DOING BUSINESS 2009 - JOHN J. HADDAD, Ph.D.

44 Doing Business 2009OverviewStarting a businessDealing with construction permitsEmploying workersRegistering propertyGetting creditProtecting investorsPaying taxesTrading acrossbordersEnforcing contractsClosing a businessexport2008Source: Doing Business database.FIGURE 9.1Speeding trade—especially in Eastern Europe & Central AsiaReduction in the time to export (days)Time toexport2005Time toexport2008Eastern Europe& Central Asia4.6daysSub-SaharanAfrica4.4daysMiddle East& NorthAfrica4.3days4.1daysSouthAsiaLatinAmerica& Caribbean2.9days2.5daysEast Asia& PacificOECDhighincome0.6daysSource: Doing Business database.100DocumentsSource: Doing BusinFIGURE 9.2Rankings onare based oAll documents rby customs andother agencies33Documto exand imCoCáñamo, a Venezuelan company exportinghandicrafts, trade—especially is eager to supply in Eastern larger Europe have & Central a better Asia chance, thanks to ongoing FIGURE reduced 9.3 the time to trade. The averageExporters in landlocked Rwanda Implementing these practices hasFIGURE 9.1Speedingclients—preferably, large U.S. departmentstores. It has the capacity to fill Links, a Kigali-based business run by Time 2005. to import (days)reforms. Indeed, baskets from Gahaya Madagascar time to export speeds has fallen imports by 3 days sinceReduction in the time to export (days)Middle East FIGURE 9.4 LatinOECDThe biggest decline was in Easternorders withinEastern Europe2 weeks. But there is one sisters Africa Janet has reformed and Joy, are the already most available high50Sub-Saharan & North South America East AsiaEurope and Central Asia—almost 5 days 2007Time to & Central Asia AfricaAfricaAsia & Caribbean & Pacific incomeexport problem: bureaucracy. “I need to get a to U.S. households in Macy’s department Number of reforms (figure easing 9.1). trade The time to export droppedlabor compliance certificate from the stores. 1 by Doing Business report year20050.6It wasn’t DB2006 easy at first, DB2007 days with high by 4 days in Africa, the Middle East and2.5DB2008 40DB2009Ministry of Labor, but before issuing the shipping Sub-Saharan costs 2.9 and days inadequate roads to North Africa and South Asia. It declinedAfricacertificate the ministry demands 4 other the port city of Mombasa, Kenya. But the by less than 3 days in East Asia 274.64.44.34.1 daysand(46 economies)documents daysfrom municipal daysdays daysauthorities. government has reformed 2 years in a 30 Pacific and Latin America. Time The cut from longestLatin America49 days to 27For each export consignment I need to row, & Caribbean and exporting is becoming easier. average export delays are 22 in Central Asiainform the authorities of my intention to (32 economies) Doing Business measures the procedural(58 days) and Central Africa (48 days), 2008export, confirm the exports and get a letterMiddle requirements, East & including the num-20 where most countries are landlocked.confirming that I have refunded the ber North of Africa14Time tonecessary documents and the The top performers on the ease of(19 economies)exportforeign exchange earned to the central associated time and cost (excluding trade trading across borders continually consult13 export businesses on how to make2008East Asiabank,” says Bruno, the company’s owner. tariffs) for exporting and importing.10& PacificSource: Doing Business database.Getting through all the paperworkcan take 2–6 months on average. Faced(24 economies) The more time consuming the exportEastern or Europe import process, the less likelytrading easier (table 9.1). In Denmark,for example, 3 main trade documents& Central Asia12FIGURE with this 9.10long and unpredictable export that a trader will be able to reach markets& Central in a timely Asiafashion. This affects the customs Documents declaration) Port Customs suffice Transport to cover(bill of lading, commercial invoice and(28 economies)Speeding process, Cáñamo trade—especially has little in chance Eastern of EuropeReduction South Asiaentering the in the U.S. time market. to export (days)Proceduresability to expand businesses and create most trade transactions. And these are(8 economies)7Middle EastLatinOECDSource: Doing Business database.jobs. Recognizing this, many economiesTable 9.1 Eastern Europe Sub-Saharan & North South America East Asia highTime to & Central Asia AfricaAfrica have OECD Asia worked & Caribbean to introduce & Pacific practices income thatexport Where is trading easy—and where not?FIGURE 9.2high income72005reduce(24 economies)the time and costs associated 0.6 with Rankings on trading across bordersEasiest Rank Most difficult Rankdaysare based on 3 subindicatorstrade. Note: A reform These is counted include as 1 reform providing 2.5 per reforming electronicSingapore 1 Angola 1722.9economy per year. All documents requiredfiling Source: Doing of trade Business documents database. daysDocument preparation,(through electronicdata interchange systems), allow-4.64.44.34.1 daysby customs andcustoms clearance andHong Kong, China 2 Burkina Faso 173days daysdays daysother agenciestechnical control, portsDenmark 3 Azerbaijan 174and terminal handling,Finland 4 Central African 175 ing shippers to declare manifests online,inland transport33.3% 33.3%Republicand handlingreducing document requirements andDocuments Time toEstonia 5 Congo, Rep. 176to export exportusing risk-based inspections. AnotherSweden 6 Tajikistan 177and import and importgood approach is to provide a single windowfor obtaining different permits and33.3%Norway Time to 7 Iraq 178exportPanama 8 Afghanistan 1792008authorizations, which reduces the timeIsrael 9 Kazakhstan 180Thailand 10 Kyrgyz Republic 181Note: Rankings are the average of the economy rankings on thedocuments, time and cost required to export and import. SeeData notes for details.Source: Doing Business database.FIGURE 9.4Africa has reformed the mostSource: Doing Business database.spent preparing documents. An efficientbanking system also helps, by speedingthe processing of trade financing instrumentssuch as letters of credit.Cost to exportand importUS$ per 20-foot container,no bribes or tariffs includedNote: See Data notes for details.FIGURE 9.5Top 5 reform features in tradingNumber of reforms easing tradeacross borders(c) The International Bank for Reconstruction and Development / The World Bankby Doing Business report yearUS$ peno bribeNote: See Data noFIGURE 9.5Top 5 reformacross bordeReforms includIntroduced or idata interchanImproved custoIntroduced riskImproved port14%Introduced borNote: A reform maySource: Doing Busin