DOING BUSINESS 2009 - JOHN J. HADDAD, Ph.D.
DOING BUSINESS 2009 - JOHN J. HADDAD, Ph.D.
DOING BUSINESS 2009 - JOHN J. HADDAD, Ph.D.
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24 Doing Business <strong>2009</strong>OverviewStarting a businessFIGURE Dealing 5.3with construction permitsEasing Employing property workers registration in RwandaReduction in time and cost, 2007–08RegisteringTime per procedure (days)240propertyTotal timecut fromGetting credit180371 days to 315Protecting investorsPaying taxes120Trading across borders35-day60Enforcing contracts procedureNO eliminatedClosing CHANGE a businessNOCHANGETime cutfrom 60 daysto 10NOCHANGE1 2 3 4 5ProceduresFIGURE 5.1Top 10 reformers in registering propertyAverage improvement2007200821%46%26%Procedures Time Cost1. Belarus2. Rwanda3. Azerbaijan4. Kazakhstan5. Hungary6. Zambia7. Mauritius8. Burkina Faso9. Madagascar10. EgyptSource: Doing Business database.(8 economies)FIGURE 5.4East Asia& Africa Pacifichas reformed 2 the most5Cost(% Ida, of property a Gambian value) entrepreneur, wants to used to be another. But in 2005 it eliminatedthe requirement for approval by8sell her plot of land to expand her manufacturingbusiness. 6.1% to 0.3% She has found Total cost an the Ministry of Urban Planning. ThatCost cut fromFIGURE 5.1cut from6interested buyer. But she has also9.4%learnedto 0.6%slashed Top 10 reformers the time in registering required to property registerFIGURE 5.3that Easing transferring Procedure property registration property 2007 in in The Rwanda Gambia Average property improvement from 397 days to 62—and therequiresandthecost4Reduction consent of the Department number of property transfers in Abidjaneliminated in time and cost, 2007–082007of Lands and Surveys—and getting NOthatalmost quadrupled, 21% from 500 in 26% 2005 toCHANGE2takes Time per about procedure a year.(days)There is another option:hire a lawyer Total time 2008 with connections at Formal property titles help promote1,968 in 2007. 1 46%2008240the departmentcutandfromobtain the consent the transfer of land, encourage investmentand give entrepreneurs access to1 2 3 4 5180371 days to 315in a day. But Ida Procedures cannot afford the cost,Source: about Doing 3% Business of the database. value of her property. formal credit markets. 2 But a large share120Ida decides to wait for the Time department’scutof property in developing countries isconsent, putting 35-dayfrom 60 dayson hold her plans to not formally registered. Informal titles60procedureto 10expand NO her eliminated business.cannot be used as security in obtainingCHANGENOBesides The Gambia,CHANGE11 other economies1still require 2 a 3ministerial 4 consent 5 ties for businesses. Many governmentsloans, Procedures which limits Time financing opportuni-CostProceduresto transfer property: Lesotho, Madagascar,CostMalawi, Nigeria, Papua New Guinea, tensive property titling programs. Buthave recognized this and started ex-(% of property value)Senegal, Solomon Islands, Tanzania, bringing assets into the formal sectorFIGURE 8 5.4Tonga, Uganda Cost and cut Zambia. from Côte d’Ivoire is only part of the story. The more difficultand costly it is to formally transferAfrica has reformed 6.1% to the 0.3% most Total costTable 5.1Number of cut reforms from6easing property registration9.4% to 0.6%Where is registering property easy—andby Doing Business property, report year the greater the chances thatwhere Procedure not? DB20062007DB2007 formalized DB2008 titles will quickly DB<strong>2009</strong>and costbecome informalagain. Eliminating unnecessarySub-Saharan4Easiest eliminated Rank Most difficult RankAfrica31(46Saudieconomies)Arabia 1 Liberia 172 obstacles to registering and transferring2Eastern GeorgiaEurope2 Angola 173 property is therefore important for economicdevelopment.& New Central Zealand Asia 3 2008 Afghanistan 17423(28Lithuaniaeconomies)1 2 4 3Bangladesh 4 5 175 Economies that score well on theLatin Armenia America 5 Procedures Nigeria 176& ease of registering property tend to haveThailandCaribbean13Source: Doing Business database. 6 Brunei 177(32 economies)simple procedures, low transfer taxes,Slovakia 7 Maldives 178Middle NorwayEast & 8 Marshall Islands 179 fixed registration fees, online registriesNorth Africa9Azerbaijan 9 Micronesia 180 and time limits for administrative procedures.They also make the use of notaries(19 economies)Sweden 10 Timor-Leste 181OECDhigh Note: Rankings incomeare the average of the economy rankings 8 on theand lawyers optional. Saudi Arabia computerizedprocedures in 2007, making it(24 procedures, economies) time and cost to register property. See Data notesfor details.South Source: Doing AsiaBusiness database.possible to register property in 2 proceduresand 2 days. In Georgia and Lithuania,which recently simplified procedures,it takes 3 days to register property.In New Zealand, number 3 on the ease ofFIGURE 5.2registering Rankings on property, registering online property registrationis are straightforward. based on 3 subindicators In Slovakia, whichreplaced Days 1. Belarusto transfer a percentage-based property As % of property fee with value, abetween 2. Rwanda 2 companiesno bribes includedfixed in main fee, city the cost to register property is3. Azerbaijanonly 4. 0.05% Kazakhstan of the property value.33.3% 33.3%5. HungaryTime CostWho reformed in 2007/08?6. Zambia7. MauritiusTwenty-four 8. Burkina Faso economies 33.3% made it easier toregister 9. Madagascar Proceduresproperty in 2007/08 (table 5.2).10. EgyptThe most popular reform feature: loweringSteps the for encumbrance cost of registration checking, deed by and reducingtitle transfertheuntil property cantransferbe sold againtax,or usedregistrationas collateralSource: Doing Business database.fees Note: See or Data stamp notes for duty. details. Five economies—Burkina Faso, the Dominican Republic,Jamaica, Serbia and Thailand—reducedFIGURE 5.5the transfer tax. The Republic of CongoTop 5 reform featuresin registering propertyReforms FIGURE including 5.2 feature since DB2006 (%)Rankings on registering propertyare based on 3 subindicators 47%Reduced taxes or feesDays to transfer propertybetween 2 companiesin main city19%Computerized procedures33.3% 33.3%Time Cost19%Increased administrative efficiency33.3%Procedures16%Combined and reduced proceduresAs % of property value,no bribes includedSteps for encumbrance checking, deed and title transferuntil 12% property can be sold again or used as collateralIntroduced fast-track procedures or time limitsNote: See Data notes for details.Note: A reform may include several reform features.Source: Doing Business database.FIGURE 5.5(c) The International Bank for Reconstruction and Development / Top The World 5 reform Bank features