1

Doing Business:Eastern Europe and Central Asia

Svetlana BagaudinovaSenior Private Sector Development Specialist

September 9, 2009

What does Doing Business measure?

Doing Business indicators:

Focus on regulations relevant to the life cycle of a small to medium-sized domestic business.

Are built on standardized case scenarios.

Are measured for the most populous city in each country.

Are focused on the formal sector.

DO NOT measure all aspects of the business environment such as macroeconomic stability, corruption, level of labor skills, proximity to markets, of regulation specific to foreign investment or financial markets.

Why do rankings change?

# 1 reason: reforms DB2010 recorded 287 reforms in 131 economies. Ranking can change because the economy reformed – OR

others did.

Changes to the methodologyOnly one change in DB2010 to methodology of Employing Workers

indicator.

New economy additions Since 2004, Doing Business added 50 economies to the sample (from

133 to 183).

Data revisionsCorrection rate for DB10 was 5.5%. Note: data for previous years are recalculated in case of revisions.

Comparable rankings are published side by side in report.

What's new in Doing Business 2010?

2007175 economies

2008178 economies

2009181 economies

2010183 economies

Starting a business Dealing with

construction permits

Employing workers Registering

property Getting credit Protecting

investors Paying taxes Trading across

borders Enforcing contracts Closing a business

Update of 2007

Add 3 countries Reformer’s Club,

and 16 case studies

New “About DB” chapter

Trends analysis DB04-DB09 Most popular

reforms Most effective

reforms Lessons learned

Add 3 new countries (Bahamas, Bahrain, Qatar)

Methodology change in Getting Credit (Legal Rights)

Business regulation and reform in the context of the global crisis

EWI and social protection

Researching ILO core labor standards

Piloting a new infrastructure indicator

New insights on gender

Add Cyprus, Kosovo

1. Singapore 16. Finland2. New Zealand 17. Mauritius3. Hong Kong, China 18. Sweden4. United States 19. Korea, Rep.5. United Kingdom 20. Bahrain6. Denmark 21. Switzerland7. Ireland 22. Belgium8. Canada 23. Malaysia9. Australia 24. Estonia10. Norway 25. Germany11. Georgia 26. Lithuania12. Thailand 27. Latvia13. Saudi Arabia 28. Austria14. Iceland 29. Israel15. Japan 30. Netherlands

Top 30 on the ease of Doing Business 2008/09

Key findings in this year’s report

Worldwide the pace of reform picks up to reach a new record: 287 reforms in 131 countries; 20% more than in the year before.

Developing economies lead in DB reforms: Two-thirds of reforms in low- and lower-middle-income economies.

Rwanda is the top reformer: Jumped 76 places in the aggregate rankings, from 143 to 67. Reforms in 7 of the 10 areas.

Eastern Europe and Central Asia is the fastest reforming region six years in a row: 26 of 27 economies reformed. Reform in ECA is spreading eastward: Albania, Belarus, the Kyrgyz Republic, Kazakhstan, Montenegro and Tajikistan continued reforming.

5 of the 10 top reformers are from Eastern Europe and Central Asia.

The Middle East and North Africa region sees the largest surge in reforms: 17 of 19 economies reformed in 2008/09.

Top reformers have been consistent, comprehensive, and committed to reform—often implemented within long term strategies.

7

Eastern Europe and Central Asia is the second best performing region in 2008/09

Lowest Rank

Average Rank

Best Rank

Percentage of countries with at least one positive reform in 2008/09

96%

89%

75%

71%63%

59%

63%

High Income OECD

Eastern Europe and Central Asia

Sub-Saharan Africa

Middle East and North Africa

Latin America and

Caribbean

South Asia

East Asia and Pacific

Eastern Europe and Central Asia reformed the most followed by Middle East and North Africa

The top 10 reformers in 2008/09 – 4 countries from Eastern Europe and Central Asia

Economy Starting a business

Dealing with construction

permitsEmploying

workersRegistering

property Getting credit

Protecting investors

Paying taxes

Trading across borders

Enforcing contracts

Closing a business

Rwanda Kyrgyz Republic

Macedonia FYR

Belarus United Arab Emirates

Moldova

Colombia

Tajikistan Egypt, Arab Rep.

Liberia              

Eastern Europe and Central Asia rankings on the ease of Doing Business 2008/09

TajikistanUzbekistan

UkraineRussian Federation

Bosnia and HerzegovinaKosovoCroatia

MoldovaSerbia

AlbaniaTurkeyPoland

MontenegroKazakhstan

BelarusRomaniaSloveniaBulgariaArmenia

Kyrgyz RepublicCyprus

AzerbaijanMacedonia, FYR

LatviaLithuania

EstoniaGeorgia

0 20 40 60 80 100 120 140 160 180

152150

142120

116113

10394

8882

7372

7163

5855

5344

4341

4038

3227

2624

11

71 reforms in 9 areas in Eastern Europe and Central Asia in 2008/09

Starting a business

Dealing with licenses

Paying taxes

Registering property

Getting credit

Trading across borders

Closing a business

Employing workers

Protecting investors

Enforcing contracts

13

1110

9 9

6 6

43

0

Starting a business is the most popular area of reform in the region

Number of reforms by indicator

Topic World’s top ranked 2008/09 Eastern Europe and Central Asia’s top ranked 2008/09

Starting a business New Zealand Georgia (5)Macedonia, FYR (6)

Dealing with construction permits Hong Kong, China Georgia (7)

Estonia (20)Employing workers Australia Georgia (9)

Belarus (32)Registering property Saudi Arabia Georgia (2)

Lithuania (4)Getting credit

MalaysiaBulgaria (4)Latvia (4) Serbia (4)

Protecting investors New Zealand Kyrgyz Republic (12)Albania (15)

Paying taxes Maldives Macedonia, FYR (26)Cyprus (37)

Trading across borders Singapore Estonia (3)Cyprus (15)

Enforcing contracts Luxembourg Belarus (12)Latvia (15)

Closing a business Japan Cyprus (21)Kosovo (28)

I checked the top ten in every indicator and we just asked them “What did you do”? - Dr Mahmoud Mohieldin, Egypt’s Minister of Investment

Top 10 by Indicator

Eastern Europe and Central Asia – top reformer in Closing a business

Eastern Europe and Central Asia lead the way in Getting credit reforms with 9 reforms in 2008/09

Improvements in the protecting investors indicator in Eastern Europe and Central Asia

Online tax filing is now possible in the majority of countries in Eastern Europe and Central Asia

Moldova’s performance stands out in Registering property and Enforcing contracts

Ease of Do-ing Busi-

ness

Starting a business

Dealing with licenses

Employing workers

Registering property

Getting credit

Protecting investors

Paying taxes

Trading across borders

Enforcing contracts

Closing a business

72 68

119

91

6351

69

105

93

59

8594 77

161

141

17

87

109101

140

22

90

Moldova DB10 Europe and Central Asia DB10

Highest 1

Lowest 183

Moldova eased the tax burden of companies by reducing the total tax rate

Series1DB10 DB09

31

42

Series1

48

52

Series1

234

Total tax rate (% of profits)

Payments (number per year) Time (hours per year)

Moldova has eased the burden of taxes on business reducing the social security taxes as paid by the employer.

228

Moldova made Starting a business quicker by 5 days

1 2 3 4 5 6 7 8 90

3

6

9

12

15

Procedures

2008

2009

5 days less

Eliminated 1 procedure

Moldova eased the business start up process by implementing an expedited company registration service.

Tim

e (d

ays)

Completed reforms inspired and informed by Doing Business

2004 2005 2006 2007 2008 20090

50

100

150

200

250

300270 completed reforms were inspired by Doing Business

270

Thank you. For more information:www.doingbusiness.org