of building permits.


climate problems leading to better outcomes for clients. One example of effective country-focused work in close partnership with World Bank units is in Peru (see box).

Partnerships with International Organizations

FIAS-supported work contributes to, and benefits from, work done by international and national organizations with mandates that cover various dimensions of the investment climate. FIAS has developed a variety of partnerships with such organizations. Examples include, among others: the Corporate Registers Forum (CRF); the International Tax Dialogue (ITD), the United Nations Commission on International Trade Law (UNCITRAL), the Dispute Board Federation (DBF), and the U.S. Federal Judicial Center (FJC).

Drawing on FIAS-supported work, IFC entered into a memorandum of understanding with Corporate Registers Forum, an international membership organization of commercial registries. This new partnership provides solid ground for sharing knowledge and experience in business entry reform. Such cooperation has already been realized at four joint regional workshops where officials from de-veloping countries had an opportunity to learn and share their experiences in implementing reforms with their CRF colleagues. Some FIAS-supported client registries decided to join CRF to obtain direct exposure to international best practice. CRF experts have also joined FIAS-supported missions to client countries in helping design business-entry reform programs. Similar memoranda of understand-ing have been signed with the International Association of Commercial Administrators and European Business Register, organizations of commercial registries from North America and Europe, respectively.

The International Tax Dialogue was launched in 2002 to provide a vehicle for coordination and exchange of information on tax technical assistance and research. Steering committee members include the International Monetary Fund, the World Bank Group (including IFC), the Organisation for Economic Co-operation and Development, the European Union, the Inter-American Development Bank, and countries such as the United Kingdom. Through the ITD, FIAS supported two tax practitioner network conferences during FY10. The first was a global conference on tax and the financial sector, attended by over 100 countries (in Beijing in October

Peru, Ranked 3rd in Doing Business 2011 Top-10 Reformers, Posts Quick Results

Peru’s rapid progress in improving its investment climate

reflects the government’s broad reform agenda targeting the

laws and day-to-day administrative procedures that regulate

how businesses start-up, operate, and grow. In FY10, Peru

recorded several reforms tracked by Doing Business, including

expanded online business registration linked to all of Lima’s

notaries and an adapted law setting time limits for construc-

tion project approvals.

Momentum for reform accelerated in July 2010 when Minister

of Economy and Finance Luis Carranza announced an ambi-

tious reform plan that would boost Peru to among the top 25

countries in the global ranking of the Doing Business indicator

measuring ease of doing business. Teams mobilized across the

World Bank Group to provide a coordinated effort. Technical

assistance focused on projects in the areas of municipal

inspection reform, property registration, trade logistics, judicial

reform, tax administration, and insolvency procedures. FIAS-

supported assistance helped upgrade an electronic system for

business start-up—which previously had few users—enabling

new companies to register their entities online in 72 hours.

The reforms also reached local governments. The Ministry

of Economy and Finance introduced a cash-transfer program

for municipalities that conditioned disbursements on

meeting certain goals, which included measures to ensure the

consistent application of business licensing and construction

permitting laws.

Quick results. Peru’s ranking among the top-10 reformers in

Doing Business 2011 is reflected in reforms measured by the

starting a business, dealing with construction permits, and

registering property indicators. The country has reduced the

time spent starting a business from 41 to 27 days and the

cost by 19 percent. The number of companies that used the

online business start-up system in the first half of 2010 was

166 percent more than in 2009. The introduction of a new

legal framework for construction and additional admin-

istrative reforms has cut the time needed to comply with

construction approvals by 15 days to 188 days. The property

registry, which was already among the most efficient in the

region, introduced a fast-track procedure that enables a busi-

ness to complete a standard property transfer in a week. A

new law passed in June 2010 further reduces procedures for

starting a business and obtaining construction permits and

allows for the use of electronic accounting books.


2009) and hosted by China’s Ministry of Finance. The second, related to smaller businesses, was held in March 2010 in Manila, the Philippines, attracting representatives from 25 countries in the region. In the ITD, FIAS supports work to coordinate tax technical assistance globally, and the ITD has become the coordinating body for the global “Tax and Development” theme that emerged from the G20 meeting in April 2009.

As a part of an ongoing partnership, FIAS facilitated the external review by the United Nations Commission on International Trade Law of draft alternative dispute resolu-tion legislation for Ethiopia, the former Yugoslav Republic of Macedonia, Papua New Guinea, Serbia, and the Solomon Islands. The U.S. Federal Judicial Center is a regular contributor at the Investment Climate ADR Advisory Board and to ADR product knowledge development initia-tives such as workshops and guidelines. The FJC also participated in scoping missions in Burkina Faso, Djibouti, and Uganda and contributed to the drafting of the three diagnostic reports on ADR. IFC, with FIAS support and as a part of a larger ADR global initiative, partnered with the Dispute Board Federation to introduce ADR in the construc-tion industry in Bosnia and herzegovina, Montenegro, and Serbia. The use of mediation and dispute boards can bring effective dispute prevention to large infrastructure projects in developing countries.

INCREASING ThE USE OF PROGRAMMATIC APPROAChES

Over the past three years, FIAS support has moved toward more programmatic approaches in key client countries. Programmatic or comprehensive approaches refer to those instances in which FIAS-supported work takes place simul-taneously across a number of investment climate product areas. Examples of this approach include programs in Colombia, Liberia, Rwanda, and Sierra Leone. In FY10, Rwanda and Colombia each recorded results in five of the thirteen investment climate product areas. More work is needed to ascertain the impacts of these approaches and, in particular, how best to structure a programmatic whole that is greater than the sum of its individual project parts. A good example of a programmatic approach is in Kenya, where initial work on simplifying business licensing was started three years ago and has led to significant reforms in the telecom and transportation sectors (see box).

Comprehensive Reform in Kenya Yields Broad Business Impact

Kenya made significant progress in its investment climate agenda in FY10. The Kenya Investment Climate Program supported a total of four reforms this year—the most national-level investment climate reforms of any FIAS program. The reforms built on the recommendations of a report prepared with FIAS support in 2007 that identified and comprehen-sively reviewed all business licenses in Kenya.

E-applications for business. The government eased the process of business entry by consolidating company registration under one agency. A stamp duty counter (a service previously provided at the Ministry of Land) was set up at the Companies Registry, reducing the time necessary to stamp articles of as-sociation from 8 to 5 days. The e-registry of business licenses became operational, providing easy access to exhaustive information about business licenses and related formalities. The portal has received over a million hits since its launch, and most agencies now issue licenses within a day instead of the previously required 30 days.

Tax returns can also be filed online, thanks to the Kenya Revenue Authority’s “e-filing” Web portal. The system now enables firms to file their returns from the comfort of their premises without interacting with revenue officers, thereby limiting delays and opportunities for rent-seeking. The Kenya Revenue Authority also implemented an online application system for a personal identification number certificate. This is expected to save the private sector an estimated $4.5 million, primarily in fewer employee-hours spent waiting and complet-ing forms.

Telecom and transportation. Among industry-specific reforms, the Communication Commission of Kenya reduced third-generation mobile licensing fees by 60 percent (from $25 million to $10 million) and ended a three-year monopoly. At least 10 million subscribers are expected to access third gen-eration services and enjoy price reductions. This has resulted in more entry and market activity among third-generation operators.

The government also abolished the $32 advance tax for the commercial vehicle driver’s and conductor’s license and drasti-cally reduced the license registration turnaround time from 30 days to 1 day. The lower cost to “formalize” is expected to increase formal registration, thereby curbing harassment by inspectors requiring informal payments for non-compliance. In addition, fees for two types of work permits for the five member states of the East African Community were abolished. In addition to increased trade and traffic across borders, the di-rect private sector cost savings are estimated at $1.13 million.

29KNOwLEDGE MANAGEMENT AND LEARNiNG

KNOwLEDGE MANAGEMENT AND LEARNiNG

Another important dimension of the FIAS program is the focus on knowledge management in developing

and elaborating Investment Climate products that are implemented by various units of the Bank Group.

In this capacity, FIAS supports work in three key areas in order to deliver the greatest impact: the internal

knowledge management and learning program; external outreach to clients via networking and learning

initiatives; and the production and dissemination of publications and knowledge products.

The knowledge management and learning program targeted capacity building in the field offices and deepened the knowledge and technical skills of operation officers through product “deep dive” learning events. Deep dives are designed to further the exchange of knowledge between senior and junior staff and often feature client and industry participation. FIAS supported seven deep dives in FY10, including six hosted at field locations (see examples in box below).

The knowledge management program distills lessons from the years of operational experience gained by established FIAS programs. For example, at the close of FY10, FIAS had benchmarked 299 locations in 42 countries and published 27 subnational Doing Business

“Deep Dives” Bring Together Staff, Clients, and Partners to Share Knowledge

In June 2010, FIAS hosted the conference “Moving Products from Firms and Farms—Themes in Trade Logistics Perspectives from Reformers and Innovators,” which attracted some of the world’s leading practitioners, policymakers, and supply chain and logistics experts to dis-cuss and debate issues that are crucial to the competitiveness of firms, farms, and economies. The trade logistics product also held a deep dive in Cartagena, Colombia, in April 2010, which brought together Bank Group staff, partners, and clients interested in trade logistics projects globally.

In April, the Business Entry deep dive in Colombia enabled practitioners and Bank Group staff to discuss the role of business entry reforms in improving the overall regulatory

framework so as to encourage entrepreneurs to join the formal economy. The event included a client workshop featuring distinguished speakers from 12 countries. As a result of the workshop, participants established the Association of Registrars in Latin America and the Caribbean.

The two-day “ICT and Investment Climate Reform” deep dive held in Mombasa, Kenya, in May featured speakers from Google, Microsoft, the Serbian Business Registrars Agency, several African e-government organizations, and the invest-ment climate team. It was attended by World Bank staff, clients from Bangladesh, Kenya, and Rwanda, and partners from the Corporate Registers Forum.

reports since starting the project in 2005, yielding a rich set of lessons (see box of key lessons, next page).

External outreach in FY10 supported work to understand and leverage the political economy of reform in client countries as well as to build capacity among clients to implement reform. Seven peer-to-peer events—including two held in Africa—attracted clients, policymakers, technical experts, and members of the private sector around themes and lessons in investment climate reform. At the January “World’s Top Ten Reformers in Ease of Doing Business” conference, jointly organized by FIAS, IFC Advisory Services in Africa, and the World Bank’s regional private sector team and the Doing Business teams, participants from 14 African countries and Singapore came together in Mauritius to share their


experiences in enacting business reforms (see box). The FIAS-supported second Eastern Africa “Network of Reformers” conference, held in Kampala, Uganda, in January 2010, provided a forum for exchange among policymakers and private sector participants, particularly about reform progress since the network’s first event in Tanzania in 2008.

Latin America’s first Single Window for Trade Conference was organized jointly with the government of Colombia and SELA, a regional organization for Latin America and the Caribbean, and held in Bogota, Colombia in March 2010. The peer-to-

peer learning event benefited from high-level technical representation from more than 18 countries in the region and featured experts from the United Nations Economic Commission for Europe and the World Customs Organization.

In FY10 a wide range of publications were produced including the Investing Across Borders flagship report, handbooks, technical papers, the Investment Climate IN PRACTICE note series, and a number of Smartlessons. (A listing of key FY10 publications, including short summaries of each, begins on p. 33.)

Key Lessons from 27 Subnational Doing Business Reports

Subnational Doing Business goes one step further than

the Doing Business project. It compares the regulatory

environment across locations within one country

(and against 183 world economies), creating powerful

incentives for reform. Such benchmarking stimulates

policy debate, by revealing potential challenges and

identifying where national and local policymakers can

look for lessons and good practices. The subnational

Doing Business experience to date offers four key lessons

in implementing reform at the local level.

Leadership and advocacy. Leadership must extend

to the local level. For example, in Colombia, which has

ranked among the leading Doing Business reformers for

three consecutive years, former President Alvaro Uribe

championed reform implementation among Colombia’s

localities and at the national level. All 13 cities measured in

the first study showed reforms in at least one area. Advocacy

for local reform must also weather political change to

endure over time.

Methodology transfer. Partnering with local think

tanks to transfer the Doing Business methodology—in

Mexico, Colombia, and the Philippines, for example—has

strengthened local ownership, enriched the knowledge base,

and helped sustain the benchmarking process over time.

Post-report momentum. The follow-up phase after the

report launch is as critical as benchmarking and report

preparation. This work catalyzes momentum for reform

at the local level. In FY10, the governments of Colombia,

India, and Kenya organized high-level, peer-to-peer learning

events where local officials could share their experiences.

Local implementation. Laws may be national, but their

implementation is local, testing the efficiency of local

branches of national agencies. Thus the reform process must

not stop when a law is passed, but must reach the local level

to achieve its desired impact.


Peer-to-Peer Knowledge Exchange on Africa’s Regulatory Reform Experience

In FY10, Rwanda and Liberia each ranked among the

world’s top 10 reformers in ease of doing business,

as recorded in the Doing Business 2010 report. Both

countries proved that in shaping business regulations that

open opportunities for smaller enterprises to grow and

create jobs, smaller countries can score top honors.

At a Doing Business in 2010 Africa conference in

Mauritius—which ranked 17th of 183 countries in

the global Doing Business 2010 rankings—14 African

countries and Singapore (the top-ranked country in the

same report) came together to share experiences and

explore strategies for successfully implementing reforms

and tracking their impact. Seven delegations at the

event were led by ministers handling the Doing Business

portfolio, reflecting the priority of business reform in

Africa.

“We focused our reforms on putting an end to suffocating

bureaucracies and office-hopping for obtaining licenses,

permits, and approvals,” said Dr. Navinchandra

Ramgoolam, Honorable Prime Minister of Mauritius,

in opening the conference. “We set out solutions that

allow enterprises to start operations on the basis of self-

adherence to clear, comprehensive guidelines, rather than

long and complicated authorizations.”

Among the achievements noted in conference discussions:

• Liberia, rising from a civil war, cut business start-up

time from 99 to 22 days, and sharply reduced time

for construction permits from 398 to 77 days in

one year;

• Mauritius, overcoming the limitations of geography

as an island state, successfully put in place reforms

that enabled it to lead Africa in ease of paying tax,

and the country raised tax revenues in the process;

• Rwanda’s remarkable ascent in the Doing Business rankings to top global reformer was the result of a

multi-year program of legislation and

administrative reform;

• Singapore’s legendary use of information and

communications technology to leverage business

reforms through the TradeNet system, which

reduced permit processing times to one minute or

less (from the previous 2- to 7-day processing

time) and paperwork to one e-form (from the

previous 3 to 35 documents).

Conference participants said that Doing Business

reforms helped open up broader reform programs. “The

benefits from undertaking business-friendly reforms were

immediate and generated positive ripples throughout

the economy,” said Clare Akamanzi, Deputy CEO of

the Rwanda Development Board, speaking about her

country’s experiences. As a result of the combined efforts

of various parts of government in Rwanda, the number of

sole proprietorships rose from 841 to 2,780 and companies

from 735 to 3,028 (between 2008 and 2009).


COMMUNICATIONSEffective communication plays an important role in explain-ing how a relatively technical subject such as investment climate reform can make an important contribution to eco-nomic growth, job creation, and poverty reduction, among other development outcomes. Solid monitoring, evaluation, and impact data are the basis for FIAS-supported commu-nications, which reveal the human face in the data through stories that share the results in a compelling and balanced way. In FY10, FIAS supported short videos showcasing reform stories in Colombia and Liberia. The videos, based on interviews with entrepreneurs and officials in those countries, aimed to introduce the role and success of in-

vestment climate reform to a wider audience. Now posted on You Tube, they have received thousands of views and provide an on-the-ground context at FIAS-sponsored train-ing events and deep dives.

In FY10 a new thematic Web site (www.wbginvestment climate.org) was readied for launch in September 2010, offering improved access to investment climate-related re-sources and replacing the former www.FIAS.net site. The new external Web site will become the primary platform for distributing investment climate-related knowledge prod-ucts. In addition, special electronic versions of the most popular investment climate toolkits and handbooks will be disseminated on the Web site.


KEY KNOwLEDGE PRODUCTS PUBLIShED IN FY10

Flagship Reports The Investing Across Borders 2010 report and database, launched in FY10, compare regulation of FDI in 87 econ-omies and offer recommendations for governments looking to improve their competitiveness in attracting investment.

investment Climate in PRACTiCe note seriesThe flagship note series for clients and practitioners featured “hands-on” topics in trade logistics, investment promotion, and business taxation.

• “Investment Promotion Essentials: What Sets the World’s Best Investment Facilitators Apart from the Rest” (no. 6, September 2009) outlines 14 common practices of the top performing investment promotion intermediaries in the Global Investment Promotion Benchmarking 2009 report and suggests how agencies can inexpensively implement these practices to win investment.

• “Providing Incentives for Investment” (no. 7, January 2010) consolidates the policy implications of investment climate research showing that incentives cannot compensate for a weak investment climate, and they carry significant costs. It identifies best practices for incentive policy and administration and provides a framework for analyzing the likely effectiveness of incentives under different conditions.

• “Tax Compliance Cost Surveys: Using Data to Design Targeted Reforms” (no. 8, February 2010) highlights key findings of tax compliance cost surveys conducted in four countries that measured the burden on business of preparing, filing, and paying taxes. It shows how survey data can be used to design reforms that reduce compliance costs and risks for small businesses.

• “Reforming Customs Clearance in Pakistan” (no. 9, April 2010) traces the decision to introduce a modern single window system for customs clearance in Pakistan, replacing numerous procedures with one electronic declaration and cutting customs processing time.

• “Ghana Leads West Africa in Transit Reform” (no. 10, April 2010) discusses key modifications Ghana introduced to its transit system, beginning in 2006, which provide a model and catalyst for broader reform to improve road-based trade in West Africa.

• “Developing a Single Window to Facilitate Trade in Senegal” (no. 11, April 2010) traces Senegal’s introduction of a single window system for electronic trade facilitation, highlighting key issues in the decision to develop a customized system and lessons in managing stakeholder needs.

• “Managing Risk in Customs: Lessons from the New Zealand Custom Service” (no. 12, April 2010) highlights the key principles and processes behind the risk management system that enables New Zealand Customs to manage large cargo volumes with limited resources, offering lessons in reforming trade logistics functions to meet global standards and security requirements.

• “Using Taxation to Enable a Fair and Thriving Mining Industry” (no. 13, June 2010) examines tax policy as a means to attract investment and spur growth in mining, analyzing tools and approaches from the perspectives of both governments and investors.

• “Taxing Tourism in Developing Countries” (no. 14, June 2010) focuses on three issues facing policymakers dealing with tourism taxation—fiscal incentives, sector-specific levies, and value-added tax—and offers policy options to encourage investment and ensure revenue collection.

viewpoint note series (published by the World Bank Group Financial and Private Sector Development Vice Presidency)—“An Open Door for Firms: The Impact of Business Entry Reforms” reviews existing research to conclude that more firms enter the market when registration procedures and costs are cut; a large percentage of new firms survive and grow; new firms increase competition, forcing incumbents to become more efficient or to exit the market and boosting overall productivity and investment; and entry reforms have greater impacts when coupled with other investment


climate reforms, in particular, those making labor more flexible.

handbooks, Technical Papers, and Reports• How Many Stops in a One-Stop Shop? reviews recent developments in business registration and provides background and advice for setting up or improving a one-stop shop.

• Outsourcing of Business Registration Activities: Lessons from Experience discusses the results of a study of business registration projects. It covers practical aspects and lessons from the combined experience of 53 registries, including some that outsourced the development and operation of computer systems.

• Secured Transactions Systems and Collateral Registries is a practitioners’ handbook that provides technical advice on the implementation of secured transactions law and institutional reforms in emerging market countries.

• A Handbook for Tax Simplification provides a framework for assessing a tax system in its entirety, measuring its parameters, and defining best practices that will yield a simple and predictable tax system that does not create an undue burden on private enterprise.

• Investment Law Reform: A Handbook for Development Practitioners focuses on one element of the legal framework for investment—investment

legislation—and covers how to create new and reform existing legislation so as to help promote private investment in developing and transition countries.

• “Incentives and Investments: Evidence and Policy Implications,” a technical paper, analyzes how investment incentives can be used to foster private investment, particularly in developing countries. The assessment draws on existing literature as well as several case studies and surveys conducted for this paper’s analysis.

• Better Regulation for Growth resources— a body of materials and tools—were developed as an outcome of the program launched in 2007 (in conjunction with the Dutch Ministry of Foreign Affairs and the U.K. Department for International Development) that reviewed and synthesized experiences with regulatory governance initiatives.

smartLessonsThe staff of the Investment Climate Advisory Services au-thored or co-authored eight SmartLessons, the note series for sharing experiences among World Bank Group staff. Two of these notes—“How to Drive a Peer-to-Peer Learning Event” and “How to Date a Project Manager”—were first and second prizewinners, respectively, in one round of an internal IFC competition.

35FiNANCiAL RESULTS

FiNANCiAL RESULTS AND RESOURCE USE

FIAS activities covered in the Annual Review are investment climate reform activities co-financed via a set of FIAS trust funds managed by the World Bank Group’s Investment Climate Department. In ad-dition to FIAS trust funds, the Investment Climate Department manages additional funds received from the World Bank and IFC for operational and administrative tasks related to the department’s “anchor” or backbone function in the investment climate space (for example, as backbone for IFC’s Investment Climate Business Line or as anchor unit for the World Bank Group’s Financial and Private Sector Development Vice Presidency), as well as donor funds for activities managed outside the scope of FIAS (such as the policy and advisory component of IFC’s Health in Africa program). The financial results reported in this section cover only those funds managed by the Investment Climate Department under the FIAS trust fund structure.

FUNDINGContributions received in FY10 from the following donors and clients are gratefully acknowledged:

• Direct contributions to FIAS trust funds:

o Australia

o Austria

o France

o Ireland

o Luxembourg7

o the Netherlands

o New Zealand

o Norway

o Sweden

o Switzerland

o the United Kingdom

o the United States

The Investment Climate Department follows IFC’s standard accounting policies and procedures, as noted below.6 Financial reporting on FIAS is based on cash-based reporting, in alignment with the quarterly financial reports on IFC’s donor funded operations.

• Contributions via IFC’s Technical Assistance Trust Funds (TATF) system:

o Japan

o the Netherlands

o Sweden

o Wallonia (Belgium)

• Client contributions:

o Brazil

o Colombia

o Denmark

o Italy

o the United Arab Emirates

o the Russian Federation/Tatarstan

6 Annual contributions from IFC, MIGA, and the World Bank are treated in the same manner as core donor funds and are commingled with other donor funds, as terms and conditions allow. Contributions from the IFC Investment Climate Business Line and Global Fund are treated as an additional source of project-specific funding. 7 Luxembourg’s FY10 annual contribution and a separate crisis response allocation were disbursed and credited to FIAS at the end of FY09 and are included in the respective FY09 line items for Luxembourg.


Core and Programmatic FundingIn FY10, FIAS donors, clients and the World Bank Group contributed a total of $32.4 million to the various FIAS trust funds, supporting the implementation of a broad-based investment climate reform program under the FIAS umbrella (see details in Tables 1 and 2). This amount is roughly equal to the total contributions received for FIAS in FY09 ($32.7 million) and reflects the strong and continued com-mitment by donors to support investment climate reform, despite severe budget constraints experienced by many donor partners due to the global financial crisis.

world Bank Group core contributions totaled $6.6 million in FY10, including $2.0 million from IFC, $3.0 million from the Multilateral Investment Guarantee Agency (MIGA), and $1.6 million from the World Bank. For cash-flow management purposes, $2.0 million of IFC’s $4.0 million core funding allocation for FY10 was transferred to FIAS as an advance in late FY09 and is reflected in IFC’s FY09 contribution. Core contributions received from do-nors amounted to $5.3 million in FY10 (significantly down from $8.4 million in FY09). These contributions include al-locations of $1.9 million from Australia and New Zealand which are reserved for investment climate reform activities in the East Asia and Pacific region. Overall, the amount of core funding for FIAS dropped from $18.3 million in FY08 to $15.5 million in FY09 and to $11.9 million in FY10, a significant decrease which seriously limited the flexibility of the FIAS program over the past year.

Programmatic contributions from donors, made available for thematic and regional FIAS Trust Funds, totaled $7.5 million in FY10, slightly down from $8.6 and $8.8 million in FY08 and FY09, respectively.

Project-Specific FundingReduced levels of core and programmatic contributions were offset in FY10 by a surge of project-specific contri-butions, received from clients, donors and the World Bank Group. Project-specific contributions from IFC, donor part-ners and clients increased to $13.0 million in FY10 (versus $9.4 million in FY08 and $8.3 million in FY09), including $8.9 million from donors, $1.8 million from clients, and $2.3 million from IFC’s Investment Climate Business Line and Global Fund.

Client contributions received from six clients almost doubled between FY09 and FY10 (from $1.1 million to $1.8 million), but the potential to generate significant cash contributions from clients remains modest, given the large share of FIAS activities in IDA as well as fragile and conflict-affected countries.

Project-specific contributions from donors doubled from $4.4 million in FY09 to $8.9 million in FY10, reflecting strong donor interest in client-facing investment climate reform interventions and an ongoing trend among some donors to decentralize their aid budgets to the field. It is recognized that donors have a choice to support country-specific investment climate activities through regional or country-specific World Bank Group programs and units (including IFC’s regional advisory services units), or through the global FIAS program. The fact that a good number of donors continue channeling their support for regional and country-specific activities via FIAS shows the confidence these donors have in FIAS’ capacity to collect, aggregate, and transfer global investment climate reform know-how back into small- and large-scale activities implemented in client countries around the globe. However, the shifting balance away from flexible core and programmatic fund-ing towards restrictive, narrowly defined project-specific funding will need to be addressed in the next FIAS opera-tional cycle.

Project-specific contributions from IFC, received in the form of project-specific FMTAAS allocations8 and a contri-bution from the IFC Global Fund, amounted to $2.3 mil-lion in FY10 (down from $3.8 million in FY08 and $2.8 million in FY09). These allocations supported primarily a range of global knowledge management and product design and development initiatives implemented under the FIAS umbrella (see Table 2).

Contributions Outside FIAS’ Regular Financial Structure

A range of indirect contributions for FIAS-related advisory activities were made available to the Investment Climate Department via non-FIAS specific funding mechanisms and are listed in Table 3. These contributions include project-specific financial support from Japan, the Netherlands,

8 FMTAAS is IFC’s Funding Mechanism for Technical Assistance and Advisory Services.

37FiNANCiAL RESULTS

Sweden, and Belgium’s Wallonia region, made available via the IFC’s Technical Assistance Trust Funds (TATF) system (a total of $1.3 million), as well as supplemental budget allocations from the World Bank of $700,000 for the development and rollout of the new insolvency product and to cover FIAS-related administrative and management costs.

Moreover, a range of World Bank and IFC regional advisory services units helped leverage FIAS-funded activities through “cross support,” a mechanism under which Bank or IFC units cover the costs of Investment Climate Department staff working on investment climate projects managed by these units. The level of cross-support received throughout FY10 from World Bank and IFC units and related to FIAS-funded activities amounted to approxi-mately $3 million. Funding from TATF, World Bank supple-mental budget allocations and cross-support are managed outside the regular FIAS trust fund structure and thus are not included in Table 1.

Shift Away from Core to Project-Specific Con-tributions

The composition of funding for FIAS has changed signifi-cantly over the past two to three years and is negatively af-fecting the degree of flexibility the program has to respond quickly to new demands for investment climate reform support. FIAS core funding has been steadily shrinking from $18.3 million in FY08 to $15.5 million in FY09 and $11.9 million in FY10. On the other hand, project-specific funding has increased from $9.4 million in FY08 to $8.3 million in FY09 and $13 million in FY10. The shift towards project-specific funding is even more dramatic if funding components managed outside the Investment Climate Department are taken into account (in particular TATF fund-ing and cross-support from Bank and IFC units).

As a result, the FIAS program is increasingly driven by specific project activities for which donors are willing to provide funding, and less by overall client needs and a global strategic investment climate reform agenda. Also, core funding is typically used to fund the knowledge management and learning agenda under FIAS, as well as new, innovative approaches and products that are under development. Given the ongoing scarcity of core funds, there is a risk that such activities will have to be scaled back significantly over the coming years.

In-Kind Support via Staff Exchanges and Secondments

The FIAS program has continued to benefit from in-kind resources that several donors have made available in the form of secondees and staff exchanges (see p 29).

Use of Funds Expenditures from FIAS Trust Funds for investment climate reform activities reached $28.7 million in FY10,9 a 13 percent decrease over FY09 expenditures of $33.0 million (Table 1, Uses of Funds). The overall decrease in FY10 expenditures reflects a conscious effort to contain costs amidst a relatively uncertain funding outlook, and the fact that a range of country-specific projects (and related funding sources) were transferred to IFC regional Advisory Services units in FY10. As a result, staff and consultant costs as well as travel costs decreased significantly against FY09 levels, whereas indirect costs (infrastructure, office space, rent) remained flat.

Trust fund administration fees amounted to approximately $1.1 million and reflect the administrative fees deducted from donor contributions credited to FIAS trust funds. Most FIAS trust fund are still operating at the 3.5 percent trust fund administration fee level, as they have been estab-lished before the new standard IFC fee level of 5 percent went into effect in 2010. FIAS trust funds established after July 1, 2009, carry a trust fund administration fee of 5 percent.

At the end of FY10, fund balances in the various FIAS trust funds amounting to a total of US$18.5 million were carried over into FY11. This amount is relatively large as it includes $5.5 million of core funds (a managed liquidity cushion of about 20 percent of the annual FIAS spending) and about $13 million of program- and project-specific funds received under multi-year donor agreements. In line with prudent financial management principles, FIAS resources are strategically managed to avoid liquidity/cash-flow issues as experienced at the beginning of the current operational cycle. In this context, the last year of a funding cycle presents specific challenges which required the carry-over of core funds into FY11.

9 FIAS FY10 total expenditures of $28.7 million include administrative fees of $1.1 million.


Project-related expenditures accounted for 73 percent of total FIAS expenditures, and non-project related expendi-tures accounted for 27 percent of expenditures (see Table 4). These figures underestimate somewhat the actual share

of project-specific costs incurred in the implementation of the FIAS portfolio, insofar as costs covered by TATF contri-butions as well as cross-support (which are typically project implementation costs) are not taken into account.

TABLE 1: SOURCES AND USES OF FUNDS (in US$ thousands)a

SOURCES OF FUNDS FY07 b FY07 c FY08 FY09 FY10World Bank Group Core Contributions IFCd 3,257 3,257 8,000 2,000 2,000 IBRD 1,203 1,203 2,000 1,600 1,600 MIGA - 4,008 4,000 3,500 3,000 Subtotal World Bank Group Core Contributions 4,460 8,468 14,000 7,100 6,600 World Bank Group Project-Specific Contributions IFC IC Business Line - - 3,800 2,672 1,862 IFC Global Fund 150 400 SUBTOTAL WORLD BANK GROUP CONTRIBUTIONS 4,460 8,468 17,800 9,922 8,862 Core Donor Contributions Australia - - 800 676 1,502 Austria - - 368 373 355 Canada 1,044 1,044 - - - France 1,334 1,334 - 1,281 - Iceland - - 45 - - Ireland 166 166 735 - - Italy - - - 1,414 - Luxembourg 257 257 273 539 - Netherlands (Global Program)e 509 509 559 2,350 1,950 New Zealand - - 399 276 384 Norway 225 225 475 475 475 Sweden - - 406 285 345 Switzerland 375 375 250 240 - United Kingdom 349 349 - 494 332 SUBTOTAL CORE DONOR CONTRIBUTIONS 4,260 4,260 4,310 8,401 5,343 Programmatic Donor Contributions Australia (EAPRO)f 118 118 - - - Austria (Investment Generation) - - 2,571 2,608 2,489 Austria (Crisis Response) - - - 280 307 Canada (Africa) 696 696 - - - Luxembourg (Crisis Response) - - - 750 - Netherlands (Trade Logistics) - - 503 400 400 Netherlands (Secured Lending) - - - 450 - New Zealand (EAPRO)f 521 521 - - - Norway (Business Entry) - - - - 154 Norway (Trade) - - 300 340 150 Ireland (Africa) 166 166 735 - 724 Italy (Africa) - - 508 - - Sweden (Africa) 353 353 628 630 1,122 Switzerland (Africa) 240 240 - - -Switzerland (Secured Lending) - - - 500 400 Switzerland (Tax) - - - 500 300 Switzerland (Western Balkans) 160 160 820 600 600 United Kingdom (Western Balkans) - - 497 440 - United Kingdom (Tax) - - 1,426 183 96 United States (Doing Business) - - 632 1,150 724 SUBTOTAL PROGRAMMATIC DONOR CONTRIBUTIONS 2,254 2,254 8,620 8,830 7,466 Donor Contributions (Project Specific) g 2,970 3,190 5,525 4,436 8,868 TOTAL DONOR CONTRIBUTIONS 9,483 9,703 18,455 21,667 21,677 TOTAL wBG AND DONOR CONTRIBUTIONS 13,943 18,171 36,255 31,589 30,538 Client Contributions 373 430 129 1,093 1,830 TOTAL RECEIPTS 14,316 18,602 36,384 32,682 32,368 ToTal availaBle FunDS (inCluDinG Carry-over From PreviouS FiSCal year) 20,965 23,107 39,415 47,945 47,267

39FiNANCiAL RESULTS

TABLE 1: SOURCES AND USES OF FUNDS (in US$ thousands)a—CONTINUED

USES OF FUNDS FY07 b FY07 c FY08 FY09 FY10Staff CostsStaff 7,272.0 9,955.0 9,961 11,636 11,181Consultants and Temporaries 4,173.8 5,528.5 9,322 10,268 7,634TOTAL STAFF COSTS - 15,483.5 19,283 21,905 18,815

Travel 3,314.1 4,308.7 6,217 6,488 5,227

indirect Costs 322.3 560.3 683 1,071 1,018Office Equipment 25.3 33.2 116 53 57Other Operating Costs 508.2 789.0 214 863 242 Other Costs 843.7 1,108.3 1,207 2,666 3,396TOTAL INDIRECT COSTS 1,699.5 2,490.8 2,221 4,654 4,713ToTal uSeS oF FunDS 5,013.6 22,283.0 27,721 33,046 28,754enDinG BalanCe h 823.8 3,031.3 15,262 14,899 18,513

Notes:a/ FIAS Annual Review is prepared as a reporting tool for FIAS donors and management, utilizing management accounting principles.b/ Excludes MIGA technical assistance expenses, which were fully integrated with FIAS on July 1, 2007. c/ Includes MIGA FY07 technical assistance expenses. d/ IFC contribution of $4.0 milllion per annum, front-loaded as follows: FY08: $4.0 million; FY09: $2.0 million.e/ Netherlands core contributions are earmarked for activities in IDA countries. f/ EAPRO is the East Asia Pacific Regional Office formed in Sydney, and funded by Australia and New Zealand. In FY08, Australia and New Zealand designated their contributions

(see Table 2).g/ For details of FY10 project specific contributions, see Table 2.h/ FY07 and FY08 ending balance restated to reflect funds under audit and transfer of funds from MIGA Technical Assistance.


TABLE 2: PROJECT-SPECIFIC DONOR AND CLIENT CONTRIBUTIONS (in US$ thousands)

PROJECT DONOR AMOUNTWorld Bank Group Contributions (iFC iC Business line / iFC Global Fund)

Land Knowledge Management and Product Development IFC IC BL 50

ADR Global Product Development and Knowledge Management IFC IC BL 223

Business Entry Product Development and Knowledge Management IFC IC BL 99

Licensing Knowledge Management IFC IC BL 175

Tax Simplification Product Design IFC IC BL 296

Doing Business Reform Rapid Response IFC IC BL 200

Global Tourism IFC IC BL 130

Public-Private Dialogue IFC IC BL 143

SEZ Project Development and Knowledge Management IFC IC BL 149

Subnational Doing Business IFC IC BL 174

Knowledge Management - Trade Logistics Advisory Services Program IFC IC BL 224

Crisis Response (Insolvency) IFC Global Fund 400

SUBTOTAL wORLD BANK GROUP CONTRIBUTIONS 2,262

Donor Contributions

GIPB09 Workshop ANIMA 8

OHADA Business Law Reform Program France 1,350

African Tax Practitioners Conference Germany 45

Haiti Investment Generation - SEZ (Phase 1) Netherlands 300

Haiti Investment Generation - SEZ (Phase 2) Netherlands 656

Liberia Investment Climate Program Sweden 966

BiH Sub-National Competitiveness Sweden 547

Sierra Leone: Administrative Barriers III - Extension United Kingdom 1,658

Kenya: Investment Climate Program (former Regulatory Performance/Capacity Building) United Kingdom 1,569

East Africa Investment Climate United Kingdom 1,068

Mali Investment Climate Program United States 676

Subnational Doing Business (Sao Tome) United States 25

SUBTOTAL DONOR CONTRIBUTIONS 8,868

Client Contributions

Brazil - Investment Promotion Network Brazil 1,500

Tatarstan - Business Environment Reform Russian Federation 43

Denmark - Regulatory Reform Review Denmark 40

Colombia - Subnational Doing Business Colombia 67

Veneto Region - Subnational Doing Business Italy 15

UAE - Subnational Doing Business United Arab Emirates 165

Subtotal Client Contributions 1,830

ToTal Fy10 ProJeCT—SPeCiFiC Donor anD ClienT ConTriBuTionS 12,959

TABLE 3: OThER FUNDING—INDIRECT SUPPORT TO FIAS PROGRAM IN FY10 (in US$ thousands)

DONOR AMOUNT1) Project-specific donor funding approved under iFC's Technical assistance Trust Funds (TaTF)

Africa Trade Logistics Advisory Services Program Japan 500

Doing Business Reform in Soth East Europe Netherlands 378

Haiti Investment Generation Strategy Wallonia (Belgium) 250

Serbia Regulatory Reform Support Sweden 210

2) Supplemental World Bank budget allocations

Towards Investment Climate Crisis Response (Insolvency) world Bank 400

Towards FIAS-related administrative costs World Bank 300

ToTal Fy10 oTHer FunDinG 2,038

41FiNANCiAL RESULTS

TOTAL PROJECT IMPLEMENTATION EXPENDITURES

IDA61%

KM/ProductDevelopment

21%

Non-IDA18%

Percent of FIAS FY10 Project Implementation Expenditures

100% = $18,473,722Percent of FIAS FY10 Project Implementation Expenditures

100% = $28,755,743

TOTAL FIAS EXPENDITURES

Client-Facing Projects

50%

Non-Client-Facing Projects

14%

Project Related10%

Non-Project Related26%

Total project implementation represents 64 percent of total expenditures; 50 percent for client-facing projects and 14 percent for non-client-facing projects (KM and product development). Project related expenditures include program management, monitoring and evaluation, business development and product development.

TABLE 4: ExPENDITURES BY ACTIvITY CATEGORY

STANDARD AS ACTIvITY ExPENDITURES FY08 Actual % FY08 Actual FY09 Actual

% FY09 Actual FY10 Actual

% FY10 Actual

Project related expenditures 20,670,730 75% 24,639,124 75% 21,047,766 73%

New Business Development/Project Development 3,225,236 12% 1,630,961 5% 811,616 3%

a) General 967,526 3% 593,579 2% 296,732 1%

b) ER - Project Preparation 2,257,710 8% 1,037,382 3% 514,884 2%

Product Development 752,522 3% 300,811 1% 147,155 0.5%

Project Implementation and Supervision 15,362,869 55% 20,956,360 63% 18,473,722 64%

Program Management & Support 986,791 4% 1,486,405 4% 1,353,730 5%

Monitoring & Evaluation 343,312 1% 264,587 1% 261,543 1%

non-Project related expenditures 7,049,783 25% 8,406,982 25% 7,707,977 27%

Knowledge Sharing & Staff Development 745,233 3% 537,318 2% 598,475 2%

Fund Raising & Donor Relations 187,107 1% 355,977 1% 419,673 1%

Public Relations 134,737 0% 196,020 1% 245,572 1%

General & Administration 5,982,706 22% 7,317,667 22% 6,444,256 22%

a) Overhead 1,374,429 6% 2,470,900 6% 1,929,749 7%

b) Non-Overhead related G&A expenditures 4,608,277 17% 4,846,767 15% 4,514,507 16%

ToTal STanDarD TaaS aCTiviTy exPenDiTureS $27,720,513 100% $33,046,106 100% $28,755,743 100%


The following tables summarize the reforms and results supported by the FIAS program in FY10 across the various investment climate top-ics. They are summarized by type of reform or result and include a brief description of the achievements. The results that have contributed to a particular reform are shaded together with the reform in the same background color.

A result is a change implemented by a client with support from a FIAS-supported project that significantly improves the investment climate in a given country, region, or sector. These changes are tangible achievements brought about with FIAS assistance and for which there is wide technical and expert consensus regarding their relevance in inducing private sector-led development.

A reform is an aggregate of results which correspond to:

• Enacted changes to primary and secondary legislation. The enactment of primary legislation that requires the further enactment of secondary legislation is counted as a reform only after the enactment of such secondary legislation.

• Changes to administrative procedures or institutional changes that result in a reduction of more than 10 percent in time, cost, or procedures for businesses.

A few additional reform criteria have also been defined for specific products. For secured transactions and collateral registries, for example, FIAS counts a reform when the establishment of a movable collateral registry has resulted in a 10 percent increase in security interests over movable properties recorded in the registry. For investment generation projects, FIAS counts a reform when institutional or administrative improvements to investment promotion agencies have resulted in an increase in foreign direct investment in the industries targeted by the investment generation projects through the investment promotion agency. The reform count is revised and validated yearly by the FIAS management team and the Investment Climate Business Line leader.

COUNTRY TOPIC REFORM DESCRIPTION RESULT INDICATOR RESULT DESCRIPTION

RESULT TYPE (NATIONAL / SUBNATIONAL) REFORM RESULT

Brazil Investment policy

Rio Grande do Sul: HCL established a global software development center to service clients in Latin America, North America, and Europe. The center was an investment of $1 million and has already employed 100 staff. Minas Gerais: Infosys established a development and delivery center for informa-tion technology and business process outsourcing to service both Spanish- and Portuguese-speaking markets in Latin America. This project was set up with a $500,000 investment, and it employs 50 staff.

Improvement in the conversion rates of investment leads from predefined strategic sectors

Apex-Brasil converted two FDI leads in targeted strategic sectors from inquiry to investment decision, starting from a baseline of 27 leads and 0 conversions in February 2009 to 2 announced investments by December 2009.

National 1 1

Investment policy

Implementation or improvement of procedures related to investment policy and promotion

Apex-Brasil and SEDECT/Para signed a cooperation agreement, the first step toward creating a national investment generation network. The agreement formalized an improved, collaborative approach to facilitate FDI for Para.

Subnational 1

ANNEx 1: REFORMS AND RESULTS SUPPORTED bY FiAS iN FY10

43ANNExES43 2010 FiAS ANNUAL REPORT


RESULT TYPE (NATIONAL / SUBNATIONAL)

REFORM

RESULTS

Brazil (continued)

Investment policy


Three better practices were established at Apex-Brasil: (i) the selection of strategic sectors in the Strategic Business Plan 2009-11; (ii) the move to stop attending numerous non-productive and costly international general investment events (24 had been planned for 2009), focusing instead on facilitating strategic investment and developing internal capacity and state partners; (iii) the application of strategic, proactive facilitation, managing inquiries and leads through screening and determin-ing level of priority and required service. By December 2009, Apex-Brasil was focused on 15 strategic projects: 10 in national-priority sectors and 5 in state-priority sectors.

Subnational 1

Investment policy


By June 2010, Apex-Brasil had confirmed an additional three strategic investment projects: General Electric estimated $30 million research and development center; RIM/Blackberry/Flextronics expansion in Soracaba of electronic manufacturing services pro-vider Flextronics; IBM $100-250 million R&D center.

Subnational 1

Investment policy

Increase in the num-ber of leads from relevant sectors into investment genera-tion pipeline

Apex-Brasil increased its leads in strate-gic sectors to 48; SEDECT (in Para) to 9; AD Diper (in Pernambuco) to 34.

National 1

Investment policy

Implementation or improvement of best practice related to investor facilitation

At AD Diper in Pernambuco, four procedures were improved to best practice through implementation of three standard operating procedures (investor information system, inquiry handling, and site visits) and the introduction of new customer relationship management software.

Subnational 1

Investment policy


At Apex-Brasil, five procedures were improved to best practice through imple-mentation of three standard operating procedures (investor information system, inquiry handling, and site visits) and the introduction of new customer relationship management software and an enhanced Web site with section on investment attraction.

Subnational 1

44 2010 FiAS ANNUAL REPORT 44ANNExES



REFORM

RESULTS

Brazil (continued)

Investment policy


Five procedures used by SEDECT (in Para) were improved to best practice through implementation of three stan-dard operating procedures (an investor information system, inquiry handling, and investor site visits) and the introduc-tion of a new customer relationship management system and new Invest in Para Web site (www.investpara.com).

Subnational 1

Investment policy

Improved institu-tional framework related to Investment Generation

A cooperation agreement between Apex-Brasil and Investe Sao Paulo was signed, building on the Apex-Brasil/Para agreement toward the formation of a national investment generation network. This agreement significantly changed how the state of Sao Paulo and Apex-Brasil work together and formalized an improved, collaborative approach toward facilitating FDI for Sao Paulo. The rollout of the national network was started earlier than planned, with investment climate team guidance.

Subnational 1

Brazil Total 1 9

Burkina Faso Trading across borders

The government reduced documentation requirements for importers and exporters by extending the validity of import and export licenses from 6 to 12 months.

Implementation or improvement of processes at techni-cal control agencies related to trade logistics

The Ministry of Commerce extended the validity date to twelve months for the intention to import document, import license, and export license. Traders can now obtain one document each year to cover imports and exports, improving their efficiency in obtaining the relevant documents prior to the importation or exportation of goods.

National 1 1

Trading across borders

Implementation or improvement of border clearance software (e.g. ASYCUDA) related to trade logistics

A module for processing and tracking transit cargo was added to the customs automation system. The module stream-lines the processing of arriving cargo and allows customs offices electronic access to cargo shipment details, which aids in the application of risk manage-ment. The module also provides a platform for Burkina Faso Customs to introduce security enhancements and reduce documentation in the future.

National 1


Reduction in the number of documents related to trade logistics

The General Direction of Customs eliminated two requirements for traders: (i) to complete and submit the interna-tional transit document for both imports and exports, reducing the number of required documents for exports from 11 to 10; and (ii) to submit the packing list and Bill of Lading documents in order to obtain customs clearance for imports and exports, reducing the number of import and export documents required for customs clearance from 10 to 8. Customs now requests these documents on an exception basis only.

National 1

45ANNExES



REFORM

RESULTS

Burkina Faso (continued)


Reduction in the number of proce-dures at customs related to trade logistics

The General Direction of Customs removed the requirement that importers obtain a hard copy of the cargo track-ing note from the Burkina Faso Chargers Council and submit it with the customs declaration to obtain customs clear-ance for cargo imports. Customs now accesses the cargo tracking information through an electronic link to the council’s system. The elimination of this procedure reduced cargo clearance procedures at the border by two steps, from 28 to 26. The removal of the requirement that traders submit the international transit document further reduced procedures to 25.

National 1

Burkina Faso Total

1 4

Cameroon Starting a business

The prime minister issued an instruction removing the fee to obtain the taxpayer card and the requirement of an attestation for physical location plan. In addi-tion, fees to register bylaws with the tax authorities have been removed.

Reduction in the number of proce-dures to comply with business regulations related to business entry

The number of procedures required to start a business was reduced from 12 to 8. The government removed the fee for obtaining the taxpayer card and the requirement of an attestation for physical location plan. In addition, fees for reg-istering by-laws with the tax authorities were eliminated.

National 1 1

Starting a business

Reduction in the number of days it takes to comply with business regulations related to business entry

The prime minister issued an instruction removing the fee for obtaining the tax-payer card and the requirement for an attestation of the physical location plan (steps 10 and 11 on the Doing Business measurements). In addition, the fees to register bylaws with the tax authorities were eliminated. This reform reduced by 3 days the time required to comply with business-entry regulations.

National 1



The government removed one clear-ance document and eliminated the procedure of checking goods at the clearance gate. Official statistics given by the one-stop shop for trade show an improvement in times for importing and exporting goods. Private-sector traders, however, did not report any noticeable improvements in time during a recent mission.

National 1

Cameroon Total

1 3




REFORM

RESULTS

China Investment policy

Creation or improve-ment at the legal and regulatory level of institutions deal-ing with investment promotion

The newly established Industrial Transfer Center—an innovative institution for investment promotion—became fully functioning and realized substantial new investments. The national strategy for investment policy and promotion covering six central provinces (all clas-sified as frontier) was publicly launched and fully implemented. The strategic industries and sectors were identified for six central provinces. The government is also piloting an investor tracking system as part of the rollout.

National 1

Investment policy


Seven improvements have been intro-duced and implemented in Yinchuan at a high government level: (i) the govern-ment now identifies priority investment opportunities through a sector-specific strategy and directs resources to address these priorities, creating more efficiency; (ii) the investment approval process was simplified and fewer levels of approval are necessary through the establishment of the Vice-Mayor Committee; (iii) the city’s investment promotion taskforce now conducts investor aftercare practices; (iv) the investment policy and promotion effort is now led by a team of specialists with dedicated management; (v) the investment policy and promotion project team was established and has been measured by a new performance review process linked to investment promotion productivity; (vi) the team has redesigned information to speak more clearly to investor needs and taken investor surveys; (vii) image building and outreach have been identified as an important priority to be strategically undertaken by the team, which has developed procedures and a system to produce promotional materials and outreach plans.

Subnational 1

China Total 2

47ANNExES



REFORM

RESULTS

Colombia Paying taxes Implementation or improvement of payment options for taxpayers

The tax authority issued a resolution mandating electronic filing of VAT, and corporate income tax has become mandatory for firms with annual turnover equal or above COP 500 million. Electronic payment of VAT and corporate income tax via the MUISCA system is encouraged.

National 1

Starting a business


The Social Security Institute reduced the time needed to register to the public pension fund from 2 weeks to around 2 days. The Social Security Institute now sends an acceptance letter to all ap-plicants. Forms are stamped at the time of registration; enrollment begins the day after the forms are submitted. Also, the Chamber of Commerce now offers the purchase and stamping of company books at the time of registration. The cost of the company books has been reduced from COP 80 per sheet to COP 50 per sheet (companies purchase 100 sheets on average).

National 1


Implementation or improvement of electronic submission of documents related to trade logistics

Traders can file Certificates of Origin re-quests and supporting documents online through the single-window system Web site (www.vuce.gov.co) and pick up the original certificates within two days of requesting them. Previously, exporters visited the offices of the Ministry of Trade, Industry and Tourism two or three times to file the necessary forms request-ing original printouts of Certificates of Origin.

National 1


Implementation or improvement of a Single Window system related to trade logistics

Importers of technology goods can elec-tronically register their contracts through a single form for trade (FUCE), a module of the single-window system (VUCE). Previously, software traders were required to attach a hard copy of the contract under which they were allowed to use the intellectual rights contained in the technology good and submit it to Customs and the Ministry of Trade. Traders can now send a scanned copy of the document through VUCE and do not have to include the copy of the contract as a support document for the import return.

National 1




REFORM

RESULTS

Colombia (continued)



Through VUCE, traders can file sworn statements online to register as local producers by using the single form for trade. This generates automatic feedback for agencies that control local production and for Customs, which controls tax exceptions of goods not lo-cally produced. In shifting from manual controls to electronic submission, this improvement minimizes the risk of lost information and documentation and im-proves system accountability. “Maquila” contracts and supporting documentation for registration (contract and sworn state-ment explaining production process) can be filed online through VUCE (using the FUCE module) to register maquila pro-ducers for preferential treatment related to taxes and industrial processes.

National 1



The implementation of a single cargo-tracking system improved the control and guarantee of trader tax payments. Control agencies can now monitor movement using coded bands, stamped seals, tapes, and barcodes on contain-ers, improving government revenue col-lection and security. Traders have better visibility across the supply chain, which affects their business performance. The Ministry of Agriculture’s control of quotas for specific agricultural products (such as sugar or rice which are locally protected) is now conducted through the VUCE. Both the import license request and quota usage per trader can be cross-checked online, allowing for close control of the amounts of these goods that enter the country.

National 1


Implementation or improvement of simultaneous inspections related to trade logistics

Through an official modification to the Customs Statute, Customs must now use risk management systems to determine the type of inspection (physical, docu-mentary, or none) cargo must undergo. This improvement targets reduced smuggling, piracy, and undervaluation of goods.

National 1

49ANNExES



REFORM

RESULTS

Colombia (continued)


Implementation or improvement of simultaneous inspections related to trade logistics

An electronic scheduling system for si-multaneous inspections was established as the foundation for launching reforms at the ports. The centralized facility allows for the four technical control agencies involved in physical inspec-tion procedures (Antinarcotics Police, Health Authority, Agriculture Authority, and Customs) to undertake inspections simultaneously. Previously, customs brokers were required to schedule an inspection—requiring potentially 4 to 5 days on multiple occasions—with each agency.

National 1


Reduction in the number of days to trade

A decree was issued to modify the Customs Statute, establishing that Customs has a maximum of 1 day to physically inspect cargo from a baseline of 5 days earlier. This inspection must take place without interruption, and the container must be sealed as soon as the inspection ends. In the completely redesigned inspections process, all par-ties involved must act in a coordinated manner. Cargo will no longer remain open for manipulation over a long period, thus decreasing the possibilities of damage and contamination.

National 1

Colombia Total

9

Congo, Democratic Republic of

Dealing with construction permits

The government eased the process of building permitting by reducing the cost of a construc-tion permit by 40 percent (from 1 percent of the estimated construc-tion cost to 0.6 percent) and set up a 60-day time limit for the Ministry of Planning and Housing to issue building permits, which previously took 180 days. The overall time to deal with construc-tion permits decreased from 248 to 128 days and cost from 4,506 percent to 2,692 percent of per capita income.

Reduction in the fees to comply with con-struction permitting

The government reduced the cost of obtaining a construction permit from 1 percent of the estimated construction cost to 0.6 percent.

National 1 1


Reduction in the number of days to comply with con-struction permitting

The government introduced a 60-day time limit for the issuance of building permits. This represents a 66 percent decrease in time required to obtain a building permit, from 180 days to 60.

National 1




REFORM

RESULTS

Congo, Democratic Republic of(continued)

Registering property

A new regulation (Article 4 of the Arrete interministeriel 004/CAB/MIN/AFF.FONC./2009 and 254/CAB/MIN/ FINANCES/2009 of December 30, 2009) reduced the registra-tion fee from 6 percent of the property value to 3 percent.

Reduction in the fees to register property

A new regulation reduced the registra-tion fee from 6 percent of the property value to 3 percent.

National 1 1

Starting a business

The government eliminated the need for certificates regarding the criminal record, residence, and non-public servant status of the company manager. In addi-tion, it eliminated the requirement to obtain a company seal. As a result, time to start a business decreased from 127 to 84 days and cost from 848 to 735 percent of per capita income.


The government reduced the number of days a company needs to register at the company registry from 9 to 5 days.

National 1 1

Starting a business


The government reduced necessary procedures from 13 to 8, eliminating the need for certificates regarding criminal record, residence, company seal, and non-public servant status of the company manager, as well as the pre-approval prior to recruiting a worker. A simple notification is now required to employ workers during the business start-up process.

National 1

Starting a business

Enactment of legislation related to business entry

The government enacted a ministerial decree regulating the declaration of the opening and closing of a business.

National 1

Congo, Democratic Republic of Total

3 6

Ghana Access to finance

A new collateral registry hosted by the Bank of Ghana began operating in March 2010. The electronic, “notice based” reg-istry publicizes existing security interests in both movable and immovable property, and it es-tablishes the priority of creditors based on the time of registration. As of May 21,2010, it was reported that 2,100 charges and over 4,700 collaterals have been registered.

Creation or improvement at the legal and regulatory level of institutions dealing with secured lending

A new collateral registry hosted by the Bank of Ghana has been operating since March 2010. The new collateral registry complies with all accepted international practices, but is not yet accessible online. The electronic, notice-based registry publicizes existing security interests in both movable and immovable property, and it establishes the priority of creditors based on the time of registration. This registry will be upgraded into an internet-based platform in FY11.

National 1 1

Ghana Total 1 1

51ANNExES



REFORM

RESULTS

Guatemala Registering property

Reduction in the number of days to register property

The property registry reduced the time to obtain the ownership and cadastral cer-tificates to 3 days (from 27 as reported in Doing Business 2010). Two thirds of total ownership certificates are obtained online. The registry began electronic notification of property transfers (to inform the cadastre and the municipality of Guatemala City, based on a unified form. However, the notification tool has limited functionality because the majority of Guatemala City properties have not been updated for the municipality or the cadastre.

National 1

Guatemala Total

1

Guinea-Bissau

Investment policy

The new Investment Code was promulgated on December 31, 2009. The new Code (i) replac-es tax holiday with a tax credit, (ii) replaces the screening require-ment by a simple registration, (iii) includes guarantee against ex-propriation, (iv) includes the right of repatriation and convertibility, and (v) includes a good practice settlement of dispute clause.

Enactment of legislation related to investment policy and promotion

The new Investment Code was promul-gated which allows for: (i) replacing the tax holiday with a tax credit; (ii) replacing the screening requirement with a simple registration; (iii) including a guarantee against expropriation; (iv) including the right of repatriation and convertibility; and (v) including a good practice settlement-of-dispute clause.

National 1 1

Guinea-Bissau Total

1 1

Haiti Investment policy


To address a huge information gap in business information for marketing pur-poses, a set of promotional folders was developed for an investors’ conference (held by Inter-American Development Bank and the Clinton Foundation in October 2009) along with further outreach and targeting activities. Fact sheets were made available in the languages of garment investment source countries (English, French, Spanish, Korean, Chinese, and Portuguese) and include basic country information, garment sector profile, zones overview, and company success stories. The pro-motional folders and sector presentations are available for use by government agencies, key embassies, and chambers in Canada, the Dominican Republic, and the United States.

National 1




REFORM

RESULTS

Haiti (continued)

Special economic zones


A series of follow-up site visits were facilitated to provide five prospective investors detailed information and help them identify project opportunities, resulting in three viable leads. Also, an expansion project of an existing company in the garment industry was facilitated.

National 1

Starting a business

The directive of the prime minister dated May 29, 2009 eliminated the requirement that company statutes be passed through the offices of the prime minister and president before publica-tion in the official gazette ("Le Moniteur"). Instead, companies are now allowed to go directly to the official gazette for pub-lication. As a result, the time to start a business was shortened by 46 percent, from 195 to 105 days.

Enactment of new/revised business entry related legislation

By directive of the prime minister, com-panies are now allowed to go directly to the official gazette "Le Moniteur" for publication, which is expected to sig-nificantly reduce the number of days re-quired for business entry. Previously, the procedure required that the company bylaws be passed through the offices of the prime minister and president before publication.

National 1 1

Haiti Total 1 3

Indonesia Special economic zones

The Parliament passed Law No. 39/2009 on Special Economic Zones on September 15, 2009. The law establishes a framework which permits the private and public-private ownership and operations of SEZs. Since the passage of the new law, 48 districts from 23 provinces have proposed zones to be estab-lished in their areas, and five of these locations are scheduled for implementation by 2014.


The Parliament passed a law adopting 21 of 24 recommendations given to the national SEZ team, including: the key recommendation that a framework be established permitting the private and public-private ownership and operation of SEZs. Since the law passed, 48 dis-tricts from 23 provinces have proposed that zones be set up in their areas. The government has selected five of these locations for priority implementation by 2014. The three recommendations not included in the law will be incorporated into SEZ regulations.

National 1 1

Indonesia Total

1 1

Iran, Islamic Republic of

Access to finance

The government established a private credit bureau, Iran Credit Scoring (ICS). The database includes 2 million individuals and 2,000 firms as of January 1, 2010. The system is automated and banks can interface with the credit bureau online to obtain credit reports on borrowers. ICS credit reports include both positive and negative information on borrowers, and all loans are included regardless of their amount.

Implementation or improvement of types of credit information sharing

Iran's private credit bureau, Iran Credit Scoring (ICS), became operational using an automated system that allows banks to obtain borrower credit reports online through an ICS interface. More than 2 million individuals and 2,000 firms were included in the database as of January 1, 2010. Six private and eleven public banks currently provide information to ICS, which is a private company owned by Iranian banks and other financial institutions. ICS credit re-ports include both positive and negative information on borrowers, and all loans are included regardless of their amount.

National 1 1

53ANNExES



REFORM

RESULTS

Iran, Islamic Republic of(continued)

Starting a business

The government eased the process of business start-up by continuing its business registration reforms and making it possible to search and reserve a unique company name through the installation of a name search portal. As a result the number of procedures to start a business was reduced from 7 to 6 and time needed from 9 to 8 days.

Creation or improve-ment at the legal and regulatory level of institutions deal-ing with business entry

The government eased the process of business start-up through the installation of a name search portal, allowing entre-preneurs to search and reserve unique company names.

National 1 1

Starting a business


The installation of a name search portal allows entrepreneurs to electronically search and immediately reserve unique company names. Previously this process required 9 days.

National 1

Iran, Islamic Republic of Total

2 3

Jordan Access to finance

In May 2010 the government passed a Law on Credit Bureaus that allows for credit informa-tion sharing. The law sets the regulatory framework for the establishment of a private credit bureau and allows non-financial institutions (such as utility compa-nies) to provide information on their customers' financial stand-ing. Additionally, Jordan reduced the threshold for loan inclusion in the public credit registry from JD 30,000 to JD 20,000 by means of circular No.(10/3/6439) dated May 4, 2009. This will allow for more borrowers to have credit histories.

Enactment of legisla-tion related to credit information

The government passed a law on credit bureaus allowing credit information shar-ing, which sets the regulatory framework for the long term goal of establishing a private credit bureau in Jordan.

National 1 1

Access to finance


Under the new law allowing credit infor-mation sharing, banks and companies can check the financial reliability and credibility of their clients. Electricity, wa-ter, and telecommunications companies will be able to provide the private credit bureau with information on their custom-ers’ financial records. The government also reduced the threshold for reporting credit at the public credit registry, al-lowing more borrowers to have credit histories.

National 1

Jordan Total 1 2




REFORM

RESULTS

Kazakhstan Dealing with construction permits

The government eased the building permitting process by implementing a one-stop shop for utility connections and adopt-ing a risk-based approach for approving construction permit applications. As a result three administrative procedures were eliminated, and the time needed to deal with construction permits decreased from 239 to 219 days.


The government reduced the time limits for issuing the land allocation permit from 20 to 10 calendar days; and the Rendering Building and Assembly Jobs Permit (from the State Architectural Supervision Authorities) from 14 to 7 business days. It also reduced the time required to issue an opinion from the State Examination Agency (from 30 to 15 days) and eliminated the requirement for an on-site inspection for applicants who possess a topographic survey.

National 1 1


Enactment of legislation related to construction permits

The government adopted a risk-based approach for approving construction permit applications. A decree signed in October 2009 created a list of complex and non-complex buildings. Warehouses and storage facilities that do not require special conditions for storage of goods or materials are con-sidered non-complex buildings and do not require approval after construction from the State Acceptance Commission. An amendment eliminated the require-ment for an on-site inspection before construction. Now this inspection only takes place if the applicant does not have a topographic survey.

National 1

Protecting investors

The government amended the Joint Stock Company Law and the Law on Accounting and Financial Reports in July 2009. This new legislation strength-ens disclosure requirements of transactions between interested parties by requiring that a de-scription of the conflict of interest be included in the annual report. In addition, the new law requires the preparation of annual financial statements in compli-ance with international financial reporting standards.

Enactment of new/revised credit infor-mation legislation

The Parliament adopted a law which makes it mandatory to publish the disclosure of information on related-parties transactions in mass media. The Agency on Regulation and Supervision of Financial Markets and Organizations developed and submitted a draft law to the government for consideration. By this draft law, a number of legislative changes will be introduced, including adaptation of the law on joint stock companies.

National 1 1

Starting a business

The government eased the process of business start-up by reducing the minimum capital requirement from KZT 116,800 ($872) to 100 KZT ($0.75). It also eliminated the require-ment that the memorandum of associations and the charter must be notarized, which reduced the cost to start a business from 4.8 to 0.96 percent of per capita income and the time needed from 20 to 19 days.


One procedure was eliminated: the requirement that the memorandum of as-sociations and the charter be notarized.

National 1 1

55ANNExES



REFORM

RESULTS

Kazakhstan (continued)

Starting a business


The government eased the process of business startup through legislation re-ducing the minimum capital requirement and eliminating the requirement that the memorandum of associations and the charter be notarized.

National 1

Starting a business

Reduction in the cost to comply with business regulations related to business entry

The legislation decreased costs by 79 percent. The government also reduced the minimum capital requirement to 100 KZT.

National 1

Kazakhstan Total

3 6

Kenya Business operations

The e-registry of business licenses has become operational and provides easy access to exhaus-tive information about business licenses and related formalities. As a result, most agencies issue licenses within 1 day (down from 30 days).

Implementation of an e-registry of administrative procedures

The government operationalized an e-registry, providing easy access to ex-haustive information on all valid business licenses, including subsidiary legislation providing for the license, downloadable application forms, fees and charges levied with respect to a particular license, statutory turnaround time for an application, and any other require-ment regarding regulation of business activities. Also, the e-registry is used to communicate new developments with regard to business regulations. It has helped to reduce duplication, eliminate opportunities for petty corruption, and reduce bureaucracies associated with business licensing; thus, the new system contributes to increased transparency, reducing regulatory risk and uncertainty for business. Most licensing agencies are now issuing licenses in record time (due to increased applicant prepara-tion)—within a day down from 30 days. (A reduction of 56 percent has been noted using the Standard Cost Model.). Some regulators have undergone process re-engineering and automation of their licensing systems as they seek to link their systems with the e-registry. The revenue authority is now issuing its personal identification number certificate online and also allows for online tax return submissions. The registrar of companies has just completed automa-tion of its systems and can now support online business name searches internally (and soon accessible by the public).

National 1 1




REFORM

RESULTS

Kenya (continued)

Business operations

Implementation or improvement of a Regulatory Impact Analysis (RIA)

The mushrooming of fees and charges by local authorities has been curtailed through a government directive. Local authorities are not to introduce any lev-ies, fees, or charges without consulting the Business Regulatory Reform Unit and the Ministry of Local Government.

National 1

Business operations

Implementation or improvement of consultation mechanisms in the business regulatory process

Local authorities are required to hold stakeholder meetings every three months in an effort to increase transparency and consultation mechanisms that can lead to clear and consistent regulatory proposals and better service delivery.

National 1

Business operations

Reduction in the time to comply with the business regulation relating to business operation

The time required to comply with regula-tion related to business operation was reduced by 56 percent as a result of reforms of the single business permit, driver’s and conductor’s licenses (for pubic service vehicles), work permits, and personal identification number. Nairobi’s city council removed the mandatory requirement to provide a personal identification number in the application for a single business permit, simplifying the process. Firms no longer must visit the revenue authority to obtain the personal identification number, which reduced the administrative burden for businesses. The city council reduced the time required to obtain the license from 30 days to 1 day, marking a 97 percent improvement in waiting time.

National 1

Industry specific

Telecom: The Communication Commission of Kenya reduced third-generation mobile licensing fees from $25 million to $10 million (60 percent) and ended a 3-year monopoly. At least 10 mil-lion subscribers are expected to access third-generation services and enjoy price reductions. Expected aggregate private sec-tor savings of $30 million will be realized and over 2,000 new jobs created. Transportation: The Minister for Finance abolished advance tax payment for Public Service Vehicle (PSV) drivers' and conductors' licenses. The licenses turnaround time has been drasti-cally reduced from 30 days to 1 day (by 97 percent).

Reduction in the cost to comply with business regulations related to business operations

The government abolished the advance tax payment required for the driver’s and conductor’s licenses (identified as a major impediment to formality and business growth) and also two work permits for members of the East African Community. The cumulative effect of these reforms was a 40 percent reduction in costs. The Communication Commission of Kenya reduced the “third generation” mobile licensing fees by 60 percent. Four operators have applied for the license, ending the 3-year monopoly by one provider and creating the oppor-tunity for reduced end-consumer prices due to healthy competition to the sector. Based on SCM methodology, expected aggregate private sector savings of $30 million will be realized and over 2,000 new jobs created.

National 2 1

57ANNExES



REFORM

RESULTS

Kenya (continued)

Starting a business

As of November 2009, a stamp duty counter was set up at the Companies Registry, reducing the time necessary to stamp articles of association from 8 to 5 days.

Creation or improve-ment at the legal and regulatory level of institutions deal-ing with business regulatory manage-ment and reform

Under amendment to the Statute Law Act, the government allowed the franking of all dutiable documents and establishment of a stamp duty counter at the companies registry, thus creating a one-stop shop.

National 1 1

Kenya Total 4 6

Latvia Closing a business

The government introduced cor-porate debt restructuring guide-lines, promulgated on August 6, 2009. The guidelines include a series of principles to guide creditors and debtors in conduct-ing out-of-court debt restructuring negotiations. The guidelines are expected to contribute to an increase in the resolution of insolvency cases out of court, which can reduce the time and transaction cost of insolvency cases and increase the rate of successful business turnaround. Several Latvian companies have already benefited from out-of-court arrangements, allowing them to stay in business and keep their workers' jobs.

Improved regulatory framework related to restructuring & insolvency

The government developed corporate debt restructuring guidelines - a series of principles to guide creditors and debtors in conducting out-of-court debt restructur-ing negotiations. The guidelines are expected to contribute to an increase in the resolution of insolvency cases out of court, which can reduce the time and transaction costs of insolvency cases and increase the rate of successful busi-ness turnaround.

National 1 1

Latvia Total 1 1

Lebanon Access to finance

Lebanon's credit bureau improved its credit information system by granting banks online access to the registry's reports.

Implementation or improvement of the coverage for credit information sharing

The public credit registry reports became accessible to banks and financial institu-tions online, improving the country’s credit information system.

National 1 1

Lebanon Total

1 1

Liberia Trading across borders

Implementation or improvement of border clearance software (e.g. ASYCUDA) related to trade logistics

The government implemented a customs automation system (ASYCUDA World) for border clearance, automating cus-toms clearance for imports and exports. This improvement is expected to cut the time required to import and export. In implementing the risk management and selectivity module, the government is de-veloping standard operating procedures consistent with international standards and conventions.

National 1



Subsequently, the working hours at the customs office were extended to 8 p.m. to help maximize the efficiency of the ASYCUDA World Customs Automation System toward an eventual move to 24-hour per day operations at the seaports.

National 1




REFORM

RESULTS

Liberia (continued)



The working hours for Customs at the Freeport were extended in preparation for the introduction of shift work for customs clearance within the one-stop shop at the Port of Monrovia, allowing traders and agents to clear cargo until 5 p.m. each workday.

National 1


Implementation or improvement of risk targeting strategies related to trade logistics

A risk management unit was created within the Liberia Bureau of Customs. Using the ASYCUDA automation, the permanent unit will manage the risk-based inspections regime, allowing less intervention by Customs and thereby reducing time and cost for traders.

National 1


Implementation or improvement of system for computerization of documents and information related to trade logistics

The pre-inspection company (BIVAC) agreed to provide advance information on pre-shipment inspection certificates issued. This information can be used to pre-populate the relevant fields in the customs automation system, helping to maximize system use (by reusing existing data) and saving freight forwarders and importers the time and cost of submitting data already held by Customs.

National 1


Reduction in the cost of trading

The government eliminated the require-ment for shipping companies to pay customs officers overtime on a routine basis when every ship arrives. Current estimates indicate this will save shipping companies servicing the Freeport of Monrovia $500 per ship.

National 1


Reduction in the cost of trading

The minimum threshold for exemption from pre- shipment inspection require-ments was increased from $1,000 to $3,500, adopting best practice in reducing time and costs for importers, particularly smaller businesses.

National 1


Reduction in the number of proce-dures at customs related to trade logistics

The government eliminated the require-ment that customs officers physically tally the discharge of containers against the ship manifest at the time of arrival, al-lowing a more efficient use of resources and reducing import procedures from 15 to 13. Data on containers is avail-able to Customs from several sources including the manifest documents and the shipping company.

National 1

Liberia Total 8

59ANNExES



REFORM

RESULTS

Macedonia, FYR

Starting a business

The government eased the process for starting a business by further improving its one-stop shop. A law, amending and complementing the Law on One-Stop Shop, incorporates registra-tion with the social fund into the one-stop shop for company registration. As a result, one pro-cedure was eliminated and the time to register a company was reduced from 4 to 3 days.

Implementation of enacted legislation related to business entry

The government amended its one-stop shop legislation to include registration with the social fund. The employer is obliged to submit the registration form/notice at the central register for the employee’s required social insurance.

National 1 1

Macedonia, FYR Total

1 1

Malawi Enforcing contracts

The government raised the thresh-old for the Magistrates Court from MWK 50,000 ($337) to MWK 2 million ($13,460), which came into force in January 2010. Simple commercial disputes are now heard in the Magistrate Court (rather than in the High Court), where the less formalistic Subordinate Court Rules are applicable. As a result, the time needed to resolve a commercial dispute was short-ened by 4 months (from 432 to 312 days), and cost by 34 percent (from 142 to 94 percent of claim value).

Enactment of new/revised new proce-dural rules

The government raised the threshold for cases filed in Resident Magistrates Court, which will now hear some simple commercial disputes previously heard in the High Court. This simplifies the procedures for small cases, making less formalistic court rules applicable.

National 1 1

Malawi Total

1 1

Mali Dealing with construction permits

The government eased the process of building permitting by implementing simplified rules for issuance of environmental impact assessment for non-complex commercial buildings. As a result, the time to deal with construction permitting decreased from 185 to 168 days and cost from XOF 2,446,150 ($4,739) to XOF1,646,150 ($3,189), equivalent respectively to 818 and 505 percent of per capita income.

Reduction in the number of proce-dures to comply with construction permitting

Builders in a newly classified category of constructions are no longer required to obtain an environmental impact study. This requirement was replaced by two procedures: submission of a notice outlining the project’s potential environ-mental hazards and an inspection. If the hazards to the environment are greater than stated in the notice, DNACPN (the agency responsible for environmental controls) can ask the project to conduct a full environmental impact study.

National 1 1




REFORM

RESULTS

Mali (continued)



The government revised rules and requirements for the issuance of the environmental impact assessment study, reclassifying commercial constructions of two stories and above into one category that will not be required to obtain an environmental study. Instead, the con-struction company is required to submit a notice outlining the project’s potential environmental hazards, which needs to be approved by a field inspection within 15 days of notice submission.

National 1


Through Art. 270 of the new Fiscal Code Nº10-014, Mali eased property transfers by reducing the property transfer tax for firms from 15 to 7 percent of property value. The reform is intended to facilitate purchases of property by firms and encour-age formal property registrations (which until now have remained mostly unregistered).

Reduction in fees to register property

Through an article of the new tax code ratified by the Parliament, the govern-ment decreased the property transfer rate from 15 to 7 percent.

National 1 1

Starting a business


Article 75 of Annex 3 of the new tax code exempts the creation of companies from stamp duty. Two procedures have been integrated within the one-stop shop: filling an employee registration request (bulletin d’embauche) with the Institut Nationale de Prévoyance Sociale; and filing every employee contract with the Direction Nationale du Travail. The government introduced a signed affidavit for entrepreneurs to cer-tify they do not have a criminal record in a 10-minute procedure.

National 1


Through an official note dated March 31, 2010, the customs administration announced that the process of carrying out redun-dant controls after customs clear-ance was thereafter completely prohibited. Previously, redundant controls were conducted in and around the customs area by representatives of the Ministry of Agriculture, the Competition Direction, and other government agencies. As a result of eliminat-ing these secondary inspec-tions, the time to export goods decreased from 32 to 26 days and the time to import decreased from 37 to 31 days.

Implementation or improvement at technical control agencies related to trade logistics

Customs enforcement units will no longer routinely re-inspect cargo shipments in a secondary clearance that often took more time than was needed for the import shipment processing. The implementation of this process change is consistent with best practice.

National 1 1



The government eliminated the require-ment that traders have an issue voucher and a collection order prior to the release of cargo from customs clearance facilities.

National 1

Mali Total 3 6

61ANNExES



REFORM

RESULTS

Mexico Dealing with construction permits

An administrative reorganiza-tion of the Urban Development and Housing Ministry led to a reduction of delays in procedures related to the issuance of build-ing permits. In particular, the average time to obtain a single zoning certificate stating specific land use and feasibility was reduced from 75 to 43 days. As a result, the overall time needed to deal with construction permits decreased from 138 to 105 days.


The Urban Development and Housing Ministry's reorganized administration led to improved construction permitting. Procedures related to zoning and utilities were merged and streamlined, reducing the number of procedures required for construction permitting from 12 to 11. The process for requesting and obtain-ing a single zoning certificate stating specific land use and feasibility was simplified.

National 1 1



The government improved construction permitting by merging and streamlining procedures related to zoning and utili-ties, reducing the number of days busi-nesses need to deal with construction permitting from 138 to 105 days.

National 1

Starting a business

Mexico eased the process to start a business by launching an online one-stop shop that allows entrepreneurs to initiate company registration. As a result, two pro-cedures were eliminated and the time needed to start a business decreased from 14 to 9 days.


The federal government added procedures conducted by the Ministry of Foreign Affairs, Tax Registry, and Social Security Institute to its online one-stop shop for business registration, allowing entrepreneurs to manage the incorporation process from the Web site (tuempresa.gob.mx) and reducing the time needed to start a business from 13 to 9 days.

National 1 1

Starting a business

Reduction in the number of procedures it takes to comply with business regulations related to business entry

As a result of adding procedures conducted by the Ministry of Foreign Affairs, Tax Registry, and Social Security Institute to the federal government’s online one-stop shop for business registration, the number of procedures required to start a business was reduced from 8 to 6.

National 1

Mexico Total 2 4

Montenegro Dealing with construction permits


The introduction of measures by the Ministry of Spatial Development and the Municipality of Padgorica resulted in reducing the time needed to meet the urban development and technical requirements (to 15 days); and to obtain the building permit (to 15 days) and technical control documents (to 7 days).

National 1




REFORM

RESULTS

Montenegro (continued)


Implementation of enacted legislation related to construc-tion permitting

The Ministry of Spatial Development and the Municipality of Padgorica further implemented the existing Construction Law of 2008, which was meant to eliminate procedures, provide faster mechanisms for permit approval, and introduce a risk-based approval system that assigns control for small projects to municipalities. The municipality organized three awareness seminars; increased municipal staff; mapped and prepared for the introduction of a one-stop shop; and took steps to enforce statutory time limits on approvals.

National 1



The government no longer requires that a lawyer draft the sale-purchase agree-ment for the simple case measured by Doing Business. This measure reduced the time required for this procedure to one day.

National 1

Starting a business

The government introduced a single registration form submitted to the tax administration, replac-ing 16 different forms that used to be submitted at four different agencies: Employment Bureau, Health Fund, Pension Fund, and Tax Administration. In addition, the procedure of registering with the Commercial Court and the procedure to obtain a statistical number were merged in May 2010, eliminating the require-ment for a separate registration with the MONSTAT (statistical authority). As a result of these reforms, four procedures were eliminated, time needed to start a business decreased from 12 to 10 days and cost was reduced from EUR 136 ($166) to EUR 91 ($126), equivalent respectively to 2.6 and 1.9 percent of per capita income.


The government introduced a single registration form submitted to the tax administration branch office, replac-ing 16 different forms previously filed at four different agencies. The single form, submitted to the tax administration branch office, automatically registers a company with the tax administration, employment bureau, and health and pension funds.

National 1 1

Starting a business


Two procedures were merged in May 2010: for registering with the Commercial Court and for obtaining a statistical number (unique company iden-tification number). New companies now only register with the Commercial Court (a separate registration with the statisti-cal authority is no longer required).

National 1

63ANNExES



REFORM

RESULTS

Montenegro (continued)


In 2009, the government eliminated terminal handling receipts for traders. As a result, traders have to deal with one less authority and the number of documents required for imports and exports was reduced from 7 to 6.


The Customs Administration eliminated the requirement that traders file terminal handling receipts at the ports, reducing the number of required import-export documents from 7 to 6.

National 1 1

Montenegro Total

2 6

Mozambique Starting a business

Decree nº 2/2008 of March 12, 2008, which came into force on March 27, 2010, sim-plified the business licensing sys-tem. Now operational licenses are exempted from environmental impact study for most activities; office space no longer requires a prior inspection by the health department, the fire department, local authority, and representa-tive of the licensing entity for company start-up; and there is no cost for the operational license. As a result, the time needed to start a business was cut in half (from 26 to 13 days), and cost decreased from MZM 1,868 ($72) to MZM 1,602 ($61) equivalent respectively to 19.3 and 13.9 percent of per capita income.


The introduction of a simplified licensing system reduced the time needed to start a business from 26 to 17 days, and operational licenses can be obtained simply and easily.

National 1 1

Starting a business


The government issued a decree that introduced a simplified licensing system.

National 1

Starting a business


There is no cost for the operational license, which previously was charged at 19.3 percent of per capita income.

National 1

Starting a business


The government reduced the proce-dures required to start a business from 10 to 7. Operational licenses are exempted from environmental impact study for most activities. Office space no longer requires prior inspection by the health department, fire department, local authority, and representative of the licensing entity for company start-up.

National 1

Mozambique Total

1 4




REFORM

RESULTS

Nepal Public private dialogue

Creation or renewed mandate of a PPD institutional mechanism

The Nepal Business Forum, a mecha-nism for public private dialogue, was established through an executive order in May 2010.

National 1

Nepal Total 1

Nigeria Dealing with construction permits


In Cross River, the number of proce-dures required to deal with construction permits dropped from 17 in Doing Business in Nigeria 2008 to 14 in the 2010 report.

Subnational 1


Reduction in the time to deal with construction permitiing

Development permit processing time was reduced in Kaduna state from 30 to a mandatory 10 days. In Kano state, the time required to deal with construc-tion permits dropped by 19 days (from 75 in Doing Business in Nigeria 2008 to 56 in the 2010 report).

Subnational 2



Pre-inspections in Lagos state were eliminated, reducing the time needed to obtain a building permit.

Subnational 1


Reduction in the time to deal with construction permitiing

Cross River state announced a reduction in the time it takes to deal with construc-tion permits from 39 to 16 days.

Subnational 1



The cost of dealing with construction permits in Lagos was reduced by 435 percentage points (from 1,016 percent of income per capita in Doing Business 2007 to 580.3 percent in the 2010 report). In Kano, the cost of dealing with construction permits was reduced by 138.8 percentage points from 233.4 percent of income per capita in Doing Business in Nigeria 2008 to 94.6 percent in the 2010 report.

Subnational 2

Paying taxes Implementation or improvement of best practice tax enforce-ment procedures or practices

In addition to introducing a direct pay-ment system, the Kano Board of Internal Revenue abolished issuance of manual receipts (any receipts outside the direct payment system are considered invalid); integrated the debt collection task force with the collection department, a big step in harmonizing operations and preventing taxpayer harassment; closed unauthorized revenue accounts in banks thought to be used by staff to divert revenues; and trained staff on e-payment systems.

Subnational 1

65ANNExES



REFORM

RESULTS

Nigeria (continued)

Paying taxes Implementation or improvement of payment options for taxpayers

The government of Kano implemented a direct payment system. As a result of this and related reform of procedures and practices, average revenues col-lected for Kano have increased (from Naira 300 million per month for the first nine months of the year to Naira 545 million for November).

Subnational 1



In Cross River state, the government reduced the time needed to: assign property (from 21 to 16 days); make a direct allocation (from 393 to 87 days); obtain consent for mortgage (from 20 to 12 days); and convert a customary title to a statutory title (from 280 to 69 days).

Subnational 1



In Kaduna state, the government reduced the time needed to approve: the application for consent to mortgage (from 16 to 1 day); consent to assign statutory right of occupancy (from 23 to 7 days); and the application for consent to assign customary right to occupancy and deemed grant of statutory right of occupancy (from 92 to 30 days). In Kano state, the government reduced the time needed to approve: the application for consent to mortgage (from 3 days to 1); and consent to assign statu-tory right of occupancy (from 10 to 3 days). Overall, time needed to register property was reduced from 38 days in Doing Business in Nigeria 2008 to 31 days in the 2010 report.

Subnational 1



In Lagos state, the government reduced the time needed to approve Governor’s Consent (from 30 days to a mandatory 48 hours). Capacity increased in the ac-counts department of the Lands Registry, reducing payment verification time by more than 20 percent.

Subnational 1

Nigeria Total 12

Papua New Guinea

Alternative dispute resolution

New ADR rules for the Papua New Guinea National Court were formally implemented and mediations began in June 2010.

Creation or improve-ment at the legal and regulatory level of institutions deal-ing with ADR

New ADR rules for the National Court were formally implemented following a launch in June 2010, and mediations began in the National Court.

National 1 1




REFORM

RESULTS

Papua New Guinea (continued)

Investment policy


The investment promotion agency developed and began using an investor tracking system, improving the quality of investment promotion activity. The system allows agency officers to access a record of previous investor contacts for their discussions with investors, and it helps the agency coordinate and in-tegrate activities among its departments and ensure that investor information flows within the agency.

National 1

Papua New Guinea Total

1 2

Paraguay Dealing with construction permits

The government eased the process of construction permitting by creating a new administrative structure and a better tracking system in the municipality of Asunción. As a result, time to obtain a building permit was reduced from 175 to 63 days.


In the Municipality of Asunción, a public-private working group introduced a new administrative structure and a better tracking system of issuing construc-tion permits, reducing the time required to obtain construction permits by 112 (compared to 291 days as reported in Doing Business 2010). The working group also introduced tracking sheets to measure how much time is spent by each member of the technical team on each application.

National 1 1


Implementation of enacted legislation related to construc-tion permitting

The Municipality of Asunción passed a resolution creating a new administrative structure that allows for the approval of construction permit applications without the signatures of several department heads, as previously required. The new administrative structure calls for technical staff from every department involved to work as a single team (at the General Directorate of the Urban Area).

National 1

Paraguay Total

1 2

Peru Dealing with construction permits

An administrative reorganiza-tion of the Registry (SUNARP) improved the time to register the Factory Statement, reducing the average time required for this procedure from 35 to 20 days, and shortening the total time to get construction permits from 203 to 188 days.


The modified law sets new time limits after the request is submitted for conven-ing the technical commission (5 working days) and evaluating the project (20 working days). If the municipality has not made a decision after this time, the project is considered approved. The water utility (SEDAPAL) has under-taken measures to prioritize commercial projects, reducing the time to obtain the feasibility study and installation to 14 and 9 days, respectively, according to SEDAPAL records. (Doing Business reports 30 and 80 days, respectively, for these procedures).

National 1 1

67ANNExES



REFORM

RESULTS

Peru (continued)



The Law of Regulation for Urban Buildings was modified to allow for implementation of new legislation on construction permits, which had been challenged by the municipalities and the professional associations of architects and engineers.

National 1

Paying taxes Implementation or improvement of payment options for taxpayers

The tax authority (SUNAT) introduced a new system for tax filing and payment using online forms for general sales and income taxes. SUNAT also introduced a new system whereby users obtain a unique payment number that allows them to pay directly through a bank-provided Web portal.

National 1


The government made it easier to register property at the land reg-istry by streamlining procedures and halving the time needed for registration (from 14 to 7 days). According to the regulation, simple property sales can be registered within 48 hours at no extra cost. The service also makes available to the citizen a standard deed for download.


The Registry (SUNARP) issued a resolu-tion requiring that the purchase registra-tion service take no more than 48 hours. The service makes a standard deed available for electronic downloading by citizens. Previously, the process by which the deed was filed for registration required 9 days.

National 1 1

Starting a business

The government has eased the business start-up process by simplifying the requirements to obtain an operating license and by creating an online one-stop shop for business registration. As a result the time to start a business was shortened from 41 to 27 days and cost decreased from PEN 2,082 ($685) to PEN 1,669 ($554), equivalent respectively to 17.1 and 13.6 percent of per capita income.


The government upgraded the 72-hour online system for business creation, expanding its usage to 100 percent of Lima’s 135 notaries. The system allows small businesses to start the process of creating a business online and receive the business registration confirmation, tax registration, and taxpayer identifica-tion in just 72 hours after notarization. The notary interface was made more user-friendly and the security of the system was improved (through encryp-tion of info sent by notaries, servers, data center). The system is used in all Registry offices in Peru.

National 1 1

Starting a business


The national government launched the Municipal Modernization Fund (PMM) to help ensure good municipal performance and enforcement of regula-tions. The PMM introduces incentives (cash transfers) to municipalities that meet program requirements, including enforcement of the law that eliminates the certificate of compatibility as a req-uisite for business entry (although District Councils must verify that new companies meet zoning regulations).

National 1

Peru Total 3 6




REFORM

RESULTS

Romania Closing a business

The government enacted provisions for the expedited restructuring of insolvent com-panies ('pre-packs'), including “Ad-hoc Mandate and Schemes of Arrangement Act No. 381/2009, (“The Concordat Act”) and amendments to the Insolvency Act No. 85/2006, now Act No. 169/2010. The purpose of these provisions is to allow corporate workouts to take place outside of court. These reforms can be expected to directly impact the approximately 16,000 companies that file for formal insolvency proceedings per year in Romania and the $5.9 billion of non-performing loans. Pre-pack insolven-cies reduce the time and cost of insolvency proceedings. Comprehensive data on pre-packs in other countries show an increased return to secured creditors of 16 percent over traditional insolvency proceed-ings and a much higher degree of job preservation.

Improved regulatory framework related to restructuring and insolvency

The government enacted legisla-tion providing for expedited formal bankruptcy cases and facilitating the development and use of out-of-court mechanisms. Reform measures include: (i) the mandatory filing for insolvency by corporate management, irrespective of whether good-faith negotiations are held with creditors to reach debt restructuring agreements; (ii) voiding of out-of-court debt restructuring agreements concluded between creditors and debtors; (iii) im-posing of certain liabilities on directors that would have been a disincentive for expedited proceedings. These changes are expected to reduce the time, cost, and consequently, recovery rate, of insolvency proceedings.

National 1 1

Romania Total

1 1

Rwanda Dealing with construction permits

A new decree (Annex 4, Prime Minister’s instruction # 001/03.3 of April 14th 2010) set up time limits to: (i) provide deed plan and lease contract simultaneously within 15 days; (ii) issue building permits within 30 days; (iii) issue occupancy permit within 30 days; (iv) authorize to renovate or change property usage within 15 days; (v) issue land title within 30 days. In addition, a new fee structure was introduced by Annex 7, Official Gazette number 22 Bis of May, 31, 2010. As a result the average time to deal with construction permits decreased from 210 to 195 days, and cost was reduced from 456 to 354 percent of per capita income.


The government enacted legislation to implement a one-stop center for construc-tion permits and a new fee structure; it also adopted time limits.

National 1 1

69ANNExES



REFORM

RESULTS

Rwanda (continued)

Access to finance

In May 2010, the government passed a law governing the establishment, organization and functioning of a credit informa-tion system. This legislation sets up the regulatory framework for the sharing of credit informa-tion and the establishment of a private credit bureau. It also guarantees the right of borrowers to obtain a copy of their credit reports. In addition, the Central Bank of Rwanda removed the minimum loan threshold for banks to report to the public credit registries and is working to include information from telecom and utility companies. Rwanda’s first private credit bureau, CRB Africa, started operations in May 2010 and is in the process of expanding its database.


The Central Bank of Rwanda removed the minimum loan threshold for banks to report to the public credit registries and is working to include information from telecom and utility companies. Rwanda’s first private credit bureau, CRB Africa, started operations in May 2010 and is in the process of expanding its database.

National 1 1

Access to finance


The government enacted legislation that sets up the regulatory framework for the sharing of credit information and the es-tablishment of a private credit bureau. It sets guidelines for establishing, organiz-ing, and governing the function of credit information bureaus. It also guarantees the right of borrowers to obtain copies of their credit reports.

National 1

Access to finance


Rwanda's first private credit bureau, CRB Africa, started operations in May 2010 and is in the process of expanding its database. The Central Bank of Rwanda removed the minimum loan threshold for banks to report to the public credit registries and is working to include information from telecom and utility companies.

National 1


Reduction in the number of proce-dures it takes to register property

The government eliminated the require-ment that companies sign a second deed agreement at the national land center, reducing the number of proce-dures from 5 to 4.

National 1

Starting a business

Reduction in the number of procedures it takes to comply with business regulations related to business entry

The number of procedures required to comply with business registration was reduced to 1.

National 1




REFORM

RESULTS

Rwanda (continued)


The government began implementing ASYSCAN—an electronic filing system that will enable traders to submit scanned copies of documents instead of hard copies. In addition, the "cargo release stamp" has replaced the printed release order previously generated by ASYCUDA++ and required by customs for clearance of imports and exports. Rwanda also enhanced its cooperation with neighboring countries. At the Rwanda-Uganda border post in Gatuna, where 75 percent of Rwandan trade makes transit, the two governments unified their customs operations under the same roof, and expanded the hours of operation to 24 hours. As a result of these reforms, the number of documents required for trade decreased from 8 to 7, and the time needed to export decreased from 38 to 35 days and to import from 35 to 34 days.


The government implemented an electronic filing system that enables traders to submit scanned, rather than hard, copies of documents. Previously customs brokers submitted an electronic customs declaration and visited a cus-toms office to submit hard copies of supporting documentation and wait for acceptance. For Customs, this system allows for easier monitoring of delays in declaration processing and reduces losses of documents in transit.

National 1 1


Implementation or improvement of payment systems for trade

The government integrated the separate fee traders previously paid to the Rwanda Bureau of Standards with the customs fee and duty collection process, allowing traders to use a single payment system for all trade related duties, fees, and taxes.

National 1


Implementation or improvement of trade logistics stan-dards and quality

The Rwanda Revenue Authority introduced a trade logistics hotline, an important measure in responding to potential issues among the trading community related to East African Community trade integration.

National 1



Various border control agencies implemented changes, reducing the number of days needed to export (by 10 percent from 42 to 38 days) and import (by 17 percent from 42 days to 35 days), as reported in Doing Business 2010.

National 1



The Rwanda Revenue Authority elimi-nated the cargo release order, which was the document previously issued by Customs (after necessary clearances were received) permitting the removal of cargo for both import and export. Instead, the authority will stamp the customs declaration form at the end of the clearance process. This change reduced the number of documents by 10 percent.

National 1

71ANNExES



REFORM

RESULTS

Rwanda (continued)


Rationalization in the number of agencies involved in trading procedures

Rwanda and Uganda introduced a joint 24-hour one-stop border point and simplified trade regime at Gatuna. Customs and technical control agencies from both sides now conduct clearance operations—previously done on both sides—under one roof. The one stop helps reduce clearance times and paperwork and speeds cargo flows for the more than 70 percent of Rwandan trade that moves through the Gatuna border crossing.

National 1


Implementation or improvement of non-intrusive examinations related to trade logistics

The Rwanda Revenue Authority intro-duced three mobile scanners for inspect-ing cargo classified as high-risk using risk management principles. Previously inspections were conducted manually by offloading the cargo from trucks. The new mobile scanners will speed the inspection process (cargo need not be offloaded), improve security, and increase cooperation with other border control agencies such as the police.

National 1

Rwanda Total

3 13

São Tomé and Principe

Starting a business


The government amended its regulations for starting a business to: (i) make one of the publications of incorporation optional; (ii) delegate notarial powers to lawyers and officials of the one-stop stop; and (iii) allow parties to present their company documents in electronic format to the notary (or other authorized person). The changes were made in an amendment to the Commercial Code.

National 1

Starting a business


The government passed a new law amending the process for starting a business in its commercial code and notary code.

National 1

Starting a business


The amended regulations making one of the publications of incorporation optional, delegating notarial powers to the one-stop shop, and allowing parties to present electronic company docu-ments reduced the costs associated with business entry regulations.

National 1

Starting a business


An amendment in the Commercial Code making one of the publications of incorporation optional reduced the time required to start a business by 45 days, assuming that entrepreneurs will choose the fastest option to publish in a widely-circulated newspaper.

National 1




REFORM

RESULTS

São Tomé and Principe (continued)

Starting a business


The government amended its proce-dures to allow businesses to advertise company formation in a local paper or the national gazette, rather than both as previously required. Entrepreneurs can now choose the faster option (local paper), eliminating one step and 45 days (the time required for advertising in the national gazette) from the process. In addition, the one-stop shop decree and notary code amendments—when physically implemented—could further reduce the procedures and time.

National 1

São Tomé and Principe Total

5

Senegal Dealing with construction permits


A decree set a new time limit for processing building permit applications. This reduces the times the government can spend from 90 days to 28 (for regular cases) or 40 (for complex cases requiring specific technical views).

National 1



The Tax and Land Department stream-lined internal procedures to allow faster property transfers, reducing time required to process a change in owner-ship from 45 to 3 days. Stricter time limits for processing land registrations cut processing time from 7 to 3 days, affecting both the construction permitting process and property registration.

National 1

Senegal Total

2

Serbia Business operations


The review phase of the regulatory reform implementation using the “guil-lotine” tool started in March 2009. During this phase, more than 500 meetings were held with representatives of public authorities, non-governmental organizations, and the private sector. Focus groups were conducted in 10 distinct areas of economic activity. These interactions prompted a total of 713 feedback comments from private sector representatives and citizens (380 offline and 333 via the e-registry). The e-registry is used not only as a database, but also as a tool for process-ing, tracking, and reviewing all laws, regulations, formalities, and administra-tive procedures as well as monitoring them on a continuing basis. During the analysis and consultation phases, all 5,606 inventoried laws and regulations were reviewed.

National 1

Serbia Total 1

73ANNExES



REFORM

RESULTS

Sierra Leone Industry specific


Sixty potential investors were identified and contacted. Of 17 potential bidders attracted to a conference organized in London, 4 paid the fee to participate in the bid. One qualified and two unquali-fied bids were received, an improve-ment of 100 percent over the previous zero conversion rate.

National 1

Industry specific


An international competitive tendering process for the rehabilitation, redevelop-ment, operation, and maintenance of the Cape Sierra Hotel received one bid and two submissions. The single bid was declared non-responsive by the evaluations committee. Guided by the Procurement Act, the government retendered to a restricted list of investors, after conducting an assessment of the reasons the initial tender failed to con-clude (as required by the Procurement Act). After extensive consultation with potential investors and stakeholders, a revised bid structure was developed and approved, and a restricted tender was sent to 16 companies or individuals. Of eight requests to be prequalified, six parties were prequalified, constituting more than a 10 percent increase in the number of relevant leads.

National 1

Paying taxes Effective January 1, 2010, a goods and services tax was introduced to replace seven different sales and services taxes. The government launched its National Revenue Authority Web site on June 30, 2010. The Web site contains information and downloadable forms that help reduce compliance cost and ease access to information. The government reduced the time it takes businesses to pay taxes by about 10 percent, from 406 to 357 hours per year (as recorded in Doing Business 2010), in-creased the number of business tax returns by 40 percent (over the number filed in 2008), and increased tax collection by 44 percent (over the volume of tax collection in 2008).

Implementation or improvement of practices to reduce corruption related to taxes

The income tax law was consolidated and made publicly available for the first time in print and on the Web, reducing opportunities for corruption.

National 1 1

Paying taxes Implementation or improvement of best practice tax enforce-ment procedures or practices

The concept of self assessment was introduced for the first time. Taxpayers can now calculate their tax liability and report, and a certain percentage of returns are pulled for audit.

National 1




REFORM

RESULTS

Sierra Leone (continued)

Paying taxes Implementation or improvement of mechanisms for filing tax returns

Income tax and general sales tax return forms were made available on the tax authority's Web site for the first time. As a result, taxpayers need not visit the tax authority to obtain properly formatted tax forms.

National 1

Paying taxes Reduction in the number of days it takes to file taxes

The time needed for a business to file taxes was cut by 42 hours (7 days), as reported in Doing Business 2010, reflecting a reduction of more than 10 percent off the initial time required (399 hours). Taxpayer education programs, easy availability of tax laws and tax forms, and better training of tax officials contributed to this reduction.

National 1

Sierra Leone Total

1 6

Solomon Islands


Creation or improve-ment of a pool of certified ADR service providers

Of 20 participants in ADR training (3 from the provinces of Western, Malaita, and Makira/Ulawa), 16 were accred-ited to Australian Mediation Standards.

National 1


Implementation or improvement of a more gender inclusive investment climate related to ADR

Of 16 trained mediators who achieved accreditation to Australian Certified Standards, 4 were women.

National 1

Investment policy


The Foreign Investment Registrar’s database was upgraded and training provided to registry staff on using the enhanced database, improving efficiency. Staff can automatically generate reports (required by client ministries) from a num-ber of search criteria, including informa-tion such as new, amended, cancelled, and rejected registrations. Previously, these reports were generated manually.

National 1

Public private dialogue


A PPD forum was established to guide and advise the Minister for Commerce, Industry and Employment and the Minister for Finance and Treasury in implementing reforms that enhance business-related laws and property rights and reduce business regulatory compliance time and cost. The program will strengthen the legislative framework and administrative arrangements that regulate business entry, operation, and closure. The PPD formed a business start-up sub-committee, which recommended two reforms (to abolish the requirement that companies use common seals and to digitize allocated business names).

National 1

75ANNExES



REFORM

RESULTS

Solomon Islands (continued)

Starting a business


The company registry digitized its name search process, reducing by 6 days (from 17 to 11) the time required to obtain company name approval.

National 1

Solomon Islands Total

5

Syrian Arab Republic

Access to Finance

The government enhanced access to credit by removing the minimum threshold for a loan to be included in the credit bureau’s database, which increased its coverage of individuals and firms from below 0.1 to 2.8 percent of the adult population.


The Central Bank of Syria removed the minimum loan threshold amount for borrowers’ information to be included in the public credit registry, increasing the public registry’s coverage of individuals and firms to 2.8 percent of the total adult population.

National 1 1

Enforcing contracts

Reduction in the number of proce-dures to enforce a contract

The government amended its law on civil procedure. The amendments increased the jurisdiction of the first instance court from a claim-value threshold of 10,000 Syrian pounds to above 200,000. Claims below 200,000 pounds are now heard at the conciliation courts. In addition, seizure orders can now be granted in return for a guarantee of 3 percent of the claimed amount to be paid to the court or by bank guarantee. Also, a specialized commercial judge now presides in each first instance court in Damascus and in all governorates.

National 1

Enforcing contracts

Reduction in the number of days it takes to enforce a contract

The government amended its law on civil procedure. The amendments increased the jurisdiction of the first instance court from a claim-value threshold of 10,000 Syrian pounds to above 200,000. Claims below 200,000 pounds are now heard at the conciliation courts. In addition, seizure orders can now be granted in return for a guarantee of 3 percent of the claimed amount to be paid to the court or by bank guarantee. Also, a specialized commercial judge now presides in each first instance court in Damascus and in all governorates.

National 1

Starting a business

The government eased the process of business start-up by reducing the minimum capital requirement for limited liability companies from SYP 3 million ($64,178), equivalent to 1,012 percent of per capita income, to SYP 1 million ($21,393), equivalent to 338 percent of per capita income.


The government eased the process of business startup by reducing the minimum capital requirement for limited liability companies by two-thirds (from 3 million to 1 million Syrian pounds).

National 1 1

Syrian Arab Republic Total

2 4




REFORM

RESULTS

Tajikistan Dealing with construction permits


The government passed several amend-ments to legal and normative acts that simplified the process of connecting to utilities. It also established a single window that can issue all technical conditions for connection to utilities and provided a list of free and paid procedures. These changes decreased the time needed to connect to utilities (from 47 to 42 days) and are expected to increase the overall transparency of the process.

National 1


The government strengthened investor protections with amend-ments brought to the Law on Joint Stock Companies, passed on January 16, 2010. The new law requires detailed disclosure of transactions involving a conflict of interest in the annual report. In addition, the amended law substantially expands minor-ity shareholders’ access to all corporate documents.


New amendments to the joint-stock com-pany law impose greater information-sharing requirements.

National 1 1



The government improved investor protections by requiring increased disclosure of corporate information to minority shareholders and the public.

National 1

Starting a business

The government eased the process of business start-up by creating a one-stop shop consolidating registration with the state registry and tax authorities. As a result, four procedures were eliminated, and time needed to start a business decreased from 38 to 27 days.


The one-stop shop for business registra-tion was rolled out to offices around the country, simplifying the registration pro-cess for entrepreneurs and legal entities. Many of the remaining issues pertaining to one-stop shop internal processes were addressed to help realize the full benefit of a less cumbersome process.

National 1 1

Starting a business


Through rollout of the one-stop shop offices, the time for registration was reduced from 25 to 5 days.

National 1

Tajikistan Total

2 5

77ANNExES



REFORM

RESULTS

Timor-Leste Public private dialogue

With the assistance of the PPD in-stitutional mechanism, the Timor-Leste Chamber of Commerce and Industry was established in April 2010.


The Better Business Initiative (BBI) increased participation and created a new institution to support ongoing dialogue and reform processes. A BBI-facilitated process to unite Timorese business factions around shared objec-tives culminated in the establishment of the Chamber of Commerce and Industry Timor-Leste at the National Congress in April, an event that brought together over 200 representatives from 17 business associations and representation from each of the country's 13 districts. At the event ― opened by the Prime Minister and attended by key govern-ment stakeholders, financial institutions, and donors― members of the business community voted to elect the chamber’s leadership and formalize the associa-tion. In the following weeks, the BBI facilitated a strategic planning process toward building a sustainable employ-ers’ association.

National 1 1

Timor-Leste Total

1 1

Togo Starting a business


The government reduced the cost for new firm registration from CFA 172 750 to CFA 97 250.

National 1

Togo Total 1

Tonga Alternative dispute resolution

The new mediation rules became effective in September 2009, and 40 cases have already been mediated through ADR.

Enactment of legisla-tion related to ADR

Mediation rules became effective in September 2009; since then, the target of 40 cases mediated through ADR was achieved.

National 1 1



A group of six new mediators were trained and accredited at the Magistrates Court level in the outer islands of Vava’u and Ha’apai, resulting in a 100 percent increase in mediators at these locations and building on previ-ous mediator training and accreditation at the Supreme Court level.

National 1




REFORM

RESULTS

Tonga (continued)

Investment policy

The process of investment appli-cation was simplified. Previously an investor would first need to obtain an investor's license, and then obtain a second license (to operate the business) from a different ministry. The process has now been streamlined so that these two licenses can be obtained from one place.


A new process was introduced to sim-plify the investment application process, resulting in a 50 percent reduction in the number of processes. Investors may now obtain both an investor’s license and a second license to operate the business at the same time and from the same place. The investment promotion process was separated from the regulatory pro-cess. The Investment Promotion Strategy and the National Export Strategy were rewritten, enabling the Tonga Chamber of Commerce and Industry to institution-alize and formalize its role in investment promotion.

National 1 1

Starting a business


The government introduced a new company registry, an adaptation of New Zealand's existing system that runs on New Zealand Companies Office servers. Data are entered in Tonga but maintained securely in New Zealand and are publicly searchable in Tonga via a new Web site (www.companies.gov.to).

National 1

Starting a business


A new Companies Act and statutory regulations were adopted by Parliament and came into force, aligning Tonga's legislation with the current provisions of New Zealand's companies legislation. The new Act provides for: (i) electronic registration of companies to replace the previous paper-based registry, including provisions allowing the register to be located offshore and simplify-ing the documentary requirements for registration, including a set of forms; (ii) elimination of the requirement for a company secretary; and (iii) a standard constitution as a schedule to the legisla-tion, to be adopted as default for new companies unless otherwise elected at the time of registration. The legislation also simplifies the legislation’s enforce-ment provisions, replacing a number of provisions that required criminal prosecu-tion (for minor process failures) with civil processes involving a fine.

National 1

Starting a business


The new electronic company registry shortened the time required to register a company from 7 days to 1 day. Under previous processes, registration certifi-cates were hand signed by the Minister for Labour, Commerce and Industries. The new registry generates certificates automatically as soon as data are entered into the system and verified.

National 1

Tonga Total 2 6

79ANNExES



REFORM

RESULTS

United Arab Emirates

Access to finance

The United Arab Emirates enhanced its access to credit by setting the legal framework for the operation of the private bureau and mandating that banks, financial institutions, and government bodies operating in Dubai share information. The de-cree also lays out the legal and operational framework for the existing credit bureau, Emcredit.


The government issued a decree which identified the Emirates Credit Information Company (Emcredit) as the appointed body for providing credit information services in Dubai, and established the legal and operational framework for Emcredit. The decree mandates Emcredit to comply with instructions and guidelines set forth by the Dubai Department of Economic Development and the Central Bank. It also mandates that all credit information providers oper-ating in Dubai, such as banks, financial institutions, and government bodies, provide Emcredit with the required credit information records to provide its credit information services.

National 1 1

United Arab Emirates Total

1 1

Vanuatu Alternative dispute resolution


Thirteen mediators were trained, ac-credited, and added by the Chief Justice to the Supreme Court's mediator list. The total number of certified mediators is now 15 (including 2 former expatriate mediators). In training locals, court-referred mediation is more sustainable.

National 1


Implementation or improvement of a more gender inclusive investment climate related to ADR

Three of the accredited mediators are female, and they will be encouraged to mediate disputes in which females are a party. A female master of mediation was also appointed. A gender and investment climate reform assessment was conducted, finding that female entrepreneurs are more likely to access ADR than the courts to resolve commer-cial disputes, and they would prefer a female rather than male mediator. Public awareness and outreach events had strong participation from women.

National 1

Investment policy

Creation or improve-ment at the legal and regulatory level of institutions deal-ing with investment promotion

The Vanuatu Investment Promotion Authority (VIPA) separated its regulatory and promotion functions. Responsibility for foreign investment regulation and administration are now handled by a different unit. This change was ap-proved by the Ministry of Trade, and a significant budget was allocated to include the hiring of a new manager for the promotion section. Changes were made to VIPA's organizational chart and VIPA identified key areas of focus in developing its promotion capacity.

National 1




REFORM

RESULTS

Vanuatu(continued)

Public private dialogue

Implementation or improvement of a more gender inclusive investment climate related to PPD

Six reports on gender-related investment climate impediments were presented at a conference in Port Vila. The conference discussed the benefits of establishing a “Women in Business” organization in countries lacking this sort of organization. As a result, Vanuatu women created the Vanuatu Women in Business organization, which is de-signed to represent women's interests in the business community and put forward a gender perspective in discussions with the government on business regulation.

National 1

Starting a business

Several improvements have been achieved to facilitate business entry. A new business license application form for the Rates and Taxes Office was made available in January 2010; application forms at Vanuatu Investment Promotion Authority (VIPA) were streamlined; process-ing applications (VIPA, Vanuatu Financial Services Commission, Rates and Taxes Office, and Vanuatu National Provident Fund) were simplified. As a result, the number of days foreign-owned enterprises need to obtain a busi-ness license was reduced from 62 to 47 days.


Several improvements were made at the regulatory level of institutions dealing with business entry, including: drafting of a new business license application form for the Rates and Taxes Office; streamlining of application forms at the Vanuatu Investment Promotion Authority (VIPA); streamlining of procedures for processing applications (VIPA, Financial Services Commission, Rates and Taxes Office, and National Provident Fund).

National 1 1

Starting a business


Cost to comply was reduced by 650 vatu to a cumulative total of 2,545.

National 1

Starting a business


The number of days required to register a business, including foreign-owned enterprises, was reduced by 15 days, from 62 to 47.

National 1

Starting a business


The required procedures for business startup were reduced from 8 to 5. The Vanuatu Financial Services Commission eliminated the internal procedure of conducting applicant due diligence checks prior to company incorporation (checks may still be conducted but the results will be addressed afterwards as required) and the Vanuatu National Provident Fund eliminated the need to provide certified copies of documents as part of the employer social security registration process.

National 1

Vanuatu Total

1 8

81ANNExES



REFORM

RESULTS

Yemen, Republic of

Industry specific


The government, through an interministe-rial committee that met with investors, removed impediments to 20 stalled investment projects, which have since reinitiated. This initiative was supported at the highest levels of government. Each project had been stalled for two to more than five years.

National 1

Special economic zones

Improved institu-tional framework related to invest-ment generation

The government eliminated the Yemen Public Zones Authority and decentral-ized its functions to the Aden Free Zone Authority. This will help minimize confu-sion and reduce steps in the regulatory process, paving the way for additional reforms that will make the sector more transparent and efficient.

National 1

Yemen, Republic of Total

2

Zambia Dealing with construction permits


The government eliminated the ex-ante environmental impact assessment for simple constructions, cutting a fee of about $5,000 and resulting in a 70 percent reduction in permit fees for simple construction. The Lusaka City Council now issues approvals in prin-ciple, allowing construction to proceed while the building committee meets to determine whether the structure requires an environmental impact assessment.

National 1

Starting a business

The government amended the Company Act in May 2010 to eliminate the minimum capital of ZMK 5,000,000 ($1,093), equivalent to 130 percent of Zambia's per capita income, and paid-up capital, which previ-ously amounted to ZMK 50,000 ($11) equivalent to 1.3 percent of per capita income.


The government eliminated the minimum capital requirement (previously 1.3 percent of average per capita income).

National 1 1

Starting a business


A new law passed by Parliament and signed by the president eased the pro-cess of business start-up by eliminating the minimum capital requirement.

National 1

Starting a business


The revenue authority simplified the VAT registration process, reducing time required to comply from 10 to 1 day.

National 1

Zambia Total 1 4

Grand Total 52 177


The following table summarizes the 56 results of projects not mapped directly to the FIAS program but that received at least 10 percent of their budgets from FIAS in FY10. They are summarized by type of result and include a brief description of the achievements. Of these 56 results, 40 were achieved at the subnational level. These results contributed to two Doing Business reforms (in addition to the 41 Doing Business reforms to which the results outlined in Annex 1 contributed). The results that have contributed to a particular reform are shaded together with the reform in the same background color.



REFORM RESULT

Armenia Business taxation

Implementation or improvement of mechanisms for filing tax returns

The government adopted a regulation in-troducing e-filing for all taxes administered by the SRC, making it easier and faster for taxpayers to submit their tax returns.

National 1

Trade logistics


"The government introduced elec-tronic submission of customs declaration documents for clearance, reducing the number of physical interactions and speeding the clearance process. Customs brokers can file their declara-tions without visiting the customs office. This measure minimizes mistakes in data entry because all information is pre-pared by traders, and the system checks accuracy. Customs is providing training to help brokers understand the system and its benefits and constraints.

National 1

Trade logistics

Risk assessment criteria were revised and updated to better analyze, treat and monitor the risks involved in trade transac-tions. The border clearance soft-ware now has an improved risk targeting strategy which will lead to an improved compliance with regulations, lower transaction costs, and improved clearance times. The government also de-veloped a number of guidelines for importers and exporters to help them understand their rights and obligations. As a result, the time needed to export a container of goods was reduced from 17 to 14 days, the number of documents required from 5 to 3, and the cost from $1,731 to $1,665. The time needed to import was reduced from 20 to 18 days, the number of docu-ments from 7 to 6, and the cost from $2,096 to $2,045.

Implementation or improvement of trade logistics stan-dards and quality

Three major activities contributed to this reform: (i) the Customs Service developed guidelines for importers and exporters to help them understand custom procedures, their rights, and obligations (including guidelines for import-export procedures, physical and legal procedures, post-clearance con-trol, and good customs service); (ii) the agency conducted a number of training courses and seminars organized with the assistance of the EU Advisory Group to improve customs officers' knowledge and skills in risk assessment, post clear-ance control, and other areas; (iii). an order of the Head of the State Revenue Committee was issued to improve governance of tax and customs service via the introduction and development of its electronic governance system.

National 1 1

ANNEx 2: OTHER REFORMS AND RESULTS SUPPORTED bY FiAS iN FY10

83ANNExES



REFORM

RESULTS

Armenia (continued)

Trade logistics

Implementation or improvement of risk targeting strategies related to trade logistics

The customs service revised and updated the risk management criteria in the software used for customs clear-ance to enhance control and improve efficiency. This improvement was part of the implementation of a modern risk management system with risk targeting strategies to better identify, analyze, treat, and monitor the risks involved in the trade transaction process. Risk assessment results in a more efficient use of resources because limited resources are deployed to deal with the highest risks, taking national priorities and the operational environment into account. This reform leads to an improved compliance with laws and regulations, better human resource management at Customs, lower transaction costs, and improved clearance times.

National 1

Armenia Total

1 4

Belarus Business licensing and regulatory governance

Presidential Decree No. 510 of October 16, 2009 on Inspections introduced a new framework for the scope and quality of supervisory services. The new system introduces risk management, reduces the num-ber of inspections, and reduces time limits for inspections.

Enactment of legisla-tion related to the business regulatory system

A presidential decree on inspections introduced risk management for all inspections, providing a legal basis for the use of checklists. The decree, which became effective January 1, 2010, reflects a major change in mindset and approach from previous inspection practices. Business surveys have shown that more than 50 percent of smaller businesses and more than 70 percent of medium-sized ones are inspected an-nually; 72 percent of SMEs find inspec-tions more punitive than preventative.

National 1 1

Investment policy and promotion


A presidential decree of May 25, 2010 authorized establishment of the new national investment promotion agency.The project delivered a draft charter and requested articles of association setting forth interagency relations with other state organizations and investors.

National 1

Belarus Total 1 2

Bosnia and Herzegovina

Business licensing and regulatory governance

Implementation or improvement of a Regulatory Impact Analysis (RIA)

The regulatory impact assessment of tourist fees and tourism promotion in Republika Srpska was completed and officially adopted by the government.

Subnational 1




REFORM

RESULTS

Bosnia and Herzegovina (continued)


Rationalization in the number of proce-dures to comply with business regulations related to business operations

A 'light” regulatory impact assessment on MOFTER specifically targeting the registration/re-registration of foreign investors (two business procedures) and the related process was completed, approved, and adopted by the na-tional government. The law, which was changed to abolish the two procedures and improved overall, was adopted in April 2010 and en force as of June 2010.

Subnational 1


Rationalization in the number of regulations related to business operations (licenses, construction permits, inspections, etc.)

The government in Republika Srpska proposed and implemented regulations that incorporated recommendations from the local level to change business operations procedures. The Ministry of Economy and Industry (in cooperation with the Ministry of Economic Affairs) accepted a recommendation from the local level (forwarded by the core project team) and included it in the proposed Law on Companies that was subsequently adopted by the republic's government. Eight other recommenda-tions for formalities improvement from the local level were sent to the Ministry of Economic Affairs, and four of these were adopted and implemented. Overall, of nine recommendations from the local level, five have been adopted and their respective regulations changed.

Subnational 1



Four of nine recommendations prepared by the City of Banja Luka and sent to authorities for consideration and approval were adopted and imple-mented by the government of Republika Srpska, marking an improvement in procedures and additional annual cost savings for businesses of Banja Luka of $1,170,098 (17 percent more than the baseline savings). After the reform, costs were calculated at $18.7 million (a savings of more than 30 percent over the baseline costs of $27 million).

Subnational 1

Bosnia and Herzegovina Total

4

85ANNExES



REFORM

RESULTS

Serbia Business licensing and regulatory governance

Creation or improve-ment at the legal and regulatory level of institutions deal-ing with business regulatory manage-ment and reform

A working body for regulatory reform was established for the city of Nis to work on quality control of future regula-tions. The working body will analyze proposed changes to administrative pro-cedures before the city council makes a final decision on their adoption, after which they will be posted to the e-registry. These three bodies comprise one institution for regulatory manage-ment and reform.

Subnational 4



A new law on planning and construc-tion was enacted in September 2009. It adopted a set of construction-related measures at the republic level recom-mended by four pilot cities and sent to the National Council for Regulatory Reform. Under this legislation, 60 procedures in the four cities (14 percent of 425 total) were improved in terms of regulatory quality.

Subnational 1



The City of Nis and three municipali-ties—Medijana, Palilula, and Pantelej—adopted legal acts with the goal of improving the business regulatory system; ensuring the legal security of the e-registry; and etablishing the respon-sible bodies for e-registry operations.

Subnational 4


Implementation of an e-registry of administrative procedures

The city of Nis and the municipalities of Palilula, Pantelej, Medijana, Crveni Krst, and Niska Banja established e-registries of administrative procedures and posted them on their Web sites. Businesses and the general public can access all relevant information for every administrative procedure in the e-reistry including: city administration units, docu-ments to be submitted, information to be provided, taxes and fees to be paid, deadlines, and contact information. The online public registries provide legal se-curity to businesses and full transparency of administrative procedures processed by the city and municipalities.

Subnational 6



Consultations on drafting regulatory pro-posals were conducted for six municali-ties (the city of Nis and the muncipalities of Palilula, Pantelej, Medijana, Crveni Krst, and Niska Banja over a period of 14 working days. Seven focus groups were organized for the private and civil sectors.

Subnational 6




REFORM

RESULTS

Serbia (continued)



Business formalities were inventoried in the city of Nis and four municipali-ties and improvements were made in eliminating procedures; reducing time, cutting taxes and costs; eliminating documentation and simplifying forms and information requirements; or a combination of these. The city of Nis improved or eliminated 116 formalities (90 percent of 128); in the municipali-ties of Palilula, Pantelej, and Crveni Krst, 19 each (100 percent of total); and in the municipality of of Medijana, 18 (100 percent).

Subnational 5



Business formalities were simplified or eliminated at the local level in four cities to eliminate procedures, reduce compliance times, cut taxes and costs to business, eliminate documentation, and simplify forms and information require-ments. In Krusevac, business formalities simplified or eliminated totaled 111(46 percent of 240 total inventoried formali-ties); in Zrenjanin, 80 (41 percent of 194); in Uzice, 112 (60 percent of 185); in Vranje, 122 (59 percent of 206).

Subnational 4



The costs for businesses to comply with business regulations were reduced by at least 10 percent. Adoption of the new law on planning and construction and simplification of construction formalities at the local level created additional private sector savings (both direct and indirect) of $18.1 million for the pilot cities of Krusevac, Zrenjanin, Uzice and Vranje. Reforms were reported for two cities, reducing costs by more than 10 percent: in Vranje, $6.59 million (11 percent of $58.9 million baseline costs) in aggregate direct and indirect private sector savings was recorded; and in Zrenjanin, $5.51 million (13 percent of $43.1 million baseline costs). At the local level, the city of Uzice reduced annual aggregated private sector costs (direct and indirect) by 5 percent ($49) per individual business as a result of the adoption and implementation of improved or simplified procedures.

Subnational 3

Serbia Total 33

87ANNExES



REFORM

RESULTS

Sudan Business licensing and regulatory governance


The Ministry of Justice one-stop shop reg-istration office reduced the average time to register a business from 4 days to 1 day. Reserving a company name prior to registration now requires just a couple hours; completing site inspections now requires 1 day as does applying for TIN (both previously required 2 days).

National 1

Business taxation

Reduction in the number of days it takes to file taxes

Further business process reengineer-ing, coupled with ongoing information technology modernization as resulted in a reduction in time needed to file taxes electronically.

National 1



The building permit process was stream-lined and costs for obtaining a building permit reduced by 30 percent.

National 1



The time needed to clear and finalize a building permit was reduced from 40 (as reported in Doing Business 2010) to 10 days.

National 1



The changes in the Planning Department have also impacted positively the construction permitting process, provid-ing an important platform for reductions in time and cost of issuing construction permits. The building permit fees were reduced by 30 percent and time taken to obtain a building permit was reduced from 40 days (in Doing Business 2009 and 2010 reports) to 15 days.

National 1

Starting a business


Adoption of the new Taxation Act 2008 led to elimination of a number of proce-dures, resulting in a 36 percent reduc-tion in the cost to register a business.

National 1

Trade logistics

Implementation or improvement of best practice risk management related to trade

The Customs Chamber launched a risk management program and assigned, recruited, and trained about 80 staff. A list of five large importers was identified and piloted with newly developed port and operational guidelines and a post-release audit was tested on one company with good results. A single window concept was designed and is being piloted in Port Sudan.

National 1




REFORM

RESULTS

Sudan (continued)

Trade logistics


The government improved Sudan’s performance as measured by the Doing Business “trading across borders” indica-tor, reducing further the time needed to import to 46 days in the 2010 report (from 83 days in 2007, 54 days in 2008, and 49 days in 2009); and the time to export to 32 days in the 2010 report (from 56 days in 2007, 39 days in 2008, and 35 in 2009). The Customs Amendment Act of 2009 was approved by the Council of Ministers (and subsequenly passed by Parliament).

National 1

Trade logistics

Implementation of international best practice clearance procedures for trading

Improvements made to the customs clearing system are likely to lead to even greater time and cost reductions. The system is now linked to customs clearing businesses, large importers, and 21 regional offices; all approvals are done electronically. The system is also linked to the tax chamber for ease of cross ref-erencing and filing. Electronic manifests, a bottleneck in the past, can be lodged electronically; clearing agents can use a special bureau at the port to lodge their applications.

National 1

Trade logistics


Improvements made to the customs clearing system are likely to lead to even greater time and cost reductions. The system is now linked to customs clearing businesses, large importers, and 21 regional offices; all approvals are done electronically. The system is also linked to the tax chamber for ease of cross ref-erencing and filing. Electronic manifests, a bottleneck in the past, can be lodged electronically; clearing agents can use a special bureau at the port to lodge their applications.

National 1

Sudan Total 10

89ANNExES



REFORM

RESULTS

Vietnam Dealing with construction permits

Reduction in the cost to comply with business regulation related to business operation

This project addresses administrative issues related to investors obtaining land from government on the primary, rather than the secondary, market. The govern-ment of Bac Ninh enacted a local regula-tion introducing an improved process for business access to land. Applications are now processed in parallel and in combination, rather than sequentially. The procedures for basic design approval, environment clearance, and investment approval can be handled simultaneously as can the procedures for obtaining the land use rights certificate and construction permit. In addition, the procedures for site location approval and the certificate of planning were combined. Investors automatically receive a certificate of planning (previously they had to apply for it) after receiving approval for a site. This regulation reduces the time it takes an investor to obtain land by 27 percent (from 151 to 110 days) and the number of visits to government authorities by 66 percent (from 36 to 12). This excludes the time and length of land clearance, compensation, and resettlement which, as interactions between the investor and current land users, are not considered administrative procedures

Subnational 1



In Bac Ninh province, the government enacted legislation related to the busi-ness regulatory system. The government of Binh Dinh province enacted a local regulation introducing an improved process for business access to land. Applications are now processed in parallel and in combination, rather than sequentially; the procedures for principal approval and site location are combined, and the procedures for in-vestment certificates, basic design, and land recovery decisions are processed simultaneously. The regulation also al-lows investors to conduct an environmen-tal impact assessment (EIA) after land allocation and before the construction permit. Although the Environment Law only requires EIA approval before the construction permit, many provinces (including Binh Dinh prior to the reform), request this be done before land alloca-tion. Binh Dinh now officially accepts EIAs conducted after land allocation, and investors do not incur EIA costs when their projects are still in the early stages of the administrative process.

Subnational 2

Vietnam Total

3

Grand Total 2 56


ANNEx 3: ACTivE AND CLOSED PROjECTS

The following table summarizes FIAS’ active and closed portfolio of projects as of June 30, 2010.

TABLE 1: FIAS PROJECTS (ACTIvE / CLOSED)

REGION COUNTRY PROJECT NAME

TOTAL FUNDING (USD IN

ThOUSANDS)PROJECT STATUS

PROJECT SUPERvI-

SION REPORT

OvERALL RESULTS

DEvELOPMENT EFFECTIvE-

NESS

East Asia and Pacific Cambodia Cambodia CIB Strategy Implementation & Capacity Building

$172 Closed –

East Asia and Pacific Cambodia Cambodia SEZ Legal and Institutional Framework $158 Closed TETJ

East Asia and Pacific Indonesia Indonesia SEZ Policy and Legal Framework $339 Closed +

East Asia and Pacific Philippines Philippines Board of Investment Aftercare Program

$25 Closed +

East Asia and Pacific Vietnam Vietnam Land Program $670 Closed +

East Asia and Pacific Vietnam Vietnam Tax Compliance Cost Survey and Assessment

$90 Closed MEC

East Asia and Pacific China Access to Business Credit - Secured Transactions -CHINA

$1,223 Closed +

East Asia and Pacific China MOFCOM - China. IP-Support for lesser-devel-oped regions.

$570 Active A

East Asia and Pacific East Asia and Pacific Region

Pacific Gender Mainstreaming Program $413 Active B

East Asia and Pacific Papua New Guinea

Papua New Guinea Regulatory Simplification and Investment Policy and Promotion Project

$930 Active B

East Asia and Pacific Papua New Guinea

PNG Country SEZ Strategy $560 Active B

East Asia and Pacific Solomon Islands Solomon Islands Regulatory Simplification and Investment Policy and Promotion Project

$700 Active B

East Asia and Pacific Timor-Leste Timor Leste Public-Private Dialogue $795 Active B

East Asia and Pacific Tonga Tonga Regulatory Simplification and Investment Policy and Promotion Program

$700 Active B

East Asia and Pacific Vanuatu Vanuatu Regulatory Simplification and Investment Policy and Promotion Project

$850 Active B

Europe and Central Asia Croatia Croatia Regulatory Governance $321 Closed +

Europe and Central Asia Southern Europe Region

Invest in the Western Balkans (IIWB) Program $2,600 Closed +

Europe and Central Asia Macedonia, Former Yugoslav Republic of

Macedonia FYR Regulatory Reform $75 Closed MEC

Europe and Central Asia Russian Federation

Russian Federation -- BEE improvement in Republic of Tatarstan

$195 Closed +


Subnational Doing Business in Russia $464 Closed TETJ

Europe and Central Asia Ukraine Ukraine Tax Compliance Cost Survey $265 Closed +

Europe and Central Asia Eastern Europe Region

BEE Regional Network $0 Dropped

A On Track with all performance categoriesB Some areas of under-performanceMEC Meets exclusion criteria (knowledge management, diagnostics, etc.)TETJ Too early to judge (development effectiveness will be judged later as new data becomes available)+ Project is rated positively (Mostly successful, Successful, Highly successful)– Project is rated negatively (Partly unsuccessful, Unsuccessful, Highly unsuccessful)

91ANNExES




PROJECT SUPERvI-

SION REPORT

OvERALL RESULTS


NESS

Europe and Central Asia Eastern Europe Region

DB Reform South East Europe $1,355 Active B

Europe and Central Asia Montenegro Montenegro National BEE Reform $565 Active B

Europe and Central Asia Serbia Regulatory Impact Analysis - Improvements in efficiency and transparency of the legislative process

$727 Active A


Russia--removing admin. barriers for invest-ment, business development in republics of N. Caucasus

$732 Active A

Europe and Central Asia Serbia Serbia Investment Promotion Program $4,775 Closed NYA

Latin America & Caribbean

Colombia Colombia Technical Assistance Program $58 Closed +


Honduras Honduras Technical Assistance Program $46 Closed +


Mexico Mexico: Administrative barriers solution design at the subnational level Phase II and III

$546 Closed +


Brazil Brazil Frontier States Investment Generation (National-Subnational)

$2,300 Active A


Colombia Colombia - Subnational Doing Business $677 Active A


Latin America Region

Doing Business Reform Latin America and the Caribbean

$1,101 Active B


Costa Rica The Role and Importance of Competition Policy in Promoting Investment, Growth, Competitiveness

$470 Closed +


Colombia Trade Logistics Advisory Program in Colombia $1,093 Active A


Egypt Subnational Doing Business Egypt $208 Closed +


MENA Region DB Reform MENA $1,342 Active B


Pakistan Subnational Doing Business in Pakistan $438 Active A


Yemen, Republic of

Yemen Investment Generation Program $2,317 Active B

South Asia India India Competitiveness Advocacy $528 Closed +

South Asia Nepal Nepal Investment Climate Reform Program $800 Active B

South Asia India Subnational Doing Business in India $430 Active A

Sub-Saharan Africa Mali Investment Climate Reform in Mali $2,127 Closed +

Sub-Saharan Africa Congo, Democratic Republic of

Investment Promotion, Taxes and Doing Business $265 Closed –

Sub-Saharan Africa Madagascar Madagascar Investment Climate Reforms - Business Licensing

$890 Closed –






PROJECT SUPERvI-

SION REPORT

OvERALL RESULTS


NESS

Sub-Saharan Africa Sierra Leone Sierra Leone Implementation Project 2: Land and titling

$300 Closed –

Sub-Saharan Africa South Africa Study of Administrative Compliance Costs for Small Business Taxes

$394 Closed +

Sub-Saharan Africa Guinea Technical Assistance to Strengthen Guinea’s Framework for Private Sector Mining Investment

$750 Closed –

Sub-Saharan Africa Africa Region DB Reform Sub-Saharan Africa $543 Active A

Sub-Saharan Africa Burkina Faso Doing Business Better in Burkina Faso $556 Active B

Sub-Saharan Africa Eastern Africa Region

EAC Investment Climate Reform Program $1,460 Active A

Sub-Saharan Africa Ghana Ghana Collateral Reform $384 Active B

Sub-Saharan Africa Mali Investment Climate Reform Program in Mali, Phase 2

$1,896 Active A

Sub-Saharan Africa Madagascar Investment Climate Reform to reduce the cost of private-sector transactions

$2,000 Active B

Sub-Saharan Africa Kenya Kenya: Improving Regulatory Performance and Capacities

$4,925 Active B

Sub-Saharan Africa Liberia Liberia PSD growth support through SEZs $700 Active B

Sub-Saharan Africa Liberia Liberia PSD in Post-Conflict Program: Phase 2 $4,601 Active A

Sub-Saharan Africa Liberia LIBERIA Trade Logistics Project $850 Active A

Sub-Saharan Africa Nigeria NGIA Subnational Investment Climate program $3,863 Active B

Sub-Saharan Africa Africa Region OHADA: Building the Capacity to Improve the Quality of the Legislation

$1,882 Active A

Sub-Saharan Africa Sierra Leone Promoting Investment and Export for Sierra Leone $1,632 Active A

Sub-Saharan Africa Rwanda Rwanda Investment Climate Reform Project $2,833 Active A

Sub-Saharan Africa Sierra Leone Sierra Leone Tax Simplification Rollout $2,050 Active B

Sub-Saharan Africa Sierra Leone Sierra Leone Tourism $2,000 Active B

Sub-Saharan Africa Sierra Leone SL Removing of Administrative Barriers to Investment (RABI) Ext Phase 2

$1,861 Active A

Sub-Saharan Africa Burkina Faso Trade Logistics Burkina Faso $297 Active A

Sub-Saharan Africa Uganda Uganda Investor Outreach Program $456 Closed –

Sub-Saharan Africa Zambia Zambia Investment Climate Program $574 Active B

WORLD World Region Capacity Building for Public Private Dialogue $322 Closed MEC

WORLD World Region Investment Promotion Performance Benchmarking 2008-2010

$462 Closed MEC

WORLD World Region KM - Managing Stakeholders in the business registration reform process

$200 Closed MEC

WORLD World Region Knowledge Management: Regulatory Reform Review of Denmark

$75 Closed MEC

WORLD World Region Licensing M&E $190 Closed MEC


93ANNExES




PROJECT SUPERvI-

SION REPORT

OvERALL RESULTS


NESS

WORLD World Region Special Economic Zones Product Development and Knowledge Management

$446 Closed MEC

WORLD World Region BEE Toolkits $600 Closed +

WORLD World Region Business Enabling Environment Network $500 Closed +

WORLD World Region Business Entry Product Development and KM $791 Active A

WORLD World Region Business Environment Snapshots $353 Active B

WORLD World Region Business Operations Product Development and Knowledge Management

$825 Active A

WORLD World Region Commercial Mediation Product Development and KM

$860 Active B

WORLD World Region Doing Business Reform Advisory -- Global $2,833 Active B

WORLD World Region Donor Committee for Enterprise Development $1,687 Active A

WORLD World Region Entrepreneurship and Economic Development $485 Active A

WORLD World Region Global Insolvency Technical Assistance Program $1,653 Active A

WORLD World Region Global Investment Law and Policy Research and Advisory Project (GILPRA)

$225 Active B

WORLD World Region Global Secured Transactions and Collateral Registries Program

$895 Active B

WORLD World Region Investing Across Borders Indicators $1,935 Active B

WORLD World Region Investment Policy and Promotion Core Product $540 Active B

WORLD World Region KM Post conflict $100 Closed +

WORLD World Region KM Trade Logistic Advisory Services Progam $1,445 Active A

WORLD Netherlands KM: Ad-hoc Support to Regulatory Governance in the Netherlands

$175 Active A

WORLD World Region KM: The Better Regulation for Growth Programme - developing and adapting regulatory management tools

$698 Active B

WORLD World Region Land Market for Investment -- Global KM and Product Development

$670 Active A

WORLD World Region PPD Product Development and KM $383 Active A

WORLD World Region Role of Incentives in Promoting Investments $217 Active A

WORLD World Region Special Economic Zones Product Development KM Phase 2

$200 Active B

WORLD World Region Sub-national Doing Business - product develop-ment and global roll out support

$1,430 Active B

WORLD World Region Tax Product Program Design $2,567 Active B

WORLD World Region Tourism Investment & Development Advisory Services Global

$297 Active A

TOTAL $96,768



The following table shows active and closed projects not mapped directly to the FIAS program but that have received at least 10 percent of their budgets from FIAS.

TABLE 2: OThER PROJECTS TO whICh FIAS CONTRIBUTED FUNDS




PROJECT SUPERvISION

REPORT OvERALL RESULTS


NESS

East Asia and Pacific China Secured Transactions Reform $1,059 Active A

East Asia and Pacific Lao People's Democratic Republic

Access to Finance – Lao Secured Transactions Project

$336 Active B

East Asia and Pacific Lao People's Democratic Republic

BEE – Lao Investment Law $376 Active B

East Asia and Pacific Mongolia Mongolia Business Inspection Reform $654 Active A

East Asia and Pacific Philippines Doing Business Plus (Philippines) $2,343 Active B

East Asia and Pacific Timor-Leste Timor-Leste Business Registration and Licensing Reform Project

$650 Active A

East Asia and Pacific Vietnam BEE – Vietnam Licensing $670 Active A

East Asia and Pacific Vietnam Access to Finance – Vietnam Secured Transactions Phase 2

$711 Active B

East Asia and Pacific Vietnam BEE – Vietnam Business Tax Simplification $1,065 Active B

East Asia and Pacific Vietnam BEE – Vietnam Land Stage 2 $340 Active A

Europe and Central Asia Armenia Armenia Regulatory Simplification – Doing Business Reform

$857 Active B

Europe and Central Asia Belarus Belarus Business Enabling Environment Phase 2 $2,188 Active B

Europe and Central Asia Bosnia and Herzegovina

Bosnia Subnational Competitiveness $3,077 Active B

Europe and Central Asia Georgia Georgia Tax Simplification Project $840 Active

Europe and Central Asia Kyrgyz Republic Kyrgyz Republic Business Enabling Environment (inspections, permits, tax administration)

$3,698 Active B

Europe and Central Asia Montenegro Montenegro Subnational Competitiveness $300 Active B

Europe and Central Asia Serbia Serbia Subnational Competitiveness $1,051 Active A

Europe and Central Asia Southern Europe Region

South East Europe Subnational Doing Business $689 Active A

Europe and Central Asia Tajikistan Tajikistan Business Enabling Environment Phases III, IV

$4,753 Active A


Caribbean Region

Investment Climate in the Caribbean $1,723 Active A


Haiti Haiti Investment Generation Strategy $1,418 Active A


Yemen, Republic of

Yemen Tax Simplification Rollout 1 $3,791 Active B

Sub-Saharan Africa Burkina Faso Doing Business Better in Burkina Faso $1,889 Active B

Sub-Saharan Africa Central African Republic

Central African Republic Investment Climate Reform Program

$470 Active B

Sub-Saharan Africa Chad Chad Small and Medium Enterprises $1,113 Closed –

A On Track with all performance categoriesB Some areas of under-performanceCj Significant under-performance+ Project is rated positively (Mostly successful, Successful, Highly successful)– Project is rated negatively (Partly unsuccessful, Unsuccessful, Highly unsuccessful)

95ANNExES


TOTAL FUNDING (USD IN ThOUSANDS)

PROJECT STATUS

PROJECT SUPERvISION

REPORT OvERALL RESULTS

DEvELOPMENT EFFECTIvE-NESS

Sub-Saharan Africa Congo, Democratic Republic of

Developing a Framework for Special Economic Zones in the Democratic Republic of Congo

$3,222 Active A

Sub-Saharan Africa Mozambique Mozambique Tourism Anchor Investment Program $1,841 Active B

Sub-Saharan Africa Sierra Leone Sierra Leone Business Forum $1,120 Active C

Sub-Saharan Africa Sudan Removing Barriers to Investment in Southern Sudan

$1,880 Active A

Sub-Saharan Africa Sudan Sudan Administrative Barriers Reform Program $1,615 Active B

TOTAL $45,739

A On Track with all performance categoriesB Some areas of under-performanceCj Significant under-performance+ Project is rated positively (Mostly successful, Successful, Highly successful)– Project is rated negatively (Partly unsuccessful, Unsuccessful, Highly unsuccessful)C Significant underperformance

A On Track with all performance categoriesB Some areas of under-performanceC Significant under-performance+ Project is rated positively (Mostly successful, Successful, Highly successful)– Project is rated negatively (Partly unsuccessful, Unsuccessful, Highly unsuccessful)


ANNEx 4: ACRONYMS AND AbbREviATiONS

ADR alternative dispute resolution

AfD Agence Française de Développement (France)

ASYCUDA Automated System for Customs Data (developed by UNCTAD)

BEE Business Enabling Environment

CRF Corporate Registers Forum

DfID Department for International Development (United Kingdom)

FDI foreign direct investment

FIAS FIAS, the multidonor program

FY fiscal year

IAB Investing Across Borders

IBRD International Bank for Reconstruction and Development

ICEX Instituto Español de Comercio Exterior (Spain)

ICT information and communication technologies

IDA International Development Association

IFC International Finance Corporation

IPIs investment promotion intermediaries

IT information technology

KM knowledge management

MIGA Multilateral Investment Guarantee Agency

OHADA Organisation pour l’Harmonisation en Afrique du Droit des Affaires

PPD public-private dialogue

SCM Standard Cost Model

SEZ special economic zone

SMEs small and medium enterprises

USAID United States Agency for International Development

VAT value-added tax

All dollar amounts are in current U.S. dollars unless otherwise specified.

THROUGH THE FiAS PROGRAM, THE wORLD bANK GROUP AND DONOR PARTNERS

ASSiST DEvELOPiNG COUNTRiES AND TRANSiTiON ECONOMiES iN REFORMiNG THEiR

bUSiNESS ENviRONMENTS, wiTH AN EMPHASiS ON REGULATORY SiMPLiFiCATiON

AND iNvESTMENT GENERATiON. FiAS PROjECTS AiM TO DELivER TANGibLE RESULTS

LEADiNG TO MEASURAbLE iMPROvEMENTS iN THE iNvESTMENT CLiMATES OF CLiENT

COUNTRiES.

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