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2011 Annual Review FIAS: The Facility for Investment Climate Advisory Services (Pre-print version as of November 7, 2011) FIAS 2011 Annual Review Table of Contents I. FIAS Results at a Glance ........................................................................................................................ 2 II. Message from the Director ................................................................................................................... 8 III. FY11 Results and Reforms............................................................................................................... 10 IV. Delivering Results, Reforms and Impact: FY08–11 Strategy Cycle Highlights................................ 22 V. Operational Highlights ........................................................................................................................ 26 VI. Knowledge Management, Learning and Communications ............................................................. 40 VII. Financial Results and Resource Use ................................................................................................ 46 VIII. ANNEXES ......................................................................................................................................... 51 Annex 1: Reforms and Results Supported by FIAS in FY11 (see attachment) ........................................ 51 Annex 2: Other Results Supported by FIAS in FY 11 (see attachment) ................................................... 51 Annex 3: Active and Closed Projects (see attachment) .......................................................................... 51 Annex 4: Abbreviations ........................................................................................................................... 52 1 I. FIAS Results at a Glance FIAS Results by Region A majority of results (39 percent) occurred in Sub-Saharan Africa (50), followed by Europe and Central Asia (38), Latin America and the Caribbean (28), Middle East and North Africa (11), and East Asia and Pacific (1). 2 FIAS Reforms by Region This year FIAS contributed to 41 reforms, of which 32 are reported in Doing Business 2012 and 4 in Doing Business 2011. In addition, FIAS support led to 5 reforms in areas not covered by the Doing Business report. (See Annex 1 for a detailed breakdown of reforms by country.) 3 FY11 Project Implementation Expenditures Sub-Saharan Africa accounted for the largest share of project expenditures (38 percent) and 52 percent of client-facing project expenditures. Focus on Priority Client Groups: IDA 63% Sub-Saharan Africa 52% Fragile and Conflict-Affected States 28% 4 FIAS Results by Region and Country in FY11 (*IDA Country, ** IDA and Fragile and Conflict- Affected Countries) Business licensing and regulatory governance Dealing with construction permits Investment policy and promotion Special economic zones Public private dialogue Registering property Protecting investors Protecting Investors Enforcing contracts Starting a business Closing a business Business taxation Access to finance Trade logistics Total Results Region Country East Asia and Pacific China 1 1 Latin America and the Caribbean Total 1 1 Europe and Central Asia Hungary 4 1 5 Kazakhstan 1 3 4 Macedonia, FYR 3 3 6 Moldova* 1 1 1 1 4 Montenegro 1 3 3 1 3 11 Romania 1 1 Serbia 4 4 Tajikistan** 3 3 Latin America and the Caribbean Total 5 7 11 1 2 1 10 1 38 Brazil Latin America and the Caribbean 12 12 Colombia 1 1 5 7 Colombia 1 1 Mexico 1 2 3 Paraguay 2 2 Peru 1 1 1 3 Latin America and the Caribbean Total 1 1 4 1 12 1 1 2 5 28 Middle East and North Africa Jordan 1 1 Morocco 3 2 5 Syria, Arab Republic 1 1 United Arab Emirates 3 3 Yemen, Republic of* 1 1 Latin America and the Caribbean Total 3 1 7 11 Sub-Saharan Africa Africa Region (OHADA)* 1 1 2 Benin* 1 3 4 Burkina Faso* 3 3 Burundi** 1 1 1 3 Central African Republic** 1 3 4 Cote d'Ivoire** 1 1 Liberia** 1 1 8 2 12 Madagascar* 2 2 Mali* 2 4 3 9 Rwanda* 1 1 2 Senegal* 1 1 Sierra Leone** 2 1 1 1 2 7 Latin America and the Caribbean Total 1 4 2 5 3 1 8 3 1 13 8 1 50 Total Results 2 5 5 9 23 5 14 3 8 5 2 32 14 1 128 5 FIAS Reforms by Region and Country in FY11 (*IDA Country, ** IDA and Fragile and Conflict- Affected Countries) DOING BUSINESS TOPICS NON-DOING BUSINESS TOPICS Business operations (incl. general licenses) Total reforms non-Doing Business topics Total reforms Doing Business topics Alternative dispute resolution Special Economic zones Public private dialogue Construction permits Registering property Resolving insolvency Protecting investors Enforcing contracts Starting a business Investment policy Business taxation Access to finance Total IC Reforms Trade logistics Industry Region Country Europe a nd Centra l As i a Hunga ry √† 1 0 1 Ka za khs ta n √ 1 0 1 Ma cedoni a , FYR √ √ 2 0 2 Mol dova * √ √ 2 0 2 Montenegro √ √ 2 0 2 Roma ni a √ 1 0 1 Serbi a 0 √ 1 1 Ta ji ki s ta n** √ 1 0 1 EUROPE AND CENTRAL EUROPE TOTAL 10 1 11 La ti n Ameri ca a nd the Col ombi a √ 0 1 Ca ri bbea n 1 Mexi co √ √ 2 0 2 Pa ra gua y √ 1 0 1 Peru √ √ √ 3 0 3 LATIN AMERICA AND THE CARIBBEAN TOTAL 7 0 7 Mi ddl e Ea s t a nd North Jorda n √ 0 1 Afri ca 1 Morocco √ 1 0 1 Syri a , Ara b Republ i c √ 1 0 1 Uni ted Ara b Emi ra tes √ 1 0 1 Yemen, Republ i c of** 0 √ 1 1 MIDDLE EAST AND NORTH AFRICA TOTAL 4 1 5 Sub-Sa ha ra n Afri ca Africa region* √ √ 2 0 2 Beni n* √ 1 0 1 Burundi ** √ √ 2 0 2 Centra l Afri ca n Republ i c** √ √ 2 0 2 Cote d'Ivoi re** √ 1 0 1 Li beri a ** √ 1 √ √ 2 3 Ma da ga s ca r* √† 1 0 1 Ma l i * √ 1 0 1 Rwa nda * 0 √ 1 1 Si erra Leone** √ √† √ √† 4 0 4 SUB-SAHARAN AFRICA TOTAL 15 3 18 Grand Total (Doing Business +non Doing Business) 2 2 4 7 2 3 2 13 1 36 5 41 Reforms captured by the Doing Business 2012 report 2 1 4 5 2 3 1 13 1 32 N/A 0 Legend: † Thi s reform i s recogni zed retroa cti vel y: i t wa s va l i da ted by Doi ng Bus i nes s 2011, but wa s not reported a s a res ul t i n FY10. 6 FY11 Funding and Expenditures FY11 CONTRIBUTIONS In US$ thousands World Bank Group Contributions (Core Funding) 8,300 World Bank Group Contributions (Project-Specific/Other 4,482 Contributions) Donor Contributions (Core) 4,552 Donor Contributions (Programmatic) 7,413 Donor Contributions (Project-Specific) 8,267 Client Contributions 283 TOTAL CONTRIBUTIONS 33,296 Less Trust Fund Administrative Fees 1,212 TOTAL (NET) CONTRIBUTIONS 32,084 FY11 EXPENDITURES In US$ thousands Staff Costs (incl. consultants) 21,229 Operational Travel Costs 5,678 Indirect Costs (incl. office and operating) 3,366 TOTAL EXPENDITURES 30,273 7 II. Message from the Director I am pleased to present the FIAS 2011 Annual Review, which reports FIAS-supported results for fiscal year 2011 and highlights cumulative results for the 2008–11 FIAS strategy cycle. I am grateful for the steadfast commitment of our donors and partners that has enabled a focused response to the sustained demand for investment climate work, particularly in view of the difficult global context. Your financial and operational support made possible the successful implementation of the 2008–11 FIAS strategy, as illustrated by more than 600 legal, regulatory, policy, and other improvements enacted with FIAS support by client governments, and by the positive independent evaluation released in February 2011. In fiscal year 2011, FIAS-funded activities supported 128 investment climate results achieved by our clients in 32 countries, with 45 percent achieved in IDA countries and 39 percent in Sub-Saharan Africa. These results contributed to 41 broader reforms. Over the entire 2008–11 strategy cycle, FIAS supported a total of 641 investment climate results in 82 countries, far exceeding the target of 400 set for the four-year strategy cycle. Individually, these results and reforms translate into business environments that support more efficient, productive operations for businesses and investors. In this past year we have developed an initial impact measurement framework that will allow us to capture how investment climate reforms contribute to the creation of new firms, investment, private sector savings, and jobs, among other economic variables. It is also helping us better allocate resources and manage projects to maximize their impact. The framework will be further refined and rolled out more broadly in the coming years. Recent examples help illustrate the wider impact of our work: A FIAS-funded tax simplification project in Sierra Leone resulted in a 40 percent increase in the number of business tax returns filed and a 44 percent increase in tax collection. As a result of reforms in several South East European countries, some supported by FIAS since 2008, 740 national laws and business regulations have been cut and simplified, yielding annual cost savings to the private sector of more than $260 million. In Ghana, FIAS funding supported reform of the country's movable collateral framework, resulting in more than 20,000 loans for $800 million backed by movable assets registered by banks and other institutions in the new collateral registry created in March 2010. FIAS-supported activities to generate investment in Haiti are expected to bring an estimated 1,150 jobs through two new investments totaling $6 million and a $4 million expansion project from an existing garment manufacturer. We continue to provide strong operational support to client governments, as detailed throughout this Annual Review. Four investment climate projects—in Bangladesh, South Sudan, Southeast Europe, and in Africa with the Organisation pour l'Harmonisation en Afrique du Droit des Affaires (OHADA)— received the coveted IFC 2011 Corporate Award. Selected from 136 submissions, the winning projects were recognized as strong examples of our focus on delivering development impact, work in IDA 8 countries, responsiveness, client relationship management, partnership building, efficiency, innovation, commitment to knowledge sharing, and teamwork. FIAS-funded projects that received IFC or World Bank awards are highlighted on p. [17]. During the past year we worked with our partners and other stakeholders on the preparation of the FIAS FY12–16 Strategy, titled "Managing for Impact," which was adopted by IFC's Board of Directors on May 3, 2011, and we began laying the groundwork for its implementation. We organized our advisory offering around three targeted objectives: fostering enterprise creation and growth, facilitating international trade and investment, and unlocking sustainable investments in key industries. Working closely with colleagues in the World Bank's Financial and Private Sector Development department, we helped design and establish the new Investment Climate Global Practice to connect more effectively with our Bank regional colleagues. A new Web site www.wbginvestmentclimate.org was launched to share information and showcase FIAS- supported investment climate work to a broad audience of donors, clients, partners, and other stakeholders. The Web portal also showcases the broad range of our knowledge management products as well as multimedia clips, videos, and slideshows of our project work. As we embark on the FIAS FY12–16 strategy cycle, we stand ready to support countries seeking help in creating a more open and dynamic environment for the private sector. Much remains to be accomplished in many parts of the world. Unexpected, urgent priorities will arise: who could have imagined the calls for sweeping reform across the Middle East and North Africa that have highlighted the need for strong institutions and better legal frameworks for businesses? With the help of our partners, FIAS is well-equipped to respond to these challenges. I look forward to continued collaboration and, as always, welcome your feedback and insights. 9 III. FY11 Results and Reforms 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 provision of investment climate advisory assistance to clients around the globe through the Investment Climate Business Line (part of IFC advisory services) and the World Bank's Financial and Private Sector Vice Presidency (FPD). The Investment Climate Department (CIC) implements the FIAS program under the joint oversight of the International Finance Corporation (IFC), the Multilateral Guarantee Agency (MIGA), and the World Bank (IBRD). 10 FIAS in the World Bank Group Institutional Structure Continued Focus on Results During FY11, the final year of the FY08–11 strategy cycle, FIAS-funded activities supported the achievement of 128 investment climate results1 in 32 countries, and via its role in product incubation 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. 11 and development supported programs in another 13 countries. This year's results compare with 173 in FY10, 2272 in FY09, and 108 in FY08. These results indicate that countries continue to recognize the need for investment climate reform, implementing policy-level reforms to help them in the face of a global recession. (Summaries of each of the results achieved in FY11, grouped by country, are presented in Annex 1.) There were fewer results recorded in FY11 than in FY10, mainly due to: Tightening of management control on results tracking and counting, in particular limiting the count of closely related measures. Deepening of reform efforts, with more emphasis on longer term interventions that may improve impact but yield fewer shorter term results. The shift of part of FIAS' project portfolio to IFC regional investment climate teams, including the whole FIAS portfolio (eight projects) in East Asia and Pacific. An increased focus at the global level on strengthening product development and knowledge sharing. In FY11, 27 projects, or 42 percent of the FIAS portfolio, were "global" projects (up from 31 percent in FY10). For example, the Global Investment Promotion Benchmarking (GIPB) and Investing Across Borders (IAB) projects do not contribute directly to the result and reform counts. Closure of several large country programs in FY11, which had contributed significantly to the result and reform counts in previous years. Investment climate programs in Liberia, Sudan, South Sudan, and Sierra Leone were completed in FY11. Among the total recorded results, (39 percent) occurred in Sub-Saharan Africa, followed by Europe and Central Asia (30 percent), Latin America and the Caribbean (22 percent), Middle East and North Africa (8 percent), and East Asia and the Pacific (1 percent). FY11 results were concentrated in the following areas: starting a business (32), dealing with construction permits (23), investment policy and promotion (14), trade logistics (14), public-private dialogue (8), closing a business (9), business operations, business taxation, and registering property (5). Of the 128 results reported for FIAS-supported projects this year, 12 were specifically achieved working with subnational governments. In FY11, the 128 results achieved by FIAS-supported projects contributed to 41 reforms. Of these 41 reforms, 36 were captured by the Doing Business 2012 report. Five reforms are in topic areas not covered by Doing Business, and they have been captured by the aggregation methodology (see Annex 1 for detailed information and country breakdown). FIAS supported 7 of the 12 countries recognized in Doing Business 2012 for the most improved ease of doing business across three or more areas of regulation. While FIAS core funding is increasingly focused on product development and knowledge generation and sharing, the global product teams in the Investment Climate Department (which hosts FIAS) continue to 2 The FY09 result total is higher than reported in the 2009 Annual Report (224). Three results associated with alternative dispute resolution were added to the total. 12 provide strong technical assistance to programs implemented by IFC and World Bank departments that do not receive FIAS funding. Thus, the outcomes of these programs are not captured in FIAS' results. For example, Investment Climate technical assistance has supported programs in South Asia [such as the Bangladesh Investment Climate Facility (BICF)] in East Asia and Pacific, and in Europe and Central Asia. FIAS, through BICF, provided indirect support to the government of Bangladesh in major legislative reforms related to economic zones, including improvements to women's working conditions in these zones (see box, p. [35]). Moldova Creates More Business-Friendly Economy Ranked 2nd in Doing Business 2012 of 12 with most-improved business regulation The government of Moldova is showing rapid progress in improving the country's investment climate, ranking 81st of 183 economies measured in Doing Business 2012 on ease of doing business—an improvement of 18 places to its ranking in the 2011 report. Since 2010, a FIAS-supported program has helped Moldova remove or reduce regulatory barriers to business operation and growth. Strengthening the business environment is especially important to Moldova as one of the poorest and most vulnerable countries in the Eastern Europe and Central Asia region. Moldova's income per capita in 2011 was $1,590. "The reforms signal the government's drive for developing a healthy business environment and desire to ease the regulatory burden for small and medium-sized enterprises," says Nicolae Cuconescu, member of the Timpul Businessmen Association of Moldova. In addition to improving the business environment of Moldova, these reforms offer an effective mechanism to mitigate the ongoing global financial and economic crisis that poses a negative impact on investment and growth in the country. Results Moldova's impressive reform path is largely a result of new legislation, designed and introduced with support from the FIAS-funded project. The new legislation makes it easier for entrepreneurs to start a business and obtain construction permits. Several laws were passed to increase the efficiency of the court system, which resulted in decreasing the time to enforce a contract from 365 to 352 days. Amendments to the Company Law were approved in FY11, eliminating the minimal capital requirement to register a business. Today it takes 88 days to open a business in Moldova—8 days less than in 2011. The new law also creates the basis for a one-stop shop, planned to become operational in FY12. In July 2010, a new law streamlining the construction permitting process was approved. The law establishes clear procedures for the construction or demolition of buildings and provides a complete list of documents that authorize the execution of construction works. To protect investors, amendments to the Law on Joint-Stock Companies were adopted in April 2011, improving disclosure obligations for transactions involving conflicts of interest. Delivering Impact in Africa Sub-Saharan Africa continues to be a primary focus of FIAS activities (examples of FIAS-supported country-specific and regional activities can be found throughout this report). In FY11, FIAS-funded 13 projects were operational in 16 countries in the region [plus the member countries of the Organization for the Harmonization of Business Law in Africa and of the East African Community]. In FY11, FIAS support contributed to firm and job creation in Africa, as reported in the external evaluations of the Burkina Faso, Liberia, Rwanda, and Sierra Leone country programs (see box, p. [23]), and FIAS- funded activities supported legal reforms critical to businesses in 16 African countries through the OHADA program (see box, p. [14]). Breakthrough Reforms to Business and Lending Regulations in 16 African States Recent changes to business laws in West Africa pave the way for a more entrepreneurial future. The latest sweeping reforms were enacted by the Organization for the Harmonization of Business Law in Africa, a unique organization in Africa that enacts common business laws for all 16 member countries (a 17th member, the Democratic Republic of Congo, is expected to join OHADA soon). As a result of FIAS-funded advisory support, the countries unanimously approved legal changes in December 2010 that will likely make an estimated $250 million in credit available to small businesses. The legislation is expected to encourage thousands of entrepreneurs to join the formal economy rather than operate off the books. "Small and medium-sized enterprises are the heart of the African economy," said M. Biossey Kokou Tozoun, Togo's Minister of Justice. "It is therefore essential that small entrepreneurs can turn to banks for loans and that everything be done to encourage them to formalize." Under the new rules, banks may now accept a much wider range of assets as collateral, rather than only real estate (most people do not have formal title to real estate). Businesses may more easily pledge all kinds of present and future movable goods, including accounts receivable, cash flow, or equipment. Banks will also be able to better manage and limit risk, and lend in a more secure environment. One of the major breakthroughs of the legal reform is the creation of a new business category— entreprenant —that will simplify procedures for micro- and small business owners who cannot afford to hire lawyers to register their businesses. It is expected that women entrepreneurs will be most interested in this new status, because it will ease their access to formal credit. OHADA oversees nine business laws (general commercial, secure transactions, company law, arbitration, debt recovery, bankruptcy, accounting, transportation of goods by road, and cooperatives). Any change in these laws requires unanimous agreement among all countries and applies throughout the entire bloc. The World Bank Group began supporting legal reform effort four years ago, with support from FIAS, France, and the Investment Climate Facility for Africa. Prioritizing Fragile and Conflict-Affected States In addition to the investment climate programs in Sierra Leone, Liberia, and Rwanda yielding strong results and impact (see box, p. [23]), FIAS support continued to be focused on activities in fragile and conflict-affected states. In FY11 FIAS supported results in 30 conflict-affected countries. 14 FIAS-supported Investment Climate Department teams, in collaboration with IFC and World Bank regional teams, started work in a number of countries which have recently come out of conflict, such as Guinea and the Central African Republic. A key feature of this work, as exemplified in Guinea, is FIAS' contribution to the overall Bank Group investment climate work in close collaboration with the World Bank team. FIAS-funded support to the newly created independent state of South Sudan helped the nascent government enact institutional reforms, including setting up a legal framework for business entry, operations, and exit, developing an Investment Promotion Act, removing administrative barriers to trade, and reestablishing an operational business registry (see box, p. [30]). In the Republic of Yemen, another fragile and conflict-affected country, FIAS-funded activities supported the passage of a new income tax law, reducing the general tax rate from 35 to 20 percent and creating a simplified filing process for micro, small, and medium-size taxpayers. These measures are expected to foster participation in the formal economy and increase tax revenues by encouraging compliance. The project effectively streamlined six procedures, which is expected to reduce corruption and result in an estimated $3.1 million in direct cost savings over the next three years. Support for business entry reforms in Timor-Leste helped reduce the time a new business needs to register from 65 to 19 days.3 The government was able to tap into the reform experiences of other countries through regional peer-to-peer learning events and study tours. FIAS support also helped in building the capacity of the Better Business Initiative, a forum for public-private dialogue, by establishing a chamber of commerce and industry that unifies operational policy and procedures for 17 business associations in one body. The forum has provided input into the national procurement law to allow for outsourcing of projects over $1 million and streamlined customs clearance procedures approved by the Council of Ministers that will reduce gridlock at the port and provide clear guidelines for importers. In addition, the project has improved regulations for microfinance institutions, which will strengthen their ability to develop, while protecting consumers from bad practices such as pyramid schemes and other abuses. FIAS-funded activities in fragile and conflict-affected states are implemented in close coordination with broader Bank Group initiatives to support communities coming out of conflict. One key partner is IFC's Conflict Affected States in Africa (CASA) initiative, which has supported work in a number of African countries. CASA programs seek to understand the causes of the conflict and tailor programs that contribute to peace and stability. Investment climate work usually comprises much of the early engagement in these states. One of the risks of work in fragile and conflict-affected countries is that it is more difficult to achieve results as quickly and effectively as in other settings. Of the three projects this fiscal year that did not receive high development effectiveness rating scores (see p. [16]), all were in countries where significant political upheaval halted project activities and progress. Building an Entrepreneurial Future in Post-Conflict Central African Republic With FIAS support, the government of the Central African Republic is taking steps to improve the country's overall conditions for private sector growth, including measures that make it easier and less expensive for entrepreneurs to set up, register, and operate their businesses. 3 Data from project report. 15 The program, which began in 2007, focused initially on improving the dialogue between public officials and the business community. The Public-Private Dialogue Forum [Cadre Permanent de Concertation Etat / Secteur Privé (CPC)], a consultative forum created by the government in late 2006, was the main driver of this approach. The forum gives entrepreneurs a voice in policymaking and helps reduce any tensions that might exist between the two interest groups. Another important milestone in the country's path to reform was the establishment of the Joint Committee for the Improvement of the Business Environment (Comité mixte chargé de l'amélioration de l'environnement des affaires en République Centrafricaine) by a decree signed in April 2010. The Joint Committee is a decision-making body of public and private sector representatives that complements the CPC and is chaired by the prime minister. It has a clear mandate to improve the business environment and full authority to approve CPC-developed reform proposals. With FIAS support, in FY11 the Committee has offered policy recommendations and proposed key legislation to further the reform agenda. The Central African Republic, which ranks 182nd of 183 economies on ease of doing business in the Doing Business 2012 report, is starting to show momentum in areas tracked by the Doing Business indicators for starting a business and registering property. In December 2010, the government amended provisions on the business registration tax in the national budget law and also adopted a new financial law. These measures cut in half the business registration and property transfer taxes and eliminated several obsolete, ineffective, and costly requirements. Development Effectiveness, Client Satisfaction, and Internal Recognition Remain High IFC measures development effectiveness of projects by looking at five areas: strategic relevance, outputs, outcomes and impacts, and efficiency, giving greater weight to outcomes and impact. Development effectiveness ratings for client-facing projects implemented by the Investment Climate Department and funded by CIC/ FIAS were at 73 percent for FY11. This significantly exceeds the rating for the overall Investment Climate Business Line (63 percent) and is in line with IFC Advisory Services score of 69 percent. 16 Of the 10 projects included in the analysis, 7 were rated positively by IFC's Development Impact Department; the 3 projects that received lower ratings were in countries (Madagascar, Pakistan, Nepal) where project progress was halted due to external, political factors (see Annex 3 for development effectiveness ratings of projects closed in FY11). Client satisfaction for investment climate projects was also rated high with 89 percent of clients reporting their satisfaction with services being delivered.4 The work FIAS supports to implement improvements and reforms in the most difficult of environments has been recognized at the corporate level within the Bank Group. The investment climate programs in South Sudan (see box, p. [30]), Southeast Europe (see box, p. [18]), with OHADA (see box, p. [14]), as well as the business registration program in Bangladesh each received the 2011 IFC Corporate Award. The Rwanda investment climate program also received a team award from the World Bank Africa Vice Presidency for its efforts in promoting agribusiness. 4 This figure relates to the overall IFC Investment Climate Business Line rather than FIAS-funded projects alone. 17 Unleashing Business Opportunities in Southeast Europe Supported by FIAS and donor partners Austria, Switzerland, and the United States, the Investment Climate Program in South Eastern Europe is helping accelerate regional governments' progress toward accession to the European Union. The program was recognized with the 2011 IFC Corporate Award for its excellence in improving the region's regulatory and judicial environment. Since the program's start in 2008, about 740 national laws and regulations have been cut and simplified, with over 2,280 recommendations adopted at the local level. To date, these reforms have yielded an estimated annual private sector cost savings of $264.7 million. Alternative dispute resolution (ADR) projects have resulted in releasing $120 million in tied-up funds through mediation, and this impact continues to build through self-sustaining mediation centers and partners. In addition to Moldova (see box, p. [13]), the former Yugoslav Republic of Macedonia was recognized among the 12 economies with the most-improved business regulation in the Doing Business 2012 report. Macedonia recorded reforms supported by FIAS-funded activities in the areas of dealing with construction permits and closing a business. The government amended two laws related to construction permitting, eliminating the preliminary design requirement, reducing municipal fees by 95 percent, and setting shorter deadlines for issuing permits. These improvements cut two procedures and 22 days from the process. In the area of closing a business, the Company Law was amended to set a 15-day limit for liquidators to announce liquidation. The Bankruptcy Law was amended to require that bankruptcy trustees use the e-bankruptcy system. The Central Registry further decreased the fee for voluntary liquidation. The Entrepreneurship Snapshots project, which included several members of the FIAS-funded team, won the 2011 Team Award from the World Bank's Development Economics Vice Presidency. The Entrepreneurship Snapshots aims to understand the dynamics of private enterprises around the world through the collection of data on business creation at the international level that can be comparable across heterogeneous legal, economic, and political systems. The data provides a picture of the impact of regulatory, political, and macroeconomic institutional changes on entrepreneurship and an understanding of what drives entrepreneurs from the informal to the formal sector. 18 Progress on Approaches to Measure Impact FIAS, in collaboration with other partners, continues to support reforms that are likely to have a positive effect on the creation of new firms, investment, and job creation. In 2011, reviews of existing literature continued to identify tangible measures of impact associated with investment climate reform (see box, p. 19). The Impact of Investment Climate Reform: Evidence from the Literature Reviews Three literature reviews were completed in the areas of business entry, alternative dispute resolution, and insolvency reform in order to gather evidence about the impact of FIAS-supported work. The main findings of the literature reviews include: Business Entry i. More firms enter the market when registration procedures and costs are cut. The average entry rate is 5 percent for selected country studies and 10.5 percent for cross- country studies. ii. A large percentage of these new firms survive and grow. Studies show that the survival rate two years after entry ranges from 61–87 percent and 27–66 percent seven years after entry. iii. New firms increase competition, forcing incumbents to become more efficient or to exit the market, boosting overall productivity and investment. Cross-country studies show that a 10-day reduction in the time to start a business is associated with a 0.3 percentage point increase in the investment rate and a 0.36 percent increase in the gross domestic product growth rate. 19 ADR i. ADR reforms reduce the cost of dispute resolution relative to litigation. Estimates of the total costs incurred by firms that use an ADR process range from 3 to 50 percent of the costs incurred by firms that go through a court litigation process. ii. ADR can also do better than traditional litigation in reducing the time to resolve a dispute. Time savings range from one month to about a year. Insolvency i. Reforms that improve insolvency regimes increase the probability of timely repayments, reduce the cost of debt and interest rates, and increase the aggregate level of credit. ii. Insolvency reforms also help reduce the rate of failure among small and medium-size enterprises, particularly the liquidation of stronger firms. iii. Evidence from high-income countries suggests that reforms to individual bankruptcy laws can increase household credit, which might also benefit entrepreneurs and non- limited-liability firms. iii. Total costs incurred by firms that use an ADR process range from 3 to 50 percent of the costs incurred by firms that go through a court litigation process. iv. ADR can also do better than traditional litigation in reducing the time to resolve a dispute. Time savings range from one month to about a year. Models that estimate the impact of reforms on business entry, trade logistics, business taxation, insolvency, ADR, construction permits, and industry are currently being developed. These models will be used to forecast the impacts of new FIAS-funded projects and provide information to optimize the allocation of resources. Impact projections for the new FIAS FY12–FY18 strategy include: Private sector savings of over $600 million, which includes $350 million in compliance cost savings and $250 million in savings from streamlined trade logistics services. Three billion dollars in investment generation— $1 billion from foreign direct investment (FDI) facilitation in priority sectors and $2 billion from new firms created as a result of business entry reforms. Increase in trade flows by $2.5 billion following trade logistics reforms. Increased returns to stakeholders by $1.5 billion resulting from 11,000 firms continuing as going concerns after debt resolution reforms. A 10 percent increase in the number of enterprises complying with tax requirements within three years of FIAS-supported tax reforms. Two impact evaluations funded by FIAS were begun in collaboration with other Bank Group departments to assess, in Georgia, work done to simplify the tax regime for small and medium enterprises (SMEs), and in Romania, the impact of the introduction of out-of-court resolution of disputes. These evaluations are intended to analyze the impact of specific investment climate advisory programs. The compliance cost savings methodology has gained traction in monitoring impact, especially in the area of business taxation. In developing and transitional countries, businesses—especially small ones— often face heavy costs in the process of preparing, filing, and paying taxes in addition to the burden of 20 tax payments. Measuring compliance costs through rigid data collection can provide useful information for the design of reforms and to reduce costs and risks for small businesses. Workshops introducing the methodology to measure compliance costs were organized in six different regions in November and December 2010. Forty-one projects from 31 countries in all regions are now effectively measuring the direct compliance cost savings indicator for investment climate projects. In FY11, 33 projects reported targets of $285 million in annual direct cost savings, and 14 projects reported actual cost savings of $70 million. These projects had total expenses of $26 million, resulting in a "bang for the buck" of 2.7 dollars of impact for each dollar spent. 21 IV. Delivering Results, Reforms and Impact: FY08–11 Strategy Cycle Highlights In a time of global economic and financial crisis as witnessed during the FY08–11 strategy cycle, FIAS has achieved the objectives set out in the FY08–11 strategy. This was essentially the conclusion of the Phase I report of the independent external CIC/FIAS evaluation, conducted with the oversight of IFC's Development Impact Department.5 "Investment climate results"—significant improvements to a country's investment climate, as defined in the FIAS monitoring and evaluation framework—were used as the primary performance indicator during the FY08–11 cycle. During the four years of the strategy cycle, FIAS-funded projects supported the implementation of more than 600 investment climate results, versus a cycle target of 400. A majority (60 percent) of these results were achieved in countries classified as IDA6 or post-conflict, and in frontier regions of middle-income countries. Globally, FIAS contributed to 183 Doing Business reforms (as documented by the Doing Business reports) over the FY08–11 cycle. Forty-four of the Doing Business reforms were in IDA or post-conflict countries, with Sub-Saharan Africa accounting for 40 percent of the total. An extensive review of the literature on the impact of reforms suggests that investment climate reforms of the type supported by FIAS can have substantial impacts on private sector investment, trade, business formation, and growth. This was confirmed by an independent evaluation that reviewed the impact of FIAS-funded investment climate reform projects in Burkina Faso, Liberia, Rwanda, and Sierra Leone. The country studies suggest that these projects resulted in clear benefits to the private sector, including significant private sector cost savings, creation of new businesses, investments and jobs. Other benefits—an expanded tax base, increased tax revenue, and higher trade flows— were not quantified but are believed to be positive (see box, p. [23]).7 5 Nexus Associates. 2011. Independent Evaluation of CIC/FIAS 2008–2011 Strategy and Program, Phase I: Final Report. Phase 1 of the evaluation covers FY08–10, the initial three years of the funding cycle. A supplemental report, to be prepared in Fall 2011, will expand the evaluation's coverage to the fourth year of the cycle. 6 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. 7 Economisti Associati srl (Italy). 2011. Investment Climate in Africa Program, Four-Country Impact Assessment Comparative Report. https://www.wbginvestmentclimate.org/uploads/Comparative_Report_20110327.pdf 22 Supporting Development Impact in Four Fragile and Post-Conflict African Countries A recent independent evaluation of FIAS-funded investment climate programs in Burkina Faso, Liberia, Rwanda, and Sierra Leone reported tangible progress on measures of private sector impact within three years after the programs began. The four programs were undertaken in partnership with the African Development Bank, Austria, Denmark, France, Ireland, Italy, Japan, the Netherlands, Norway, and Sweden. The assessment, conducted by Economisti Associati, was commissioned by IFC to capture interim results of substantial programs in African countries facing considerable challenges to reform. The evaluators reported these aggregated results for the programs: $13.2 million in cost savings for businesses; 23,000 new businesses registered; $75–90 million invested; and 51,500 new jobs created. More than 70 reforms were implemented, making it easier and less costly for entrepreneurs to start up and operate as formal, registered businesses. "It is important to register your business because you are legally recognized, so you can bid on government tenders and get invited to business forums," says Rwema Mimable, co-owner of a small information technology business in Rwanda. Three of the programs are in countries recovering from civil war (Liberia, Rwanda, and Sierra Leone), and their infrastructure and some government institutions are in disrepair. Burkina Faso and Rwanda are landlocked and face inordinate costs for transporting goods. All four countries rely on small-scale farming as their main industry and are very poor by global standards, with gross national income per capita ranging from $550 per year in Burkina Faso to just $190 in Liberia. Each country program was designed to tackle areas most likely to have an early and positive impact on the regulatory environment governing business growth, investment, and employment opportunities, providing a foundation to address poverty and income security. 23 The programs introduced reforms in business registration, construction permits, real estate transactions, and trade logistics. They sought to reduce business owners' direct costs by eliminating or reducing fees, save staff time and labor costs by streamlining procedures, and improve cash flow through adjustments in the payment schedules of certain fees and taxes. For example, registering a business in Rwanda currently costs $25 (less than 5 percent of income per capita) or no charge if conducted online, and it requires just one day. Key Objectives of the FY08-11 Strategy Realized According to the FIAS evaluation, other key elements of the FY08–11 strategy were implemented as follows: • FIAS-funded projects moved beyond diagnostic assessments to deepen the Bank Group's core areas of investment climate expertise, met client needs through customized interventions, and focused on knowledge management and outreach. The FY08–11 strategy transformed FIAS' approach from standalone diagnostic assessments and ad-hoc interventions to reform implementation around core products. In line with this strategy, FIAS funding was used to strengthen technical expertise in 14 product areas, responding to evolving client demand. Projects supported by FIAS were larger and often incorporated multiple products (see box on Sierra Leone program, p. [24]). Moreover, FIAS resource use concentrated on 26 major country programs, complemented by shorter-term interventions (often along the Doing Business agenda) in more than 50 countries. Considerable funding was devoted to knowledge management efforts, resulting in a wide range of technical papers, practitioner guides, and toolkits, Investment Climate In Practice notes, and SmartLessons, as well as numerous deep-dive learning and peer-to-peer, knowledge-sharing events. • FIAS funding allowed the Bank Group to respond to increased demand from IDA countries and Sub- Saharan Africa. With successful fundraising, $89.5 million was spent on FIAS-related activities in FY08– 10, roughly 6 percent more than the amount originally contemplated in the strategy. • FIAS-funded projects met high levels of client satisfaction (between 88 and 92 percent annually); and planning and control systems related to FIAS activities were strengthened. CIC, the department managing FIAS, increased staffing levels in the field and transferred project management responsibility for most client-facing projects from headquarters to the field. IFC also strengthened planning and control and developed and implemented a robust system to track results and reforms. The overall recommendation of the FIAS evaluation in Phase I reads as follows: "FIAS has demonstrated its ability to develop new products, disseminate best practices, and help countries reform their investment climates. Most elements of the FY08–11 strategy have been implemented as planned, yielding over 400 results and more than 150 reforms over the initial three years of the strategy period. While the impact of reforms is difficult to quantify, the general literature and preliminary findings from studies of FIAS projects suggest that benefits may be substantial. Provided that it continues to strengthen its strategy and operations, the World Bank Group and donors should be prepared to support FIAS in the next strategy cycle." Sierra Leone Acts on Bold Agenda to Create Firms and Jobs Places among Most-Improved Countries for Business Regulation in Doing Business 2012 Supported by FIAS and the United Kingdom's Department for International Development (DfID) during 24 the current strategy cycle, the Removing Administrative Barriers to Investment (RABI) program in Sierra Leone helped the government develop conditions for private sector growth. Sierra Leone has implemented bold reforms and is recognized in the Doing Business 2012 report as one of twelve economies with the most improved ease of doing business across several indicators. The country improved its ranking from 150th in Doing Business 2011 to 141st in the 2012 report. The impacts of the RABI program, which began in 2004, have been significant, encouraging job creation and laying a foundation for the country's economic growth. An external evaluation of RABI completed in FY11 estimated that the program had resulted in creating nearly 6,000 new businesses and 15,000 jobs. The evaluation also cited an increase in the tax base, with 330–550 new taxpayer registrations leading to incremental revenues from corporate and self-employment taxes of $1.4–2.1 million (3.5 percent increase in income tax revenues). This finding is supported by the Sierra Leone Ministry of Finance's reported increase in the tax to gross domestic product ratio of 13 percent (from 10 percent in 2008). "Under the RABI program, we have seen great progress on the ease of doing business in this country," says Minister of Trade and Industry David Carew. Results FIAS-supported improvements are reflected in the areas of dealing with construction permits and registering property, among others. The government moved the construction permitting process from the Ministry of Lands to the Ministry of Works, which led to a 31-day reduction in the time required to issue location clearances and building permits. The total time businesses need to obtain permits and utility connections was cut from 269 to 238 days. The government lifted the moratorium on land transfer, significantly improving the time it takes to transfer property. The time needed to register property was cut from 235 to 86 days. The Land Survey Act was amended, allowing for the digitization of land surveys and enabling a modern cadastre system in the medium term. Several improvements were implemented that make it easier for taxpayers to make payments. The tax and business registration offices are now linked together, allowing tax and business registration to be conducted at the same location. Taxpayers can also make their payments at any of eight major banks. FIAS funding also supported initial work on developing a Taxpayer Management Module for Tax Administration to improve compliance with tax filing. A fast-track commercial court became operational in May 2011, and it will be fully automated and have real-time transcription of the proceedings. 25 V. FY11 Operational Highlights In the last year of the FY08–11 strategy cycle, FIAS-funded projects continued to demonstrate results using established reform approaches on business regulation, tax, trade logistics, and investment generation. Progress was made in adapting these offerings to address key sectors, such as agribusiness, and high-priority issues, including tackling reform in conflict-affected countries and unlocking investments in sub-Saharan Africa. FIAS activities also continued to use technology and innovation as a means for sustainable growth and to help clients put in place regulatory frameworks encouraging models for green growth. FIAS-funded teams continued to work closely with other teams across the World Bank, MIGA, and IFC. New partnerships have been built and existing ones strengthened with external good practice institutions, and collaboration with donor partners has gone beyond funding to include learning and staff exchanges. A wealth of knowledge products and tools have been produced, including establishment of a new external investment climate Web site that has further consolidated the facility's presence as a leader in the investment climate arena, in terms of both research and practical, results- based implementation. Helping Clients Build Better Regulatory Frameworks FIAS funding continued to support the first-response technical assistance related to Doing Business which contributed to 23 reforms in 17 countries in conjunction with regional World Bank and IFC investment climate teams. Approximately a third of these reforms were in fragile and post-conflict countries, with 60 percent in IDA countries. Countries supported include Armenia, Burundi, the Central African Republic (see box, p. [16]), Moldova (box, p. [13]), Montenegro, and Sierra Leone (box, p. [24]. In FY11, FIAS funding supported the implementation of business regulation reforms in more than 20 countries. The merger of the business entry and business operation practices into one business regulation product allowed more efficient use of expertise to support a broad spectrum of reforms. Global experts were teamed with the Bank and IFC regional project teams on the ground to deliver targeted advisory services. In Serbia, 625 business procedures (of 5,900) were simplified or eliminated, resulting in annual aggregated cost savings of around $26 million to small businesses. FIAS support in South Sudan also led to solid results (see box, p. [30]). FIAS-supported activities helped Morocco improve its performance as measured by the Doing Business indicators, and the country was recognized in Doing Business 2012 as the most-improved economy in ease of doing business across several areas of regulation. Working very closely with the national reform coordination unit placed under the Ministry of General Economic Affairs and with Morocco's first public- private dialogue mechanism (the National Council for the Investment Climate), the team focused on four Doing Business topics: enforcing contracts, resolving insolvency, starting a business, and dealing with construction permits. As a result, a decree published in May 2011 considerably simplified business start- up procedures.8 The minimal capital requirement for starting a business was eliminated, cutting start-up costs by 42 percent. Half of the 6 procedures for starting a business were eliminated, and the company name search can now be handled online at the one-stop shop. In the area of construction permitting, the one-stop shop established in Casablanca at the end of 2005 became fully operational and widely used by entrepreneurs, who can obtain a permit in 15 days. 8 Due to the recent timing of the legislation, the improvements reflected in the decree were not acknowledged in the Doing Business 2012 report. 26 Investment climate projects aimed at improving business taxation systems in developing countries now span countries in every World Bank Group region. In FY11, FIAS supported tax interventions in Armenia, Bangladesh, Bosnia-Herzegovina, Burundi, Georgia, India (Bihar) the Kyrgyz Republic, the Lao People's Democratic Republic, Liberia, Mali, Rwanda, Sierra Leone (see box p. [24]), Tanzania, Uganda, Vietnam, the Republic of Yemen, and the East African Community (EAC). The tax team also provided advice to governments in Bulgaria, Dominica, Guinea-Bissau, Kenya, Mexico, Poland, and Tajikistan, through tax reform projects led by World Bank Group regional departments. A key FIAS-supported activity has been the development and launch of a new initiative to improve tax transparency. It has the objectives of promoting international cooperation in the global fight against tax evasion and improving developing countries' ability to administer and enforce their tax laws. This initiative addresses growing demand from developing countries and supports the G20 mandate that the World Bank Group, and other organizations, promote the link between tax and development and foster tax transparency in developing countries. In particular, the technical assistance focuses on helping countries to develop transfer pricing legislation, administrative procedures, audit capacity, and appropriate accounting rules and to ensure their legal and administrative frameworks meet international tax transparency standards. Regional assistance was provided in Latin America and the Caribbean, East Asia and Pacific, and Africa, and country-level assistance was provided following requests from Georgia, Ghana, Kenya, Thailand, Vietnam, and several economies in the Western Balkans. Strong partnerships have also been formed on this agenda with external and internal groups (see p. [38]). Tools for improving the frameworks for alternative dispute resolution (ADR), restructuring and insolvency, and secured transactions and collateral registries in client countries were further strengthened in FY11. At a time when many countries continue to face recession, these tools support reforms that reduce the time and cost of exit proceedings for firms and enhance the likelihood of viable businesses being rescued. A closer alignment of these products in FY12 is expected to leverage and scale up the expertise, experiences, and lessons learned from all three. In Montenegro, a FIAS-supported ADR and insolvency project created the legal framework and sustainable mediation centers to provide alternatives to slow court settlements and also amended the insolvency law to include a special provision stipulating the opportunity for mediation. This legislation has contributed to the release of funds through mediation, with the project's impact increasing every day through self-sustaining mediation centers and partners. Mediation proceedings can now be started (even before the ruling on initiating bankruptcy proceedings is passed), thus offering the possibility of preventive action during bankruptcy and envisioning mediation as an option during the bankruptcy litigation process. These reforms are expected to improve the country's business-rescue culture (roughly 96 percent of insolvency cases in Montenegro result in liquidation), improve the current low recovery rates, and reduce the overall cost to recover disputed claims. In FY11 new laws related to secured transactions were enacted in Lao PDR, Liberia, Moldova, and the Republic of Yemen. Laws were drafted in Ghana, Jordan, and Malawi. In Ghana, FIAS supported the reform of the country's movable collateral framework to encourage SME financing against valuable movable assets. Through a new law, the Borrowers and Lenders Act of 2008, Ghana set up a collateral registry at the Bank of Ghana—a temporary solution that is being upgraded into a Web-based electronic registry—and reported these early results: 27 Increased volume of financing for SMEs: More than 20,000 loans have been registered by banks and non-banking financial institutions in the collateral registry since its creation in March 2010. These loans account for more than $800 million in financing secured with movable property. Wider use of movable assets as collateral by businesses: Businesses and SMEs are now using a wider variety of collateral beyond real estate. Types of collateral include: inventory and accounts receivable (used in 32 percent of the loans); investment instruments such as shares, cash, bonds, and deposit accounts (19 percent); household assets (13 percent); motor vehicles (10 percent); real estate property (10 percent); and machinery, equipment, all enterprise assets, other (16 percent). Increased financing by banks and non-bank financial institutions taking movable property as collateral: Of 52 financial institutions, 33 institutions (17 banks, 13 non-bank financial institutions, 4 foreign-based banks, and 2 rural banks) have registered with the collateral registry and granted loans secured with movable property. However, a considerable number of the rural and community banks have not yet benefitted from the new infrastructure in place. Electronic collateral registries were also created in India, Sri Lanka, and Vietnam, and a Web-based collaborative secured transactions platform was launched to link secured transactions experts from around the world. The use of innovative information communications technology (ICT) solutions has been a key feature of the secured transactions and other business regulation work supported by FIAS. New technologies can improve the quality and accessibility of regulatory information; increase the reach, cost-effectiveness and transparency of government service delivery through online transactions; as well as enable businesses to participate in the digital economy via trade single windows and secured transaction registries. ICT can enhance, and even transform, the services and operations of government, as evidenced by the number of significant technology-related reforms worldwide documented by the Doing Business report. In the past year, FIAS has supported 14 client countries in implementing ICT- based applications to improve government-to-business service delivery, increase transparency, reduce the regulatory cost burden and opportunities for corruption, and improve management and regulatory oversight through information-sharing across government and process automation (see box, p. 29). Given the strong client demand for more sophisticated assistance with ICT applications, FIAS-supported projects are working to implement technically and financially sustainable technology solutions across different program areas, exploiting emerging technologies such as cloud computing, mobile phone platforms, and social media to enhance public service delivery and improve economic governance. 28 Helping Clients Leverage Technology to Realize and Sustain Investment Climate Reform Innovative uses of technology provide powerful tools to transform the way public services are delivered to citizens, and they can enhance transparency in government. FIAS-supported technical assistance to implement ICT is helping businesses in client countries to register and obtain licenses and permits online, which reduces costs and the time firm owners must spend to comply with registration requirements. Through an e-registry in Kenya, for example, entrepreneurs can now locate specific licensing requirements, costs, contact information, and application forms. This initiative is expected to help encourage businesses to formalize and promote greater regional economic integration by simplifying regulatory compliance and reducing opportunities for corruption. In Liberia, FIAS support enabled the launch of the Liberia Business Registry in April 2011. The registry brings together agencies involved in the registration process under a single roof, reducing the time to register a business from 99 days (as reported in Doing Business 2008) to 36 hours (as tracked by the registry Web site).* By fully automating the process of enterprise formalization, permitting online business registration and access to information services (including search and reservation of corporate names), the registry has seen an annual 75 percent increase in new business registrations. *These recent improvements are not yet reported in Doing Business. Improving Investment Policy and Enabling Cross-Border Trade FIAS-funded activities continued to enable efficient and effective trade logistics systems and services that allow for streamlined import and export of goods, as well as the creation of strong institutional capacity to serve private firms engaged in cross-border trade and investment. In FY11, this work was conducted in more than 18 countries, including 10 IDA and 4 conflict-affected countries. These projects focus on reducing non-tariff barriers and rationalizing trade logistics systems and services by streamlining border clearance processes, introducing risk management systems, and supporting automation in trade-related clearance services such as electronic payment. Improved automation in trade services supports better coordination among key technical agencies including customs, standards, veterinary, health, and transport agencies. In Colombia, FIAS-supported activities further improved the electronic system for filing documents as well as measures to manage risks associated with trade. Importers now electronically file the declaration of value, a key document for cargo entering the country. In FY11, the government passed legislation formalizing the automatic online connections between the single-window system and the agencies for health and agriculture and the Bureau of Standards. Customs established qualifications for customs brokers, freight forwarders, and warehouses, and they are required to assess their clients' risks by obtaining corporate, financial, and tax information through mandatory visits and inspections. Traders can electronically file import documents in advance of ship arrival, allowing Customs officials time to identify the companies, goods, and risks each shipment represents prior to its arrival. In other areas tracked by Doing Business, FIAS-supported projects helped Colombia implement reforms that cut business start-up costs and shortened the time to register property. The government also enacted a bill to reduce backlog in its courts, creating 30 municipal courts. Colombia was recognized in Doing Business 2012 as one of twelve economies with the most-improved business regulation, as 29 measured by the report, which ranks the country 42nd (of 183 economies) in overall ease of doing business. FIAS funding has continued to enable advisory support to client governments on developing investment policy, attracting new investment, and diversifying the portfolios of existing investors through reinvestment opportunities. These initiatives include the development of programs to attract and facilitate investment in competitive sectors, create greater numbers of new investment leads, and become more effective at translating needs into actual investment decisions. FY11 yielded results in seven countries including Brazil, China, Haiti, Liberia, Rwanda, South Sudan, and Ukraine. In FY11, 57 percent of clients of FIAS-supported investment generation work were IDA countries and 43 percent were fragile and conflict-affected states. In Brazil, investment was attracted to two frontier states, Para and Pernambuco, through a fully client- funded project that has linked the country's national and state investment promotion agencies to provide a more coherent framework of support for investors. Interventions to help improve investment generation practices (partnerships, systems, Web sites, outreach, facilitation, aftercare, and policy advocacy) have led investors to announce plans for 15 projects in Pernambuco and Para following FIAS- supported assistance. The team has also helped Apex-Brasil, the national agency, in developing investor- friendly strategies and a best-practice approach, resulting in eight announced investments since support began in May 2009. To date, $25.7 million in new investment has been secured and 765 jobs created as a result of this project (confirmed by direct interviews with investors). In Yinchuan, a poor western province in China, FIAS funding has supported the enactment of numerous investment climate reforms in recent years, including in FY11 the removal of some 96 mandatory investment approvals, a reduction in investment approval times from 202 to 96 days, and a reduction in the time to register a new business from 55 to 14 days. In addition, the government opened a new investor one-stop shop, "Government Hall," and launched its investor-focused Web site. As a result of these and other reforms, Yinchuan has attracted significant new investment into the province— investment inflows in 2010 alone rose by a staggering $32 billion relative to estimated baselines, with the client government in Yinchuan attributing much of the increase to further liberalization of the provincial economy and enhanced investment promotion efforts. An important catalyst was the province's first regional investment summit in September 2010 organized by the Yinchuan Investment Promotion Bureau, which resulted in the signing of 134 new investment agreements worth $2.76 billion. A good example of FIAS-supported work this fiscal year through increasingly comprehensive, programmatic approaches is in South Sudan, where complementary interventions around core products and areas of expertise were combined to deliver maximum results for clients (see box p. [30]). An Independent South Sudan Creates an Enabling Environment for Business The new country of South Sudan declared independence in July 2011 and began setting conditions for private sector growth, especially for local smaller businesses that are critical in creating jobs and increasing living standards. An IFC and World Bank team supported by FIAS has worked closely with the government during the past three years in building a nascent private sector. The recently launched Doing Business in Juba 2011 finds that the government is making strides in improving the business environment for small and medium 30 enterprises. The report cites that at 15 days, the start-up time for a business in Juba is comparable to the average 13.8 days in developed economies of the Organisation for Economic Co-operation and Development (OECD). While the report ranks Juba 159th (of 183 economies) on overall ease of doing business, a new legal framework for investors is now in place that will help improve conditions for investment. Results: 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 be enacted. Business entry. The business registry was improved, allowing businesses to be incorporated within a day. About 12,000 businesses—most domestic and small or medium-size—have 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 Southern Sudan Investment Authority, established by the Investment Promotion Act 2009, is pursuing potential investors and re-investors in targeted sectors including agribusiness, power generation, manufacturing, and services. A target has been set of 15 closed investments by the project's end in 2013. Drawing on their experiences in helping set the conditions for SME-friendly business growth in challenging frontier markets, IFC and World Bank teams have helped the country create the South Sudan Business Forum, a mechanism for public-private dialogue, to give local entrepreneurs a voice in policymaking. "This process would not have been easy if we had not gotten this unlimited support from the World Bank Group," says John Luk Jok, South Sudan's Minister for Legal and Constitutional Affairs. Client Engagement through Established Benchmarking Tools FIAS funding continues to support the development of strong indicator-based tools and knowledge resources as an entry point for broader investment climate reforms. The Investing Across Borders flagship report released in July 2010 examines and quantifies 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 competitiveness in attracting FDI. In FY11, the IAB team provided specific reform recommendations based on IAB indicators to more than 10 client governments worldwide. IAB is serving as a catalyst for other Bank Group projects that look for improvement of the business environment in client countries. For example, the arbitration indicators have helped drive advisory work in Bangladesh, the Comoros, and Malawi. The land indicators have informed reforms in land information systems in Bosnia and Herzegovina. The "starting a foreign business" indicators are being used to facilitate business entry in the East African Community. The IAB 2012 report, planned for release in the summer of 2012, will identify the full set of reforms that have been informed or motivated by the IAB indicators. 31 The third Global Investment Promotion Benchmarking survey was launched in FY11, in close collaboration with MIGA, to assess the capabilities of 189 nationally-mandated investment promotion intermediaries in providing information to investors, focusing on agribusiness and tourism in this round. GIPB is a powerful tool for governments to assess the competitiveness of their promotional efforts to attract investment. It enables investment promotion intermediaries in improving their information provision and monitors their performance over time and against competitors. The full results of the GIPB survey will be released in FY12. Subnational and regional Doing Business reports capture differences in business regulations and their enforcement across locations in a single country or region. This FIAS-supported comparative domestic and international benchmarking tool fosters competition to reform. In collaboration with World Bank Group country offices, four subnational Doing Business reports were published in FY11 for Juba (South Sudan), Zanzibar, the Philippines (covering 25 cities), and South East Europe (22 cities). The reports show how government regulations and their implementation ease or constrain business activity in selected locations. FY11 results show that subnational Doing Business studies continue to be a powerful tool to inspire reforms at the local and regional level. Second round studies measure reform progress over time. This year the reports for South East Europe—covering Albania, Bosnia and Herzegovina, Kosovo, FYR Macedonia, Moldova, Montenegro, Serbia—and the Philippines influenced 48 business reforms. Leveraging FIAS' Experience to Target Reforms in Strategic Sectors In FY11 FIAS-funded activities have strategically supported enhanced engagement in two key sectors that have broad relevance to development in many low-income countries: agribusiness and tourism. Both sectors can have significant impact on growth and poverty reduction; also, these two sectors are major sources of employment. Better investment and business conditions in the agribusiness sector will contribute directly to improving food security in developing countries, through an increase in investment, higher outputs, and efficiency improvements in the distribution channels for agricultural products. Removal of barriers that restrict market entry or suppress competition in the agribusiness sector will open up input markets, logistics chains, and marketing mechanisms that are highly concentrated at present in many countries. More competition also increases efficiency along the supply chain. These improvements increase the competitiveness of locally produced agricultural goods and boost internal food security. An example is the introduction of a warehouse receipts system as a financial tool that expands the range of goods that can be used as loan collateral by farmers. This helps to improve storage of harvested crops, lowers post- harvest losses, minimizes the impact of brokers, and stabilizes prices. In FY11, the FIAS-supported agribusiness global product team engaged closely with other Bank Group partners to create multidisciplinary teams in support of agribusiness development. For example, in Eastern Europe and Central Asia FIAS support enabled the IFC regional investment climate team to promptly respond to burgeoning client demand for agribusiness-specific investment climate reforms, resulting in fivefold growth of the regional industry portfolio within the fiscal year. Building on the success of the Ukraine investment climate project in abolishing duplicative Soviet-era regulations on food safety in 2010 (see box, p. [33]), the product team worked with a range of regional teams in Europe and Central Asia (IFC investment climate advisory, World Bank, IFC Investment, IFC Sustainable Business Advisory, and Access to Finance) to launch programmatic interventions on 32 agribusiness reform and investment generation. This work is ongoing in Armenia, Bosnia and Herzegovina, Moldova, Tajikistan, and Ukraine. The teams are also collaborating in Central Asia, where a product development project is underway encompassing tax transparency and industry-specific regulatory reform. In Rwanda, FIAS funding is supporting investment promotion in the tea and horticulture sectors. The agribusiness agenda focuses on addressing critical constraints at the industry level while leveraging the improved investment climate to generate investment impact. This approach to investment promotion in agribusiness is being replicated in various other countries in Africa, Latin America, and beyond. Overall, FY11 saw significant growth of the investment climate agribusiness portfolio globally, from 5 projects in FY10 to 14 pipeline and operational projects at the end of the fiscal year, with the Africa region witnessing the strongest demand by clients. The ramp-up in FY11 sets the stage for the FY12–16 FIAS strategy cycle, during which agribusiness is expected to remain a major growth area in the portfolio. This increased focus comes at an opportune time and is part of a wider World Bank Group initiative. On one hand, it informed the IFC Agribusiness Action Plan for FY12–FY14, which was endorsed by IFC Senior Management in March 2011. On the other, it is leveraging links with the World Bank's Agriculture and Rural Development Department to incorporate investment climate reform in long-term agricultural and agribusiness transformations. Planting the Seeds for Agribusiness in Ukraine Ukraine has a large untapped potential to export foodstuffs and the ability to play a global role in food security. Through the global product team for agribusiness (housed in the Investment Climate Department), FIAS funding provided technical support to the IFC regional team in designing and implementing key investment climate reforms in Ukraine's agribusiness sector (although FIAS did not directly fund this project). In 2010 the Cabinet of Ministers abolished the requirement of mandatory certification of most food products by the State Committee for Technical Regulations and Consumer Policy, which was identified as a burdensome requirement for food processors. Its abolition reduced compliance costs for the private sector by $20 million and opened up new agricultural export opportunities. Food producers have so far reaped the most benefit from regulatory improvements, including: Cancellation of mandatory certification of food products (excluding baby food, tobacco, and alcoholic products) Cancellation of costly duplicative licenses for certain agribusiness activities, including wholesale seed trading, rearing of domestic animals, and manufacturing of agrochemicals Licenses for trading of agrochemical and selling of biogas and biofuel, previously subject to five- year renewals, made permanent President Viktor Yanukovych's commitment to establish a single food-safety controlling agency instead of several agencies undertaking duplicative responsibilities. "Abolishing mandatory certification has helped tremendously," said Serhiy Samonenko, a director at Vimel Company, which produces potatoes and starch. "There is now one less regulatory body duplicating the same type of controls on food products. I no longer need to pay 1,600 UAH (around 33 $200) for a certificate for each delivery of raw materials. In approximate terms, the cost savings to my business per year is up to 30,000 UAH (around $3,750) and the 500 man hours it took to obtain the certificates," he explained. Building on the results related to food product certification, in FY11 the FIAS-supported and IFC Ukraine investment climate teams helped draft and advocate for the Law on Market Surveillance. Adopted in December 2010, the law establishes a risk-based market surveillance system, eliminating burdensome and duplicative controls and inspections by different regulatory agencies. "In the rest of Europe, technical standards are voluntary-based. These are considered and adopted by business associations, scientists, and other industry stakeholders and the responsibility of quality control lies with businesses," said Svetlana Mikhaylovska, a member of the European Business Association. "In Ukraine, we faced double mandatory regulation—both in terms of safety and quality provided by technical regulations and standards, respectively. By working with the World Bank Group, we were successful in removing this outdated system." Preparations are currently underway for the project's next phase, which will focus on agribusiness investment climate reform in the areas of input markets regulation, post-harvest infrastructure and logistics, and food safety for the grain, fresh fruit, and vegetable sectors. FIAS funding in FY11 has contributed to the establishment of a strong foundation for investment climate projects focused on the tourism sector, an important, and in some cases the most significant, service sector for many IDA countries. Eighty percent of Bank Group client countries have identified tourism as a key economic sector in their economic diversification and poverty reduction strategies,9 and the sector is second to agriculture only in terms of employment generation per unit of investment. During FY11, a standardized mode of engagement for FIAS-supported tourism work was articulated, with diagnostic, regulatory, and investment facilitation dimensions, resulting in an active portfolio covering nine countries including Mozambique (see box, p. [34]). A further pipeline of projects in 14 countries has been generated. There has been strong regional demand for tourism work, and FIAS resources have been significantly leveraged by regional teams in South Asia, the Middle East and North Africa, and Africa, in particular. The relevance of the tourism sector and the issues around sector governance, competition policy, and debt resolution have been especially prominent in the wake of the Arab Spring and discussions with the emerging administrations. Mozambique Tourism Anchor Investment Program: From Potential to Reality [received 20% FIAS funding] In March 2011, a landmark agreement launched the development of a $3 million eco-lodge in Mozambique's Maputo Special Reserve, a 70,000-hectare prime protected area. Bordering the Indian Ocean, the reserve offers tourists a varied experience of beaches, bays, coral reefs, forests, lakes, rivers, and a host of wildlife including an estimated 350 elephants. Co-financed by Switzerland and other donors through the FIAS platform, the Mozambique Anchor Tourism Investment Program assisted the government in developing and implementing a private-sector 9 Hawkins, Donald E. 2007. "The World Bank's Role in Tourism Development." Annals of Tourism Research, Vol. 34, No.2: 348–363. 34 investment strategy and procurement approach to attract qualified eco-tourism investors for the Maputo Special Reserve. The 25-year partnership agreement creates a joint venture between a local community association, A Hi Zameni Chemucane, and a private investor, the Bell Foundation, to build and operate a 36-bed lodge at Ponta Chemucane in the reserve. It is Mozambique's first agreement granting a community long-term concession rights for a tourist area within one of the country's leading national parks. The lodge is expected to create 60 full-time jobs and help spur local growth in an area that has few opportunities for formal employment. In addition, annual concession fees to be paid to the government will be used for park and longer-term conservation management. Following investment in the Maputo reserve, a standardized set of procedures was compiled and a toolkit developed for future use by Mozambican authorities. The Maputo model has been replicated to attract a $30 million investment for a 200-bed eco-lodge in Mozambique's Zambézia Province. The program is also assisting in sustainable tourism development. Through new investment zone regulations, for example, the government can reserve land with unique natural, cultural, or historic attributes for tourism development. The Inhassoro and Crusse-Jamali sites along Mozambique's coasts have been declared the country's first tourism investment zones, securing over 4,500 hectares. The gender gap in economic participation remains vast. Women own fewer businesses—only one-third of firms surveyed by the World Bank in 118 economies have female participation in ownership.10 Businesses owned by women also tend to have fewer employees, lower sales, and lower invested capital.11 There are fewer women than men in the global labor market, and women in every economy are paid less for their work than men—with the wage gap averaging 17 percent in 2008. The 2012 World Development Report, which focused on Gender Equality and Development and other recent World Bank Group publications like Women, Business and the Law 2012 are bringing attention to such issues. FIAS is responding, including incorporating gender-specific reform targets in its projects particularly on the industry side (see box, p. [35] about FIAS-supported technical assistance to an IFC-led economic zones project in Bangladesh). It is also providing follow-up technical assistance support for on-the- ground applications of the practitioner's guide, Gender Dimensions of Investment Climate Reform, released in FY10. Creating Gender-Inclusive Economic Opportunities in Bangladesh FIAS-funded global product teams continue to provide technical expertise in project design and implementation to IFC regional programs, including the Bangladesh Investment Climate Fund (BICF). In one such case, a global investment generation team working on a BICF-funded project helped the government of Bangladesh in formulating and implementing a social compliance management system in Bangladesh's export processing zones (EPZs). These zones house more than 300 factories and employ 10 Data from World Bank Enterprise Surveys on 118 countries (see http://www.enterprisesurveys.org). 11 Bruhn, Miriam. 2009. "Female-Owned Firms in Latin America: Characteristics, Performance, and Obstacles to Growth." Policy Research Working Paper 5122 (November). World Bank. 35 nearly 300,000 workers, mostly women, who manufacture garments and other products. One key component of the project is to increase female participation in the workers' welfare associations in the zones. As a result of BICF's recommendation, 30 percent of seats on the association were allocated for women. Also, the role of female labor counselors who advocate on-site for women employees' rights was strengthened. Shamela Begun, a worker at one of the factories in an EPZ shared her experience. "Workers in factories outside the EPZs don't have the facilities that we have in the zones and complain about not getting holidays or about getting paid late," she said. "Here it is safe and comfortable. We have a feeling of community. I feel a part of things." Thanks to her hard work, Shamela now takes home about $100 each month. She also receives benefits at her garment factory, including free medical coverage, lunch, and flexible sick leave allowance. Both her sons have university degrees and supplement their mother's income. BICF, managed by IFC in partnership with DfID and the European Union, has facilitated $203 million of FDI and 17,000 new jobs to the economic zones of the country through an aggressive investment promotion capacity-building program for the government of Bangladesh. The project actively supported enactment of the Economic Zones Act, opening up the zones program to private developers and paving the way for a potential 1.5 million new jobs in 25–30 private zones by 2021. Also, the project facilitated a new central effluent treatment plant in the Dhaka EPZ which, by August 2011, had increased the amount of properly-treated industrial water from 0 to 15,000 cubic meters.12 Fostering Innovation and Competition FIAS-supported programs increasingly consider innovative approaches to harness "green" or low carbon patterns of growth to meet the twin challenges of poverty reduction and climate change. The quality of the investment climate will play a key role in a transition to a green economy by setting standards and attracting much-needed private investment into low carbon, more resource-efficient economic activities. In FY11, FIAS made progress in incubating and piloting new investment climate tools that can be used to promote green growth, including projects in Indonesia (see box, p. [37]) and Colombia helping local governments in the capital cities design and implement green building codes. These approaches will continue to be developed during the FY12–16 cycle, in support of broader World Bank Group climate change-related efforts. With FIAS support, Rwanda's first special economic zone near Kigali is developing as a "green zone." The government has received technical advice on developing low-carbon regulations for the zone, including through stakeholder consultations with the City of Kigali, the Ministry of Infrastructure, the Rwanda Energy, Water, and Sanitation Authority, the Rwanda Environmental Management Authority, the United Nations Industrial Development Organization, and the United Nations Environmental Program. The five key policy areas to be addressed, as prioritized by a task force of stakeholders, are energy, building codes and construction, water and sanitation, urban planning, and waste management. 12 Results from BICF projects are reported in the BICF Annual Report, and are not covered in the FIAS results reported in Annex I and II of this report. 36 Curbing Greenhouse Gases in Jakarta As one of the world's largest greenhouse gas emitters, Indonesia's building sector accounted for more than a quarter of total energy use in 2004—a share that is expected to increase to nearly 40 percent in the next two decades. In response, IFC advisory services in the region is helping the government of the capital province, Jakarta, develop a green buildings code. FIAS activities have supported the code's incubation and development. The code sets energy and water efficiency requirements for buildings, and will require climate change adaption practices to be included in building designs. Implementation of the code is expected to reduce energy consumption in large commercial and high-rise residential buildings, potentially cutting around 2.7 million tons of carbon dioxide per year by 2020. This is equivalent to carbon sequestered annually by 60 million grown trees or equivalent to the current annual emission of Macau SAR (2.4 million tons of carbon dioxide). The goal is to create a code that is simple to implement, effective, and easy to monitor. The project's analysis modeled a range of possible changes for each commercial building type in Jakarta which met clear criteria for market preparedness and ease of implementation, while maximizing the benefits of energy (CO2) and water reductions in a cost-effective manner. The details of the code have been developed in close consultation with government as well as private sector stakeholders, including developers, landlords, and professional associations. "To help achieve *the national target of cutting carbon emissions by 26 percent by 2020+, Jakarta has been working on a number of sustainable city initiatives since 2008," said Jakarta Governor Fauzi Bowo at the launch of the project. "With effective implementation of the green buildings code in Jakarta, the city can serve as a model for implementation in other cities in Indonesia." The project is evaluating the feasibility of various measures under the draft green building code and hosting a series of consultation workshops with key private sector players. It is providing support for the local government through a series of training and capacity-building initiatives, and to the private sector through a review of financing needs and incentives for firms to retrofit existing buildings. Competition plays a central role in fostering growth, investment, and job creation. Demand for competition policy reforms increased during the past fiscal year. FIAS-supported work on competition focuses on removing constraints that stifle growth of competitive market structures in key strategic sectors. It also supports the development of effective competition policies to prevent discriminatory treatment and discourage anti-competitive actions. In FY11, the framework for competition policy reforms was developed and applied to the preparation, design, and implementation of eight investment climate projects in four different regions including the Middle East and North Africa, Sub-Saharan Africa, Latin America and the Caribbean, and East Asia and Pacific. The framework includes rapid-assessment tools to address economy-wide issues and sector- specific constraints to competition. The global competition team also provided inputs and technical feedback to client countries as part of cross-support to five World Bank projects including in Russia and Turkey. Advisory services on competition allowed repealing price controls proposals, minimizing distortive state aid schemes, and reducing discriminatory actions by government officials. 37 Improvements to the competition framework have been proposed and implemented in two countries— Armenia and Romania—and more than five interventions are in the pipeline in at least three IDA countries. Supporting Productive Partnerships FIAS continued its rich legacy of setting up new partnerships and strengthening existing collaboration with donors, clients, teams across the World Bank Group, and external good practice institutions in the investment climate arena. An array of tools and services to support investment climate improvements is available within the Bank Group, but for any given project these key products may be offered through different parts of the organization. FIAS-funded teams in the Investment Climate Department, working closely with MIGA, IFC, and the World Bank, often provide a critical link to unlocking synergies and bringing technical expertise from different parts of the institution together to provide comprehensive reform solutions for clients. In Rwanda, for example, a FIAS-supported advisory project is partnering with IFC and the World Bank to attract possible investments in the agribusiness sector. Removing critical constraints to increased investment and exports in the horticulture and tea sectors, in particular, is considered key to achieving this goal. MIGA guarantee staff also attended the Rwanda Investor Conference, which highlighted recent improvements to the country's investment climate and showcased new investment opportunities in agribusiness. Collaboration with MIGA on specific activities of mutual interest was expanded in FY11. In order to gauge marked demand for the planned MIGA Facility for Conflict-affected and Fragile Economies, FIAS- funded activities included organizing a number of focus group discussions with private sector participants in Bosnia and Herzegovina, Georgia, Liberia, and Sierra Leone. Moreover, a MIGA staff member was posted to the Vienna office under an assignment jointly funded by FIAS and MIGA. As part of the assignment, the linkages between investment climate reforms and political risks are being researched, with the goal of developing a new political risk assessment tool that can be used by countries interested in lowering non-commercial risks for cross-border investors. FIAS-supported global product teams continued in FY11 to collaborate closely with practitioners in their respective reform arenas within and outside the Bank Group. On the tax work, for example, the FIAS- funded product team partnered closely with different units within the World Bank Group including Poverty Reduction and Economic Management and IFC's Legal Department. In Tunisia, the team is supporting the World Bank's assistance to the transition government, working with the Ministry of Finance in designing and implementing a reform of tax and customs formalities affecting businesses with the objective of streamlining procedures, cutting costs, and improving transparency. Externally, the global tax work is closely coordinated with the International Tax Dialogue, which comprises all major players providing tax technical assistance including the International Monetary Fund, the OECD, regional tax groupings, and major donors. Tax transparency-related collaboration includes the G20, the OECD, the Global Forum for Tax Transparency and Exchange of Information, the International Bureau of Fiscal Documentation, and the European Commission on supporting the global mandate to improve tax transparency in countries through technical assistance. The team also works with regional tax administrators' forums such as the Africa Tax Administrators Forum. 38 During FY11 other innovative partnerships with leading institutions in the investment climate arena were organized, including a tripartite cooperation with the Norwegian Agency for Development Cooperation and the Bronnoysund Registration Centre (BRC) in Norway. The first agreement of its kind, it allows FIAS-supported teams to draw on the business regulation experience of state agencies from developed economies to benefit projects in developing countries. Experts from BRC shared their firsthand experiences with clients in Nepal, Sierra Leone, Tanzania, and Togo. In addition, a comprehensive case study of business registration reforms in Norway was developed and made available to reform practitioners. This pilot approach to partnerships with relevant state agencies from developed countries is a model to be replicated in similar partnerships going forward. Partnerships on competition policy issues with the OECD, the International Competition Network, and the International Development Research Centre have been nurtured through collaboration on analytical work, participation in knowledge events, and coordination to take advantage of synergies among partners. On trade, the FIAS-supported team engaged with international organizations such as the World Trade Organization, the Caribbean Community and Common Market, and the United Nations Conference on Trade and Development. Benchmarking tools such as the subnational Doing Business reports (see p. [32] for more detail) also rely on strong partnerships. Increasing demand from client countries to conduct repeated benchmarking studies in 16 economies have paved the way to gradually transfer the methodology, share best practices, and develop expertise in client countries by partnering with local institutions and governments. Currently, the team is working in partnership with think tanks and academic institutions in Mexico, Indonesia, the Russian Federation, and the Philippines. After benchmarking 38 economies and more than 300 cities, a new franchising model is being developed in Mexico, the pioneer country for such subnational studies. There, the local strategic partner is responsible for implementing the project in collaboration with the government, while the role of the Bank Group focuses on providing quality control and the Doing Business brand. Strong engagement with donor partners, not only on funding but also through staff learning and knowledge activities, continues to provide the cornerstone for the success of FIAS activities. This engagement occurs through platforms such as the Donor Committee for Enterprise Development, donor participation on advisory panels for different global products, as well as learning events sponsored by global product teams and at the project level. For more details on funding and staff exchanges, see Financial Results and Resource Use section, p. [46]. 39 VI. Knowledge Management, Learning and Communications The knowledge management and learning program is designed to establish the thought leadership of FIAS-supported activities in the area of investment climate reform within and outside the Bank Group. In FY11, the program was further strengthened, engaging with practitioners, government and private sector clients, and donor partners and other stakeholders. As part of this approach, over 45 events attracting more than 1,500 staff and external participants— including seminars, "deep dive" learning events, and client peer-to-peer workshops—were supported by FIAS in FY11 (see box, p. [40]). One such activity was the global networking and learning event for the investment policy product held in Vienna, Austria. Attended by more than 120 participants from 43 countries, it helped deepen the technical skills of operation officers and established strong networks with government officials and investment policy practitioners. Collaborating Across the World Bank Group to Encourage Client Peer-to-Peer Learning A peer-to-peer workshop organized jointly with IFC Advisory Services in the Middle East and North Africa brought together over 70 e-Government experts in Amman, Jordan in May 2011 to explore how technology and ICT solutions could improve business and regulatory environments in the region. The event assessed how governments in the region are using technology to ease the regulatory burden on businesses, making it easier for new entrepreneurs to register their businesses and access government services. Speakers highlighted innovations such as cloud computing, social media, and mobile applications as new opportunities for governments to improve cost-effectiveness, increase transparency, facilitate the government-to-business dialogue, and extend access to information and services to entrepreneurs in underserved segments of the business economy. The event enabled participants to learn more about institutional and change-management considerations they must address in reengineering government service delivery. All participants expressed their satisfaction with the learning and knowledge sharing, and asked the Bank Group team to offer more specialized training for larger target groups. Also in FY11, the FIAS-funded secured transaction and collateral registries product jointly with the IFC Access to Finance Business Line organized the Financial Infrastructure-Secured Transactions International Conference in Rio de Janeiro, Brazil in March 2011. The purpose of the conference was twofold: to educate and train public- and private-sector stakeholders on recent developments and best practices in secured transactions and collateral registries; and to develop a greater awareness of clients' innovative approaches to carrying out secured transactions reform and the adoption of collateral registries. More than 70 participants attended the secured transactions sessions at the event. Attendees included government officials, representatives from national central banks, stakeholders from private financial institutions, individuals from the business and legal communities, bilateral donors (the United States Agency for International Development and Switzerland's State Secretariat for Economic Affairs), and 40 multilateral organizations. To help increase staff capacity on investment climate issues and themes, intensive learning events such as the trade logistics, business registration, agribusiness and tourism product workshops were organized during the Bank Group's 2011 Financial and Private Sector Development Forum in Washington, D.C. Under the theme of "Building Competitiveness," the forum brought together more than 600 Bank Group colleagues, private sector development executives, academics, and donor representatives to discuss the latest issues in financial sector and private sector development. Furthermore, contributions to the World Bank Group Entrepreneurship Snapshots—one of the most comprehensive datasets on cross-country firm entry data—have been created in cooperation with the World Bank Development Research Group, IFC, and the Kauffman Foundation, yielding wide recognition across the World Bank Group (see p. [18]). In FY11 several flagship reports were published, including: Investing Across Borders, Healthy Partnerships – How Governments Can Engage the Private Sector to Improve Health in Africa, Rebuilding Business and Investment in Post-conflict Sierra Leone, and Managing for Impact – FIAS Strategy for FY12–16 were published. These are also available electronically on the investment climate Web site. A wide range of other publications were produced including handbooks, guidebooks, technical papers, the Investment Climate In Practice note series, a viewpoint note, and a number of SmartLessons. A listing of key FY11 publications, including short summaries of each, begins on p. [43]. Communications Communications activities in FY11 were geared to showcase how FIAS-supported investment climate work across the globe has contributed to results and had a substantive impact on clients' development objectives, including a more vibrant private sector, new businesses, jobs, and growth. This "results communications" agenda has relied on solid monitoring, evaluation, and impact data as the basis for feature stories, multimedia, and other communications products. Through client, private sector, and other stakeholder testimonials, on-the-ground stories provided a human face to the data, presenting results in a compelling and balanced way. In FY11, the investment climate thematic Web site (www.wbginvestmentclimate.org) was successfully launched. The Web site is among the top-10 search results for the term "investment climate" on Google. It is receiving strong interest, with page views rising from 3,000 when it was launched in October 2010 to 136,000 views by June 2011, becoming the main platform for disseminating investment climate- related knowledge products and information. Electronic versions of most popular investment climate handbooks including the Investment Generation Toolkit, How to Reform Business Licenses, and the Health Policy Toolkit are now available, making these knowledge products easily accessible and highly interactive for practitioners. Several slideshows and short films documenting success stories through compelling client and entrepreneur testimonials were produced in FY11. Four investment climate videos were well received by viewers, garnering a total of 8,000 views on YouTube. 41 Cultivating a community of social media contributors and leveraging World Bank Group social media platforms created opportunities for direct conversations and discussions about investment climate reforms. Stories featuring investment climate project activities and results were posted across the World Bank Group's social media channels, such as the IFC and World Bank corporate, country- and region-specific Facebook and Twitter accounts. Investment climate staff actively contributed to thematic blog sites, including the World Bank's Private Sector Development Blog. 42 Key Knowledge Products Published in FY11 Flagship Reports The Investing Across Borders 2010 report, launched in July 2010, compares regulation of FDI in 87 economies and offers recommendations for governments looking to improve their competitiveness in attracting investment. The Rebuilding Business and Investment in Post-Conflict Sierra Leone (RABI) report features the perspectives of entrepreneurs, key government reformers, and FIAS practitioners in tracing Sierra Leone's path to revive and grow the private sector following its long civil war. The publication, Managing for Impact: FIAS Strategy for Fiscal Year 2012–16, outlines FIAS' mission and reform activities for the FY12–16 strategy period. Investment Climate IN PRACTICE note series The flagship note series for clients and practitioners featured "hands-on" topics in investment promotion, investment regulation, business taxation, and strategic communications. "Using Strategic Communications to Engage Stakeholders in Tax Reform" (no. 15, March 2011) outlines a strategic communications approach tested in tax reform projects in the Republic of Yemen, Sierra Leone, and Lao PDR. "Investment Regulation and Promotion: Can They Coexist in One Body?" (no. 16, March 2011) outlines how investment promotion is correlated with investment regulation. The note argues that the two functions should be kept separate and offers policy advice for countries that have them combined. "Leveraging Technology to Support Business Registration Reform: Insights from recent country experience" (no. 17, June 2011) discusses key findings of a recent Bank Group survey examining the experience of 34 company registrars in implementing new or upgraded technology solutions. It identifies several factors influencing the registrars' approaches, and summarizes key lessons in choosing and implementing ICT solutions. Viewpoint note series (published by the World Bank Group Financial and Private Sector Development Vice Presidency)—"Attracting FDI: How Much Does Investment Climate Matter?" analyzes how improving the investment climate offers an excellent opportunity for countries seeking to attract FDI. 43 Handbooks, Technical Papers, and Reports How to Reform Business Inspections: Design, Implementation, Challenges is a practitioners' handbook that provides would-be reformers, inside and outside of the Bank Group, with a comprehensive range of tools that enable them to tackle all essential aspects of regulatory simplification and smarter regulation. Surveying Businesses on Tax Compliance Costs analyzes surveys of business taxpayers regarding their experiences with tax compliance costs and their attitudes toward tax compliance. Tax Perception and Compliance Cost Surveys: A Tool for Tax Reform analyzes surveys of business taxpayers and shows how understanding perceptions and experience is important to gauging changes in tax morale and general trends in tax compliance. Alternative Dispute Resolution Guidelines provides a framework for setting up a system for alternative dispute resolution. It highlights and draws upon experiences of many countries within the investment climate reform agenda. Alternative Dispute Resolution Center Manual: A Guide for Practitioners on Establishing and Managing ADR Centers summarizes best practice guidelines in the establishment of an ADR center, provides a rich body of case studies incorporating ADR centers globally, and provides a comprehensive appendix of pro forma documents for use by ADR centers. Special Economic Zones in Africa: Comparing Performance and Learning from Global Experiences provides the first systematic and comprehensive analysis of zone programs in sub-Saharan Africa. It is the result of detailed surveys and case studies conducted during 2009 in ten developing countries, including six in sub-Saharan Africa. Four Country Impact Evaluations are external assessments of FIAS programs in Burkina Faso, Liberia, Rwanda, and Sierra Leone. The reports analyze the efficacy of the programs in achieving their initial objectives and the quantitative impacts generated from program achievements. Inspections Reform: Do Models Exist? is an analytical review of Inspections reforms in 25 countries worldwide, with analysis of models and features of reforms undertaken. 44 SmartLessons In FY11 staff authored and co-authored 17 Smartlessons, highlighting experiences from FIAS-supported activities with Bank Group staff through this IFC-sponsored learning note series, one that is also increasingly sharing Bank Group lessons with external audiences. Three of these notes—"Pilot Land Reforms in Nigeria: Think Big, Start Small, Move Fast But Where Do We Start?," "Show Me the Money! Using Peer-To-Peer Learning for Accelerated Investment Climate Reforms", and "VAT Media Campaign in Lao PDR Results in a Big Bang for the Buck"—were first-prize winners in Bank-wide SmartLessons competitions. 45 VII. Financial Results and Resource Use FIAS activities covered in the Annual Review are co-financed via a set of FIAS trust funds managed by the World Bank Group's Investment Climate Department. In addition 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 and 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 or work on private infrastructure). The financial results reported in this section cover only those funds managed by the Investment Climate Department under the FIAS trust fund structure. The Investment Climate Department follows IFC's standard accounting policies and procedures, as noted below.13 FIAS financial reports uses cash-based reporting in alignment with the quarterly financial reports on IFC's donor funded operations. FUNDING Contributions received in FY11 from the following donors and clients are gratefully acknowledged: Direct contributions to FIAS trust funds:* o Austria o European Commission o France o Ireland o Kauffman Foundation o Korea o Luxembourg o the Netherlands o Norway o Sweden o Switzerland o United Kingdom o United States *Core donors are in bold. In addition to the above, the FIAS program received financial contributions in FY08-10 from other donor countries including Australia, Iceland, Italy and New Zealand to support the implementation of the FIAS investment climate program outlined in the FIAS FY08-11 strategy. Contributions for FIAS projects received via IFC's Technical Assistance Trust Funds (TATF) program: o Japan 13 Annual contributions from IFC, MIGA, and the World Bank are treated in the same manner as core donor funds and are co-mingled with other donor funds in the FIAS Master Trust Fund account, as terms and conditions allow. Contributions from the IFC Investment Climate Business Line are treated as an additional source of project-specific funding. 46 o Spain Client contributions: o APEC o Denmark o Mexico o Poland CORE AND PROGRAMMATIC FUNDING In FY11, FIAS donors, clients and the World Bank Group contributed a total of $32.1 million (net of trust fund administration fees of $1.2 m) 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 equal to the total contributions received for FIAS in FY10 ($32.7 million) and reflects the strong and continued commitment by donors to support investment climate reform at the global level, despite severe budget constraints experienced by many donor partners due to the global financial crisis. World Bank Group core contributions totaled $8.3 million in FY11, including $4.0 million from IFC, $2.7 million from the Multilateral Investment Guarantee Agency (MIGA), and $1.6 million from the World Bank. Core contributions received from donors amounted to $4.6 million in FY11 (significantly down from $6.7 million in FY10). These contributions include an allocation of $1.5 million from the Netherlands earmarked for activities in IDA countries. Overall, the amount of core funding for FIAS dropped from $18.3 million in FY08 to $12.8 million in FY11, a significant decrease which seriously limited the flexibility of the FIAS program over the FY08-FY11 strategy cycle. Programmatic contributions from donors, made available through thematic and regional FIAS Trust Funds, totaled $7.4 million in FY11, slightly down from donor contributions of $8.6, $8.8 and $7.5 million in FY08, FY09 and FY10, respectively. PROJECT-SPECIFIC FUNDING Reduced levels of core and programmatic contributions were offset in FY11 by increased project-specific contributions received from clients, donors and the World Bank Group including the World Bank Group's Trade Facilitation Facility and Gender Action Plan. Project-specific contributions from IFC, donor partners and clients amounted to $11.3 million in FY11, including $8.2 million from donors, $0.3 million from clients, and $2.8 million from IFC's Investment Climate Business Line (including $0.9 million from IFC's Advisory Service contingency fund). Client contributions received from four clients ($0.3 m) were significantly down from contributions received from clients in FY09 and FY10 ($1.1 million and $1.8 million, respectively). The potential to generate significant cash contributions from clients remains modest given the high concentration of FIAS activities in IDA as well as fragile and conflict-affected countries. Project-specific contributions from donors remains consistent $8.3 million in FY11 and $8.8 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. 47 Project specific contributions from IFC, received in the form of project-specific FMTAAS allocations14, amounted to $1.9 million in FY11. These allocations primarily supported a range of global knowledge management and product design and development initiatives implemented under the FIAS umbrella. In addition, the Investment Climate Department received IFC Advisory Service contingency funds in the amount of $ .9 million to finance FIAS-related advisory and technical assistance activities (see Table 2). Other contributions from IFC, amounting to $1.7 million in FY11, supported non-project activities including portfolio management, monitoring and evaluation, and knowledge sharing associated with the global portfolio implemented under the FIAS umbrella. 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 and Spain, made available via the IFC's Technical Assistance Trust Funds (TATF) program (a total of $1.0 million). 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 FY11 from World Bank and IFC units and related to FIAS- funded activities amounted to approximately $3.0 million. Funding from TATF, World Bank supplemental 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 CONTRIBUTIONS The composition of funding for FIAS has changed significantly over the past two to three years and is negatively affecting 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 $12.8 million in FY11. On the other hand, project-specific funding has increased from $9.4 million in FY08 to $11.3 million in FY11. 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 funding 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. Throughout the year, senior staff members from Agence Francaise de Developpement (AfD), the United Kingdom Department for International Development (DfID), the Italian Ministry of Foreign Affairs, the Korean Ministry of Knowledge Economy, and the Norwegian Ministry of Foreign Affairs, and the Spanish Institute of Economy and Finance have been seconded to the Investment Climate Department where they have been working on FIAS-funded 14 FMTAAS is IFC's Funding Mechanism for Technical Assistance and Advisory Services. 48 activities. In return, one Investment Climate Department staff member was on a long-term assignment with AfD. Such staff exchanges and secondments offer an attractive way for FIAS partners to be directly involved in the program and establish direct connections between their respective private sector development programs and FIAS. USE OF FUNDS FIAS trust fund expenditures for investment climate reform activities reached $30.3 million in FY11, an increase of 10 percent over FY10 expenditures of $27.6 million (Table 1, Uses of Funds). The increase in FY11 expenditures is due in large part to expenditures associated with the additional contingency funding received from IFC ($0.9 m) and a conscious effort to use earmarked donor funds to the fullest extent possible to close the FIAS FY08-FY11 funding cycle. As a result, staff and consultant costs as well as travel costs increased, whereas indirect costs (infrastructure, office space, rent) remained relatively flat. Administration fees are collected by IFC to cover trust fund administration costs and are deducted from donor contributions at the time of receipt. In FY11 IFC collected trust fund administration fees of $1.2 million from FIAS donor contributions.15 At the end of FY11, fund balances in the various FIAS trust funds totaling US$ 18.4 million16 were carried over into FY12. This amount is relatively large as it includes $8.0 million of core funds and about $10.4 million of program- and project-specific funds received under multi-year donor agreements. In line with prudent financial management principles, FIAS resources are strategically managed to avoid liquidity/cash-flow issues as experienced at the beginning of the FY08-FY11operational cycle. In this context, the transition into the new FIAS FY12-FY16 strategy cycle present specific challenges which required the carry-over of core funds to ensure FIAS operations into FY12. Project-related expenditures (both direct and indirect) accounted for 88 percent of total FIAS expenditures and general and administration expenditures (rent, communications, equipment and other non-overhead costs such as administrative and back-office support staff) accounted for 12 percent of total expenditures (see Table 4). In July 2010 IFC implemented a new cost allocation methodology for Advisory Services which resulted in a re-distribution between direct and indirect project costs. Due to this change, some figures in Table 4 are not consistent with figures reported in FIAS Annual Reports/Reviews, FY08-10. General and administration expenditures, however, are not affected by this change in methodology and are the same as reported in the FIAS FY08-10 Annual Reports/Reviews. Table 1: Sources and Uses of Funds Table 2: Project-Specific Donor and Client Contributions Table 3: Other Project-Specific Funding – Indirect Support to FIAS Program Table 4: Expenditures by Activity Category 15 FIAS trust funds established after July 1, 2009 are subject to the standard IFC trust fund administration fee of 5 percent. Since most of FIAS trust funds were established prior to July 2009, a 3.5 percent trust fund administration fee applies. Trust fund administration fees collected by IFC are included in Table 1, Sources of Funds for FY08-FY11. 16 FIAS trust fund cash balances less commitments and balances refunded to donors. 49 TABLE 1: SOURCES AND USES OF FUNDS 1 In US$ Thousands FY08 FY09 FY10 FY11 Sources of Funds World Bank Group Core Contributions 2 IFC 8,000 2,000 2,000 4,000 IBRD 2,000 1,600 1,600 1,600 MIGA 4,000 3,500 3,000 2,700 Subtotal World Bank Group Core Contributions 14,000 7,100 6,600 8,300 World Bank Group Project-Specific and Other Contributions IFC IC Business Line - Project-Specific 3,800 2,672 1,862 1,915 IFC IC Business Line - Administration - - - 1,687 IFC AS Contingency - - - 880 IFC Global Fund - 150 400 - Subtotal World Bank Group Contributions 17,800 9,922 8,862 12,782 Core Donor Contributions Australia 800 676 1,502 - Austria 368 373 355 331 France - 1,281 1,403 - Iceland 45 - - - Ireland 735 - - - Italy - 1,414 - - Luxembourg 273 539 - 829 3 Netherlands (Global Program) 559 2,350 1,950 1,550 New Zealand 399 276 384 - Norway 475 475 475 1,138 Sweden 406 285 345 396 Switzerland 250 240 - - United Kingdom - 494 332 309 Subtotal Core Donor Contributions 4,310 8,401 6,746 4,552 Programmatic Donor Contributions Austria (Investment Generation) 2,571 2,608 2,489 2,287 Austria (Crisis Response) 280 307 - Luxembourg (Crisis Response) - 750 - 263 Netherlands (Trade Logistics) 503 400 400 - Netherlands (Secured Lending) - 450 - 600 Norway (Business Entry) - - 154 428 Norway (Trade Logistics) 300 340 150 500 Ireland (Africa) 735 - 724 531 Italy (Africa) 508 - - - Sweden (Africa) 628 630 1,122 - Switzerland (Secured Lending) - 500 400 400 Switzerland (Tax) - 500 300 200 Switzerland (Western Balkans) 820 600 600 500 United Kingdom (Western Balkans) 497 440 - - United Kingdom (Tax) 1,426 183 96 - United States (Doing Business) 632 1,150 724 1,704 Subtotal Programmatic Donor Contributions 8,620 8,830 7,466 7,413 Donor Contributions (Project Specific) 4 5,525 4,436 8,868 8,267 Total Donor Contributions 18,455 21,667 23,080 20,231 Total WBG and Donor Contributions 36,255 31,589 31,941 33,013 Client Contributions 129 1,093 1,830 283 Total Receipts 36,384 32,682 33,771 33,296 5 Trust Fund Administrative Fees 1,099 973 1,140 1,212 Total (Net) Receipts 35,285 31,709 32,631 32,084 FY08 FY09 FY10 FY11 Uses of Funds Staff Costs Staff 9,961 11,636 11,181 13,273 Consultants and Temporaries 9,322 10,268 7,634 8,101 Total Staff Costs 19,283 21,905 18,815 21,374 Travel 6,217 6,488 5,229 5,678 Indirect Costs Office Occupancy 683 1,071 1,018 1,073 Office Equipment 116 53 57 47 Other Operating Costs 214 863 242 528 Other Costs 108 1,693 2,256 1,718 Total Indirect Costs 1,122 3,681 3,573 3,366 Total Uses Of Funds 26,622 32,073 27,616 30,418 1/ FIAS Annual Review is prepared as a reporting tool for FIAS Donors and Management, utilizing management accounting principles. 2/ IFC contribution of $4.0 milllion p.a., front-loaded as follows: FY08: $4.0 million; FY09: $2.0 million. 3/ Netherlands core contributions earmarked for activities in IDA countries. 4/ For details of FY11 project specific contributions, see Table 2. 5/ Administration fees collected by IFC to cover cost of trust fund administration. TABLE 2: PROJECT-SPECIFIC DONOR AND CLIENT CONTRIBUTIONS In US$ Thousands PROJECT DONOR AMOUNT WORLD BANK GROUP CONTRIBUTIONS (IFC IC Business Line and IFC AS Contingency) Crisis Response (Insolvency) IFC IC BL 392 Impact Measurement IFC IC BL 224 Agribusiness IFC IC BL 200 Trade Logistics IFC IC BL 199 Doing Business Reform Advisory in Conflict Affected Countries IFC IC BL 191 Green IC IFC IC BL 140 Public-Private Dialogue IFC IC BL 116 Tax Haven, Transfer Pricing IFC IC BL 106 Subnational Doing Business IFC IC BL 101 Tourism IFC IC BL 97 Donor Committee for Enterprise Development (DCED) IFC IC BL 70 Tax Transparency IFC IC BL 49 Business Regulation Deep Dive IFC IC BL 30 AS Tax Transparency IFC AS Contingency 500 Investing Across Borders IFC AS Contingency 280 IS/AS IC Agribusiness Tax in Central Asia IFC AS Contingency 100 Subtotal World Bank Group Contributions 2,795 DONOR CONTRIBUTIONS Kenya: Investment Climate Program (formerly, Regulatory Performance/Capacity Building) European Commission 2,353 Global Investment Promotion Benchmarking (GIPB) European Commission 1,461 Subnational Doing Business in Russia European Commission 259 OHADA Business Law Reform Program France 1,324 Entrepreneurship Project Kauffman Foundation 32 Low Carbon Green Economic Zones Korea 300 Kenya: Investment Climate Program (formerly, Regulatory Performance/Capacity Building) Netherlands 676 Regulatory Reform Netherlands 86 Agribusiness USAID 483 Impact and Knowledge Management USAID 154 Mali Investment Climate Program USAID 676 Subnational Doing Business (Sao Tome) US Treasury 63 Alternative Dispute Resolution (ADR) WBG/Gender Action Plan 50 Developing/Building Trade Logistics WBG/Trade Facilitation Facility 350 Subtotal Donor Contributions 8,267 CLIENT CONTRIBUTIONS Investing Across Borders Asia-Pacific Economic Cooperation (APEC) 120 Regulatory Reform Review Denmark 32 Doing Business Reform Mexico 105 Doing Business Reform Poland 26 Subtotal Client Contributions 283 Total FY11 Project - Specific Donor and Client Contributions 11,345 TABLE 3: OTHER FUNDING - INDIRECT SUPPORT TO FIAS PROGRAM In US$ Thousands OTHER FUNDING - INDIRECT SUPPORT TO FIAS PROGRAM DONOR AMOUNT Project-Specific Funding - IFC Technical Assistance Program Commercial Mediation Product Development and Knowledge Management Japan 385 Global Investment Promotion Benchmarking (GIPB) Spain 226 Global Trade Logistics Advisory Program Spain 206 Public-Private Dialogue (PPD) Product Development and Knowledge Management Spain 220 TOTAL FY11 OTHER FUNDING 1,038 TABLE 4: EXPENDITURES BY ADVISORY SERVICES (AS) ACTIVITY % % % FY11 % FY08 FY09 FY10 Standard AS Activity Expenditures 4 FY08 FY09 FY10 Actual FY11 Actual Actual Actual Actual Actual Actual Actual Project Related Expenditures of which: Direct Project Expenditures 1 17,620,579 64% 21,993,742 67% 18,988,606 69% 19,202,677 63% of which: Indirect Project Expenditures 2 4,117,228 15% 3,734,697 11% 3,322,980 12% 7,679,623 25% Total Project Related Expenditures 21,737,807 78% 25,728,439 78% 22,311,586 81% 26,882,300 88% General & Administration Costs 3 5,982,706 22% 7,317,667 22% 5,304,256 19% 3,535,986 12% Total Standard AS Activity Expenditures 27,720,513 100% 33,046,106 100% 27,615,842 100% 30,418,286 100% Notes: 1/ Direct Project Expenditures include project preparation, implementation and supervision costs. 2/ Indirect Project Expenditures include program management and operational support, including new business development, product development, M&E, knowledge sharing & staff development, donor relations, and public relations previously reported separately and consolidated under the new IFC cost allocation 3/ General & Administration includes overheads (rent, communications, equipment, etc.) and other non-overhead costs such administrative and back-office support staff. 4/ Due to a change in IFC's cost allocation methodology, some figures in Table 4 are not consistent with figures reported in FIAS Annual Reports/Reviews, FY08- 10. The new cost allocation methodology re-distributes expenditures between direct and indirect project costs. General & Adminstration expenditures are not affected by the change in the cost allocation methodology and are consistent with the figures reported in the FY08-10 FIAS Annual Reports/Reviews. Total FY11 FIAS Expenditures Total FIAS FY11 Project Implementation Expenditures 50 VIII. ANNEXES Annex 1: Reforms and Results Supported by FIAS in FY11 (see attachment) Annex 2: Other Results Supported by FIAS in FY 11 (see attachment) Annex 3: Active and Closed Projects (see attachment) 51 Annex 1: Reforms and Results Supported by FIAS in FY11 The following tables summarize the reforms and results supported by the FIAS program in FY11 across the various investment climate topics. 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. Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Africa Region Access to On December 13 and 14, 2010, the Organization for the Enactment of new/revised OHADA's member states adopted in December National 1 1 finance Harmonization of Business Law in Africa (OHADA) amended secured lending legislation 2010 two amended laws and three new the Uniform Act on Secured Transactions. The amended Act regulations for the modernization of the registries was published in the official gazette on February 15, 2011 for companies and secured transactions, which will and entered into force on May 15, 2011. The revised Act on significantly improve the legal and institutional Secured Transactions allows for the creation of possessory framework for private sector activities in the 16 and non-possessory security interests on all types of countries. The law includes acceptance of a much movable property, present and future, and guarantees all wider range of assets as collateral, such as future kinds of obligations (future, conditional, monetary, or non- movable goods including accounts receivable, cash monetary). In addition, it harmonizes the legal framework flow, and equipment. of mechanisms such as the "gage" (Art. 92 to Art.124) and the "nantissement" (Art. 125 to Art. 179). Furthermore, new types of security interests such as the "nantissement de compte de titre financiers" or the "cession de créances à titre de garantie" were introduced in the revised version of the Act. The amended Act also simplifies and establishes a general publicity regime for security interests on movable property (Art. 52 to Art. 66). Finally, the amendments also allow out-of-court enforcement of security interests on some movable property (Art. 104). Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Starting a On December 15, 2010, the OHADA Council of Ministers Enactment of new/revised OHADA's Council of Ministers adopted the revised National 1 1 business amended the Uniform Act on General Commercial Law. The business entry related OHADA General Commercial Law in December Uniform Act was published in the OHADA official journal on legislation 2010. The law creates a new business category, February 15, 2011 and took effect on May 16, 2011. "entreprenant," which will simplify procedures for According to Article 45 of the General Commercial Law, micro and small business owners who cannot entrepreneurs are required to provide a sworn declaration afford to hire lawyers to register their businesses. stating that they have not committed any crime and are not subject to any restriction on carrying out commercial activities (Article 10 of the Uniform Act on General Commercial Law). They are required to obtain copies of their criminal records within 75 days after incorporation of their companies. In addition, the amendments created a new business category, "entreprenant," that will simplify procedures for micro and small business owners by allowing them to register a business without hiring a lawyer. Africa Region Total 2 2 Benin Enforcing Enactment of new/revised In October 2011 the Parliament adopted the new National 1 contracts civil procedural rules civil, commercial, administrative, and social procedure code, which is expected to reduce the time for contract enforcement. The code is expected to reduce the length of proceedings (by limiting the number of hearing postponements), facilitate case filing, and accelerate the settlement of disputes. Under the new code, the time to file an appeal was reduced from two months to one, and the time to take a case to the Supreme Court was reduced from five to three months. Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Starting a Following the amendments to the OHADA Uniform Act on Reduction in the cost to The Minister of Justice issued a letter to Courts National 1 1 business General Commercial Law, the Minister of Justice issued a comply with business staff and sent them a model of sworn declaration letter on December 30, 2010 addressed to courts staff with regulations related to to replace the submission of criminal record, a model of sworn declaration to replace the submission of business entry cutting $1 from the cost of starting a business. criminal record. As a result, the number of procedures to start a business was reduced from 7 to 6, time needed from 31 to 29 days, and cost from 154 to 150 percent of income per capita. Starting a Reduction in the number of The government cut 2 of the overall 31 days National 1 business days it takes to comply with entrepreneurs spend in starting a business and $1 business regulation related from the cost. to Business Entry Starting a Reduction in the number of The government reduced the required procedures National 1 business procedures to comply with to start a business from 7 to 6. business regulation related to business entry Benin Total 1 4 Brazil Investment Improved institutional Apex-Brasil and the Secretary of Economic Subnational 2 policy and framework related to Development for the state of Pernambuco signed a promotion investment generation cooperation agreement formalizing a collaborative approach towards facilitating FDI for Pernambuco, significantly changing how FDI is attracted and marking an important step in creating a national investment generation network. SEDECT in Para and partners in FDI promotion (the executive-level working group representing key public and private sector actors) signed a collaboration agreement to coordinate investment attraction activities in the state of Para. Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Investment Improvement in the The three investment promotion intermediaries, Subnational 4 policy and conversion rates of Apex-Brasil (the national investment promotion promotion investment leads from agency), Invest in Pernambuco, and Invest in Para, relevant sectors each increased their conversion rates of leads to announced investments. Apex-Brasil reported a 12 percent conversion rate (8 cumulative announced investments from 67 leads); Invest in Pernambuco reported a 13 percent conversion rate (10 cumulative announced investments from 77 leads), and Invest in Para reported a 20 percent conversion rate (5 cumulative announced investments from 25 leads) Increase in the number of In the second half of FY11, each of the three Subnational 3 leads from relevant sectors investment promotion intermediaries Apex-Brasil, into investment generation Invest in Pernambuco, and Invest in Para incrased pipeline its investment generation pipeline of active leads by more than 10 percent. Apex-Brasil reported 67 active leads; Invest in Pernambuco reported 77; Invest in Para reported 25 Increase in the number of In the first half of FY11, each of the three Subnational 3 leads from relevant sectors investment promotion intermediaries Apex-Brasil, into investment generation Invest in Pernambuco, and Invest in Para incrased pipeline its investment generation pipeline of active leads by more than 10 percent. Apex-Brasil reported 60 active leads; Invest in Pernambuco reported 44; Invest in Para reported 11. Brazil Total 12 Burkina Faso Trade logistics Implementation or The Ministry of Agriculture agreed to merge the National 1 improvement of best Phytosanitary Bulletin Verification document (a practice procedures related requirement of the Economic Community of West to the flow of cargo African States) and the Certificate of Phytosanitary Inspection (a national regulation). This improvement allows traders to obtain only one document when their goods are subject to phytosanitary inspection Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Trade logistics Implementation or The Ministry of Commerce and the Ministry of National 1 improvement of processes Finance agreed to allow importers to import goods at technical control into Burkina Faso and obtain specific standards agencies related to trade approval from the Ministry of Commerce after the logistics goods have been cleared. This is the country's first trade reform agreed between different government agencies. It facilitates a more efficient process for traders importing goods that require standards certification Trade logistics Improved institutional The government passed a decree establishing a National 1 framework related to trade formal committee within Customs to manage the logistics implemention of risk management for border inspection and clearance. This improvement is significant as it is the first step required by an entity implementing a risk-based inspections i Burkina Faso Total 3 Burundi Dealing with The National Laboratory for Building Construction and Reduction in cost to comply The government made dealing with construction National 1 1 construction Public Works changed the fee structure, reducing the fee with construction permits easier by reducing the cost to obtain a permits for a geotechnical study from BIF 6,500,000 to BIF permitting geotechnical study from BIF 6.500.000 to BIF BIF 2,574,460 ($4,899 to $1,940). This cut the total cost to 2,574,460 ($4,899 to $1,940), reducing total cost obtain a building permit and utility connections from 6,296 from 6,296 to 4,066 percent of income per capita. to 4,066 percent of income per capita. Protecting The new Company Law enacted on May 30, 2011 Enactment of legislation The government enacted the new Company Law National 1 1 Investors strengthened investor protections by introducing new related to company on May 30, 2011, strengthening investor requirements for the approval of transactions between legislation protections by introducing new requirements for interested parties; requiring greater corporate disclosure to the approval of transactions between interested the board of directors and in the annual report; and making parties, by requiring greater corporate disclosure it easier to sue directors in cases of prejudicial transactions to the board of directors and in the annual report, between interested parties. and by making it easier to sue directors in cases of prejudicial transactions between interested parties. Starting a Enactment of legislation The government adopted a New Company Law on National 1 business related to business entry May 30, 2011 which simplifies the conditions for incorporating a company and starting a business. Burundi Total 2 3 Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Central African Registering In December 2010, the new Financial Law was adopted. The Reduction in the fees to The government reduced by half the property National 1 1 Republic property Article 301 reduced the property transfer tax ("droits register property transfer tax (from 15 to 7.5 percent). d'enregistrement") by 50 percent, from 15 to 7.5 percent, and the total cost of registering property was reduced from 18.5 to 11 percent of property value. Starting a The National Budget Law of December 2010 (Article 11) Reduction in the cost to Several reforms cut the cost to start a business by National 1 1 business amended the relevant tax provisions about the business comply with business $186 as follows: the very high business registration registration tax (Articles 301 and 302 of the "Code de regulations related to tax was cut from $312 to $146; the professional l'Enregistrement"), cutting it by more than a half, from business entry traders' card was eliminated as a requirement for 150,000 to 70,000 XAF (from $312 to $146). As a result, the registering a business; the ministerial license and total cost to start a business decreased from 228 to 176 the mandatory registration fee for the chamber of percent of income per capita. commerce were removed; and the cost of publication to the Web site was reduced. Starting a Reduction in the number of The government implemented several reforms National 1 business days it takes to comply with that reduced the time required to start a business business regulations from 22 to 13 days. related to business entry Starting a Reduction in the number of The government reduced the required steps to National 1 business procedures to comply with start a business from 8 to 7 by eliminating the business regulation related professional traders' card. to business entry Central African Republic Total 2 4 China Investment Improvement in the score The Yinchuan Investment Promotion Agency National 1 policy and of investment promotion improved the score of its investment promotion promotion intermediaries in the Global intermediary in the current GIPB report by 8 Investment Promotion percentage points compared to previous editions. Benchmarking (GIPB) The project worked in particular on the Web site, which scored an increase of 20 percentage points. China Total 1 Colombia Enforcing Enactment of legislation An administrative agreement of March 2011 National 1 contracts related to enforcing created 18 municipal courts (11 to process and contracts adjudicate enforcement procedures and 7 for ordinary procedures) and 12 municipal courts to process commissions as part of enforcement procedures Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Starting a The Law 1429 of 2010 and Decree 545 of 2011 introduced a Creation or improvement A new law and decree introduced a progressive fee National 1 1 business progressive fee schedule for new companies, which at the legal/regulatory level schedule for new companies, exonerating them exonerates them from an upfront payment of fees for the of institutions dealing with from an upfront payment of fees for the first few first few years in operation. In particular, the fee associated business entry years in operation. In particular, the fee associated with the commercial license "matricula comercial" no with the commercial license no longer needs to be longer needs to be paid at the time of start-up. As a result, paid at the time of start-up. As a result of this the cost to start a business was reduced by 45 percent, and improvement, the cost to start a business was the total cost to start a business decreased from 14.7 to 8 reduced by 45 percent. percent of the income per capita. Trade logistics Implementation or The government implemented connecting Web National 1 improvement of a single services between the single window system window system related to (VUCE) and the agencies for health and agriculture, trade creating automatic linkages among the systems and allowing faster release of licenses. The VUCE import module was upgraded allowing traders to electronically submit conformity certificates to the Bureau of Standards. The system will automatically reject the request (without generating a payment) if there is a mistake in the license sent by the trader Trade logistics Implementation or Traders now must electronically submit the National 1 improvement of electronic Andean Declaration of Value through the MUISCA submission of documents system. This document is a required supporting related to trade logistics document for cargo to enter the country. Previously traders had to file this information Trade logistics Implementation or h i ll t C The governmenttissued a resolution which requires National 1 improvement of risk customs brokers, freight forwarders, and targeting strategies related warehouses to assess clients' risks. Customs to trade logistics brokers now must make their financial statements public. Also, customs brokers, warehouses, and freight forwarders must visit and inspect the warehouses of their clients to obtain corporate, financial, and taxation information, especially important for importers of sensitive goods. This information is also submitted to Customs, which allows for easier movement of cargo since the companies are fully identified before the cargo Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Trade logistics Implementation or The MUISCA system that allows traders to do National 1 improvement of system for advanced filing of information prior to ship arrival computerization of was improved. Imports, including the import documents and information returns for sensitive goods, and all supporting related to trade logistics documents are now filed through the system at least 48 hours in advance. This allows for early identification of companies, goods, and cargo risks prior to cargo arrival Trade logistics Implementation or Customs established a series of minimum National 1 improvement of trade qualifications for companies to exist as customs logistics standards and brokers, freight forwarders, and warehouses. quality Based on the companies' assets and size, they are qualified on a level of 1 to 4 (with 1 as the safest). This improvement helps in assessing risk and controlling money laundering Registering Reduction in number of An administrative resolution issued on March 8, National 1 property days to register property 2011 established time limits for notaries' preparation of public deeds. As a result of this and related improvements within the framework of the pilot project, the time to transfer property was reduced by 11 days (55 percent). Colombia Total 1 7 Cote d'Ivoire Starting a Due to a reorganization of the Courts' Clerk Office where Reduction in the time to The Courts' Clerk Office where entrepreneurs file National 1 1 business entrepreneurs file their company documents, the time to comply with business their company documents was reorganized, start a business was reduced from 40 to 32 days. regulation (related to resulting in an 8-day reduction (20 percent) in the business entry) time required to start a business. Cote d'Ivoire Total 1 1 Hungary Dealing with The government passed a new building regulation that Enactment of legislation A new Permits Law was passed in March 2011 National 1 1 construction reduced the statutory time limit to issue a building permit related to construction setting statutory limits for issuing construction permits by 15 days. permits permits. Dealing with Reduction in the cost to The government adopted statutory limits for National 1 construction comply with construction issuing construction permits. If deadlines are permits permitting breached, authorities are obliged to reimburse clients for fees and pay the client additional compensation in the amount of a one-time official fee. Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Dealing with Reduction in the number of As a result of the reduction in required procedures, National 1 construction days to comply with the time companies must spend to comply with permits construction permitting construction permitting procedures is expected to be cut by 15 percent, from 189 to 160 days. Dealing with Reduction in the number of Under the new Permits Law, five procedures were National 1 construction procedures to comply with eliminated. permits construction permitting Trade logistics Reduction in the number of The government streamlined the functioning of National 1 procedures at Customs the single window for trade, which connects eight related to trade logistics national authorities involved in the trade logistics process. The government also continued to implement ongoing reforms, including the introduction of post-clearance audits and the application of risk management systems to border controls. Hungary Total 1 5 Jordan Starting a The Decree number 17/2011, which entered into force on Enactment of legislation A decree entered into force on May 16, 2011 National 1 1 business May 16, 2011, reduced the minimum capital requirement related to business entry reduces the minimum capital requirement from JD from JD 1,000 to JD 1 (from $1,333 to $1.3), of which 50 1,000 to JD 1, of which 50 percent has to be percent must be deposited prior to company registration. deposited prior to company registration. Jordan Total 1 1 Kazakhstan Protecting The amendments to the Law on the Issues of Mortgage Enactment of legislation A law passed on Feb. 10, 2011 increases disclosure National 1 1 Investors Loans and Protection of the Rights of Financial Services related to disclosure requirements and ease of shareholder suits. Consumers and Investors, which were passed on Feb. 10, (outside company law) 2011, regulated the approval of transactions between interested parties and made it easier to sue directors in cases of prejudicial transactions between interested parties. Starting a Enactment of new A government decree eliminated 4 procedures for National 1 business legislation related to entrepreneurs in starting a business. b i t Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Starting a Reduction in the number of A government decree reduced the time National 1 business days it takes to comply with entrepreneurs must spend in starting a business by business regulations 48 percent (from 19 to 10 days). The decree says related to business entry that the business registration process should be completed in no more than 5 working days. Starting a Reduction in the number of The government eliminated 4 procedures in National 1 business procedures it takes to starting a business, cutting required procedures comply with business from 6 to 2. regulations related to business entry Kazakhstan Total 1 4 Liberia Enforcing Enactment of legislation A law to establish the country's first Commercial National 1 contracts related to enforcing Court and eight laws to promulgate the first contracts Commercial Code were passed. The Commercial Court is part of the government's reform initiatives undertaken through the Central Bank of Liberia, which had prioritized the need to set up a dispute settlement mechanism within the economy's commercial sector. Investment The government passed a new investment code in May Improved regulatory The government passed a new investment code in National 1 1 policy and 2010 that provides for transparency in the granting of framework related to May 2010 that provides for transparency in the promotion investment incentives and protects investors against investment policy and granting of investment incentives and protects expropriation. It also allows for repatriation of profits, promotion investors against expropriation. It also allows for protection of intellectual property rights, and provides repatriation of profits, protection of intellectual investors with access to international dispute resolution property rights, and provides investors with access mechanisms. Under the new law, the number of sectors to international dispute resolution mechanisms. reserved exclusively for the indigenous population has been Under the new law, the number of sectors reduced by 50 percent, which opens the remaining half to reserved exclusively for the indigenous population international investment. has been reduced by 50 percent, which opens the remaining half to international investment. Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Public private Liberia Better Business Forum supported a highly successful Number of PPD-sponsored Eight laws establishing Liberia's first commercial National 1 8 dialogue effort to draft, advocate, and support the passage of eight Investment Climate code were passed by the legislature on September laws establishing the country's first commercial code, which reforms enacted which 16, 2010. These laws cover general provisions, were passed by the legislature on September 16, 2010. were directly supported by sales, leases, finance Leases, negotiable These laws cover general provisions, sales, leases, finance the PPD project team instruments, secured transactions, mortgages, and leases, negotiable instruments, secured transactions, commercial arbitration. The passage of the laws mortgages, and commercial arbitration. The passage of the has contributed to an improved investment laws has contributed to an improved investment climate, climate, greater security for commercial greater security for commercial transactions, improved transactions, improved access to finance, and access to finance, and greater confidence in Liberia as an greater confidence in Liberia as an investment investment destination. destination. Trade logistics The Bureau of Customs and Excise enhanced and Reduction in the number of It is no longer necessary for cargo to be physically National 1 1 broadened the efficacy of the risk-based inspection regime procedures at Customs escorted when in transit or being transshipped at the border and implemented online submission of related to trade logistics through Liberia, enhancing the value of the port of customs forms. As a result, the time to export decreased Monrovia as a transit port. This improvement will from 17 to 15 days and the time to import from 15 to 14 help reduce costs for the private sector, specifically days. brokers and importers who use Liberia as a transit country for importing goods into Guinea and Sierra Leone. International best practice calls for not physically escorting cargo (by customs officers) when an appropriate bond has been paid to cover customs charges Trade logistics Implementation or The Liberian Bureau of Customs signed a border National 1 improvement of risk cooperation agreement with the National Customs targeting strategies related Department of the Republic of Guinea. This to trade logistics agreement allows for the exchange of information and intelligence between the two countries regarding border management issues and strategies to help improve the targeting of high risk cargo across land and sea borders Liberia Total 3 12 Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Macedonia Closing a In February 2011, the Company Law was amended to set a Enactment of legislation The Company Law was amended in February 2011 National 1 1 business limit of 15 days for a liquidator to announce that a company related to closing a to set a limit of 15 days for liquidators to announce is undergoing liquidation. In April 2011, the Bankruptcy Law business liquidation. In April 2011 the Bankruptcy Law was was amended to require bankruptcy trustees to use the e- amended, requiring bankruptcy trustees to use the bankruptcy system to record all phases and process actions e-bankruptcy system. during bankruptcy proceedings. Closing a Reduction in the fees to The Central Registry further decreased the fee for National 1 business close a business voluntary liquidation of a company (by 60 percent), reducing costs for registration from MKD 1300 to MKD 500. Closing a Reduction in the number of Amendments to the Company Law and the National 1 business days to close a business Bankruptcy Law reduced the number of days needed to close a business. Dealing with The Law on Construction and the Law on Urban and Spatial Enactment of legislation The Law on Construction and the Law on Urban National 1 1 construction Planning were amended in October 2010 and February related to construction and Spatial Planning were amended in October permits 2011. The amendments eliminate the preliminary design permits 2010 and February 2011. The amendments requirement, reduce municipal fees and set shorter eliminate the preliminary design requirement, deadlines for issuing permits. As a result, the number of reduce municipal fees, and set shorter deadlines procedures to obtain a construction permit and utility for issuing permits. connections decreased from 20 to 10, the time needed from 139 to 117 days, and the cost from 1,600 to 553 percent of income per capita. Dealing with Reduction in the cost to As a result of amendments to the Law on National 1 construction comply with construction Construction and the Law on Urban and Spatial permits permitting Planning, the government reduced municipal fees Dealing with Reduction in the number of b Amendments to the Law on Construction and the National 1 construction days to comply with Law on Urban and Spatial Planning eliminated two permits construction permitting procedures and set shorter deadlines for issuing permits, reducing the time required to comply with construction permitting by 22 days. Macedonia Total 2 6 Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Madagascar Business Effective January 1, 2009, corporate income tax and tax on Implementation or In 2010 the government began implementing its National 1 1 taxation interest have both been reduced from 25 to 24 percent. improvement of payment 2009 decision to simplify payment by taxpayers. These rates were further reduced to 23 percent in 2010. options for taxpayers This improvement covers means and frequency of payment and allows payment by bank transfer. Business Rationalization in the tax The government rationalized the tax system, base, National 1 taxation rate and the tax base and rates. The Taxe Professionnelle, two stamp duties, and the transactions tax were eliminated. Three distinct taxes on individuals were merged into a single personal income tax. The tax base was broadened, and the corporate income tax rate was reduced from 25 to 23 percent. Value-added tax recommendations were implemented. A simplified tax (with simpler declaration and a reduced rate of 5 percent) was introduced for small taxpayers (both companies and individuals). Madagascar Total 1 2 Mali Dealing with Enactment of legislation The government enacted two measures on National 1 construction related to construction October 11, 2010 to improve and simplify permits permits construction permits. Arrete No. 10-3336, related to small buildings, reduced the number of required documents by eliminating five procedures. Arrete No. 10-3337 implemented an arbitration committee of urbanism and construction to handle appeals in cases when the application for construction permit is rejected. The arbitration committees in each region and Bamako district can manage cases that previously needed to go to court. Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Dealing with Implementation or Commercial constructions of two stories classified National 1 construction improvement of inspection as category "C" will not be required to obtain an permits regime for construction environmental study. Under the new decree, permitting builders would need to submit a notice outlining the project's potential hazards to the environment. This notice needs to be approved by a DNACPN inspection carried out within 15 days of submission of the notice. If DNACPN discovers that the hazards to the environment are greater than stated in the notice, the agency can ask the project to carry out an full environmental impact study. Starting a The one-stop shop for company registration improved its Enactment of legislation Article 75 of Annex 3 of the new Tax Code National 1 1 business operation by adding two additional steps into its workflow: related to business entry exempted stamp duty for company registration. (i) employee registration with the Social Security; (ii) filing employee contract with the labor authorities. As a result, the number of procedures to start a business decreased from 6 to 4. Starting a Creation or improvement Two agencies have been merged and now offer National 1 business at the legal and regulatory services within a one-stop shop. level of institutions dealing with business entry Starting a Reduction in the number ofThe government introduced a signed affidavit to National 1 business certify no criminal record for entrepreneurs days it takes to comply with business regulations starting a business, reducing start-up time by 7 related to business entry days. In about 10 minutes, the entrepreneur can sign the affidavit and then continue the procedures while he waits to get the required two copies of the criminal record. Starting a Reduction in the number of Two procedures have been integrated within the National 1 business procedures it takes to one-stop shop: filing an employee registration comply with business request with the Institut National de Prevoyance regulations related to Sociale and filing every employee contract with the business entry Direction Nationale du Travail. Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Trade logistics Implementation or The process of scanning cargo was implemented, National 1 Improvement of best- reducing costs for customs brokers and importers practice procedures related who are now able to make the goods declaration to the flow of cargo prior to having their goods scanned. International best practice calls for scanners to be used as a verification tool, allowing scan results to be compared with documents submitted by the broker or importer. Trade logistics Implementation or The direct release form for imports was National 1 improvement of systems computerized. Brokers and importers are now able for computerization of to process within the customs automation system documents related to trade cargo shipments that qualify for direct release logistics from customs control. Trade logistics Reduction in days to trade The time required to import was cut from 37 to 31 National 1 days (16 percent) and for exports from 32 to 26 days (18 percent). Mali Total 1 9 Mexico Access to The government strengthened the secured transactions Enactment of legislation The government strengthened the secured National 1 1 finance system by implementing a centralized collateral registry related to secured lending transactions system by implementing a centralized with an electronic database. Now registrations for all types collateral registry with an electronic database of security interest over movable property can be made accessible online. As a result, Mexico's score on online at no cost. the legal rights index increased by 1 point. Dealing with The government consolidated internal processes and hired Reduction in the number of The government consolidated some internal National 1 1 construction more personnel to issue zoning certificates. As a result, the days it takes to comply with processes, hired more staff to issue zoning permits time to complete this procedure was reduced from 43 to 20 business regulations certificates, and better integrated and coordinated days, and the overall time to obtain a construction permit related to business activities between the cadastre and municipality and utility connections from 104 to 81 days. operations on urban planning. Dealing with Implementation or Improvements in the inspection regime for National 1 construction improvement of inspection construction permitting helped cut the time to permits regime for construction complete construction permitting procedures from permitting 43 to 20 days (57 percent). Mexico Total 2 3 Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Moldova Dealing with Enactment of legislation The Parliament adopted a new law on National 1 construction related to construction authorization of execution of construction works permits permits on July 9, 2010 which is expected to streamline processes for construction permits. The law establishes the procedure of authorization, notification, and control over the design, construction, or demolition of any kind of building, irrespective of the category, destination or type of property, except for those with military or secret objectives. The law provides a complete list of documents that authorize the execution of construction works, as well as their content, conditions and terms of issuance. Enforcing Several laws were passed to increase the efficiency of the Enactment of legislation Amendments to the Enforcement Code were National 1 1 contracts court system. The Law on Court Bailiffs adopted on June 17, related to enforcing adopted on July 2, 2010 and enacted on 2010 and enacted on July 23, 2010 made the first step in contracts September 7, 2010. Under the new provisions, the changing public enforcement procedures into private ones. bailiff initiates the enforcement proceedings Amendments to the Enforcement Code were adopted on without having to give the debtor a term to comply July 2, 2010 and enacted on September 7, 2010. Under the voluntarily with the judgment, but offers the new provisions, the bailiff initiates the enforcement possibility of conciliation to the parties. If the proceedings without having to give the debtor a term to parties agree to a settlement, the bailiff will record comply voluntarily with the judgment, but offers the the settlement terms and then terminate possibility of conciliation to the parties. As a result, the time enforcement proceedings. The amendments to the to enforce a contract decreased from 365 to 352 days. Enforcement Code also supplement the bailiffs' rights in enforcement proceedings. The Law on Court Bailiffs adopted on June 17, 2010 and enacted on July 23, 2010 made the first step in changing public enforcement procedures into private ones. Under the law, a court bailiff has powers vested by the state to meet the public interest activities in enforcement proceedings. Bailiffs' activities are supervised by the Ministry of Justice jointly with the National Union of the Protecting Enactment of legislation Amendments to the Law on Joint Stock Companies National 1 Investors related to disclosure were adopted on April 15, 2011, improving (outside company law) disclosure obligations for transactions involving conflicts of interest. Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Starting a New amendments to the Company Law were passed, Enactment of legislation New amendments to the Company Law were National 1 1 business creating the legal basis for the one-stop shop. As a result, related to business entry passed, eliminating the minimum capital the number of procedures to start a business decreased requirement from registration and creating the from 8 to 7, and the time needed to start a business from legal basis for the one-stop shop. 10 to 9 days. Moldova Total 2 4 Montenegro Business Implementation or The formally established legal and institutional National 1 licensing and improvement of mechanism for permanent consultations (the regulatory consultation mechanisms in Council) began acting as an oversight authority governance the business regulatory with monthly meetings involving the private process sector. At the regulatory level, working groups became active and seven consultations were held with the private sector to solicit recommendations for improving or abolishing regulations. The seven consultations included: three meetings on construction permits with three companies, the Association of Builders, and the Association of Architects; one meeting with the chamber of commerce on the draft Omnibus law on construction permits; one consultation with the chamber of commerce on the Law on Spatial Planning; one consultation with the chamber of commerce on the Law on Labor; one consultation with trade unions on the Law on Labor. Closing a A new Bankruptcy Law was passed in December 2010 and Enactment of legislation A new Bankruptcy Law passed in December 2010 National 1 1 business entered into force in January 2011. The law, harmonized related to closing a and entered into force in January 2011 sets with the contemporary Bankruptcy Law of Europe, business deadlines for bankruptcy proceedings, introduces introduced reorganization and liquidation proceedings, sets mediation, and outlines the functions of a time limits for these proceedings, and provides the bankruptcy court. The law is harmonized with the possibility of recovery of secured creditors' claims and contemporary Bankruptcy Law of Europe. settlement before completion of the entire bankruptcy procedure. Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Closing a Improved regulatory A new Bankruptcy Law was adopted by Parliament National 1 business framework related to on December 22, 2010, facilitating the use of restructuring and mediation in the resolution of insolvencies. i l Closing a Reduction in the number of As a result of the new Bankruptcy Law, the time National 1 business days to close a business needed to close a business is expected to decrease by around 20 percent (from 24 to 19 months). Dealing with Enactment of legislation Six laws related to construction were amended National 1 construction related to construction and set up a one-stop shop for construction permits permits permitting as follows: Law on Amendments to the Law on Spatial Planning and Construction, Law on Amendments to the Law on Electronic Communication, Law on Amendments to the Law on Protection and Rescue, Law on Amendments to the Law on Waters, Law on Amendments to the Law on Agricultural Land, and Law on Amendments to the Law on Geological Researches Dealing with Reduction in the number of As a result of amendments to six construction- National 1 construction days to comply with related laws, the time required to comply with permits construction permitting construction permtting was reduced by 50 days (21 percent) Dealing with Reduction in the number of Amendments to six construction-related laws National 1 construction procedures to comply with reduced the number of required procedures from permits construction permitting 14 to 2. Registering Reduction in the number of A new decree was passed promulgating the Law on National 1 property procedure to register the Improvement of the Business Environment. property The decree reduces a number of administrative fees, including the court fee associated with the signing and authentication of signatures in the transfer of property title at the Municipal Court. Starting a A one-stop shop for company registration was established Enactment of new The Law on Accounting and Auditing, the Law on National 1 1 business within the Central Registry of the Commercial Court. As a legislation related to Tax Administration, and the Company Law were result, the number of procedures to start a business business entry amended to account for the establishment of a decreased from 7 to 6. one-stop shop. Starting a Reduction in the number of The number of days required to start a business National 1 business days it takes to comply with was cut from 10 to 5. business regulations related to business entry Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Starting a Reduction in the number of The number of procedures required to start a National 1 business procedures it takes to business was cut from 7 to 6. comply with business regulations related to business entry Montenegro Total 2 11 Morocco Dealing with The one-stop shop for construction permitting established Reduction in the number of The construction permit can be obtained in 15 National 1 1 construction in Casablanca at the end of 2005 became fully operational days to comply with days, the land registry plan in 7 days (a decrease of permits and widely used by entrepreneurs by the second half of construction permitting 2 days), and a certificate of conformity in 30 days. 2010. As a result, the number of procedures to obtain a construction permit and utility connections decreased from 16 to 15, the time needed from 104 to 97 days, and the cost from 246 to 235 percent of income per capita.The construction permit can be obtained in 15 days (down from 20 last year), and the land registry plan in 7 days (down from 9). Dealing with Enactment of legislation The one-stop shop for construction permitting National 1 construction related to construction established by a decision of the Wali of Casablanca permits permits in November 2005 became fully operational and widely used by entrepreneurs. Dealing with Reduction in the number of Entrepreneurs no longer need to request and National 1 construction procedures to comply with receive a technical inspection for building control permits construction permitting from the Ministry of Economic Development. As of June 2010, the company in charge of water and sewerage and electricity connections requires only one application for these two services. Starting a Enactment of legislation The government eliminated the minimum capital National 1 business related to business entry requirement, cutting the cost of starting a new firm by 42 percent. Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Starting a Reduction in the number of The government eliminated 3 of 6 procedures. The National 1 business procedures to comply with requirement that the company's statutes and business regulations leasing contracts be legalized to establish proof of related to business entry residence was eliminated. The company's name search can be dealt with online and confirmed as part of an integrated set of registration formalities at the one-stop-shop of Casablanca. The procedure at the prefecture has no legal basis and is no longer required Morocco Total 1 5 Paraguay Dealing with The Municipality of Assuncion created a single window for Enactment of legislation Paraguay made dealing with construction permits National 1 1 construction building permit approvals. This initiative includes the related to construction easier by implementing a risk-based approval permits implementation of a new checklist system for accepting permits system, a more comprehensive checking process building permit applications and a risk-based approval for applications, and a single window to obtain system. As a result, the time to obtain a building permit was construction permits. shortened by 42 days, (from 63 to 21), and the overall time to obtain all permits and utility connections fell from 179 to 137 days. Dealing with Reduction in the number of Improvements in the process of obtaining a National 1 construction days to comply with construction permit resulted in a reduction of 42 permits construction permitting days (from 63 to 21). Paraguay Total 1 2 Peru Business The Law 29566 of July 9, 2010 led to improvements in Reduction in time of days it A law was enacted in July 2010 to improve the National 1 1 taxation electronic filing and payment of three major taxes. As a takes to file taxes investment climate and facilitate payment of taxes result, the time to prepare, file, and pay taxes decreased in Peru. from 380 to 309 hours. Protecting On July 28, 2010, the government amended the Companies Enactment of legislation Amendments to the Companies Law strengthened National 1 1 Investors Law by adopting Law no. 29566. The law strengthened related to company investor protections by allowing minority investor protections by allowing minority shareholders, legislation shareholders (holding 5 percent of the company's holding 5 percent of a company's paid capital, to request paid capital) to request access to non-confidential access to non-confidential corporate documents. corporate documents. Previously an individual shareholder did not have the right to inspect internal documents and minority shareholders (holding 10 percent) could only demand inspection by independent third parties such as auditing firms. As a result, Peru's score on the shareholder suit index increased by 1 point, from 7 to 8 (of 10), and by 0.3 on the Ease of Protecting Investors Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Starting a The Law No. 29566, published on July 9, 2010 Enactment of legislation The government enacted a law on July 9, 2010 to National 1 1 business (implemented by Decree No. 001-2001-PRODUCE, January related to business entry improve the investment climate and facilitate 23, 2011) eliminated the requirement for micro and small payment of taxes. The law makes starting a enterprises to deposit start-up capital in a bank before business easier by eliminating the requirement for registration. As a result, the number of procedures to start micro and small enterprises to deposit start-up a business decreased from 7 to 6, the time from 27 to 26 capital in a bank before registration. days, and the cost from 13.6 to 11.9 percent of income per capita. Peru Total 3 3 Romania Closing a The government promulgated in September 2010 the Implementation or The government promulgated in September 2010 National 1 1 business Corporate Debt Restructuring Guidelines for out-of-court improvement of best the Corporate Debt Restructuring Guidelines for workouts, which have been published on the Web sites of practice voluntary/informal out-of-court workouts, which have been published the Ministry of Justice, Ministry of Finance, and the Central business restructuring on the Web sites of the Ministry of Justice, Bank. The guidelines will contribute to an increase in the procedures Ministry of Finance, and the Central Bank. The resolution of insolvency cases out of court, which can be guidelines will contribute to an increase in the expected to reduce the time and transaction cost of resolution of insolvency cases out of court, which insolvency cases and increase the rate of successful can be expected to reduce the time and business turnaround. transaction cost of insolvency cases and increase the rate of successful business turnaround. Romania Total 1 1 Rwanda Closing a Enactment of legislation The government introduced the Insolvency Law, National 1 business related to closing a the country's first complete bankruptcy regulation. business The law's main objectives are the maximization of value of the debtor's assets, the equitable treatment to creditors of the same category, the preservation of insolvent estates, and the facilitation for honest debtors to be discharged from residual debt. These objectives are aligned with international leading practices. Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Special The Special Economic Law #05/2011 was enacted on March Improved institutional The government enacted the Special Economic National 1 1 economic 21, 2011. The law regulates the establishment, framework related to Law of March 21, 2011, which regulates the zones development, operation and maintenance of special special ecoonomic zones establishment, development, operation, and economic zones, including description of permitted (SEZs) maintenance of special economic zones in Rwanda. activities (all activities, unless specifically prohibited), A SEZ Regulatory Unit was established at the thereby allowing for broad economic development and Rwanda Development Board to ensure fair and diversification. In addition, a SEZ Regulatory Unit was transparent treatment of businesses within the established at the Rwanda Development Board to ensure zone. Draft SEZ regulations were prepared. fair and transparent treatment of businesses within the zone, while acting as an "honest broker" between businesses and the government, and also to reduce the administrative burden on businesses in the zone. Rwanda Total 1 2 Senegal Dealing with Reduction in the number of A single window for construction permits has National 1 construction days to comply with centralized the processing of applications at the permits construction permitting municipal level, reducing the number of procedures and the time required to obtain a Senegal Total 1 1 Serbia Business The Decision on the Office for Regulatory Reform and Change in the costs to Following improvements in Serbia's business National 1 1 licensing and Regulatory Impact Assessment was adopted by the comply with regulations procedures, annual aggregated private-sector regulatory government on November 18, 2010. As a result of a related to business direct costs were reduced by $44,555,541 (63 governance regulatory reform: 625 (11 percent) of 5,900 proposed operation percent of the baseline) based on Standard Cost business procedures were simplified or improved; 355 (11 Model data after recommendations were adopted percent) of 3,170 inventoried and reviewed business laws and implemented. and regulations were abrogated or improved; and annual aggregated private-sector direct costs were reduced by $44,555,541 (63 percent of the baseline). Business Enactment of legislation The Decision on the Office for Regulatory Reform National 1 licensing and related to the business and Regulatory Impact Assessment was adopted regulatory regulatory system by the government on November 18, 2010. It governance establishes the agency as part of the civil service, subordinate to the government, with ex officio authority for oversight of the regulatory framework. The Office will apply regulatory governance principles and criteria Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Business Rationalization in the Of 5,900 proposed business procedures, 625 (11 National 1 licensing and number of procedures to percent) were simplified, improved, or eliminated regulatory comply with business as a result of regulatory reform. All of these governance regulations related to improvements were introduced into the legal business operations system through the adoption or abrogation of appropriate legal acts Business Rationalization in the Of 3,170 inventoried and reviewed business laws National 1 licensing and number of regulations and regulations, 355 (11 percent) were abrogated regulatory related to business or improved as a result of regulatory reform. governance operations Serbia Total 1 4 Sierra Leone Business Implementation or The National Revenue Authority made compliance National 1 taxation improvement of best easier for taxpayers by allowing tax payments to practice tax enforcement be made an any of eight major banks. Previously procedure and practices payments had to be made at tax offices. Business Implementation or The National Revenue Authority combined the tax National 1 taxation Improvement of payment and business registration offices, allowing options for taxpayers registration for new business and registration for tax purposes to be conducted at the same location. Previously, new businesses were required to complete their tax registration at a tax office, which could present opportunities for harassment and demands for pre-payment of taxes. Closing a A fast-track commercial court became operational in May Creation or improvement The government established specialized industrial National 1 1 business 2011. The court will expedite commercial cases, including at the legal and regulatory courts to deal with reorganization proceedings, insolvency proceedings level of institutions dealing which expedited the hearing of commercial cases with closing a business involving these proceedings. Dealing with The government made dealing with construction permits Reduction in the number of The government made dealing with construction National 1 1 construction easier by moving the process from the Ministry of Lands to days to comply with permits easier by moving the process from the permits the Ministry of Works. This led to a reduction of 31 days in construction permitting Ministry of Lands to the Ministry of Works. This led the time to issue location clearances and building permits, to a reduction of 31 days in the time to issue reducing the total time businesses need to obtain permits location clearances and building permits. and utility connections from 269 to 238 days. Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Enforcing A fast-track commercial court became operational in May Creation or improvement A fast commercial court was set up and started to National 1 1 contracts 2011. The court will be fully automated and have real-time at the legal and regulatory hear cases in May 2011. The court will be fully transcription of the proceedings. level of institutions dealing automated and have real-time transcription of the with enforcing contracts proceedings. Prior to the court's opening, the team recommended the establishment of the reform coordination mechanism that ensured the commercial courts would start their operations. This coordination included raising awareness among the legal community and a broad communications campaign to help ensure that cases are brought to the commercial court. Registering The government lifted the moratorium of land transfer, Reduction in the number of The government lifted the moratorium of land National 1 1 property significantly improving the time it takes to transfer days to register property transfer, significantly improving the time it takes to property. The time needed to register property was transfer property. The time needed to register reduced from 235 to 86 days. property was reduced from 235 to 86 days. Registering Enactment of legislation The Land Survey Act was amended in January 2011 National 1 property related to construction to allow the digitization of land surveys. Work to permits improve the survey map will enable a modern cadastre system in the medium term. Sierra Leone Total 4 7 Syrian Arab Starting a The Legislative Decree 29 of 2011 reduced the minimum Enactment of legislation A legislative decree reduced the minimum capital National 1 1 Republic business capital requirement from SYP 1,000,000 to SYP 400,000 related to business entry requirement from SYP 1,000,000 to SYP 400,000 (from $21,070 to $8,428). (from $21,070 to $8,428). Syrian Arab Republic Total 1 1 Tajikistan Starting a Amendments to the Law of the Republic of Tajikistan "On Enactment of new Amendments to the Law on Limited Liability National 1 1 business Limited Liability Companies" adopted on December 29, legislation related to Companies were adopted on December 29, 2010, 2010 removed the requirement to pay 50 percent of the business entry eliminating the minimum capital required to start a minimum capital before registration. Instead, this amount business. may be paid in up to one year after registration. As a result, the number of procedures to start a business decreased from 8 to 5, the time needed from 27 to 24 days, and the cost from 37 to 33 percent of income per capita. Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Starting a Reduction in the number of The government reduced the time entrepreneurs National 1 business days it takes to comply with need to start a business from 27 to 24 days. business regulations related to business entry Starting a Reduction in the number of The government eliminated three procedures: National 1 business procedures it takes to registering the company with the State comply with business Registration of Legal Entities and Individual regulations related to Entrepreneurs and obtaining the state registration business entry certificate; obtaining a statistics code at the Statistics Committee; and registering with the Agency for Social Protection and Pension and obtaining a social insurance number. Tajikistan Total 1 3 United Arab Starting a The newly established online business registration system Creation or improvement The newly established online business registration National 1 1 Emirates business was launched in October 2010. The online portal allows the at the legal and regulatory system was launched in October 2010. entrepreneur to file a single form for business registration, level of institutions dealing licensing, and membership with the Dubai Chamber of with business entry Commerce. As a result, the number of procedures to start a business was reduced from 9 to 8, the time needed from 15 to 13 days, and the cost from 6.4 to 5.6 percent of income per capita. Starting a Reduction in the number of The introduction of a single form for business National 1 business days it takes to comply with registration, licensing, and membership with the business regulations Dubai Chamber of Commerce reduced the time related to business entry needed to start a business from 15 to 13 days. Starting a Reduction in the number of In early 2011 the online portal process was National 1 business procedures it takes to improved to allow the entrepreneur to file a single comply with business form for business registration, licensing, and regulations related to membership with the Dubai Chamber of business entry Commerce. United Arab Emirates Total 1 3 Annex 1: Reforms and Results Supported by FIAS in FY11 Result type (National / Country Topic Reform Description Result indicator Result Description Subnational) Reform Result Yemen, Special The government passed the law that created the board for Improved regulatory The government passed legislation creating the National 1 1 Republic of economic the new special economic zone authority, providing it with framework related to board for the new special economic zone zones powers that helped streamline zone approval and investment generation authority, providing it with powers that helped development. The decree decentralizes regulations of zones streamline zone approval and development. The and their enterprises to the regional authority. It also allows decree decentralizes regulations of zones and their for private sector representation on the board. enterprises to the regional authority. It also allows for private sector representation on the board. Yemen, Republic of Total 1 1 Grand Total 41 128 Annex 2: Other Reforms and Results Supported by FIAS FY11 The following table summarizes the 81 results of projects not mapped directly to the FIAS program but that received at least 10 percent of their budgets from FIAS in FY11. They are summarized by type of result and include a brief description of the achievements. Of these results, 43 were achieved at the subnational level. These results contributed to 14 Doing Business reforms (in addition to the 41 Doing Business reforms to which the results in Annex 1 contributed). The results that have contributed to a particular reform are shaded together with the reform in the same background color. Result type (National / Country Topic IC Reform Description Result indicator Edited text Subnational / Reform Results Armenia Business The Decision #1493, Oct. 18, 2010, instituted an inspection Enactment of legislation The government instituted an inspection National 1 1 licensing and moratorium, which prohibits the inspection agencies from related to the business moratorium on October 18, 2010 which prohibits regulatory inspecting smaller businesses until the agencies adopt a risk- regulatory system the inspection agencies from inspecting smaller governance based inspection system. The moratorium does not apply to businesses until the agencies adopt a risk-based tax inspections. inspection system. The moratorium does not apply to tax inspections. A presidential decree issued on December 11, 2010 merged the food safety and veterinary inspection and the phytosanitary inspection of the Ministry of Agriculture and created a new food safety agency. Business Enactment of legislation On June 23, 2011 the government adopted the National 1 licensing and related to the business Law on Urban Development. regulatory regulatory system governance Business Amendments to tax laws made tax compliance for firms Enactment of legislation The government reduced the number of property National 1 1 taxation easier by reducing the number of payments for corporate related to business taxation tax and land tax payments from 12 to 6; the income and labor taxes. As a result, the number of tax number of reports, statements, and returns from payments made by a medium-size company in Armenia 71 to 42; and the time spent on tax accounting and decreased from 50 to 34 and the time to prepare, file, and filing of reports from 581 (Doing Business 2011 ) to pay taxes decreased from 581 to 500 hours. 500 hours (Doing Business 2012 ). The requirement that taxpayers file certain applications and other documents (around 30) was eliminated. Annex 2: Other Reforms and Results Supported by FIAS FY11 Result type (National / Country Topic IC Reform Description Result indicator Edited text Subnational / Reform Results Dealing with The Decision #1617-N on Amendments to the earlier Enactment of legislation The government adopted amendments to its two National 1 1 construction Decision on Mandatory Environmental Expertise, adopted related to construction decisions: Mandatory Environmental Expertise and permits Dec. 9, 2010, introduced a risk-based approach to the permits Construction Process. Also, two decisions of the construction permitting process, eliminating the Public Services Regulation Council established new requirement to obtain an environmental impact assessment deadlines for approval (and submission to the for small projects. As a result, the number of procedures to Municipality) of plans for electricity and gas obtain a building permit decreased from 19 to 18, the time connections. A risk-based approach to the needed from 136 to 79 days, and the cost from 122 to 57 permitting process for different categories was percent of the income per capita. defined, and the time allowed for the permitting process was reduced and differentiated for each risk category. Starting a In December 2010 the Parliament adopted a package of Enactment of legislation On Dec. 21, 2010 the Parliament adopted a National 1 1 business amendments to Laws "On State Registration of Legal related to business entry package of amendments, eliminating three Entities" and "On Tax Registration and Deregistration of procedures: the state registry will provide a Tax Organizations and Individuals," which led to the creation of Identification Number, which eliminates the need a one-stop shop for business registration. Companies and for visits to the tax office; commercial individual entrepreneurs can now obtain the name organizations are no longer required to provide a reservation, business registration, and tax identification bylaw for registration; and individual number at a single location at the same time. As a result, entrepreneurs are not required to pass the state the number of procedures to start a business decreased registration process (a simple application form will from 5 to 3, and the time needed to complete the process be enough to start a business). from 14 to 8 days. Trade logistics Implementation or The government allocated funding to establish an National 1 improvement of payment effective link between the customs clearance systems for trade system and the banking/payment system. Traders can now pay customs fees and duties and receive confirmation of payment via the electronic system. The government also introduced provisions which allow customs officers to electronically approve the customs declaration and release goods. Both improvements reduce transaction costs by eliminating the need for traders to visit the Customs office. Annex 2: Other Reforms and Results Supported by FIAS FY11 Result type (National / Country Topic IC Reform Description Result indicator Edited text Subnational / Reform Results Trade logistics Implementation or The government adopted 10 legal acts to improve National 1 improvement of processes and simplify trade procedures for mandatory at technical control certification during importation; certification and agencies permissions during import of measuring devices; certification of product origin during export and import; permission for export of dual use goods; veterinary controls during the import and export of animal products; and phytosanitary controls during import/export of plants. These changes are expected to reduce the cost and time of trade procedures. They also target improvements in risk- based control and clarification of the documentation and functions of agencies involved in the import and export process. Trade logistics Implementation or The government introduced provisions which allow National 1 improvement of processes customs officers to approve the customs at technical control declaration and release goods via the electronic agencies related to trade system. Previously traders visited the customs logistics office to obtain a seal on the paper copy of the declaration. The government also allocated funding to establish an effective link between the customs clearance system and the banking/payment system. Trade logistics Implementation or The government amended the Customs Code and National 1 improvement of risk adopted measures to ensure the effective use of a management related to risk management system for customs clearance trade logistics and control. The measures aim to reduce the rate of physical inspections of cargo crossing Armenia's borders, thus saving time and money. Annex 2: Other Reforms and Results Supported by FIAS FY11 Result type (National / Country Topic IC Reform Description Result indicator Edited text Subnational / Reform Results Trade logistics Implementation or Amendments to the Customs Code aimed at National 1 improvement of trade simplifying customs valuation procedures were logistics standards and drafted, submitted to the Parliament for adoption, quality and two legal acts were adopted. The legal acts set limits on the customs authority's response time for importers' applications during the customs clearance process. The deadline of 2 days (previously 5 days) was set for acceptance or rejection of the customs value of imported goods based on the transaction value method. If the decision is not made within 2 days, the customs value presented by the applicant is deemed accepted. Trade logistics Reduction in the number of The government reduced the time exporters and National 1 days to trade importers must spend in conducting their trade procedures. The number of days for export was reduced by 4 ( a more than 10 percent reduction from the baseline), and the number of days to import was reduced by 2 (as reported in Doing Business 2011). Trade logistics Reduction in the number of The number of trade documents was reduced by 3 National 1 documents related to trade including two export and one import documents, as reported in Doing Business 2010. Close cooperation with customs authorities and joint efforts contributed significantly to this improvement, which reflects a 10 percent reduction from the baseline. Armenia Total 4 12 Annex 2: Other Reforms and Results Supported by FIAS FY11 Result type (National / Country Topic IC Reform Description Result indicator Edited text Subnational / Reform Results Belarus Closing a Improved regulatory A presidential decree improved procedures for National 1 business framework related to economic insolvency, providing for: creditors to restructuring and acquire the debtor's immovable assets without insolvency documents certifying their state registration (although there is no efficient mechanism for application); a debtor to transfer illiquid assets against the debt; more options to dispose of receivables; and tax exemption on sale turnover and profit from sale of the debtor's entity property complex. Belarus Total 1 Bosnia and Business Creation or improvement As a result of the enactment of legislation at the Subnational 1 Herzegovina licensing and at the legal and regulatory local level, a regulatory body dealing with regulatory level of institutions dealing regulatory management and reform was created in governance with business regulatory the municipality of Siroki Brijeg. This sort of management and reform institution did not previously exist and the concept is new for the municipality. Business Creation or improvement Regulatory bodies dealing with regulatory Subnational 6 licensing and at the legal and regulatory management and reform were created in six regulatory level of institutions dealing localities. Responsibilities and tasks of these bodies governance with business regulatory are defined in the legal acts adopted at the local management and reform level. Changes are implemented after regulatory review by these bodies and approval of the proposal by the local authorities. Business Implementation of an e- E-registries were completed, tested, and became Subnational 4 licensing and registry of administrative fully operational in Modrica, Zvornik, Novi Grad, regulatory procedures and Gorazde. The e-registries contain all governance information on local administrative procedures and documents and forms can be downloaded. Annex 2: Other Reforms and Results Supported by FIAS FY11 Result type (National / Country Topic IC Reform Description Result indicator Edited text Subnational / Reform Results Business Implementation of an e- Six e-registries of administrative procedures were Subnational 6 licensing and registry of adminitrative established in the municipalities of Bijeljina, Bihac, regulatory procedures Tesanj, Doboj, Visegrad, and Siroki Brijeg. The e- governance registries help inform businesses of licensing and other requirements to operate, including all relevant information related to each single formality (department, documentation and information needed, taxes, fees, waiting time, deadlines, contacts, and forms to file). Business Implementation or A systematic review of business regulations Subnational 1 licensing and improvement of a proposed the simplification and elimination of regulatory Regulatory Impact Analysis regulations at the municipal level and related to governance specific sectors (such as tourism, SMEs, crafts, financial). Municipal regulations were structurally changed to eliminate/improve procedures as follows: in Bijeljina (3 regulations changed); in Tesanj, Doboj, and Bihac (3); in Visegrad and Siroki Brijeg (2). Thirteen regulations that apply across the federation were changed related to sectors such as forestry, tourism, geology, and mining. Business Rationalization in the Of 96 business procedures inventoried in Siroki Subnational 1 licensing and number of procedures to Brijeg municipality, 65 were improved (67 percent regulatory comply with business of all inventoried business procedures). Legislation governance regulations related to was enacted enabling implementation of the business operations recommended improvements, which reduce time spent on the procedures, eliminate documentation, and simplify forms and information obligations. Annex 2: Other Reforms and Results Supported by FIAS FY11 Result type (National / Country Topic IC Reform Description Result indicator Edited text Subnational / Reform Results Business Rationalization in the In the Republika Srpska, a Regulatory Impact Subnational 6 licensing and number of regulations Analysis on sections of the labor law, including a regulatory related to business cost-benefit analysis, was completed and the governance operations government began implementing its recommendations. The Ministry of Labor was asked to engage with social partners and find ways to formulate changes to the labor law. The Republika Srpska empowered its Ministry of Economic Relations to establish a unit with authority to oversee comments and report on the quality of regulatory proposals. Business Reduction in the cost to Improved procedures at the municipal level Subnational 6 licensing and comply with business resulted in cost savings in Bijeljina (20 percent less regulatory regulation related to than baseline), Doboj (31 percent), Bihac (25 governance business operation percent), Visegrad (25 percent), Siroki Brijeg (27 percent), and Tesanj (31 percent). Investment Enactment of legislation The government adopted an amendment to the Subnational 1 policy and related to investment Law on FDI, issued instructions for implementing promotion policy and promotion the new FDI registration policy, and assisted local governments in implementing it. The policy abolished the registration of businesses with the Ministry of Foreign Trade and Economic Relations. Foreign investors and domestic companies need only register at the municipal/basic court. The instructions also regulate how the courts submit, record, and disclose data on registered FDI business entities. Annex 2: Other Reforms and Results Supported by FIAS FY11 Result type (National / Country Topic IC Reform Description Result indicator Edited text Subnational / Reform Results Investment Implementation or An electronic tracking and analyzing system was Subnational 2 policy and improvement of established at the Ministry of Foreign Trade and promotion procedures related to Economic Relations, which acts as the principal investment policy and government source on FDI inflows. In addition, promotion new unified procedures for issuing work permits to foreigners were drafted and put into force in June 2011. The by-law provides for a single and streamlined process. Bosnia and Herzegovina Total 34 Burkina Faso Business In January 2010, the Parliament adopted a new law creating Enactment of legislation The Parliament adopted in January 2010 and National 1 1 taxation a corporate tax by merging three different taxes. The new related to business taxation promulgated in March 2010 a new law creating a corporate tax has been lowered to 27.5 percent. Effective corporate tax by merging three different taxes. January 2010, apprentice tax has been reduced from 4 to 3 The new corporate tax has been lowered from 30 percent. Also, a new tax procedure book has been adopted to 27.5 percent . A new tax procedure book was to provide uniform tax procedures across different offices. created. Dealing with Dealing with construction permits became less costly and Reduction in cost to comply The cost of the soil survey was reduced from XOF National 1 1 construction easier as a result of a reduction in the cost of the soil with construction 600,000 to XOF 300,000 (from $1,232 to $616), permits survey by a half [from XOF 600,000 to XOF 300,000 ($1,232 permitting and the time to process a building permit to $616)] and a reduction in the time to process a building application was cut by a third. permit application by a third (from 30 to 20 days). As a result, the total cost to obtain a building permit and utility connections decreased from 668 to 524 percent of income per capita, and the time decreased from 108 to 98 days. Enforcing The commercial court provided for under Law n°022-2009 Enactment of legislation The government adopted in June 2010 two joint National 1 1 contracts of May 2009 became operational in October 2009. It is related to enforcing ministerial decrees appointing 64 new consular competent for all commercial matters with a claim value in contracts judges at the commercial court and also initiated a excess of XOF 1,000,000 ($2,053). strong training program for the commercial court judges and clerks. Prior to this, the program funded the design and set-up of the case management at the lower court and supported the lower court in implementing the automated case management system. Annex 2: Other Reforms and Results Supported by FIAS FY11 Result type (National / Country Topic IC Reform Description Result indicator Edited text Subnational / Reform Results Enforcing New/reorganized Following adoption in May 2009 of the law National 1 contracts institution becomes creating the commercial courts, the government operational set up specialized commercial courts in the capital city, Ouagadougou, and in the economic capital, Bobo Dioulasso. Starting a Following the amendments to the OHADA Uniform Act on Enactment of legislation Following the adoption of the revised OHADA law National 1 1 business General Commercial Law, the Ministry of Justice adopted in related to starting a on general commercial law, the Ministry of Justice May 2011 a sworn declaration that replaces the business adopted in May 2011 a sworn declaration and a requirement to submit a copy of criminal record at the time circular letter was sent to all courts related to the Burkina Faso Total 4 5 Georgia Business The new tax code enacted from January 2011 simplified the Implementation or The system for filing VAT returns was improved. National 1 1 taxation system of filing value-added tax (VAT). According to the tax improvement of Effective with enactment of the new Tax Code, code, companies can choose quarterly, instead of monthly, mechanism for filing tax companies can file quarterly, rather than monthly, VAT payments. returns VAT payments. Business Implementation or The tax system for micro and smaller businesses National 1 taxation improvement of a SME tax was reformed following the adoption of the new regime Tax Code enacted in January 2011 and two pieces of secondary legislation. Easy-to-read materials were developed to help micro and small businesses understand the new system and reduce their compliance costs. Georgia Total 1 2 Haiti Investment Three companies have materialized investment and job Increase in the number of In FY11 investment leads increased from 5 to 11, National 1 1 policy and creation in this period: Timberland with $3 million and 400 leads from relevant sectors which resulted in investments and job creation promotion employees, Propper with $3 million and 400 employees; into investment generation from three companies in this period: Timberland and Willbes, an existing garment company, with $4 million pipeline with $3 million and an estimated 400 employees; and 350 employees. Propper with $3 million and an estimated 400 employees; and Willbes, an existing garment company, with $4 million and hiring 350. Haiti Total 1 1 Annex 2: Other Reforms and Results Supported by FIAS FY11 Result type (National / Country Topic IC Reform Description Result indicator Edited text Subnational / Reform Results Papua New Alternative The time to resolve a commercial dispute through Reduction in the cost and The cost savings for businesses that resolved National 1 1 Guinea dispute mediation was reduced from 60 to 48 days for the entire time for business to a disputes through mediation is estimated at resolution process, including a reduction from 4 days to 1 for the time dispute $350,000, primarily as a result of reduced legal spent in court. The private sector cost savings are estimated fees. Time saved in court days alone is estimated at $350,000 as a result of savings in reduced legal fees. at 3 days per case (from 4 days to 1). Total time saved, based on court-provided data, is estimated at 12 days per case (from 60 to 48 days) including waiting time from the date the judge referred the case to the start of the mediation. Alternative Implementation or Thirty-six new mediators were trained and National 1 dispute improvement of a more accredited in November 2011, including seven resolution gender inclusive women. This was the first group of mediators investment climate related trained and accredited in the country under the to ADR new mediation program. Papua New Guinea 1 2 Philippines Starting a Enactment of legislation The Business Permit and Licensing System Subnational 1 business related to business entry standards were enacted in January 2011. Philippines Total 1 Annex 2: Other Reforms and Results Supported by FIAS FY11 Result type (National / Country Topic IC Reform Description Result indicator Edited text Subnational / Reform Results Serbia Business Creation or improvement Regulatory bodies were established in the Subnational 2 licensing and at the legal and regulatory municipalities of Niska Banja and Crveni Krst. The regulatory level of institutions dealing inter-municipal Central Working Body for governance with business regulatory Regulatory Reform, comprised of representatives management and reform of five municipalities, is responsible for quality control and regulatory management and reform, ensuring the harmonization of administrative procedures for the municipalities. In addition, a small operation team for each municipality was formed to initiate the process of regulatory impact assessment and to support the Inter-municipal Central Working Body for Regulatory Reform. Final decisions on the registration, amendment, and repeal of administrative procedures will be made by existing Municipal Councils in each municipality, taking into account the opinion of the Inter- municipal Central Working Body for Regulatory Reform. Business Enactment of new/revised Legal acts were adopted in the municipalities of Subnational 2 licensing and legislation improving the Crveni Krst and Niska Banja, with the goal of regulatory regulatory system improving the business regulatory system, governance ensuring the legal security of the e-registry, and establishing the responsible bodies for its operation. Annex 2: Other Reforms and Results Supported by FIAS FY11 Result type (National / Country Topic IC Reform Description Result indicator Edited text Subnational / Reform Results Business Rationalization in the Of a total 19 business formalities inventoried in the Subnational 1 licensing and number of procedures to municipality of Niska Banja, 18 formalities (or 95 regulatory comply with regulations percent) were simplified, improved, or eliminated governance related to business as a result of regulatory reform. Improvements operations were achieved in terms of reducing the number of necessary procedures; in cutting taxes and costs; and in eliminating documentation and simplifying forms and information requirements. All improvements were introduced into the legal system of Niska Banja through the adoption of appropriate legal acts. Business Reduction in the cost to Three municipalities reported private sector cost Subnational 3 licensing and comply with business savings as a result of improvements in business regulatory regulations related to regulations. All figures include both direct and governance business operations indirect costs. Post-reform figures are based on Serbia Total Sudan Public private Number of PPD-sponsored Two laws drafted with IFC support were enacted National 2 dialogue Investment Climate by Parliament in May 2011. The Sale of Goods Act reforms enacted which (2011) provides the legislative framework for were directly supported by wholesale and retail trading in South Sudan. The the PPD project team Cooperatives Provisional Order provides a legal framework to encourage formation of cooperatives as legal business entities, a key strategy for opening up commercial agriculture in South Sudan. Starting a Increase in number of A total of 2,869 new business entities were National 1 business newly registered businesses registered in FY11, and a total of 12,373 new business entities have been registered since project inception. Sudan Total 3 Timor-Leste Starting a The company registry was reorganized in order to Enactment of legislation The decree-law establishing the Fast Incorporation National 1 1 business streamline the business registration process and reduce the related to business entry procedure (FIP) became effective on January 1, time necessary to receive, analyze, and process new 2011, and follow-up workshops were held with applications. As a result, the time to start a business staff. decreased from 147 to 103 days. Annex 2: Other Reforms and Results Supported by FIAS FY11 Result type (National / Country Topic IC Reform Description Result indicator Edited text Subnational / Reform Results Timor-Leste Total 1 1 Tonga Public private Implementation or The Tonga Women in Business organization, National 1 dialogue improvement of a more Women in Sustainable Enterprises (WISE), was gender inclusive registered in July 2010. WISE was created as the investment climate related result of the Women in Business conference Tonga Total 1 Vietnam Business The government reviewed six licenses related to Rationalization in the The government reviewed six licenses related to National 1 2 licensing and transportation and eliminated two. Also, in the area of number of regulations transportation and eliminated two. It is no longer regulatory advertisement licenses, of 11 different types, 8 licenses related to business necessary for businesses to register to change the governance were reviewed and replaced with post-supervision checks. operations (licenses, label of charter buses. The government also construction permits, approved the proposal to stop exploiting fixed, city inspections) inner, nearby interprovincial, and 1000 km or less interprovincial transportation routes. Related to the area of Clean Development Mechanism, the government eliminated five requirements that businesses must: prepare dossiers to get approval or comments from the provincial authority and relevant agencies; submit an approval letter of the provincial authority; submit the Assessment Report on Environmental Impact; submit the license on the exploitation of surface water and groundwater; and submit the contract/agreement with the electricity company. The government also reduced the requirement that businesses submit 18 dossiers in Vietnamese and 3 dossiers in English to just 1 dossier in Vietnamese, and it also reduced the number of ministries represented on the steering board from 14 to 3. Annex 2: Other Reforms and Results Supported by FIAS FY11 Result type (National / Country Topic IC Reform Description Result indicator Edited text Subnational / Reform Results Business Creation or improvement An advisory council was established in the new National 1 licensing and at the legal and regulatory control agency to support the review of draft new regulatory level of institutions dealing and amended legal documents related to re- governance with business regulatory registration and conversion of foreign-invested management and reform companies; registration for private placement of shares; and licensing of micro-finance institutions and insurance companies and brokers. Business Rationalization in the The government amended the advertisement National 1 licensing and number of regulations licensing procedure by eliminating eight of eleven regulatory related to business types of licenses and the resolution was approved governance operations (licenses, by the Prime Minister. Vietnam 1 4 Total Yemen, Business The government enacted a new tax law in August 2010 that Implementation or The new income tax law based on self assessment National 1 1 Republic of taxation reduced the general corporate tax rate from 35 to 20 improvement of practices and the six streamlined procedures reduce percent and harmonized tax incentives with investment to reduce corruption corruption related to taxes. Taxpayers now law. related to taxes determine the tax base and assess the payable tax in accordance with the provisions of this law. The taxpayer is liable for payment of the tax, on the basis of the filed return, at the same date it is filed without the need for a claim from the tax authority. Prior to this law, the tax authority determined tax payable, which could result in a negotiation between the official and the taxpayer and open opportunities for corruption. Annex 2: Other Reforms and Results Supported by FIAS FY11 Result type (National / Country Topic IC Reform Description Result indicator Edited text Subnational / Reform Results Business Implementation or The government introduced a new income tax law National 1 taxation improvement of a SME tax and executive regulations to create a tax regime regime for smaller businesses. The tax base (net profit) of the taxable small enterprises for the commercial and industrial profit tax and the tax on the net profit of non-commercial and non-industrial professions is determined as a percentage of turnover based on the type of activity. Business Implementation or The government reformed its approach to National 1 taxation improvement of a tax incentives to ensure they do not harm the tax base incentive regime while encouraging private sector growth. The new income tax law harmonizes incentives with investment law and uses incentives based on accelerated depreciation and job creation. Business Implementation or The government implemented a new streamlined National 1 taxation improvement of system for filing tax payments. Under the new mechanisms for filing tax streamlined process, a taxpayer files two tax returns declaration forms (one form for CIT and one integrated form for general sales tax and PAYE, if possible) and no attachments are required. Businesses of all sizes and tax types can use one unified process at one location, or taxpayers can file through registered mail and pay directly to the bank. The refund application is merged with the tax declaration form, allowing the taxpayer to claim a tax refund when submitting the tax declaration. Annex 2: Other Reforms and Results Supported by FIAS FY11 Result type (National / Country Topic IC Reform Description Result indicator Edited text Subnational / Reform Results Business Implementation or The tax payment process was redesigned to National 1 taxation improvement of payment incorporate the necessary steps for a self- options for taxpayers assessment tax system. The new streamlined process allows for voluntary tax payment and the automatic issuance of a tax certificate every time the taxpayer's account is settled. The taxpayer can and should only pay tax liabilities directly to banks and the post office. Business Rationalization of the tax A new income tax law reduced the tax rate from National 1 taxation rate and the tax base 35 to 20 percent (and 15 percent, in some cases). The introduction of the tax regime for smaller businesses is expected to increase the tax base. Yemen, Republic of Total 1 6 Grand Total 14 81 Annex 3: Active and Close Projects The following table summarizes FIAS' active and closed portfolio of projects as of June 30, 2011. Due to the implementation on a new project monitoring system, Project Supervision Report Overall Results are not available. TABLE 1: FIAS PROJECTS (ACTIVE/CLOSED) PROJECTS DEVELOPMENT REGION COUNTRY PROJECT NAME APPROVED BUDGET STATUS EFFECTIVENESS Europe and Central Asia Central Asia Region Tax Transparency and Industry-Specific $300,000 Active Regulatory Reform Product Development in Europe and Central Asia Eastern Europe Region DB Reform East Europe and Central Asia $1,354,780 Active Europe and Central Asia Montenegro Montenegro National BEE Reform $569,050 Active Latin America & Brazil Brazil Frontier States Investment Generation $2,300,000 Active Caribbean (National-Subnational) Latin America & Colombia Trade Logistics Advisory Program in $1,099,053 Active Caribbean Colombia Latin America & Latin America Region Doing Business Reform Latin America and $1,411,082 Active Caribbean the Caribbean Middle East and North MENA Region DB Reform MENA $1,341,636 Active Africa Middle East and North Yemen, Republic of Yemen Investment Generation Program $1,338,630 Active Africa Middle East and North Yemen, Republic of Yemen Special Economic Zones - IG $504,271 Active Africa Sub-Saharan Africa Africa Region OHADA: Building the Capacity to Improve $1,882,479 Active the Quality of the Legislation Sub-Saharan Africa Africa Region DB Reform Sub-Saharan Africa $867,380 Active Sub-Saharan Africa Burkina Faso Trade Logistics Burkina Faso $823,591 Active Sub-Saharan Africa Burundi Burundi Investment Climate Reform $1,500,000 Active Program Sub-Saharan Africa Eastern Africa Region EAC Investment Climate Reform Program $1,457,020 Active Sub-Saharan Africa Ghana Ghana Collateral Reform $1,449,508 Active Sub-Saharan Africa Kenya Kenya: Improving Regulatory Performance $4,925,000 Active and Capacities Sub-Saharan Africa Kenya Trade Logistics Kenya $1,082,939 Active Sub-Saharan Africa Liberia LIBERIA Trade Logistics Project $850,000 Active Sub-Saharan Africa Mali Investment Climate Reform Program in Mali, $1,896,000 Active Phase 2 Sub-Saharan Africa Nigeria NGIA Subnational Investment Climate $3,863,000 Active program Sub-Saharan Africa Rwanda Rwanda Investment Climate Reform $4,500,000 Active Program Sub-Saharan Africa Sierra Leone Sierra Leone Tax Simplification Rollout $2,050,000 Active Sub-Saharan Africa Sierra Leone Promoting Investment and Export for Sierra $1,632,050 Active Leone Sub-Saharan Africa Sierra Leone Sierra Leone Tourism $1,999,500 Active Sub-Saharan Africa Uganda Uganda Investment Climate Program $1,442,399 Active Annex 3: Active and Close Projects PROJECTS DEVELOPMENT REGION COUNTRY PROJECT NAME APPROVED BUDGET STATUS EFFECTIVENESS WORLD Netherlands KM: Ad-hoc Support to Regulatory $175,000 Active Governance in the Netherlands WORLD World Region Donor Committee for Enterprise $2,524,000 Active Development WORLD World Region Global Secured Transactions and Collateral $1,829,045 Active Registries Program WORLD World Region Global Investment Law and Policy Research $224,544 Active and Advisory Project (GILPRA) WORLD World Region Sub-national Doing Business - product $1,613,178 Active development and global roll out support WORLD World Region Investment Policy and Promotion Core $540,000 Active Product WORLD World Region Investing Across Borders Indicators $3,399,209 Active WORLD World Region Tax Product Program Design $2,722,249 Active WORLD World Region Commercial Mediation Product $1,500,000 Active Development and KM WORLD World Region Doing Business Reform Advisory -- Global $2,908,833 Active WORLD World Region Tourism Investment & Development $397,144 Active Advisory Services Global WORLD World Region Land Market for Investment -- Global KM $500,700 Active and Product Development WORLD World Region Role of Incentives in Promoting Investments $526,564 Active WORLD World Region Restructuring and Insolvency Advisory $1,998,785 Active Services Program WORLD World Region PPD Product Development and KM $607,500 Active WORLD World Region Global Investment Promotion Benchmarking $1,752,125 Active 2011 WORLD World Region Special Economic Zones Product $200,000 Active Development KM Phase 2 WORLD World Region Global Trade Logistics Advisory Program $1,200,000 Active WORLD World Region KM: Best Practice in Investment Climate $378,000 Active reforms and incentives to promote low- WORLD World Region Business Regulation Product Management $717,131 Active and KM WORLD World Region IC-BL Impact Estimations & Evaluations $1,249,438 Active East Asia and Pacific China MOFCOM - China. IP-Support for lesser- $570,060 Closed Positive developed regions. East Asia and Pacific East Asia and Pacific Pacific Gender Mainstreaming Program $412,500 Closed Positive Region Europe and Central Asia Russian Federation Russia--removing admin. barriers for $731,890 Closed TETJ investment, business development in republi Europe and Central Asia Serbia Regulatory Impact Analysis - Improvements $809,938 Closed Positive in efficiency and transparency of the Latin America & Colombia Colombia - Subnational Doing Business $681,907 Closed Positive Caribbean Middle East and North Pakistan Subnational Doing Business in Pakistan $297,428 Closed Negative Africa South Asia India Subnational Doing Business in India $430,000 Closed Positive Annex 3: Active and Close Projects PROJECTS DEVELOPMENT REGION COUNTRY PROJECT NAME APPROVED BUDGET STATUS EFFECTIVENESS South Asia Nepal Nepal Investment Climate Reform Program $800,000 Closed Negative Sub-Saharan Africa Liberia Liberia PSD in Post-Conflict Program: Phase 2 $4,600,925 Closed Positive Sub-Saharan Africa Madagascar Investment Climate Reform to reduce the $2,000,000 Closed Negative cost of private-sector transactions Sub-Saharan Africa Rwanda Rwanda Investment Climate Reform Project $2,833,000 Closed Positive Sub-Saharan Africa Sierra Leone SL Removing of Administrative Barriers to $1,860,858 Closed Positive Investment (RABI) Ext Phase 2 Sub-Saharan Africa Zambia Zambia Investment Climate Program $643,681 Closed Positive WORLD World Region Entrepreneurship and Economic $484,572 Closed MEC Development WORLD World Region Business Environment Snapshots $353,136 Closed MEC WORLD World Region KM: The Better Regulation for Growth $698,000 Closed MEC Programme - developing and adapting regulatory management tools WORLD World Region Business Entry Product Development and $791,023 Closed MEC KM WORLD World Region Business Operations Product Development $825,000 Closed MEC and Knowledge Management WORLD World Region KM Trade Logistic Advisory Services Progam $1,445,476 Closed MEC Total $90,672,207 MEC 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) 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 WITH FIAS FINANCIAL CONTRIBUTIONS (ACTIVE/CLOSED) DEVELOPMENT APPROVED BUDGET PROJECTS STATUS EFFECTIVENESS REGION COUNTRY PROJECT NAME East Asia and Pacific Mongolia Mongolia Business Inspection Reform $1,184,452 Active East Asia and Pacific Papua New Papua New Guinea Regulatory $1,049,546 Active Guinea Simplification and Investment Policy and Promotion P East Asia and Pacific Philippines Doing Business Plus (Phil) $2,343,000 Active East Asia and Pacific Timor-Leste Timor-Leste Business Registration and $631,049 Active Licensing Reform Project East Asia and Pacific Tonga Tonga Regulatory Simplification and $1,291,264 Active Investment Policy and Promotion Program East Asia and Pacific Vietnam BEE-Vietnam Land Stage 2 $421,679 Active East Asia and Pacific Vietnam BEE-VN Licensing $770,129 Active Europe and Central Albania Albania Sub-national Regulatory $699,760 Active Asia Simplification and Investment Generation Europe and Central Armenia Armenia Regulatory Simplification - Doing $1,539,307 Active Asia Business Reform Europe and Central Belarus Belarus: Regulatory Simplification and $3,030,841 Active Asia Investment Generation 2010 - 2013 Europe and Central Bosnia Bosnia Sub-national Competitiveness $2,982,452 Active Asia Europe and Central Georgia Georgia Tax Simplification Project $1,034,900 Active Asia Europe and Central Kyrgyzstan Kyrgyzstan Business Enabling Environment - $3,697,790 Active Asia inspections, permits, tax administrat Europe and Central Serbia Serbia Sub-national Competitiveness $978,546 Active Asia Europe and Central South East South East Europe Sub-national Doing $857,402 Active Asia Europe Business Report Latin America and Haiti Haiti Investment Generation Strategy $2,291,692 Active Caribbean Middle East and Yemen Tax Simplification Rollout 1 $3,765,700 Active North Africa Sub-Saharan Africa Burkina Faso Doing Business Better in Burkina Faso $2,444,328 Active Sub-Saharan Africa Mozambique Mozambique Tourism Anchor Investment $1,855,149 Active Program Sub-Saharan Africa Southern Sudan Southern Sudan Investment Climate Reform $3,000,000 Active Program Phse 2 East Asia and Pacific Indonesia Indonesia Agribusiness IC $465,572 Closed Negative East Asia and Pacific Papua New PNG Country SEZ Strategy $348,106 Closed Negative Guinea East Asia and Pacific Solomon Island Solomon Islands Regulatory Simplification $891,739 Closed Negative and Investment Policy and Promotion Pr Sub-Saharan Africa Sudan Sudan Administrative Barriers Reform $1,615,000 Closed Positive Program Total $39,189,403 + Project is rated positively (Mostly successful, successful, highly successful) - Project is rated negatively (Partly unsuccessful, unsuccessful, highly unsuccessful) Annex 4: Abbreviations ADR alternative dispute resolution AfD Agence Française de Développement (France) BICF Bangladesh Investment Climate Fund BRC Bronnoysund Registration Centre (Norway) CASA Conflict Affected States in Africa (IFC) CIC Investment Climate Department (IFC/World Bank) CPC Cadre Permanent de Concertation Etat / Secteur Privé (Central African Republic) DfID Department for International Development (United Kingdom) EPZs export processing zones FDI foreign direct investment FIAS Facility for Investment Climate Advisory Services (formerly Foreign Investment Advisory Service) FPD Financial and Private Sector Development (Vice Presidency/Network) FY fiscal year GIPB Global Investment Promotion Benchmarking report IAB Investing Across Borders (project and report) IBRD International Bank for Reconstruction and Development ICT information and communication technologies IDA International Development Association IFC International Finance Corporation MIGA Multilateral Investment Guarantee Agency OECD Organisation for Economic Co-operation and Development OHADA Organisation pour l'Harmonisation en Afrique du Droit des Affaires RABI Removing Administrative Barriers to Investment (Sierra Leone project) SMEs small and medium enterprises _______________ All dollar amounts are in current U.S. dollars unless otherwise noted. 52
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