PUBLIC ADMINISTRATION REFORM AND ECONOMIC DEVELOPMENT

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PUBLIC ADMINISTRATION REFORM AND ECONOMIC
DEVELOPMENT

• SIGMA Regional Workshop on Public Administration
  Reform and EU Integration
• Budva, 4-6 December 2005

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Progress and Challenges in Regulatory Reform
Progress and Challenges in Regulatory Reform
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Regulatory reform is a key factor in increasing
Foreign Direct Investment (FDI)
Evolution of the Investment Environment in the
SEE Region
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Progress and Challenges in Regulatory Reform
SEE countries are increasingly aware of the
importance of regulatory reform

• At the 2003 Ministerial Meeting, SEE Ministers of
  Economy adopted the statement Pushing ahead with
  reform Removing obstacles to FDI
• Recent reports have highlighted progress and
  challenges for the region
• EBRD BEEPS 2005
• World Bank Cost of Doing Business
• Investment Compact Regulatory Governance
  Initiative
• Investment Compact Enterprise Policy Performance
  Assessments
• White Books by Foreign Investors Councils at
  national and regional level.

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Main areas of concern for business
Progress and Challenges in Regulatory Reform
The regulatory environment should be stable,
transparent and predictable in order to ensure
low costs of compliance

• Company registration and de-registration
• Enforcement of contracts, commercial courts
• Fair and efficient tax administration
• Licenses, permits and other administrative
  procedures result in a time tax of considerable
  importance.

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Progress and Challenges in Regulatory Reform
Regulatory reform is a continuous process, that
needs constant attention
For example, all SEE countries have reviewed and
simplified their business registration procedures

• E.g. in Montenegro a limited liability company
  can be registered for 1, within four working
  days, and by submitting three documents
• The one-stop-shop approach and the principle
  silence is consent are being implemented in
  many countries of the region
• Reforms have been recently implemented also in
  Bulgaria, Serbia, and Macedonia

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Progress and Challenges in Regulatory Reform
Regulatory reform is a continuous process, that
needs constant attention
but further work is still needed in order to
simplify procedures for licenses and permits
Administrative steps required to build a
standardized warehouse
Country Time(days) Procedures (number) Cost ( of income per capita)
Moldova 122 20 215.0
Serbia and Montenegro 212 21 2,195.0
Bulgaria 212 24 325.1
Macedonia, FYR 214 18 67.5
Croatia 278 28 1,236.7
Romania 291 15 187.7
Albania 344 22 227.4
Bosnia and Herzegovina 476 17 8,735.4
AVERAGE SEE region 268.6 20.6 1,648.7
OECD 146.9 14.1 75.1
Source Cost of Doing Business 2006 (data for
2005)
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Challenges ahead
Progress and Challenges in Regulatory Reform

• All SEE countries have started the simplification
  of their laws and regulations (e.g. Moldova,
  Bulgaria, Serbia)
• The Regulatory Impact Analysis (RIA) should be
  implemented and regularly applied as a tool to
  prevent the adoption of new regulations implying
  unnecessary burdens to business
• Access to export markets is severely hindered by
  the inadequacy of product standards and of
  certification

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ICs Experience in Supporting the Reform Process
The implementation of reforms relating to the
investment climate are monitored though a
detailed index (IRI)
IRI Dimensions
Investment policy Investment promotion Tax policy Anti-corruption Competition policy Trade policy Public administration Financial institutions and infrastructure SME support Human capital
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Contacts
Antonio Fanelli Deputy Head of SEE Investment
Compact 2, rue André Pascal 75775 Paris Cedex 16
- France tel [phone] fax[phone]
93 35 antonio.fanelli_at_oecd.org
Anthony O'Sullivan Head of SEE Investment
Compact 2, rue André Pascal 75775 Paris Cedex 16
- France tel [phone] fax[phone]
93 35 anthony.osullivan_at_oecd.org
SIGMA 2, rue André Pascal 75775 Paris Cedex 16 -
France tel [phone] fax33 1 45
24 13 05 www.sigmaweb.org