ANNUAL 2016 REVIEW FIAS the Facility for Investment Climate Advisory Services With support from: 2 84 MESSAGE FROM THE SENIOR DIRECTOR ANNEXES ©2017 The World Bank Group 1818 H Street NW Annex 1: Reforms and Other Results Supported by FIAS in FY16 4 MAIN ACHIEVEMENTS Washington, DC 20433 Annex 2: Portfolio of FIAS-Funded AND MILESTONES Telephone: 202-473-1000 Projects in FY16 Internet: www.worldbank.org All rights reserved. Annex 3: Abbreviations This volume is a product of the staff of the World Bank Group. The World Bank Group refers to the member institutions of the World Bank Group: The World Bank (International Bank for Reconstruction and Development); International Finance Corporation (IFC); and Multilateral Investment Guarantee Agency (MIGA), which are separate and distinct legal entities each organized under its respective Table of Articles of Agreement. We encourage use for educational and non-commercial purposes. Contents The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Directors or Executive Directors of the respective institutions of the World Bank Group or the governments they represent. The World Bank Group does not guarantee the accuracy of the data included in this work. 76 Rights and Permissions FINANCIAL RESULTS AND RESOURCE USE 12 The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be SPECIAL TOPIC: a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission to reproduce BENCHMARKING FOR portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright A BETTER QUALITY Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; BUSINESS Internet: www.copyright.com. ENVIRONMENT All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, 64 The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: pubrights@worldbank.org. About the Facility for Investment Climate Advisory Services (FIAS) COLLABORATION, Through the FIAS program, the World Bank Group and donor partners facilitate investment climate reforms in developing KNOWLEDGE, 18 countries to foster open, productive, and competitive markets and to unlock sustainable private investments in sectors that AND LEARNING contribute to growth and poverty reduction. The FIAS program is managed by the Trade & Competitiveness Global Practice 46 of the World Bank Group. For more information, visit www.wbginvestmentclimate.org, www.worldbank.org/trade, and www.worldbank.org/competitiveness. OPERATIONAL CORE THEMATIC AREAS HIGHLIGHTS Acknowledgments This report was written by the staff of the World Bank Group’s Trade & Competitiveness Global Practice and edited by John IN INVESTMENT Diamond, with editing and technical support provided by Lorenzo Nelli-Feroci. Design Partner: Corporate Visions, Inc. CLIMATE INTERVENTIONS District Creative Printing, Inc. Cover photo: housing construction, Addis Ababa, Ethiopia (World Bank Group photo). Inside back cover photo: carpenter in the Kyrgyz Republic (World Bank Group photo). 1 iii MESSAGE FROM In FY16, FIAS support helped bring about 76 supported rapid response in Nepal following the investment climate reforms in 42 client countries, major earthquake, and Jordan, which is struggling bringing the total of reforms achieved for the five- with a major influx of refugees from the conflict THE SENIOR DIRECTOR year cycle to 341 in 83 countries, well above the target of 250. More than three out of four reforms were in member countries of the International in Syria. The strategy for the new five-year cycle was developed and approved during FY16. It focuses Development Association (IDA); two-thirds were on three strategic pillars: improving business With an ambitious new strategy and an in Sub-Saharan Africa; and nearly one-third were environments in client countries; expanding implementing team that pulls together expertise in states in fragile and conflict-affected situations market opportunities; and strengthening firm from across the World Bank Group, the FIAS (FCS), all reflecting strong performance in FIAS competitiveness. The thematic areas of gender Trust Funds are moving ahead in helping client priority areas. As a result of new sector work in FY16 and inclusion, transparency and political economy, countries build stronger, more resilient and inclusive and revised reporting of earlier work, investment green competitiveness, and a focus on high-growth Anabel Gonzalez economies. FIAS—the Facility for Investment businesses will cut across the entire FIAS portfolio. Senior Director Trade & Competitiveness Climate Advisory Services—is now in its fourth decade supporting advisory, technical support, and “In virtually every On behalf of the T&C team, I would like to convey Global Practice World Bank Group knowledge-based projects tailored to help improve benchmark area by our heartfelt thanks to our FIAS donors and partners struggling and vulnerable economies and help make emerging economies even stronger. which we measure our for continuing their strong support in FY16 and for the confidence they have shown us through their Fiscal year 2016 marked the end of the FY12–16 results and impact, support for the FY17–21 work program. FIAS strategy cycle, and I am pleased to report that in virtually every benchmark area by which we we have exceeded our measure our results and impact, we have exceeded our targets for the five-year period. The Bank Group’s targets.” Anabel Gonzalez Trade & Competitiveness Global Practice (T&C), Senior Director generated on industry-specific projects has reached which implements the FIAS program, brings to bear Trade & Competitiveness Global Practice $1.58 billion for the cycle, well above the $1 billion a formidable array of skills, tools, and experience World Bank Group target. Compliance cost savings to businesses due in working with clients to improve the climate for to streamlined regulations exceeded $200 million for investment, attract increased domestic and foreign the cycle. investment, promote competition, and enhance the competitiveness of key business sectors in client One of the themes that comes across in this year’s economies. As we embark on the new FY17–21 FIAS report is the priority to help client countries achieve strategy cycle, including new and enhanced areas of rapid results. These “quick win” reforms have been work, I am proud to present the FIAS 2016 Annual a hallmark of the Indicator-Based Reform (IBR) work Review, outlining our achievements in working featured in the special section chapter of this year’s with poor and conflict-affected countries as well as Annual Review. And it is a theme that recurs across emerging economies and middle-income countries the FIAS-supported teams working in our priority as we pursue the Twin Goals of eliminating extreme areas of IDA countries, the Sub-Saharan Africa poverty and boosting shared prosperity. region, and FCS. The report also highlights FIAS- 2 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 3 1 MAIN ACHIEVEMENTS AND MILESTONES FISCAL YEAR 2016 At a time of economic uncertainty, FIAS-supported projects aimed at advancing the World MAIN ACHIEVEMENTS Bank Group goals of inclusive economic growth and job creation, robust private sector competition, and sustainable investment in sectors that contribute to poverty reduction are more vital than ever. FY16 marked the end of the five year FY12–16 strategy cycle, a period of AND MILESTONES significant achievement in advancing developing country growth agendas. In FY16, the Trade & Competitiveness Global Practice (T&C) made a concerted effort to put FIAS support to work across all Bank Group regions. Direct project expenditures were nearly double the FY15 level, and the number of active FIAS-supported projects in FY16 was up sharply, from 69 in FY15 to 112. FY16 marked the end of the five year FIAS has exceeded virtually all of its key targets for reforms and investment generated. The new FY12–16 strategy cycle, a period of FIAS FY17–21 strategy, finalized during FY16, is now well under way. It rests on three strategic significant achievement in advancing pillars: improving business environments; expanding market opportunities; and strengthening developing country growth agendas. firm competitiveness. These are further bolstered by the cross-cutting themes of gender and inclusion, transparency and political economy, and targeting high-growth businesses. FIAS Strategy Cycle Performance Exceeds Targets for FIAS FY16 FINAL REFORM COUNT Reforms, Investments Reforms 76 • For the FY12–16 strategy cycle, FIAS helped bring about of which in FCS 22 29% 341 reforms in 83 countries across all developing regions of which in IDA 59 78% (strategy cycle target: 250 reforms; see Annex 1.1, p. 86). of which in EAP 1 1% • Of the 341 reforms, 248, or 73 percent, were in of which in ECA 15 20% International Development Association (IDA) countries of which in LAC 6 8% (strategy cycle target: 60 percent); 225, or 66 percent, of which in MENA were in Sub-Saharan Africa; and 103, or 30 percent, were of which in SA 4 5% in countries in fragile or conflict-affected situations (FCS). of which in SSA 50 66% • Compliance cost savings (CCS) reached $208.2 million (strategy cycle target: $350 million) reflecting lower of which validated by DB 66 87% business costs due to streamlined regulations and (of which validated BY DB16) 7 permitting processes. • FIAS is reporting an additional $219 million in private sector investment generated for the FY12–16 cycle due to an upward revision in the totals from Brazil, and $7.9 million stemming from a comprehensive investment climate project in Georgia. • Total confirmed investment generated, FY12–16, was In FY16, $1.58 billion (cycle target: $1 billion). $1.58 341 $208 • Client satisfaction with FIAS-supported projects was 92 percent for the cycle; almost 90 percent of FIAS projects received positive development effectiveness ratings (see Annex 1.2, p. 88). FIAS-supported programs • Over the five-year cycle, the Bank Group’s Doing contributed to 76 reforms Business report identified 39 countries on its annual in 42 client countries and billion reforms million top-ten list of reformers (with some countries appearing more than once). Of those, 27, or 69 percent, benefited investment generated FY12–16, achieved in 83 client countries in direct compliance cost savings from FIAS-supported projects and/or implemented FIAS reforms. one region. exceeding the $1 billion target FY12–16, well above reform target to private sector, FY12–16, from for strategy cycle of 250 for strategy cycle streamlined regulation and lower business costs 4 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 5 FIAS Strategy Cycle Metrics, FY12–16 Strong Performance in FY16, FIAS Portfolio: Client-Facing, Knowledge and Product With the completion of the FIAS FY12–16 strategy cycle, the results show that FIAS has exceeded strategy cycle Final Year of FY12–16 Strategy Cycle Development, Industry-Specific targets1 for total reforms, implementation of reforms in Doing Business, and IDA reforms, while also maintaining • FIAS-supported programs implemented by T&C • In FY16, FIAS funding was used to co-finance 112 focus on the priority areas of Sub-Saharan Africa and conflict-affected states. contributed to 76 reforms in 42 client countries and one projects implemented by T&C, including 25 non-client region in FY16 (68 reforms in 40 countries in FY15).2 facing projects focused on knowledge management TOTAL FIAS-SUPPORTED REFORMS SHARE OF REFORMS RECORDED IN DOING BUSINESS • Doing Business 2017 reports that 66 of the 76 FY16 FIAS and product development.4 (Target yearly average: 50 reforms) (Target: 50%) reforms, or 87 percent, were relevant to DB topics (in • Total direct project expenditures were $35.6 million 100 FY15: 63 percent; see FIAS-supported reforms table, p. in FY16, nearly double the previous year’s $18.3 n Reforms 100% 87% 11); 1 out of 4 of the 283 DB reforms recorded in FY16 million. Of total direct project expenditures, $20.9 n Countries 80 76 75% 74% 75% were achieved with the help of FIAS-funded advisory 75 76 80% 69% million went to client-facing projects ($9.9 million 68 *Yearly 63% services. 60 in FY15) and $14.6 million went to knowledge reform 60% 46 target: 50 Target: • FIAS-supported projects accounted for 71 percent of the management and product development projects 41 39 40 42 50% 107 reforms achieved through the work of T&C teams. ($8.4 million in FY15). 40 40% 30 • FIAS support helped achieve $15.2 million in CCS in • The share of expenditures on industry-specific 20 20% FY16, (in FY15: $20.8 million), bringing the total in savings activities supported by FIAS totaled $3.4 million to the private sector from regulatory reform to $208.2 in FY16, or 16 percent of client-facing FIAS 0 0% million for the cycle. FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 Cycle expenditures ($1.57 million in FY15, or 15.9 percent). FISCAL YEAR 2016 MAIN ACHIEVEMENTS AND MILESTONES • Doing Business 2017 lists 10 countries as most improved • Projects relating to improving the business in terms of reforms undertaken. Eight of these—Belarus, Brunei Darussalam, Georgia, Indonesia, Kazakhstan, environment in client countries drew the largest Kenya, Pakistan, and Serbia—benefited from FIAS- share of client-facing expenditures, with 19 percent, SHARE OF REFORMS IN IDA COUNTRIES SHARE OF REFORMS IN SUB-SAHARAN AFRICA supported projects. Georgia and Serbia instituted reforms followed by trade facilitation and logistics, industry- (Target: 60%) in FY16. specific, indicator based reform, investment policy 100% 100% and promotion, business taxation, and competition 83% 82% policy. 80% 76% 78% 73% Cycle 80% FY16 Portfolio Information: Focus on Priority Client Groups 63% target: 65% 66% 66% 66% • The region with the highest proportion of spending 60% 61% 60% • 78 percent of reforms were achieved in IDA 60% countries (63 percent in FY15). was Sub-Saharan Africa, accounting for 46 percent 41% in FY16 (50 percent in FY15), in line with the FIAS 40% 40% • 66 percent of reforms were achieved in Sub-Saharan strategy. Africa (66 percent in FY15).3 20% 20% • Funding administered via FIAS contributed to 22 • 29 percent of reforms were achieved in countries in percent of total T&C spending in FY16 (in FY15: 19.8 0% 0% fragile or conflict-affected situations (34 percent in percent), and FIAS funding was involved in projects FY12 FY13 FY14 FY15 FY16 Cycle FY12 FY13 FY14 FY15 FY16 Cycle FY15). that supported the implementation of 71 percent of • FIAS supported active projects in 23 out of the all advisory area reforms (76 of 107 reforms) brought world’s 35 FCS countries in FY16 (in FY15, FIAS about through T&C interventions (73 percent in supported projects in 21 of 33 FCS countries) the FY15). SHARE OF REFORMS IN FRAGILE AND CONFLICT- FIAS-SUPPORTED PROJECTS, REFORMS IN FCS highest number and proportion of FCS client AFFECTED SITUATIONS • FIAS continued to direct considerable support countries served of the five-year cycle. to knowledge and product development, which 100% • The 76 FIAS-supported reforms in FY16 exceed the accounted for 41 percent of direct project 80% 40 36 yearly target of 50 reforms. expenditures (45 percent in FY15). 33 35 33 35 60% 30 24 23 23 23 19 21 22 34% 18 17 40% 32% 30% 29% 30% 20 FIAS FIAS support helped achieve $15.2 million in CCS 24% 11 20% 10 0% 0 FY12 FY13 FY14 FY15 FY16 Cycle FY12 FY13 FY14 FY15 FY16 in FY16, bringing the total in savings to the private sector n Total FCS Countries n FCS Countries with Active FIAS Projects from regulatory reform to $208.2 million for the cycle. n Number of Reforms 2 Reform totals are preliminary and may be subject to minor revision. 1 3 The figures add up to more than 100 percent because of overlap between the FCS, IDA, and Sub-Saharan Africa categories. Target indicates goal per year for the FY12–16 Strategy Cycle. 4 FIAS funding supported an additional 9 projects that had less than $10,000 in expenditures for the fiscal year. 6 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 7 Balance in the FIAS Portfolio TOTAL EXPENDITURE BY THEMATIC PRIORITY OF CLIENT-FACING PROJECTS, FY16 FIAS, T&C Development Effectiveness and TRADE & COMPETITIVENESS GLOBAL PRACTICE CLIENT SATISFACTION, FY08-FY16* As the bar graph below indicates, target spending, 100% = $20,989,587 Client Satisfaction (Share of clients satisfied) actual spending, and distribution of reforms by priority • The development effectiveness rating for FIAS- area were in rough alignment in FY16, with the share n International Trade and 100% 94% 92% Investment (46%) funded projects that closed in FY16 was 83 percent, 92% 88% 89% 91% 91% 89% of reforms in each priority area exceeding the share of 85% slightly below the average for the cycle. One project 80% funds invested, particularly in Sub-Saharan Africa. The n Business Regulation for wheel charts show FIAS FY16 spending by thematic Enterprise Creation and out of six rated (an investment climate project in priority and product line for client-facing projects. Growth (33%) Moldova) received a ‘mostly unsatisfactory’ rating. 60% n Investment Climate for Development effectiveness for the cycle averaged 88 40% Industry (16%) percent. n Other (5%) • Overall client satisfaction in FY16 with T&C advisory 20% RESULTS BY PRIORITY CLIENT GROUP , FY16 services, through which a majority of FIAS-funded 0% Share of Client-Facing Project Expenditures and Total Reforms programs are implemented, was 92 percent, up from FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 89 percent in FY15. 100% *Client satisfaction ratings for Investment Climate Business Line • FIAS-supported projects received a client satisfaction from FY08-FY14. 78% 80% 70% 70% TOTAL EXPENDITURES BY PRODUCT LINE OF rating of 95 percent (in FY15, 89 percent). 66% CLIENT-FACING PROJECTS, FY16 60% FISCAL YEAR 2016 MAIN ACHIEVEMENTS AND MILESTONES 50% 100% = $20,989,587 46% FIAS DEVELOPMENT EFFECTIVENESS RATINGS, FY12–FY16 FIAS CLIENT SATISFACTION, FY12–FY16 40% 34% 29% n Spacial Growth Solutions (0%) (Share of completed projects with positive ratings) (Share of positive client responses from FIAS supported projects) 27.5% n Competition Policy (1%) 20% n Manufacturing (2%) 100% 86% n Discounted-Business Taxation (2%) 100% 83% 100% 88% 83% 0 95% n Services (4%) 95% IDA-eligible countries Sub-Saharan Africa Fragile and conflict- 80% 95% affected situations n Other Business Line Product (5%) 92% n Trade Policy and Integration (8%) 89% 60% 90% n Percent of Client-Facing Project Expenditures, Target 88% n Agribusiness (10%) n Percent of Client-Facing Project Expenditures, Actual n Investment Policy and Promotion (14%) 40% 85% n Percent of Total Reforms n Indicator Based Reform (14%) 20% 80% n Trade Facilitation and Logistics (18%) n Business Environment (19%) 0 75% FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY12–FY16 FY08-FY11 average (88%) average (92%) 8 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 9 FY12–16 Funding and Expenditures FIAS-Supported Reforms by Region and Country, FY16 Investment Policy - Entry Compliance Management 2012 2013 2014 2015 2016 Trading Across Borders Licenses and Permits Resolving Insolvency Construction Permits Registering Property Tax Simplification and Protecting Investors Enforcing Contracts Starting a Business Investment Policy - Getting Electricity Contributions (Sources In US$, Share of In US$, Share of In US$, Share of In US$, Share of In US$, Share of of Funds) Thousands Total Thousands Total Thousands Total Thousands Total Thousands Total Getting Credit Competition Grand Total WORLD BANK GROUP Protection 12,089 36%  11,754   42% 9,917 19% 7,627 21% 9,428 26% CONTRIBUTIONS Core 8,188 24% 8,000 28% 7,600 14% 6,700 18% 7,300 20% Region Country IFCa 4,088 12% 4,000 14% 4,500 9% 5,100 14% 5,700 16% EAST ASIA AND THE PACIFIC Timor-Leste a,b ü 1 MIGA 2,500 8% 1,600 6% 1,500 3% - 0% - 0% EAST ASIA AND PACIFIC TOTAL 1 1 World Bank 1,600 5% 2,400 8% 1,600 3% 1,600 4% 1,600 4% EUROPE AND CENTRAL ASIA Albania ü* ü* ü** 3 Project Specific/Other Croatia ü* 1 11% 3,754 13% 2,317 4% 927 3% 2,128 6% Contributions (IFC) 3,901 Georgia ü* ü*ü 3 Donor Contributions 21,390 63% 16,435 58% 42,584 81% 29,060 79% 25,011 68% Kyrgyz Republica ü** ü** 2 Core 5,730 17% 5,532 20% 21,241 40% 7,872 21% 7,141 19% Serbia ü** ü* ü* 3 Programmatic 6,678 20% 5,447 19% 15,410 29% 16,522 45% 11,856 32% Tajikistana ü** 1 Project Specific 8,982 26% 5,456 19% 5,933 11% 4,666 13% 6,014 16% Uzbekistana ü* ü* 2 Client Contributions 484 1% 90 0.3% 75 0.1% 50 0.1% - 0% EUROPE AND CENTRAL ASIA TOTAL 2 1 3 3 1 1 4 15 Total Contributions b 33,963 100% 28,279 100% 52,577 100% 36,737 100% 34,439 94% LATIN AMERICA Dominican Republic ü 1 Less Trust Fund AND CARIBBEAN Ecuador ü* 1 FISCAL YEAR 2016 MAIN ACHIEVEMENTS AND MILESTONES 1,122 1,021 2,507 1,421 1,080 Administration Fees Guatemala ü** 1 Total Net Contributions 32,841 27,258 50,070 35,316 33,359 Guyanaa ü* 1 Paraguay ü* 1 Expenditures In US$, Share of In US$, Share of In US$, Share of In US$, Share of In US$, Share of St. Kitts ü 1 (Uses of Funds)a Thousands Total Thousands Total Thousands Total Thousands Total Thousands Total LATIN AMERICA AND CARIBBEAN TOTAL 1 1 1 3 6 Staff Costs 70% 21,855 69% 22,439 81% 22,262 80% 32,465 79% SOUTH ASIA India ü* ü* ü* ü* 4 (including consultants) 19,740 SOUTH ASIA TOTAL 1 1 1 1 4 Operational Travel Costs 5,847 21% 6,099 19% 3,643 13% 4,176 15% 6,360 16% Indirect Costs (including SUB-SAHARAN AFRICA Regionala ü 1 9% 3,603 11% 1,792 6% 1,673 6% 2,114 5% Angolaa ü* ü* 2 office and operating costs) 2,455 Total Expenditures 28,042 100% 31,557 100% 27,875 100% 27,875 100% 40,939 100% Benina ü* ü* 2 Burkina Fasoa ü* 1 Burundia, b ü* 1 a Includes Advisory Services administrative budget and expenditures of approximately $1.2 million in FY12 and FY13, $2.3 million in FY14 and $3.1 million in FY15 provided by IFC to cover Cameroona ü* ü* 2 staff and travel costs of a number of mainstreamed Advisory Services (AS) positions related to the delivery of the FIAS Program. Central African Republica, b ü* 1 b FY12 donor contributions amended to correct a typographic error in the FY12 Expenditures table on page 6 of the FIAS 2012 Annual Review. Chada, b ü* ü* 2 Comorosa, b ü* ü* 2 Congo, Democratic ü* ü* 2 FIAS Expenditures, FY16 and FY12–16 Republica, b Congo, Republica ü* 1 DIRECT PROJECT EXPENDITURES, FY16 DIRECT PROJECT EXPENDITURES, FY12–16 Côte d'Ivoirea, b ü* ü* ü* ü* 4 (Client-Facing IDA/Non-IDA and Non-Client-Facing) (Client-Facing IDA/Non-IDA and Non-Client-Facing) Equatorial Guinea ü* 1 100% = $35,577,999 100% = $113,898,894 Gabon ü* 1 Guineaa ü ü ü* 3 n Client-Facing IDA (41%) n Client-Facing IDA (44%) Guinea Bissaua, b ü* 1 n Non-Client-Facing KM/PD (41%) n Non-Client-Facing KM/PD (37%) Madagascara, b ü* ü* 2 n Client-Facing Non-IDA (18%) n Client-Facing Non-IDA (19%) Malawia ü* 1 Malia, b ü* ü* ü* 3 Mauritiusa ü* 1 Mozambiquea ü* 1 Nigera ü* ü** 2 Nigeriaa ü* ü* 2 Rwandaa ü 1 CLIENT-FACING EXPENDITURES BY REGION, FY16 CLIENT-FACING EXPENDITURES BY REGION, FY12–16 Senegala ü* ü ü* ü* 4 100% = $20,989,587 100% = $71,353,301 Togoa, b ü* ü* ü* 3 Ugandaa ü* 1 n World (2%) Zambiaa ü ü* 2 n Middle East and North Africa (9%) n World (6%) SUB-SAHARAN AFRICA TOTAL 1 4 1 6 1 2 2 3 17 7 5 1 50 n South Asia (6%) n Latin America and Caribbean (10%) GRAND TOTAL 1 6 2 6 2 1 3 2 3 7 17 9 7 10 76 n South Asia (10%) n Middle East and North Africa (6%) Reforms captured by Doing Business 66 87% n East Asia and Pacific (12%) n Latin America and Caribbean (7%) FIAS Total of which in IDA 59 78% n Europe and Central Asia (12%) n Europe and Central Asia (9%) 22 29% FIAS Total of which in FCS n Sub-Saharan Africa (46%) n East Asia and Pacific (11%) FIAS Total of which in AFR 50 66% n Sub-Saharan Africa (55%) Of the 66 reforms recognized by Doing Business, 59 were validated by DB17* and 7 were validated by a International Development Association (IDA) country DB16 ** and reported retroactively. Three reforms under DB topics do not fall under the standarized Doing Business case study. b Fragile or conflict affected situation 10 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 11 2 SPECIAL TOPIC SPECIAL TOPIC: BENCHMARKING FOR A BETTER QUALITY BUSINESS ENVIRONMENT BENCHMARKING FOR A Indicator-Based Reform (IBR) effectively leverages data and evidence to help client countries foster a better business environment and deliver results on the ground. Today the emphasis BETTER QUALITY is not just on efficiency but the quality of regulations and institutions governing the business life cycle from start-up to insolvency. Ask the poor and they will tell you that getting a job or starting a business is the most BUSINESS ENVIRONMENT effective way to get out of poverty. More and better-paid work has been critical to poverty alleviation. Around the world, small- or medium-sized companies contribute significantly to creating business and employment opportunities, accounting for two-thirds of formal jobs in developing countries and 80 percent in low-income countries. While the majority of job creation happens in the private Among the first findings in Doing Business, for example, sector, governments play a crucial role in fostering was that firms in developing countries face regulatory enterprise creation and growth; they create the regulations environments two to three times more difficult and with and institutions that support—and in some cases inhibit— fewer potential investors than their counterparts in high- the ability of firms to start up and grow. income countries. The realization that policy makers as well as local and international investors would use this data as For many years, a country’s reputation as a place for input for decision-making and strategic planning on what to doing business stemmed from anecdotes and individual reform or when to invest gave governments a compelling experiences. These shared stories influenced investor incentive to support investment climate reform. perceptions and behavior, but lacked data on which to conduct comparative analysis that could inform policy or investment decisions. Today, a growing suite of global In the FY12-16 data and benchmarking products, such as the Doing Business project, provide periodic factual data and evidence on business regulations and institutions, and allow for benchmarking and peer-to-peer learning. In the spirit of ‘what gets measured gets done’, Doing Business was strategy cycle, IBR has among the first to introduce measures, supported by factual evidence and comparable data across 189 countries, supported 228 reforms in on the regulations governing local firms and investors and the institutions and agencies that enforce them. The collected and published data follows the life cycle of a firm, 63 countries. Of the total covering everything from setting up a business or trading reforms achieved during 228 50 23% across borders to enforcing a contract through the courts. In subsequent years, other datasets were developed following a similar approach. These, too, were based on the cycle, 207, or 91 percent, objective data (i.e., regulations) and were actionable. These include the Women, Business and the Law report, regulations concerning foreign direst investment (FDI) and were FIAS-funded. the Benchmarking Public Procurement report. reforms countries of reforms The Power of Benchmarking of business regulations have formed high-level reported by Doing Business Such benchmarking made reliable, comparable data achieved in 63 client committees coordinating since 2008 supported by IBR on business regulatory regimes readily accessible to countries, FY12–16; 207 business reform agenda policymakers and investors around the world. It drew reforms supported by FIAS5 attention to policies impacting local, smaller-sized firms. 5 Reform count reflects those reforms tracked through the IFC Monitoring & Evaluation (M&E) system; additional IBR reforms have been achieved through World Bank projects. 12 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 13 IBR Created in Response to Client Demand Group instruments—lending, technical assistance, and IFC advisory. The name changed from Indicator Based With this impetus, as many as 30 client countries in a Reform Advisory to Indicator Based Reform to reflect this given year have asked the World Bank Group for support joint approach. The core global team is based primarily in Figure 1: Average change in the distance to frontier in countries with in translating Doing Business and other data into reform Washington, D.C., with two based in Europe and regional vs without IBR engagement plans and actions to improve their regulatory environment. The FIAS-supported Indicator-Based Reform team leads in Peru, Kenya, and Mexico (see Table 1). 2010-2016* (IBR) was created in fiscal year 2008 to respond to this Strong Reform Results demand, leveraging the Bank Group’s growing indicator and knowledge base and supporting clients through In the FY12–16 strategy cycle, IBR has supported 228 8 reforms in 63 countries. Of the total reforms achieved 7 what often starts off as a brief window of opportunity for 6 reform. The most significant improvements happen when during the cycle, 207, or 91 percent, were FIAS-funded. 5 that brief window evolves into a long-term relationship These FIAS-supported IBR reforms, in turn, made up 4 and a comprehensive approach to investment climate 61 percent of the total of 341 FIAS-supported reforms 3 reform. Led by the Bank Group’s Trade & Competitiveness achieved during the five-year cycle. Across every World 2 Global Practice (T&C), IBR operates under a highly Bank Group region, engagement with IBR coincided with 1 collaborative model pooling expertise from other Global better-than-average country improvement as measured 0 Practices. The team is fully joint, combining both IFC and by the Doing Business “distance to frontier” scale. In Engaged (3) Non-engaged (27) Engaged (37) Non-engaged (9) Engaged (24) Non-engaged (8) Engaged (19) Non-engaged (6) Engaged (12) Non-engaged (12) Engaged (118) Non-engaged (64) World Bank staff implementing the full range of Bank about one out of five cases, IBR was the country’s first SPECIAL TOPIC: BENCHMARKING FOR A BETTER QUALITY BUSINESS ENVIRONMENT investment climate project (see Figure 2). Table 1: Achieving Results— What Has Worked Ownership: High-level client demand and ownership In countries such as Colombia, India, and Rwanda, the president (at the ministerial level or higher) generated by Doing Business or prime minister has initiated and closely followed the reform benchmarking. program. Focus on results: Built-in results frameworks and global visibility Of total number of reforms reported by Doing Business since given to reformers through annual reform tracking by Doing 2008, 23% were supported by IBR. SSA LAC ECA EAP OECD Global Business. Timeliness: Deliverables drawing on structured sources of data Engagements can start with first expert-reviewed deliverables n Average change in Distance to Frontier score and analysis, and established cross-practice collaboration allow in as early as 2–5 months. for rapid response to client requests so governments can make use of time-sensitive opportunities for reform. *Engagements that only recently initiated are excluded; MENA and South Asia are not shown due to a lack of non-IBR engagement comparison group. Actionable reform advice: Concise reform recommendations 106 client governments have benefited from Doing Business delivered in memoranda assessing constraints to businesses reform memoranda; over 60 countries from programmatic using international benchmarks, firm surveys, other sources, and action plans. The majority of client countries reformed in at least three Figure 2 providing roadmap for short- to medium-term reforms based on areas, reflecting the team’s consistent effort to adopt Number of countries in which global good practice. a programmatic approach with clients that increases IBRA was the first IC project1 likelihood and the scale of positive economic impact. Business entry regulations cannot be viewed or improved 12 26% 32% 27% 14% 18% 67% Global expertise: Multi-practice collaboration allows IBR to tap IBR works in at least 9 regulatory areas across 5 Global Practices into global expertise across a wide range of topics. (T&C, Finance & Markets, Governance, Urban, and Development in isolation, for example, because encouraging new firm 10 Economics). formation depends as well on other factors, such as land and labor regulations and taxation. Capacity building: Supports clients in designing programs Close to 50 countries have formed committees—typically at 8 involving multiple agencies in the context of a broader inter-ministerial level or reporting directly to the president or the Clients Focus on Long-Term Gains competitiveness agenda, determining priority areas for reform, prime minister—to ensure coordination of effort across agencies 6 setting targets with measurable results, and strengthening and levels of government. The reform momentum has spread. In addition to the over institutional capacity for managing reform programs across 60 countries currently supported by IBR, a number of other multiple sectors or levels of government. countries continues to reform under follow-on Bank Group 4 projects. These often continue with longer-term institution 3 3 3 building such as the creation of a movable collateral 2 Peer-to-peer learning: IBR leverages its access to global Over 10 peer-to-peer learning events at the ministerial level in knowledge base on regulatory practices to support peer-to-peer 3 regions. registry in Costa Rica, modernizing the business registries learning events at the technical and political level. in Croatia, facilitating access to credit in Colombia, supporting the development of a new building permits 0 regime in Albania, and strengthening property rights in SSA ECA EAP LAC MENA OECD Cost effectiveness: Standardized deliverables build on a vast Program cost per IBR-supported reform achieved averages Greece. An independent evaluation found that 50 Bank high % of countries in which IBRA income knowledge base on regulatory practices and reforms allowing for $70,000 Group client countries that engaged with the IBR team was the first IC engagement cost-effective technical assistance. achieved an increase in their investment climate portfolio (1) Considers IC portfolio 2005-2014; (2) Of countries with IBRA engagements size. 14 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 15 “Working with the World Bank’s IBR team on business Though the IBR program is implemented by T&C, four service relating to land registries and property rights, the registry reform in Croatia has been one of the best other Global Practices—Finance & Markets, Governance, level of automation available to businesses and investors, collaborative activities we have had as an agency,” said Energy & Extractives, and Social, Urban, Rural, and and the case management practices at commercial courts. Andrea August, Director of the Agency for Investments and Resilience—support efforts to tap into the full range of These and other measures can then be compared against Competitiveness in Croatia’s Ministry of Economy. “The Bank Group instruments. The work supports reforms in nine global good practices. IBR team’s global experience proved to be an indispensable regulatory areas: business entry; construction; property; asset. We worked as a team, and communicated easily corporate governance; credit; trade; taxation; contracts; and An Expanding IBR Agenda and regularly to shape all aspects of the reform program. insolvency. Key offerings include technical advice, capacity Longstanding client relationships, combined with expertise We especially appreciated the IBR team’s fast and precise building and institutional setup for reform, prioritization, translating data into actionable policy advice and reform, feedback and look forward to working with them further on infrastructure (including information technology), peer-to- have made IBR a natural platform for incubating new reform implementation. ” peer networking, and good regulatory practices particularly offerings based on evolving client demand. In Morocco, with a focus on mitigating and reducing implementation with FIAS support, IBR has been implementing an Global Practices Strengthen IBR Delivery gaps. innovative project to measure and address potential With the creation of the Global Practices at the beginning of The Global Practice structure positions T&C well for implementation gaps related to construction permitting fiscal year 2015, new opportunities have arisen to leverage supporting reforms that improve the quality of regulation and public procurement payment delays. The team worked Bank Group expertise and instruments. Reform programs and their implementing institutions, including company and closely with the public-private National Committee of being implemented in 21 client countries are combining property registries, courts, and credit bureaus. Through Business Environment to develop an evidence base for advisory and lending instruments for greater impact. While collaboration with other Global Practices and Bank Group the quality and predictability of services provided by SPECIAL TOPIC: BENCHMARKING FOR A BETTER QUALITY BUSINESS ENVIRONMENT Bank Group lending projects continue to help clients put in units, T&C is helping clients design and implement reforms government for the private sector. The resulting evidence place needed hard infrastructure and give a framework to that respond to the shift in Doing Business towards a not only informed public-private dialogue, it also led the programmatic policy reforms, they can often deliver greater longer-term substantive suite of institutional reforms government to incorporate findings and recommendations benefits when implemented in parallel with technical supported by lending and the new measures included in into a new draft law on public procurement payment delays. assistance projects that support reform implementation. Doing Business reports. The recent expansion of Doing The data enabled government to track progress in the The TA projects can be funded by pooling together donor Business to include new measures on the quality of implementation of a new building code across different funds, through client contributions, or some combination of regulations and institutions supports a broader reform municipalities and to encourage peer-to-peer learning. donor and client funding. program. The new data covers such issues as the quality of Based on the experience with the Morocco pilot, a key component of the Good Regulatory Program launched in FY16 focuses on implementation gaps and the ways to mitigate them. In Côte d’Ivoire, a top Doing Business reformer, IBR expanded a well-established business regulation program to include reforms aimed at increasing equal opportunity for women. The result was a change in law giving married women equal rights as head of household, a reform featured in the Bank Group’s annual Women, Business and the Law report. Such work not only speaks to one of the core pillars under the newly launched FIAS FY17–21 strategy cycle— improving the business environment—it also encompasses core themes such as transparency and gender and inclusion. The program is expanding in scope along with the expanding coverage of Doing Business. In response to the worldwide decline in prices for extractives and other commodities, the IBR team is working with a number of countries as varied as Bhutan, Lesotho, and Saudi Arabia that are seeking to diversify their economies. IBR has played a pivotal role in the success of the FIAS FY12– 16 strategy cycle, accounting for 60 percent of the reforms achieved and exceeding the strategy targets consistently each year. The experience gained and lessons learned from this work is being actively applied, replicated, and enhanced in the new strategy cycle under way. Beginning with its foundational work in helping client countries improve their investment climate, IBR initiated and incubated work in new areas—particularly gender, transparency, implementation gaps, and good regulatory practice—that have been incorporated into the FY17–21 strategy. 16 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 17 3 OPERATIONAL OPERATIONAL HIGHLIGHTS FY16 marked the final year of the FIAS FY12–16 strategy cycle during which the mission of FIAS- HIGHLIGHTS supported programs was to facilitate reforms in developing countries to foster open, productive, and competitive markets and to unlock sustainable private investments in sectors that contribute to growth and poverty reduction. Those priorities, which remain central to the FIAS agenda, were visible in FIAS-supported efforts for FY16. By the end of the fiscal year, FIAS funding supported FIAS is supporting implementation of a portfolio of 112 projects—81 IFC; 6 IBRD; and 25 non-client-facing projects in knowledge reforms in more fragile states than management and product development. This compares with 69 projects, 17 of them non-client- ever. T&C demonstrated its ability to facing, in FY15. FIAS recorded $15.2 million in additional compliance cost savings to the private respond rapidly with post-quake work sector stemming from the efficiencies and benefits of investment climate reform. For the five-year in Nepal. cycle, compliance cost savings and trade sector savings to private sector firms due to reforms in client countries reached $641 million, surpassing the target of $600 million for the cycle. FIAS Focus on FCS States Another outcome of this initiative was a regional conference, “Enabling Growth & Increasing Trust—the A top priority of FIAS-supported work involves advisory Impact of Business Regulation Reforms in Fragile and services to states in fragile and conflict-affected Post-Conflict Countries” held in Abidjan, Côte d’Ivoire, situations (FCS). Key to this work is the idea that in February 2016, in collaboration with the Bank Group’s economic recovery and growth can be a part of conflict Fragile, Conflict, and Violence Cross-Cutting Solutions resolution, rather than an offshoot of it. In FY16, 22 of Area. Attendees explored the impact of business the 76 reforms, or 29 percent achieved with the help of regulatory reform, particularly in the areas of inspections FIAS-supported projects occurred in 11 countries on the and licensing. Lessons learned from international efforts FY16 Harmonized List of Fragile Situations (in FY15, 23 in FCS countries were presented to help participating out of 68 reforms, or 34 percent, in 9 countries). countries strengthen their reform efforts. The event also In FY16, FIAS supported active country-specific or showcased the Bank Group’s expertise in working with regional projects benefiting 23 of the world’s 35 FCS FCS states and highlighted Côte d’Ivoire’s reform efforts. states and territories: Afghanistan; Bosnia and Much of this FCS work has been informed by a broader Herzegovina; Burundi; Central African Republic; Chad; effort by T&C to capture lessons learned from its the Comoros; the Democratic Republic of Congo; advisory efforts with client countries. A strategic paper Côte d’Ivoire; Guinea-Bissau; Haiti; Iraq; Lebanon; stemming from this initiative proposes a balanced Liberia; Madagascar; Mali; Myanmar; Solomon approach between creating conditions for private sector Islands; Somalia; South Sudan; Timor-Leste; Togo; the growth and seizing on opportunities for near-term gain in West Bank and Gaza; and Zimbabwe. (In FY15, FIAS generating inclusive growth and creating jobs. supported projects in 21 out of 33 FCS states.) Project expenditures in FCS countries totaled $6.5 million, or 31 Protracted conflict in Côte d’Ivoire harmed the country’s percent of client-facing project spending ($3.06 million, previously robust economy in many ways, one of which or 31 percent in FY15). In terms of the number of FCS was in the deterioration of the judicial system. By 2011, countries with FIAS-supported projects, the results for 78% 66% 29% after years of civil conflict, the country’s main tribunal in FY16 are the best for the cycle. Abidjan was spending little time on commercial cases. Amid the post-war recovery effort, commercial banks and In FY16 T&C formed an FCS Community of Practice business community groups identified the dysfunction of to bring together practitioners in a single knowledge- the judicial system as among the most difficult problems sharing platform supported by a collaborative Spark page, stemming from the conflict. Enforcement of legislation Fragile Business. This practitioner-level collaboration was and contracts was slow and at times non-existent; instrumental in swiftly mobilizing a team of practitioners of FIAS reforms in IDA reforms in Sub-Saharan of reforms in FCS proceedings lacked transparency; courts and magistrates to contribute to a Damage and Needs Assessment in countries in FY16 Africa lacked the human and technical resources to fulfill their Nigeria. The team proposed a practical approach toward responsibilities. job creation and increased private sector activity in a post-conflict scenario. 18 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 19 An extended Bank Group project, supported by FIAS, has representatives of Burkina Faso, Côte d’Ivoire, Mali, Consultation Committee to launch a Joint Inspection ” said business owner Brou Jeanette, for inspections, dramatically improved the situation. The joint effort by T&C Niger, and Senegal establishing a regional list of consular Management System IT Platform. The online service from Maquis Duval. “Now, I have received advice in and the Finance & Markets Global Practices, begun in judges and commencing work on an OHADA Uniform Act increases the speed and efficiency of inspections and hygiene control and food security norms that has helped 2011, has brought to bear information and communication on commercial justice. helps companies comply with norms and standards, thus me to improve the quality of my services. I welcome technologies to help bring the country’s court services up improving their performance. inspectors to my premises to share good practices and to international standards. In 2015, the Ivoirian commercial to learn how I can better meet my customers’ needs. ” court system’s performance on a regional level was Starting Businesses and Fostering their Growth “The benefits we have received through the improved, and in FY16, commercial justice services were implementation of the Joint Inspection System project Overall, the business regulation program under which A core area of FIAS-supported work, T&C’s offerings and are impressive,” said Committee Executive Secretary the new platform was developed aims to improve the meeting demand across the full spectrum of business client services in investment climate lay the foundation Fadiga Fofana. “Indeed, beyond the strengthening of the business enabling environment for small and medium activities. Reforms instituted with Bank Group assistance for sustainable growth. The Investment Climate team current norms, this initiative helps to improve the quality enterprises (SMEs), particularly for women-owned included establishment of a quick resolution system for promotes investment competitiveness by helping of health services and restaurant performance, helping to businesses. The FIAS-supported team delivers advisory small disputes and optional mediation services. While governments unlock productivity gains from domestic in 2012 it took 395 days to get a judgment, by 2015 the improve Côte d’Ivoire’s image internally and externally.” services in construction permitting, property registration, and foreign investments. The Business Environment starting a business, cross-border trade, contract time required was down to about 150 days. The number team analyzes client country performance based on key of judgments issued rose exponentially, from 33 in 2012 Workshop participants included representatives of 49 enforcement, and taxation. Legal reforms relating to international benchmarks and designs better business enterprises from the tourism and health sectors, where women’s rights in doing business are expected to (reflecting the moribund post-conflict condition of the regulations and improved regulatory implementation. court) to 4,445 in 2015. the new IT tools were tested in a pilot project. The increase newly created or formalized women-owned The Investment Policy and Promotion team supports system has incentivized self-improvement by businesses businesses from 10 percent to 25 percent of all countries in attracting, retaining, and maximizing in areas such as licensing, staff awareness of first aid enterprises registered. The commercial court reforms in Côte d’Ivoire have spillovers of FDI for the local economy. and fire safety, sanitation, cleaning, housekeeping, had positive spillover effects across the region, as the improved procedures drew the attention of neighboring Investment Climate Work in Sub-Saharan Africa food safety, and access to clean water and sanitation Enhancing Integration and Boosting Investment in West Africa countries Benin, Burkina Faso, Mali, and Senegal. systems. Less than half of all enterprises in the pilot OPERATIONAL HIGHLIGHTS T&C’s FIAS-supported business regulation program is districts were in compliance with standards, so the need Regional strategies for economic development have the Delegations from these countries toured the Ivorian helping the government of Côte d’Ivoire improve its for improvement was clear. Reaction from the business potential to leverage World Bank Group expertise and courts, leading to discussions among 17 member business inspection systems to enhance corporate community has been positive. achieve scale more rapidly than country-specific programs. countries of the Organization for the Harmonization of governance, transparency, and the quality of services T&C’s FIAS-supported work in West Africa exemplifies this Business Law in Africa (OHADA6) about establishing a provided by firms in the tourism and health sectors. “Previously the system was disorganized, based on approach as countries in the region step up their efforts to regional commercial court system. In February 2016, A workshop in Abidjan in June 2016 provided a forum sanctions rather than providing guidance, with little integrate regional economies and improve the investment a memorandum of understanding was signed by climate. In June 2016, T&C, with FIAS support, organized for the Bank Group and Côte d’Ivoire’s Public-Private information to enterprises on check-lists and the dates FIAS Helps Conflict-Affected State Address Obstacles to Growth The Democratic Republic of Congo is recovering from years of conflict, with rebel and criminal groups “This project will enable our still active in the country’s eastern region. Persistent conflict has made this vast country one of the most region’s integration into the challenging business environments in the world. Micro, small, and medium enterprises (MSMEs) and global economy, while ensuring informal businesses dominate the private sector. Serious constraints range from limited access to finance the competitiveness of our to a dysfunctional judicial system. Infrastructure is poor, the regulatory environment burdensome, and private sector by improving the officialdom beset by high levels of corruption. Unemployment is very high, especially among young business climate.” people. These constraints are exacerbated by fragile and inefficient state institutions at national and Kalilou Traore, ECOWAS Commissioner provincial levels. for Industry and Private Sector The FIAS-supported Democratic Republic of Congo investment climate project seeks to sustain reform Promotion momentum and foster enterprise creation and growth through targeted investment climate reform. In particular, the program encourages business registration and formalization, streamlines and strengthens construction permitting, and improves the effectiveness and transparency of the commercial justice system. During FY16, two reforms supported by the project team and government relating to starting a business and construction permits were recognized in the Doing Business 2016 report. As a result of the business registration reform, the time required to create a limited liability company was reduced from 16 days to 11 based on a recommendation formulated by the FIAS-supported project team. This further improved an established one-stop shop in the business registration process. The reform also reduced the minimum capital requirement. For the construction permitting reform, IFC advised the government on key streamlining measures, including a review of the costs associated with construction permits. The resulting reform cut in half the cost of obtaining a building permit. The benefits expected to result from these reforms include an increase in the MSME formalization rate as well as jobs creation in particular in the construction sector. 6 OHADA is the French acronym for Organisation pour l’Harmonisation en Afrique du Droit des Affaires. 20 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 21 a regional public-private dialogue (PPD) in Dakar, Senegal, more and better-quality investments to their countries, and Under an initiative approved in FY15 and implemented in within 24 hours, at no cost, to obtain a professional to identify regional and national investment constraints, increase the flow of investment across the region. The FY16, Albertine was offered the opportunity to formalize entreprenant card, and to open a bank account. facilitate investment-policy improvements, and enhance improvements will be monitored through scorecards, and her small business by registering as an entreprenant, a integration in the region. The forum was part of a four-year offering opportunities for member countries to dialogue new simplified legal regime piloted in Benin and expected In Cotonou, T&C has partnered with the one-stop-shop for project implemented by T&C and funded by the European and learn about best practices. (For more on FIAS- to be adopted by all 17 member countries of OHADA. business registration, two local business incubators, the Union and FIAS to improve the business and investment supported work with ECOWAS, see p. 31.) tax authority, and two banks to streamline the business climate in the 15 member countries of the Economic Eloise Bossou took advantage of the same opportunity. registration process, making it easier, faster, and cheaper Community of West African States (ECOWAS). More Entreprenant Status in Benin Helps Small Businesses Formalize Once a market trader, she is now a successful to register. The project also supports practical training and than 50 representatives participated in the two-day event businesswoman. She dreamed of having a job that would advisory services in key business areas. With her shop stocked with spare auto parts, Albertine bring her closer to home and her four children. Eloise from the public and private sector, including ministers Djoyi is challenging traditional perceptions of female started saving profits from her market sales with the hope Albertine has benefitted from training in accounting, from Liberia, Niger, and Senegal. Representatives of entrepreneurs in Benin. Albertine’s path into a business of expanding her horizons. inventory management and finance. The new skills have the member countries (also including Benin, Burkina typically managed by men came unexpectedly. When her transformed the way she runs her business. According to Faso, Cabo Verde, Gambia, Ghana, Guinea, Guinea- husband died, she was compelled to take over the family A dozen years ago, she opened a neighborhood bar on the Albertine, the most important benefit was learning how to Bissau, Côte d’Ivoire, Mali, Nigeria, Sierra Leone, and business and support her four children. outskirts of Cotonou, Benin’s economic capital. It quickly pay taxes. Togo) strongly welcomed the initiative. It was hosted by ECOWAS and the West African Economic and Monetary became a local favorite, known for Eloise’s impeccable Initially, she struggled with the basics of running a small customer service. “Before I was afraid and avoided paying taxes,” she Union. business—keeping the place organized, taking stock of said. “I now understand how to calculate my taxes the parts, and pricing them. Learning the trade quickly, out “I love my customers and I enjoy serving them, ” and accept that I must pay them to contribute to the “This project will enable our region’s integration into the of necessity, Albertine travelled to Nigeria to buy quality she said. Like Albertine, Eloise also faced serious development of my country, so that my kids and I can global economy, while ensuring the competitiveness of parts and stock the shop. But she kept no accounting challenges when she wanted to expand her bar into a benefit.” our private sector by improving the business climate, ” records and so, from month to month, did not know if she two-floor restaurant and catering business. Kalilou Traore, the ECOWAS Commissioner for Industry was making a profit or taking a loss. One of thousands Through better management, bookkeeping, stock OPERATIONAL HIGHLIGHTS and Private Sector Promotion, told the gathering. of individuals operating in the informal sector in Benin, The entreprenant regime is specifically designed to monitoring and pricing, Albertine has been able to ECOWAS is focusing on reforms that target investment Albertine had insufficient access to credit and financial encourage small entrepreneurs to join the formal sector. As establish a standard monthly profit margin which she uses entry regulations and investment incentives to help reduce services, common constraints to business formalization beneficiaries of the entreprenant concept piloted in Benin, to support her family to pay for school fees, healthcare and uncertainty for investors, enable governments to attract and private sector development in Sub-Saharan Africa. Albertine and Eloise received support to register businesses living expenses. A Comprehensive Approach to Growth and Transparency in Mali FIAS-funded projects achieve scale not only through regionally oriented initiatives in economic leagues such as OHADA and ECOWAS but also by supporting comprehensive investment climate initiatives in single countries that span a range of economic activity from business regulation to taxation, to investment and trade. The Mali Investment Climate 3 program seeks to strengthen the role of the private sector in stabilizing the country’s economy by initiating improvements in a number of economic spheres. The project supports the country’s national investment promotion agency to improve its ability to promote and facilitate new investments. A national investment strategy developed with the help of the FIAS- supported T&C team has identified three areas—energy, livestock, and agriculture—as sectors that offer a competitive advantage for investment. The government is also receiving support for streamlining and improving its public-private dialogue (PPD) platforms to help improve the business environment and unlock investment constraints in priority sectors. As a Sub-Saharan nation, a fragile and conflict-affected state, and a member of IDA, Mali falls into all three FIAS priority areas. Working to improve the transparency of existing incentive regimes is one way the FIAS- supported effort seeks to restore and build confidence in governmental institutions. For example, in the As a beneficiary of the commercial court, procedures are being simplified and transparency increased through the development of entreprenant concept piloted a website to publish all decisions. in Benin, Eloise received The project provided technical inputs in the drafting of a new competition law—adopted in February support to register businesses 2016—and the respective bylaw. Implementation of the new framework will increase the effectiveness within 24 hours, at no cost, and the transparency of the rules to fight anticompetitive practices, prevent mergers that are likely to to obtain a professional harm competition, and control state aid that distorts trade and competition. Ultimately, the result will be entreprenant card, and to to reduce associated cost burdens on the private sector. Technical assistance is helping Mali modernize open a bank account. the commercial and collateral registry in line with OHADA guidelines and international best practice. Establishing a more reliable, secure, accurate and accessible database of existing businesses and movable assets will enable financial institutions to provide better access to credit for SMEs, and help foreign investors find reliable business partners. Elouise Bossou in her popular neighborhood bar in Coutonou, Benin. Bossou was surprised with the benefits that came with formalization. (IFC photo) 22 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 23 enabling environment by simplifying business entry FIAS-supported IBR work, see Chapter 2.) The project The IBR team is also focusing on communication activities and operation procedures, while the Competitiveness goals are well aligned with the strategic priorities for the and outreach to the private sector in countries that are and Integrated Growth Opportunity Project aims to World Bank Group, focusing on measures to create a level- implementing reforms. The FIAS-supported project’s foster entrepreneurship. Both projects jointly support playing field for businesses while enhancing the regulatory learning efforts included the annual flagship Ease of the implementation of the entreprenant legal status, delivery capacity of public institutions. The innovative Doing Business Peer-to-Peer (P2P) learning event, which including access to credit and incentives such as a lower delivery model emphasizes rapid-response, concrete and took place in Kenya in 2016, bringing together over 350 tax; formalization assistance; and support with bank, tax measurable investment climate reform recommendations. participants from more than 15 regional economies. mediation and counseling services. The program came to a close in 2016 after a successful four years. FIAS-supported IBR work in Sub-Saharan Africa gained Phase II of the IBR Sub-Saharan Africa project was new clients in FY16 while continuing to support Doing recognized in FY16 with a World Bank Group Corporate Increasing the Effectiveness of Merger Control in Zambia Business-related activities in the region through technical Award. The IBR work being done is making Sub-Saharan support and advisory services. Six countries in the Africa the world’s leading reform region in terms of pace, In Zambia, the FIAS-supported team has assisted the region—Cameroon, Ethiopia, Niger, Nigeria, Tanzania, accounting for almost a third of all reforms captured Competition and Consumer Protection Commission in and Zambia—joined the roster of client countries seeking globally. preparing and adopting new merger control guidelines. to improve their business environment via reforms in The effort has generated immediate results. In the first Doing Business indicators. These new clients joined the The global visibility of Doing Business and its associated months of implementation in FY16, the new guidelines five Sub-Saharan Africa client countries already working country rankings has consistently generated strong client reduced compliance cost by 44 percent, or about $154,000 with the IBR team on FIAS-supported reform efforts: interest in the IBR suite of services. The project’s regional per transaction on average, while the time required to Benin, Ghana, Mauritania, Senegal, and Togo. The approach promoting knowledge sharing enhanced the assess proposed mergers declined by 14 percent, from IBR team is also providing technical support to many ability to offer advisory services on a flexible basis, an 97 to 83 days. The merger control guidelines, issued in other countries in the region through existing Bank approach that was at the heart of the project’s design. August 2015, increase the clarity and predictability of Group projects implemented by T&C. Among these are OPERATIONAL HIGHLIGHTS the legal system by explaining what transactions need Angola, Botswana, the Democratic Republic of Congo, In the Latin America and Caribbean (LAC) region in FY16, to be notified, as well as what economic tests would Kenya, Lesotho, Madagascar, Mozambique, Rwanda, FIAS funding directly supported IBR recommendations in be applied to assess a merger. As a result, the number Somalia, and Zimbabwe. Assistance under IBR covers Guyana and St. Lucia. The team expects that St. Lucia of mergers subject to notification and review has been a wide range of areas, including overall guidance on will improve its regulations for secured transactions and reduced by nearly a third, further speeding the processing the Doing Business cycle and methodology—including insolvency. This work is part of a much larger IBR-focused of transactions that do require review. The guidelines also providing detailed technical input through targeted effort in the LAC region involving FIAS-supported teams. create a fast-track procedure to handle in a more efficient technical assistance on Doing Business indicators— Bolivia, Colombia, and Ecuador implemented reforms to way mergers that are unlikely to harm competition. through reform memoranda, action plans, methodology facilitate the process of starting a business, respectively Mergers affecting control of parent companies outside of video conferences, and other technical trainings. by streamlining registration formalities, decreasing the Zambia but involving no change of control among firms in time necessary to register a company, and eliminating Zambia no longer need to be notified. Likewise, foreign The IBR team developed or updated action plans for the publication of company charters in local newspapers. acquisitions of Zambian firms are subject to notification Nigeria and Tanzania. Training sessions and workshops Argentina introduced a streamlined licensing system and review but only if the transaction has the potential to focused on methodology, and Doing Business reform for cross-border trade. Brazil adopted a new contract affect competition in Zambia. This means, for example, recommendation validation workshops were delivered in enforcement mediation law. And the Dominican Republic that a foreign firm with no presence in Zambia that buys a Cameroon, Mozambique, Nigeria, and Tanzania. According decreased its mandated corporate income tax rate. Albertine Dijoyi, left, in her auto parts shop in Benin, has benefitted Zambian firm does not have to go through the notification to the Doing Business 2017 report, FIAS supported 11 IBR Although FIAS funding did not directly support these from a FIAS-supported business formalization initiative. (IFC photo) and review process. According to the competition law in reforms in eight Sub-Saharan African countries in FY16. particular reforms, the expertise developed through FIAS- Zambia, the guidelines are binding. (For more on FIAS- supported work and implemented with the help of FIAS- supported work on competition policy, see p. 47.) As examples, in Angola, the team developed a reform supported teams has been instrumental to the passage of “My clients like the way I run my business. They no memo and action plan laying out short-, medium- and long- Doing Business-related reforms across the LAC region. longer think that selling spare parts is only a man’s The experience and results obtained from the advisory term reform measures designed to improve the country’s business,” said Albertine. competition has enhanced coordination between IFC and Following the successful implementation of a commercial business environment. In FY16, Angola made starting a the World Bank in Zambia. The design of an investment business easier by eliminating the paid-in minimum capital registry (CR) reform strategy in Lebanon, T&C, with FIAS Eloise also benefitted from the same courses and lending operation on agribusiness now includes a requirement. The team worked with Mauritius to develop support, assisted the government in developing the first proudly displays her training certificate on the wall of her component on competition policy to address policy a new digitized land records system and streamlined version of the Lebanese e-Government Interoperability restaurant. and regulatory gaps affecting competition in Zambia’s processes. And the team worked with Burundi on a Framework (LGIF), linking all the administrative “With these new qualifications, my clients and the agriculture markets. The goal is to identify and implement reform memo and action plan, one result of which was constituents within the scope of the commercial registry local authorities have more respect for me.” Eloise pro-competition reforms to unlock policy obstacles to free a streamlined value added tax (VAT) filing system that one-stop-shop reform. LGIF provides the framework to said. “They now consider me a true businesswoman. ” and fair competition in markets along agribusiness value reduced the required documents and entries. support and implement the commercial registry one- chains, and to enhance the impact of the producer support stop-shop reform. The framework provides interfaces Her management skills have greatly improved, and her program funded by the loan. Absent the competition policy and data exchanges among the stakeholders. As the profits are increasing. With more disposable income, component, barriers to competition would remain and The IBR team continued to actively support country government adds more e-government services over time, Eloise has hired additional staff, including a cook. She has threaten the effectiveness of the entire lending operation. teams and regional task team leaders to enhance their the system has the flexibility to provide the platform for expanded her offerings from selling beverages only, and understanding of Doing Business methodology and their successive LGIF versions. A prime ministerial decree now serves local food delicacies. IBR Project Gains Clients in Africa, Leveraging Key Investment role in the data collection process. As part of these efforts, was issued in November 2015 establishing a steering the project team helped facilitate video conferences committee in charge of driving the implementation of Since 2012, the World Bank Group has been supporting Climate Indicators among countries in the region. Knowledge products LGIF . Represented on the committee are the Office of the government of Benin to implement investment The objective of the Indicator Based Reform (IBR) project developed on Doing Business reform in the region in FY15 the Presidency of the Government (Chair), the Ministry climate reforms that promote trade and competitiveness is to help client governments and the private sector in included a paper on reform structures and mechanisms of Justice, the Ministry of Economy and Trade, Office in the private sector. The Benin Investment Climate implementing reforms in areas measured by a broad set for successful reformers from the region and trainings and of the State Minister for Administrative Development, Program specifically aims to build a strong business of actionable investment climate indicators. (For more on methodology-specific discussions for task team leaders. Ministry of Finance, Central Bank, the Bar Association, the 24 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 25 Ministry of Interior and National Social Security Fund. The investor protection by introducing legal requirements for Fostering Efficient Debt Resolution and Business Exit Procedures law, published in the law gazette in January 2016. The LGIF, along with the commercial registry one-stop-shop immediate disclosure of related-party transactions to the law modernizes Malawi’s outdated insolvency regime, implementation plan and reform package, was endorsed public. Croatia strengthened minority investor protections In FY16, the FIAS-supported Debt Resolution and providing a streamlined set of procedures for individuals, by all government stakeholders in May 2016. The reform by requiring detailed internal disclosure of conflicts Business Exit (DRBE) program worked on some 40 unincorporated businesses (such as sole proprietorships package is currently being reviewed by the council of of interest by directors to their company. The Kyrgyz client-facing projects across two global practices, T&C and partnerships), and corporations. A newly established ministers for final approval to initiate the implementation. Republic made transferring property easier by introducing and Finance & Markets (F&M).7 These projects focused director of insolvency monitors the performance of The government requested T&C’s support in providing an online procedure for obtaining the non-encumbrance on a range of interlinked issues, including insolvency, insolvency practitioners. The law establishes a regime overall implementation quality assurance and oversight. certificates and also instituted improvements that reduced creditor rights, secured transactions, arbitration, and to facilitate the rescue of financially distressed but The government has pledged a budget of over $2 million the time and cost of exporting. Serbia made dealing with mediation. In total, the projects led to ten reforms. viable corporations, and provides for the adoption of the to support the implementation effort. construction permits cheaper by eliminating the land DRBE assists governments in improving their credit UNCITRAL law on cross-border insolvency. development tax for warehouses and simplified property environments through the development of more effective FIAS-supported IBR work in the Europe and Central Asia transfers by introducing effective time limits. And Tajikistan insolvency systems. Business failure occurs in all types Fiscal 2016 marked a number of milestones in the (ECA) region continued in FY16 to support business made trading across borders easier by making it possible of economies; healthier, more robust economies help Western Balkans DRBE project, largely focused environment reforms through technical assistance, to submit customs declarations electronically. manage these challenges by following internationally on Serbia. The Serbian government adopted a non- advisory services, and implementation support to the recognized standards which foster increased confidence performing loans (NPL) resolution strategy, developed client countries. The project provided assistance to nine The team supplemented its reform work with a number among lenders and investors. DBRE helps clients with jointly by representatives from the Serbian Ministries countries (Albania, Bulgaria, Croatia, Kazakhstan, of technical assistance reports, including Doing Business international standard-setting, detailed diagnostics, and of Finance, Justice, and Economy, the Central Bank of Kosovo, the Kyrgyz Republic, Serbia, Tajikistan, and reform memorandums for Bulgaria and Uzbekistan, technical assistance for implementation. The team’s work Serbia, the International Monetary Fund, the European Uzbekistan). New requests have been received from a review of Albania’s construction permitting system, helps to save viable businesses, while allowing failed Bank for Reconstruction and Development, and the Azerbaijan, Poland, and Romania. The work in ECA business environment reform reviews for Albania, the businesses to “exit” the market efficiently and effectively. Bank Group. The strategy is designed to increase helped produce eight business environment reforms Kyrgyz Republic and Serbia, and a communique on Ultimately, this increases the return to stakeholders (banks bank lending and reduce systemic risk by removing in FY16, validated by Doing Business. The team also construction permitting for Albania. It also organized and other creditors) from non-performing loans, reduces obstacles for meaningful debt resolution, encouraging OPERATIONAL HIGHLIGHTS delivered 10 technical assistance reports, organized five workshops on a range of issues, from Doing Business to dependency on the courts for debt recovery, and saves debt restructuring, ensuring timely loss recognition, and workshops, and was instrumental in generating three construction permitting and public registries. Follow-on jobs through the preservation of enterprise value via preventing banks from accumulating distressed debt. follow-on Bank Group operations. operations stemming from the IBR work in ECA include restructuring. A related law enacted as part of the strategy offers a development policy loans on jobs and competitiveness framework for debt restructuring to enable the stabilization Albania lifted the longstanding moratorium on in Albania, reimbursable advisory services on improving The DRBE team, including elements from both T&C and and recovery of businesses affected by financial construction, introduced streamlined procedures for business registries in Croatia and on construction F&M, assisted the Organization for the Harmonization difficulties. An additional reform enacted in law improves obtaining construction permits, and piloted a new online permitting and business registries in Bulgaria. of Business Laws in Africa (OHADA) in adopting a the operations of the Serbian Bankruptcy Supervision permitting platform. Albania also strengthened minority significantly revised and modernized Uniform Act on Agency. The project is also helping Serbia update its 2014 Insolvency. This insolvency law came into force on insolvency law to meet IMF requirements regarding the December 24, 2015, with strong international support. status of secured creditors. Draft amendments finalized It applies to 17 OHADA countries: Benin, Burkina Faso, prior to the end of FY16 are currently going through a Cameroon, Central African Republic, Chad, Comoros, period of public consultation. Côte d’Ivoire, Democratic Republic of Congo, Equatorial Guinea, Gabon, Guinea, Guinea-Bissau, Under the Global Product Development Project, the Mali, Niger, Republic of the Congo, Senegal, and Togo. DRBE team led a dialogue on credit infrastructure with The law introduces many innovations in keeping with a the Turkish Presidency of the G20 at the 2015 G20 best-practice insolvency regime, including: summit in Antalya, Turkey. World leaders endorsed the “G20 Action Plan on SME Financing”8 in the summit’s • More flexible pre-insolvency procedures to communiqué. The plan forms part of the G20’s goal of encourage saving viable businesses. promoting economic growth by encouraging G20 and non-G20 countries alike to develop environments that • Providing for a “new money” privilege for creditors support small and medium enterprises (SMEs). Key to who provide post-commencement financing. this strategy is increasing the ability of SMEs to access • Establishing a common regulation for insolvency financing and credit. The G20 identified three areas of practitioners across the OHADA region. credit infrastructure as key priority reform measures in financial markets: • Simplifying regulations for micro, small and medium enterprises to facilitate insolvency proceedings. • Improvements of the credit reporting framework for SMEs. • Adopting the UNCITRAL model law on cross-border insolvency. • Reforms that allow banks and non-banks to lend to SMEs against movable collateral. • Ensuring harmonization with the relatively new regime dealing with secured transactions. • Debt resolution and insolvency reforms.9 The team provided extensive technical assistance in The DRBE team is responsible for developing a helping Malawi establish a new unified insolvency framework for monitoring progress on reform in financial infrastructure for the countries that adopt the proposed 7 Beginning in FY15 with the creation of the Global Practices, the DRBE team transitioned from T&C to F&M (which is also a joint World Bank and IFC practice). This transfer is now complete; as of FY17, DRBE work is funded by FMTAAS. For more information, donor partners may contact Lead Financial Sector Specialist Mahesh Uttamchandani at F&M. Construction site in Bulgaria. (IFC photo) 8 http://www.g20.org/English/Documents/PastPresidency/201512/P020151228341855289327.pdf. 9 http://www.g20.org/English/Documents/PastPresidency/201512/P020151228341855289327.pdf, pages #–#?. 26 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 27 measures, and the team is developing a questionnaire to validation is required. Although the guidelines have yet fees for obtaining land and building registry were also related to business regulation, industrial infrastructure, track implementation of the action plan. to be tested, the first case using the OCW guidelines in cut by half. Overall, the monitoring and evaluation team and export diversification through sector and trade Jordan appears to be progressing well. (M&E) has confirmed and verified estimated private competiveness. In Vietnam, a new insolvency framework implemented sector compliance cost savings as a result of the team’s with the support of the DRBE team has improved the In FY16, Bosnia and Herzegovina, with the help of the work in Bosnia and Herzegovina of $1.6 million per year. An important component of investment climate reform effectiveness and efficiency of Vietnam’s insolvency FIAS-supported team, took energetic steps to institute involves ensuring that current and potential trading and resolution process. The first year of the framework’s investment climate reforms in categories covered by FIAS provided critical bridge funding in FY16 for a investment partners know of the effort to improve the implementation saw a nearly fourfold increase in corporate Doing Business. The team helped implement a reform technical assistance program in Bangladesh intended climate for doing business. To this end, the team helped insolvencies filed and resolved. The team supported eliminating the fee for obtaining a work permit for to maintain reform momentum for investment climate organize a high-level investment and policy summit in creation of an ADR chapter in the country’s new civil foreign workers in Sarajevo Canton. The annual fee had work transitioning between two project phases. The January 2016 to showcase the investment in Bangladesh procedure code to improve consistency in recognizing been $590 per request and had to be paid each year if team helped Bangladesh improve two regulatory and to identify further policy improvements needed to and enforcing arbitration awards. This change contributed work permits were to be renewed. Sarajevo, the only processes important for agribusiness competitiveness maximize domestic and foreign investment opportunities. to a 50 percent increase in the number of cases that government-level canton to impose this fee, has the through process simplification and automation, one The summit, held in Dhaka, helped Bangladesh the country’s largest arbitration center heard in 2015 as highest number of annual requests for a work permits relating to standards and testing to simplify product secure investment pledges totaling $ 15.2 billion for compared to 2013. in the country, with 850 requests in 2015. The reform quality certification, the other to speed phytosanitary infrastructure—power, energy, trade logistics—and high- thus has the potential to save businesses a combined certification of agriculture products for import and export. growth manufacturing sectors. Some 2,200 participants, In Jordan and Lebanon, the DRBE team helped the half million dollars per year. The reform brought with it FIAS funding contributed to project completion and including 450 investors, from 11 countries, including governments launch an out-of-court workout (OCW) an improvement in the general screening procedure. An sustainability of the reforms. FIAS support is also helping Britain, China, India, Japan, the Republic of Korea, framework in an effort to strengthen creditor recovery. amendment to the country’s company law cut the initial set the stage for phase II of the Bangladesh Investment Malaysia, Singapore, and the United States attended the The guidelines, based on international best practices, capital requirement for establishing a limited liability Climate Fund, a six-year competiveness advisory program event. The T&C team supported the Bangladesh Board of were customized by country and subsequently adopted corporation (LLC) by half. Court fees for registering an with strongly complementary ties to the T&C lending Investment in planning and technical preparations for the by each country’s central bank. The new mechanisms are LLC were cut by 80 percent. Annual savings for the portfolio. The project seeks to address constraints summit. OPERATIONAL HIGHLIGHTS fully voluntary and out-of-court; no judicial supervision or private sector are estimated at $277,150 per year. The FIAS-Supported Team Carries Out a Comprehensive Effort in the Kyrgyz Republic The investment climate work under way in the Kyrgyz Republic illustrates the comprehensive approach to addressing client needs made possible by enhanced collaboration and the Global Practices architecture. In FY16, the FIAS-supported team helped the government make significant progress in streamlining inspections regulations, improving government-to-business services, and addressing priorities for improving Doing Business indicators. Amendments to the law on inspections enacted in April 2016 corrected some ambiguous clauses and added new progressive norms. The amendments limit inspections of entities with a high level of sanitary and veterinary risk to a maximum of two visits per year, which cut by about half the number of sanitary and veterinary inspections. Inspection reports will now be made publicly available on a regular basis while businesses are obliged to publicize the results of inspections, for example, so that customers can access hygiene reports on restaurants. The new regime lays the groundwork for establishing a hygiene sticker system in the country, similar to systems in place in Britain and Denmark. The government also has the possibility to free low risk businesses from planned inspections. Beginning in December 2015, the Kyrgyz investment climate project began work that has now extended to three inspection agencies to establish a web-based system to process feedback from businesses. The initiative traces its origins to an in-depth assessment conducted in 2013 that highlighted the need to improve existing business feedback mechanisms. Entrepreneurs in the Kyrgyz Republic did not trust previously existing communications channels due to time-consuming procedures and low confidence that feedback would ever reach the intended addressee and prompt any further action. The new online system responds to these concerns. Jointly with the IBR team, the Kyrgyz project assisted the government in developing a comprehensive action plan, approved in January 2016, on Doing Business reforms for 2016 and 2017, consisting of some 50 actions. In the ‘getting electricity’ indicator, the government introduced a new way to calculate the costs of providing electricity to new consumers. The new system reduces the risk of exposing consumers to unfair or even corrupt practices in gaining access to the power grid. Another reform makes available online information about energy tariffs. In the ‘getting credit’ indicator, changes in law allow distribution of data from retailers or utility companies, in addition to banks and other financial institutions, improving the scope and accessibility of credit information available through the credit bureau. In the Kyrgyz Republic, one of the Toktogul hydro-power cascade plants on the Naryn River. (IFC photo by Serhiy Osavolyuk) 28 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 29 Boosting Trade and Investment as in most developing countries. The problem stems from an acute shortage of collateral of the kind that To address the problem, T&C, with FIAS support, is working with government ministries to implement the that sit astride the main trade corridors within the region: Benin, Burkina Faso, Côte d’Ivoire, Ghana, and Niger. in Developing Countries banks generally demand when making loans. T&C, with FIAS support, is helping unlocking the collateral value of Malawi WRS project, a three-year effort that involves introduction of a new warehouse receipts law, drafting of More than 40 participants, including representatives from Throughout the FY12–16 strategy cycle FIAS has inventories that farmers, traders, and processors manage related regulations and operational guidelines, stakeholder the ECOWAS and the West Africa Economic Monetary supported projects geared toward helping clients boost by establishing a warehouse receipt system (WRS) that training, and the creation of a warehouse receipts Union (WAEMU) Commissions, the European Union, domestic and international trade through work in corridors can help ease the credit constraints on smallholder platform. The project exemplifies the Bank Group’s the Bank Group, and stakeholders from the public and and zones, trade and customs regulatory reform, business farmers. emphasis on collaboration across teams—in this case, private sectors from the five countries, attended the two- taxation streamlining, and trade logistics. Going forward IFC and World Bank teams bringing to bear expertise in day event. It was co-hosted by ECOWAS and the World some of this work, for example tax policy, is moving to In principle, a warehouse receipt is a document issued analytics, access to finance, and public-private dialogue, Bank Group. Salifou Tiemtore, the ECOWAS Director other Global Practices, while work in trade facilitation and by a warehouse operator to a named depositor as among other specialties. for Customs, said, “We are committed to implementing related spheres will be done by T&C with the support of evidence that specified commodities of stated quantity programs to facilitate regional integration and make it work separate trust funds. FIAS continues to support a wide and quality have been deposited at a particular location. In 2014, passage of a warehouse receipts bill was followed for private sector operators and the people of West Africa.” variety of projects geared toward integrating clients into In 2012 the banking sector in Malawi extended 11 percent by training engagements, benchmarking study tours to increasingly complex global markets. of its lending portfolio to agriculture focused on large India and South Africa, and in 2015, stakeholder training Main themes discussed included: enhancing the flow of commercial tea, sugar cane, and tobacco farmers, with workshops. In FY16, rules were promulgated governing transit trade by managing trade corridors, efficient ports less than 2 percent going to the smallholder food crop the operation and quality control of warehouses and the and effective border crossings; customs information How Warehouse Receipts Can Unlock exchange mechanisms between neighboring countries; producers who make up the bulk of the country’s working obligations of the licensed commodity exchanges that Financing for Farmers and Traders population. Lack of land titles and other encumbered fixed oversee them. increasing transparency of trade procedures; and Malawi is one of the poorest countries in the world, assets that could be used as collateral, as well as the lack promoting collaboration between national border agencies. with roughly three-quarters of the population living in of indemnity for product quality deterioration and storage The positive impact of the new system has been The project, funded by the European Union and FIAS, and extreme poverty and most working people living in rural losses, were among the underlying reasons for the low notable. By FY16, six commercial banks were financing implemented by T&C, supports ECOWAS in improving OPERATIONAL HIGHLIGHTS areas engaged in smallholder farming. Access to finance levels of lending. warehouse receipts, up from only one in 2014. Total trade in the West African region and, specifically, transit remains one of the challenges of agriculture in Malawi, warehouse financing jumped from about $600,000 as of trade along the region’s major trade corridors. It focuses the end of 2013 to $13.6 million in FY16. At the beginning on reducing the time and cost to trade, and increasing of the project, fewer than 2,000 farmers operating as border agency cooperation and coordination, to encourage cooperatives were benefiting from warehouse receipt a better flow of goods within the region, and with financing under an earlier private sector-led pilot project international trading partners. dating back to 2006. By FY16, with the help of the FIAS-supported effort, some 106,500 farmers were In an illustration of T&C’s work in the FIAS priority area participating. of fragile and conflict-affected situations (FCS), the team worked with the Côte d’Ivoire Customs Service to remove In Senegal, FIAS support to the government played a key duplicative customs procedures along the trade corridor role in supporting the establishment of a WRS mechanism between Côte d’Ivoire and Burkina Faso. Public-private that allows agricultural commodities to be used as dialogues, field visits, and a perception survey organized collateral and addresses the critical challenge of access to by the team revealed that in the northern region of Côte credit in the agricultural sector. FIAS contributed directly d’Ivoire, there was serious mistrust within the trade to the drafting of the legal and regulatory framework on community toward the Ivorian Customs Service and other WRS. The resulting proposal was recently introduced control agencies. This stemmed from the halt in customs in parliament for adoption. The effort also included a functions during the country’s crisis in 2010 and 2011. By component involving sensitization to the new provisions 2013, two border checkpoints had been re-instated along aimed at key public and private stakeholders. The measure the Abidjan-La Leraba route leading to Burkina Faso. One is expected to benefit some 2,500 farmers, millers, and of these, at Ferkessédougou, was considered redundant traders as they are introduced to a new system enabling and had become the root cause of many complaints, them to store their goods and access credit within three adding to the mistrust towards customs clearance officers years of project completion. This support is expected to in the region. The team worked with the government unlock a minimum of $2.5 million annually in credit to the and ultimately helped bring about a decision to remove agricultural sector, and rice has been selected as the pilot the Ferkessédougou checkpoint in early 2016. A detailed commodity. transition plan was developed to ensure that the reform was properly instituted and well understood by customs Streamlining the Flow of Commerce staff and the trade community. The removal of this checkpoint sent a strong message to the public and the along West African Trade Corridors trading community that the Ivorian Customs Service is As it works to improve the investment climate, West serious about facilitating trade. Africa is moving to address transit challenges along key trade corridors and improve regional trade. At an event in To further build trust towards the Ivorian government Accra, Ghana, in June 2016, cohosted by the Bank Group authorities, the team also supported a sensitization and ECOWAS, a technical workshop aimed to share best program in the wider ECOWAS region. According to practices in implementing reforms that facilitate trade. ECOWAS guidelines, member states were encouraged to Preliminary national reform action plans to improve trade operate three or fewer customs checkpoints and simplify facilitation were developed by five member countries and streamline the documents and procedures to increase Lusaka farmer woman selects onions for distribution in Zambia and Malawi. (Bigstock photo) regional trade. 30 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 31 In Somalia, T&C is supporting the federal government breaking development. Until recently, state and non- systems, and relevant business processes. Based on the efforts but with little if any coordination among them. At and private sector to address constraints to investment state actors have been largely disengaged, a legacy of study findings, in FY16 Belarus Customs and the FIAS- the subnational level, there are more than 15 different and competitiveness as the country slowly emerges from the protracted civil conflict. The Somali private sector, supported project team signed a joint action plan focusing investment promotion agencies, while at the national decades of fragility and conflict. In its initial engagement, which is recognized for its business savvy and solidarity, on improvements in risk management, including post- level, coordination across four relevant ministries and the program supported a Doing Business data collection and provision of essential services, has not effectively customs control, and inter-agency information sharing— agencies is ill-defined. The government is drafting a initiative, enabling Somalia to join the more than 190 influenced the regulatory regime and has therefore often all of which will reduce cost of trade for exporters and decree to improve the legal investment regime. The economies measured in the Doing Business report. This borne the burden of gaps in public service delivery. importers. The study will be repeated to evaluate the team’s analysis also identified cross-cutting barriers to landmark initiative not only provides an objective basis for The new PPD platform will collaboratively identify impact of the upgrades. investment relating to infrastructure and taxation. Lack understanding and improving the regulatory environment private sector priorities, public sector interventions of highways and railways systems that could effectively for business, it also enables the government to signal and international community technical support in Supporting Trade Logistics, Investment Policy connect industrial and commercial poles in the interior to the outside world that ‘Somalia is open for business.’ strategic sectors capable of spurring the country’s of the country with its main ports in the Caribbean and The survey results pointed up priority reform areas for economic growth. In Hargeisa, a city in the autonomous and Promotion, and Agribusiness in LAC the Pacific are imposing significant costs for investors. the Somalia Investment Climate Reform Program, an Somaliland region, the program supports the government In the Latin America and Caribbean region, with support An ambitious highway construction program should important initial step following the establishment of a in implementing Doing Business activities and the from FIAS, the Trade Logistics Caribbean Project continued contribute to reducing the gap in this area. High effective fully recognized federal government and related security establishment of its own PPD process. to support trade facilitation reforms in the Caribbean tax rates and uncertainty due to frequently changing tax gains. The team has helped the government achieve region during FY16. The program expanded its trade regulations was another area identified by the private quick-win reforms identified by the government in the In Belarus, FIAS funding supported efforts to increase advisory services to include Jamaica and Suriname, sector as a drag on the investment climate. Amid these areas of enhancing transparency and efficiency in public the country’s international trade and transit role in the in addition to existing activities in the Organization of challenges, the decline in oil prices and currency volatility service delivery. Follow-up efforts are under way to ensure region. Belarus occupies a strategic position as a member Eastern Caribbean States (OECS). In Jamaica, the Bank have slowed growth. Two pending investor-state disputes effective implementation, with T&C working closely with of the Eurasia Economic Union (EEU), and bordering Group’s Latin America and Caibbean (LAC) team helped involving telecommunications and mining companies the government, a revived private sector, and the active three European Union countries (Latvia, Lithuania, and the customs agency and other border agencies improve have pointed up the need to strengthen the government’s Somali diaspora community. Poland) as well as Ukraine and Russia. A tailor-made study risk management, increase use of the harmonized system strategy for dispute prevention. Based on these key OPERATIONAL HIGHLIGHTS conducted in the spring of 2015 examining cargo crossing for product classification, and modernize the legislative findings, an Investment Reform Map (IRM) process will be In June 2016, the program supported the launch of at three border points in Belarus generated important framework. As part of the Trade Logistics Caribbean conducted under the project to gather inputs for a national Somalia’s economy-wide public-private dialogue (PPD) insights into the border crossing process and enabled Project funded by FIAS, the Bank Group organized two investment policy framework and an action plan. platform. While setting up a PPD is a standard move in the T&C team to identify opportunities for improvements workshops on trade portals and electronic single windows T&C client countries, in Somalia it represents a ground- in physical infrastructure, customs risk management for trade and an assessment report of the use of risk With FIAS support, the Central America Regional management in all border agencies. Agribusiness Trade Logistics Project launched a regional IT system for the recognition of sanitary registration of In Suriname, the FIAS-supported team initiated a new processed food and beverages in Central America. This advisory support relationship related to trade facilitation initiative is a strategic alliance with USAID in Costa Rica, Responding to the Refugee Crisis: FIAS Supports World Bank Group Effort in Jordan El Salvador, Guatemala, Honduras, and Nicaragua. The and customs reform. One reform completed in FY16 As a result of the tragic civil war in Syria, neighboring Jordan, a country of 9.5 million people, has become involved establishment of a National Trade Facilitation goal is to streamline, harmonize, and automate sanitary home to more than 1 million refugees, according to the latest census of December 2015. In a Bank Group- Committee to prioritize and coordinate trade facilitation registration procedures for processed food and beverages wide collaborative effort, T&C is playing a leading role in support of an initiative to boost the Jordanian reforms across government agencies and with the private to enhance the potential for trade in these products and sector, in line with commitments under the World Trade contribute to regional integration in Central America. economy and provide economic opportunity for the refugee population. FIAS is contributing support for Organization’s (WTO) Bali Trade Facilitation Agreement advisory services geared toward helping Jordan approve and implement reforms relating to investment Companies that wanted to trade products in Central (TFA). The initiative is expected to contribute to a Bank entry, promotion, and aftercare. The overall program, developed during FY16 in response to a request Group program of fiscal and competitiveness development America went through the hassle of sanitary registration from Jordan and the international community, is structured as a Program for Results Operation in which policy loans in Suriname, one example of many in which procedures in each country. The Bank Group embarked on disbursement of some of the development funds is contingent on Jordan implementing certain investment T&C has been able to synchronize advisory and lending a pilot project focused on improving sanitary registration climate reforms. services. by simplifying, streamlining, and automating procedures for sanitary registration of processed food and beverages The advisory work, funded jointly by FIAS and other sources, focuses on investment climate, investment In the OECS, T&C completed an assessment of the in Central America. The new regional ICT system— promotion and related services to investors. The Jordan project is expected to generate economic benefits implementation of TFA in St. Kitts and Nevis and launched in the context of a presidential summit in Roatán, by supporting much-needed improvements in the country’s investment climate and supporting investment the rollout of an ICT system in Grenada. The system Honduras, in June 2016—facilitates recognition of sanitary promotion, attraction, and retention initiatives to stimulate the establishment and expansion of firms in facilitates the electronic exchange of information between registration of Central America products within the region, Jordan. It consists of three major prongs: first, to afford easier market access for Jordanian exports in the the Bureau of Standards and the Customs & Excise reducing the number of days needed to complete the Division, eliminating the need for traders to submit paper recognition process considerably, while also reducing European Union; second, the imperative to reform the country’s investment climate; and third, agreement documents to the bureau. the costs by 25 percent. The Bank Group has provided by the government to provide work permits to refugees. technical assistance to improve and develop national The Jordan project marks a number of firsts and significant milestones. It is the first Bank Group loan to a Preliminary analysis was undertaken in FY16 by the FIAS- systems of El Salvador, Honduras, and Nicaragua, as supported LAC team in support of investment policy and well as the interconnectivity of all five countries with the host country focused on refugees in decades, going back to the post-World War II era. It is one of only two promotion in Colombia. Implementation of the diagnostic regional system. The project includes technical assistance projects using a special International Development Association (IDA) window for middle-income countries work and advisory support is underway in FY17 . to support the implementation of national reforms, such under stress from the refugee crisis. And it is the first Program for Results Operation in Jordan. The effort as reduction of legal requirements and interinstitutional has combined Bank Group resources and expertise, including the Office of the Chief Economist, T&C and The preliminary analysis identified several existing coordination, to improve and facilitate sanitary procedures. other Global Practices, IFC, the World Bank, and the Middle East North Africa (MENA) region, as well as deterrents to investment in Colombia, notably, the lack Success to date in applying the ICT system to processed external partners, including Better Work Jordan, the European Union, the International Labour Organization, of a comprehensive and articulated investment policy. food and beverages has generated interest in expanding the UN Refugee Agency, UKAID, and USAID. Various institutions at the national and subnational levels it to cover other categories of products, such as engage in investment promotion, policy, and retention medications, cosmetics, and fertilizers. 32 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 33 This complex program was developed in FY14 and Boosting Investment Climate and Competitiveness in LAC Streamlining Trade in Myanmar FY16 implemented key recommendations of the Wagah implementation will run through FY18. Total project costs TRS including: development of a dedicated gate for trucks; for the program are in the range of $2.5 million, with FIAS funds have supported development of complex The Ministry of Commerce of Myanmar instituted an enhanced coverage of the online customs clearance about 10 percent of total project costs covered by IFC’s programs to improve the investment climate and boost investment climate reform in FY16 with the help of the system; creation of a single window for the collection of Funding Mechanism for Technical Assistance and Advisory competitiveness in the LAC region. Taking a regional FIAS-supported team that stands to benefit more than port charges; and the addition of another scanner and a Services (FMTAAS) funds, with the remainder from client approach requires investing additional time in coordination 4,000 importers and greatly streamline the country’s weighbridge to reduce clearance time. The Torkham TRS and donor funds (FIAS, Norway, and USAID). and program structuring. The payoff is that scope and engagement in international trade. On July 27 , 2015, the is expected to result in similar improvements and improve impact can be leveraged for scale. The Central America ministry issued a notification establishing for the first time the quality of trade facilitation at the border between Regional Agribusiness Trade Logistics Project, described a “negative list” concerning imports that require a license Peru OECD Standards Project above, and the CANAMBER program are two examples of from the ministry. Any item not covered on the list can Pakistan and Afghanistan. With FIAS support, T&C in FY16 began coordinating a how the scope of programs can be leveraged to include a be assumed to no longer require a license. The T&C team Bank Group program to support Peru in adopting OECD combination of low- and middle-income countries, as well assessed that the reform resulting from the adoption of a Central Asia Trade Logistics Project Helps Advance TFA Agenda standards as part of a long-term strategy to improve as covering a broader program of reforms, reinforced by negative list will benefit some 4,198 importing firms and The Central Asia Trade Logistics project provides the country’s investment climate. This is a pilot program peer-to-peer learning and knowledge exchange. reduce the number of licensing transactions required by technical support to the Kyrgyz Republic and Tajikistan that the Bank Group plans to replicate in other countries 80,251 over the course of one year. The dollar value of to streamline the clearance process and enable traders interested in engaging with the OECD. The pilot aims to CANAMBER—the Canada Americas Business those transactions no longer requiring a license comes to get their goods to market faster and at a lower cost. assist the government in applying OECD standards to Environment Reforms Program—is a regional initiative to about $3.4 billion in imported goods. The time saved The FIAS-supported project involves work with customs, improve priority policy areas, with the overarching goal developed in FY13 in partnership between the World processing transactions and the money saved in licenses sanitary and phytosanitary agencies, and standards of promoting a conducive environment for private sector Bank Group and the Canadian International Development no longer required add up to an estimated compliance agencies on reducing the number of documents required growth and preparing Peru to become an OECD member. Association (CIDA) and now in the final phase of cost savings to the private sector of $3.75 million. to trade and simplifying the procedures for clearing goods. Adopting OECD standards helps countries improve implementation. The program seeks to foster firm creation Solutions include improving business processes, rigorous growth, jobs, and productivity. The standards cover a and growth and facilitate integration and investments Promoting Foreign Investment in Armenia application of risk management strategies, development across LAC through investment climate reforms, of a ‘trusted traders’ program, as well as initiatives OPERATIONAL HIGHLIGHTS wide range of issues, including corporate governance, elimination of barriers to competition in key markets A FIAS-supported investment climate project in Armenia that support alignment with the WTO Trade Facilitation financial transactions, quality of public governance, and that affect private sector competitiveness and cross assists the government in developing a conducive Agreement (TFA). In both countries, several missions the environment. They help governments and economies border trade, and simplification of tax systems to reduce investment policy framework for foreign investors. have been carried out and good relationships have been find appropriate solutions to common challenges and are compliance burdens. The program has already achieved all Activities include developing an investment reform map developed with the ministries of economy and the national built on the exchange of experiences and good practices targets agreed at inception, and critical reforms have been (IRM) for the attraction and retention of FDI, and improving customs administrations. between member countries, which include some of supported. For instance, Colombia lowered the payroll tax FDI law and related implementing regulations. The IRM, the most successful examples in sustained growth and and introduced exemptions for health care contributions approved by the government in 2015, analyzes Armenia’s In Tajikistan, the team has assisted the Customs development in history. In this way, OECD standards paid by employers. Costa Rica improved its system for FDI data, its legal, regulatory and institutional framework, Administration in developing the country’s first National help disseminating policies that foster economic growth, getting credit by adopting a new secured transactions and identifies a reform plan, including a timeline. The Commodity Nomenclature, compliant with the World productivity and living standards. For instance, Eicher & law that establishes a functional secured transactions comprehensive analysis of FDI law and regulations as Customs Organization (WCO) Harmonized System Schreiber (2010) found that a 10 percent increase in the system and a modern, centralized, notice-based collateral compared to international good practice was completed nomenclature, covering a broad array of products— quality of structural policies towards OECD standards registry. Guatemala made paying taxes less costly for in FY16 and has informed the development of a detailed everything from agriculture and live animals to chemicals, raises annual subsequent growth by about 2.7 percent.10 companies by reducing the corporate income tax rate, as inventory of provisions proposed for amendment, minerals, and metals to textiles, vehicles, and other The pilot project in Peru has yielded several positive well as improved trading across borders by reducing the elimination, or inclusion in the law. The project helped manufactured goods. This marks a seminal achievement concrete results. In the area of integrity, the project documentary and border compliance time for importing. government establish a new market surveillance for Tajikistan. Tariff classification is among the most provided inputs to strengthen the role of the High Level inspection agency and conduct training courses for important and complex areas of customs work. The Commission against Corruption as the leading institution Peru has approved and implemented several national and inspectors. In FY16, the project completed 11 reports, project supported three workshops led by WCO experts to develop an effective anti-corruption policy and legal subnational business regulation and competition reforms conducted 17 workshops and training events for 569 to educate customs officers, officials from other framework. The FIAS-supported team provided advice on based on recommendations by the FIAS-supported T&C participants (216 of them women), and assisted in agencies involved in goods clearance, and private sector preparing a regulation needed to enforce an anti-bribery team. In September 2015, Peru passed a cutting-edge adoption of two changes in law or regulation and stakeholders about the new nomenclature and the law covering international transactions. The Peruvian business safety inspections (BSI) reform that not only improvement of six procedures. principles of the Harmonized System. A new Coordinating congress approved the regulation in April 2016. In the area classifies businesses according to risk but also—for the Committee for Trade Facilitation, established with the help of innovation, the Peru pilot included the development first time in Latin America—mandates outsourcing of BSI Supporting Trade Facilitation in Pakistan of the project, will support Tajikistan’s alignment with the of a methodology to assess public spending on science, to the private sector. The reform would improve safety TFA. Working jointly with the Asian Development Bank and In FY16, FIAS supported work with Pakistan customs to technology, and innovation in the context of an OECD and could save the private sector up to $11.8 million within WCO, T&C is helping Tajikistan prepare for a time release improve the flow of trade and promote greater regional standard. A related workshop served to create capacities four years of project completion.* Along with the BSI study (TRS) of border crossings with Afghanistan and the economic integration. A time release study (TRS) was among key institutions supporting innovation in the use reform, Peru also passed the most important revision to Kyrgyz Republic. TRS is a benchmark for the efficiency conducted in FY16 at the Torkham border crossing the new methodology. The Bank Group team participated the country’s legal framework for competition in 10 years of cargo processing at border crossings and inland. As between Pakistan and Afghanistan, following on an earlier in an environmental performance review, including during FY16. As a result, Peru now has an internationally part of its transparency drive, TFA requires members to TRS supported by FIAS funding, of the Wagah border contributing to an action plan to adopt the review’s 66 recognized competition policy framework, a strengthened make public the results of time release studies. The team crossing between Pakistan and India. The objective is recommendations with a particular focus on identifying tool to prevent government actions from violating is also collaborating with USAID on helping Tajikistan to map the entire cargo clearance process at the border links with OECD Acts and the Sustainable Development competition principles, and a roadmap for developing a build capacity and apply risk management techniques crossing points in Pakistan and develop for customs Goals. The team is helping Peru plan for the scale-up of a regulatory mandate on competition in payment systems. to trade facilitation through launch of a pilot program for authorities an action plan to improve the quality of pollutant release and transfer register, which is a tool to Government agencies have already removed some 900 authorized economic operators. Companies that qualify as trade facilitation for greater economic integration with monitor impact of businesses on the environment and a unnecessary bureaucratic barriers in major economic AEOs would enjoy a range of benefits, including reduced the neighboring economies, Afghanistan and India in best practice flagship in OECD countries. sectors that were increasing the cost of doing business inspection rates and simplified procedures, while customs particular. The study complemented the government’s and limiting competition. and other inspections agencies would be able to operate flagship trade facilitation program. Pakistan Customs in more efficiently. 10 Theo S. Eicher and Till Schreiber (2006): “Structural Policies and Growth: Time Series Evidence from a Natural Experiment,” Journal of Development Economics, Vo. 91, Issue 1, January 2010, pp. 169–179. * Post-publication note: At time of publication, Peru had passed a BSI law as described, but not yet associated bylaw to regulate the inspections; the bylaw is required to improve safety and achieve the estimated $11.8 million in savings. 34 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 35 In the Kyrgyz Republic, the project reached tentative T&C support by the Georgian National Investment based on project recommendations, the change to the the survey results to identify next steps in improving the agreement in FY16 for supporting the establishment Agency sets up a targeted investor aftercare program to tax code reduced the VAT refund period from three investment climate and boosting growth. and operation of a National Trade Facilitation Committee increase retention and expansion of existing investors. months to one month. In addition to the trade facilitation charged with improving the availability of trade-related The initiative is expected to yield about $18 million in conference described above, Georgia also hosted a two With FIAS support, T&C is working with Timor-Leste on information, building capacity of customs via risk new investment generated, nearly half of which has day conference on investment policy and promotion in preliminary planning for an industrial park in Tibar Bay, management approaches, and supporting greater already been confirmed. The Ministry of Economy and June 2016, organized jointly with T&C’s global investment including identification of two possible sites and a market efficiency and transparency for the process of importing Sustainable Development has drafted a new investment policy team. Participants from around 20 states from the assessment and demand forecast for the industrial park and exporting commercial cargo—all areas covered by the law, incorporating several IFC recommendations. The draft Europe and Central Asia and Africa regions discussed at each site. The market assessment has helped the TFA. FIAS was one of several donors that supported the law was reviewed and approved by the Ministry of Justice. how countries can stimulate investment by removing government focus on next steps to ensure the plan spurs participation of representatives of ministries of economy In June 2016, the investment policy and promotion (IPP) barriers, leveraging international legal frameworks, growth in tenants in the industrial park. These include (responsible for WTO issues) and customs of the Kyrgyz team and Georgia’s Ministry of Economy held a two-day protecting and retaining current investors, and promoting investment climate reforms to remove bureaucratic Republic, Tajikistan and other countries from the region P2P learning conference on IPP issues in Batumi, Georgia. opportunities in promising sectors. The FIAS-supported obstacles to doing business and significant investment in in the Bank Group’s peer-to-peer learning conference The conference, also sponsored by the Austrian Federal project also analyzed and published results of an IFC vocational training to build the skilled workforce needed to on “The Journey towards implementing an Authorized Ministry of Finance and BP , brought together leading business perception survey. It found that there is virtually compete with other countries in Southeast Asia. Economic Operators Program” for Europe and Central global experts to discuss reform options for attracting, no perception of corruption in Georgia and that the Asia, held in Batumi, Georgia (see box p. 37). retaining, and expanding FDI. vast majority of firms are satisfied with the business In the second half of FY16, a project focused on improving environment. More than 800 business, large, medium, the competitiveness of the private sector in Vietnam received FIAS funding for scoping and developing a Comprehensive Investment Climate Effort Helps T&C worked with Georgia’s business ombudsman’s office and small, participated. The government plans to use new advisory services project to reduce the burden of to develop a new website, introduce a systemic investor Georgia on Multiple Fronts response mechanism (SIRM), and develop a tracking With the help of a FIAs-funded project, T&C is working tool for proper results measurement. The SIRM aims to improve coordination among government agencies to P2P Learning Event in Georgia Helps Central Asia Countries Streamline Trade with Georgia on trade facilitation, investment policy, OPERATIONAL HIGHLIGHTS taxation, and business sector perceptions of government. catch investor grievances at an early stage and prevent T&C convened 70 delegates from 16 European and Central Asian countries in the Black Sea resort of Batumi, The Georgia Revenue Service adopted a new customs their escalation into formal disputes. The project has been Georgia, for a two-day peer-to-peer (P2P) learning conference on authorized economic operator (AEO) risk management policy in December 2015 that will supporting the Revenue Service in streamlining the value- programs and their role in facilitating trade in June 2016. Representatives of customs administrations, reduce the number of inspections and increase trade added tax (VAT) refund process for businesses. With the ministries of economy, and private sector stakeholders from Albania, Armenia, Azerbaijan, Belarus, Bosnia revenue. An investment policy initiative developed with help of a new risk-based VAT refund system introduced and Herzegovina, Georgia (which co-hosted the event), Kazakhstan, the Kyrgyz Republic, Macedonia, Moldova, Montenegro, Serbia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan attended the event to exchange knowledge, learn and share. The focus was on learning the basics of implementing an AEO program, the practical challenges involved, and the implications for internal governance, customs controls and international trade priorities. The P2P covered the pros and cons of these programs and shared lessons learned in countries that have established AEO programs. The program included a roster of speakers from the European Community, Italian Customs, WCO, WTO, and the private sector. The program included site visits to a border crossing with Turkey and a customs clearance center for a demonstration of how Georgia processes consignments both physically and electronically. The following key messages emerged from the two-day discussions: • The TFA agenda is important in the region, setting a common direction toward simplification, transparency, and predictability, with benefits from businesses to countries and the global economy. • AEO programs are challenging to put in place but important to businesses. • AEOs work best when developed and implemented in partnership with the private sector. Traders stand to gain from faster and easier clearance processes; the public sector benefits from more efficient, risk- based and effective controls. • The key is to change the mindset from one of compliance to one of trust. It helps to discuss with the private sector early what they would see as tangible benefits to determine what should be included. • Mutual recognition of AEOs can make these programs very beneficial, especially if recognition covers multiple countries and involves businesses with value chains covering several countries. The private sector can also play a role in facilitating mutual recognition through associations and chambers that support businesses in navigating trade requirements and providing input on questions of mutual recognition. Most of the countries in the Europe and Central Asia (ECA) region have tried to launch AEO programs, but with limited success so far. Continued sharing of experience among countries and across public and private sectors can lead to better results. Many clients expressed their interest in deepening their AEO experience. Some expressed skepticism that it can be done. 36 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 37 government regulations and foster linkages between Policy rationalization, logistics efficiency, and enhanced Brazil, Georgia, Haiti, Mali, and Rwanda, among other FDI and domestic firms, particularly SMEs. A number of market intelligence can improve manufacturer access to countries. The FIAS supported team continues to work FIAS-Supported Investment Generated Totals for the scoping activities were conducted to explore possible input, intermediate, and final goods markets. The project with regional and national governments to identify and FY12–16 Strategy Cycle support to the government in the areas of economy-wide also seeks to encourage and incentivize manufacturing attract investments globally from firms investing in light investment policy and regulatory measures to enhance firms to invest in new technologies and undertake the and heavy industry, renewable energy, agribusiness, and implementation on the ground and targeted sectoral interventions to improve linkages between domestic firms and FDI in global value chains. Consultations business changes required to capture the productivity and quality advantages that technological change can deliver. These solutions draw on all of T&C’s practices, services. Throughout the cycle, the team has been rigorous in FY12 and focus group discussions with private sector and channeling expertise and experience towards the reporting only those investments actually committed Brazil: $33.5 million government stakeholders as well as research institutes specific challenges of manufacturing sectors. Many also by firms for specific projects, not just projections or Haiti: $49 million and development partners helped define the challenges leverage IFC MAS’s firm-level support through access to promises. The rollout of a new, even more conservative and opportunities related to FDI-SME linkages in Vietnam. investment and operating capital. methodology for the new strategy cycle has delayed Mali: $25 million The consultations identified competitiveness and enabling confirmation and certification of some FY16 results. But FY12 Total: $107.5 million environment issues faced by the private sector, particularly T&C’s manufacturing strategy and solutions initiative was analysis of investment generated earlier in the cycle domestic firms, and issues that hamper firm productivity publicly presented at a number of regional and global has revealed a significantly larger influx of investment and innovation, and FDI-SME linkages in selected value World Bank and IFC events, testing its robustness and generated in the northern frontier states of Brazil, the chains. Possible partners are under consideration, and confirming its relevance. Based on feedback generated, largest of the investment generated initiatives over the initial design of the project has been worked out. the team advanced deployment in support of T&C country programs. Among the initial steps, the team undertook sector analysis to support country teams last five years. The Brazil investment generated effort is focused on the northern frontier states of Para and Pernambuco, which have levels of poverty that FY13 Sustainable Investment in Key Industries by assessing manufacturing sector opportunities in match those of the world’s poorest countries. Follow- Bangladesh: $4.6 million T&C has steadily ramped up its work in industry Ethiopia, Kenya, the Philippines, and Vietnam. In up information gathered from the government and Brazil: $525 million OPERATIONAL HIGHLIGHTS sectors during the strategy cycle, culminating in FY16 Kenya, the team focused on supporting investment investors in Brazil has identified an additional $219 million Haiti: $9.5 million with the launch of a manufacturing initiative and the generation and retention in the textile apparel sector, as in investment generated in FY13, bringing the total for well as exploring opportunities for cleaner production Brazil for the five-year cycle to $1.3 billion. Rwanda: $9 million expansion of project work in agribusiness and tourism, sectors particularly important to women’s economic techniques to target green apparel market opportunities. FY13 Total: $548.1 million Also in Kenya, the team launched a new supplier In FY16, the team recorded $7.9 million in investment advancement. development project focused on local manufacturing and generated in Georgia as a result of work with four firms service delivery linked to Kenya’s newly developing oil in fields ranging from services to construction supplies T&C’s Manufacturing Initiative off to Strong Start in FY16 and gas sector. This initiative will build firm-level capacity to textiles. FIAS support helped remove administrative In FY16, T&C’s FIAS-supported Competitive Sectors team to support product development, increase productivity, obstacles that unlocked the new investment. As a result launched an initiative to help client countries develop their manufacturing sectors. The effort draws on T&C’s diverse tools and experience in sector work to arrive and open new business opportunities. Together with T&C’s Investment Climate team, the of the revision in the totals from Brazil and the $7.9 million investment generated in Georgia, total investment generated for specific projects for the FY12–16 cycle FY14 Brazil: $743 million at solutions. The initiative represents a rapid response Competitive Sectors team scoped and started the design reached $1.58 billion, easily exceeding the cycle target of to client demand—stemming from the sharp downturn of a project to support the government of Vietnam in $1 billion. Haiti: $6.7 million in commodities—for help in growing manufacturing addressing concerns about ‘enclave manufacturing’ FY14 Total: $749.7 million sectors and diversifying economies and, in the process, in its special economic zones. In partnership with the Pipeline investment generated initiatives include a joint deepening value addition and creating more skills- IFC’s Cross-cutting Advisory Services, the team scoped World Bank and IFC effort in Guinea that has helped intensive jobs. automotive sector linkages in Macedonia, Romania, several investment projects move forward, a poultry and Serbia, designing a regional project to broaden project in Mali, and a solar energy initiative in Senegal The process begins by codifying solutions, which involves automotive component manufacturing opportunities. described below. The team continues to work on building a business case and strategy for a manufacturing focus, and developing a set of tools to ensure that T&C country teams are able to respond quickly and effectively In Egypt, the project provided strategic support to the country team in defining the scope and focus of clean technology manufacturing opportunities, collaborating investment generated projects in Brazil, Haiti, and Kenya, among other countries. FY15 Bangladesh: $170 million to client demand for manufacturing-focused initiatives. with the Bank Group’s Energy Global Practice to help the Unlocking Solar Power Investment in Senegal The objective of T&C’s offer is to support the growth government understand how it can support the growth of of manufacturing eco-systems that attract investment, a local photovoltaic manufacturing sector. A $300 million solar energy project in Senegal set to capture increased value, and serve as a source of high- receive IFC financing was stalled for several months in 2015 due to an impasse over technical legal language FY16 productivity jobs. The effort focuses on four specific Finally, in Bangladesh, the team is supporting the but interrelated products that respond to challenges design and implementation of a large manufacturing concerning third party indemnification. Senegalese law confronting many developing and emerging market diversification project, supporting the process of followed French civil law principles which held that the economies in terms of manufacturing competitiveness: targeting sectors and developing strategies to guide national government would be liable to a third-party Georgia: $7.9 million investment generation; industrial infrastructure and multi-year interventions. plaintiff if a court or tribunal ruled that its actions had linkages; market access; and technology adoption. constituted “negligence or gross negligence;” IFC and other international lenders follow long-established Investment-Generated Efforts Exceed Strategy Cycle Target T&C support under the manufacturing initiative seeks to ensure that manufacturing firms have access to the capital, technology and ideas they need to grow. The In addition to its investment policy and promotion work, T&C continued to work with client countries in principles which require a finding of “gross negligence or willful misconduct. ” The differing application of liability principles was enough to hold up execution of the FY12–16 FY16 to generate investment in specific projects. Over Strategy Cycle Total: $1.58 billion initiative advances policies designed to leverage foreign investment transaction for eight months. To address the direct investment (FDI) for economic development by the course of the strategy cycle, this work has helped issue, T&C’s investment policy and promotion (IPP) team (Target: $1 billion) supporting local sourcing, so as to increase domestic client countries identify and attract major investors in worked with the Bank Group’s public-private partnership value addition, technology transfer and employment. a variety of sector-specific projects in Bangladesh, team to craft compromise language that satisfied both 38 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 39 Senegal and IFC on the all-important liability language. over the last several years. Overall, FIAS-supported FIAS-supported agribusiness interventions help countries government to establish and enforce standards, reform T&C engagement in Senegal has generated 11 reforms develop competitive agribusiness sectors that reduce state owned enterprises, and promote price sharing to In February 2016, the government of Senegal accepted during the FY12–16 strategy cycle in a number of areas, poverty and promote inclusive growth. Agribusiness enhance linkages between FDI and local agribusinesses. the proposed hybrid approach, which adapted elements including investor protections, investment policy, getting development delivers other benefits, among them, At the subnational level, IFC has signed a memorandum from both legal traditions. Subsequently, Senegal credit, starting a business, construction permitting, empowering women, improving efficiency of resource of understanding with the provincial Government of Dong signed the agreement to develop public- and privately- tax simplification, property transfers, and resolving use, and improving public health outcomes (for example, Thap for much-needed investment promotion support. financed solar energy facilities that could produce up to insolvency. by ensuring food safety). Such collateral impacts The province has already established contact with 200 megawatts of electricity, with a total project value have been particularly enhanced by the integration of potential Japanese and Taiwanese investors, opening of about $300 million. The project has claimed $150 Investment Climate Reforms in Agribusiness IFC and World Bank teams within T&C. The resulting markets for agribusiness value chains such as mangos, million in investment generated (still to be verified by collaboration has strengthened the capacity of the FIAS- rice derivative products, and agro-tourism. the monitoring and evaluation team). The overall effort Improving the commercialization of the agricultural supported agribusiness portfolio to deliver integrated exemplifies the collaborative approach that increasingly sector by creating efficient market channels is elemental solutions ranging from input reforms to competitiveness FIAS support is helping client countries seize growth characterizes joint advisory and investment initiatives. In to sustainably reducing poverty and enhancing interventions. With the new FIAS strategy cycle opportunities through improved competitiveness this case, participating parties included T&C and the Bank economy-wide growth. With more than 60 percent under way, the agribusiness work has a time-tested, through interventions involving trade facilitation and Group’s PPP team, IFC, MIGA, and IDA. The IPP team of the world’s poor largely dependent on agriculture consolidated approach that can help expand market logistics, SME support, and improvements in the brought to bear particularly relevant expertise through for their livelihoods,11 agribusiness competitiveness opportunities and enable a country’s private sector to business environment which can reduce compliance the work its legal experts have been doing in ECOWAS interventions go hand in hand with poverty reduction. develop them all along the value chain for inclusive costs and registration procedures and increase and their familiarity with French civil law, which applies Competitive agribusiness firms can drive improvements economic growth. During FY16, a number of country competition in input and output markets in many ECOWAS member countries. The project is part in farm productivity by providing incentives, upgrading level projects have contributed to some remarkable of a broader Bank Group clean energy initiative called technologies and processes, building markets, and achievements towards these objectives The Philippines faces a particularly challenging Scaling Solar, which seeks to support the development enhancing cooperation and value chain coordination. The environment when it comes to securing its borders and of public- and privately-financed utility-scale solar power growth of agro-processing firms has been associated A number of FIAS-supported interventions have aimed ensuring that both biological and security risks do not OPERATIONAL HIGHLIGHTS projects across Sub-Saharan Africa. Similarly, T&C’s with job creation, with some estimates attributing the to expand market opportunities by reducing barriers, materialize. As an archipelago nation, there are many support in the investment policy context is part of a creation of 25 indirect jobs for every job created within developing market linkages and mobilizing investments points of entry, a situation that caused government larger investment climate effort that has made Senegal an agro-processing firm.12 through interventions involving trade policy, food safety, to establishment of an exhaustive set of government one of the top Doing Business reformers in Africa investment promotion and spatial approaches. It is controls to manage them. This control often came at important to note that many of these projects have the expense of doing business, which posed a major not only achieved the development of new market challenge to competitiveness of agribusinesses, farmers, opportunities that broaden the economic growth, but and particularly the fishing industry. A FIAS supported FIAS Helps Achieve Momentum in Haiti Investment Generation Program they have also had corollary impacts which improve project set out to reduce the time and expense of public health. transporting agricultural goods between the nation’s FIAS-supported work in the area of investment policy and promotion (IPP) and spatial solutions—special islands by catalyzing a risk-based redesign of the border encompassing economic zones (SEZs) and trade corridors—continues to make strides in Haiti. In addition to The Kyrgyz Republic has struggled to attract investment inspection process to enable safe trade outcomes at-the- the $65.2 million in investment generated during the FY12–16 cycle, significant additional new investment is and capitalize on competitive endowments in agriculture border, behind-the-border, and between the country’s in the pipeline for FY17 still to be certified. The T&C-led advisory program, aimed at generating investment due to a number of impediments that have weakened own islands. To date three major regulatory reforms have and jobs in the apparel industry, has generated more than 13,700 new direct jobs and contributed to an export competitiveness of tradeable products. A been achieved, benefiting 2,684 firms through improved increase in textile exports from $400 million in 2008 to more than $800 million by 2014. Rated successful at fragmented inspection system has posed a particularly customs and border control services. The average completion, the program is expected to surpass an aggressive investment generated target of $150 million, formidable obstacle for businesses. Previous attempts number of days to comply with business regulations for at reform and investment have been inconsistent and sanitary and phytosanitary (SPS) export clearance has and has already exceeded the targets of 5,750 jobs created and $460 million in exports. yielded limited benefit. As a result of deficiencies in the decreased nearly 30 percent. As the project continues its The T&C team helped public and private stakeholders in Haiti overcome the two biggest barriers to food safety framework, the Kyrgyz agriculture sector is implementation, it will build off the Bank Group’s global FDI attraction and job creation, namely, the lack of industrial space and poor promotion capacity. IFC cut off from potentially lucrative international markets experience by seeking to further improve inspections, that could grow and attract new investment. Linking laboratory systems, and legislation that will take a Advisory Services in the areas of IPP and SEZs provided integrated support focused on five areas: (1) Kyrgyz agribusinesses to these markets will require balanced approach to the management of associated developing investment promotion capacity to reach out to foreign investors in target source markets and significant work improving the governance of food risks to SPS controls and trade. manage the information and site-visit logistics for prospective investors; (2) promoting Haiti’s apparel safety, liability for food producers, and traceability, all industry internationally following the 2010 earthquake to retain and expand buying contracts and attract de facto requirements of food processors, wholesalers Beyond country-specific support, clients need assistance new investment; (3) providing technical support to the quake repair effort, including expansion of the and retailers. The FIAS-supported project has initiated engaging at the regional level, where the Bank Group is government’s Parc Industrial Metropolitain; (4) producing and disseminating a full suite of technical SEZ a comprehensive set of food safety reforms that have better positioned to play a coordinating role between a reports that became Haiti’s SEZ strategy; and (5) drafting and advocating for laws and regulations, including prepared the country to access markets in the Eurasia diverse set of actors. FIAS support to the East African the Free Zones Implementing Regulations enacted in 2012. Economic Union. These efforts have led to reforms which Community (EAC) exemplifies how coordinated increase transparency for agribusiness firms and improve interventions have enabled a regional entity to drive The new legal and SEZ provisions generated private sector interest and involvement in expanding industrial food safety outcomes for public health and anticipated integration among constituent members and enable space. The regulatory framework has facilitated the creation of new free zones and associated investment— impacts are estimated to reach over 300,000 farmers competition in domestic markets. While the five EAC from one zone in 2012 to ten now operating or under development. Industrial space was expanded both directly and indirectly by 2017. countries (Burundi, Kenya, Tanzania, Rwanda, and by public and private sectors, while apparel investors established and expanded their operations. Apparel Uganda) have committed to the promulgation of the maker Hansae Co. Ltd., the latest to commit, expects to create 7,000 jobs, helping bring the total for the At the national level in Vietnam, T&C agribusiness work Common Market Protocol, several market, policy, has supported the Ministry of Agriculture in developing and capacity failures had constrained the potential project to more than 20,000. a strategy for attracting FDI in agriculture, forestry, and of the EAC Common Market. A reluctance to adhere fisheries by 2030. Project support has motivated the to integration programs and the persistence of legal 11 World Bank (2008). World Development Report: Agriculture for Development. Washington, D.C.: World Bank. 12 International Finance Corporation (IFC) (2013). IFC Jobs Study: Assessing Private Sector Contributions to Job Creation and Poverty Reduction. 40 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 41 and regulatory barriers that limit cross-border trade of projects as well as in enabling IFC investment in notes and two videos showing the wide range of the government and private sector to help restore the have dampened the EAC’s ability to catalyze trade and WRS financing programs through its Global Warehouse economic benefits deriving from investments in the economically vital tourism trade disrupted by the quake. investment. The FIAS-supported project was designed to Finance Program, which supported about $6 billion tourism sector. In particular, the effort supported steps to address address these challenges by building strong institutional of trade volume and reached some 750,000 farmers. challenges relating to the country’s popular trekking processes within the EAC Secretariat and the five The WTO’s Trade Finance and SMEs report cited the The FIAS-supported portfolio of industry-specific routes (see box on following page). member states. The project has led to the introduction IFC program as an example of best practice in this projects in tourism included 12 active projects during of five seed standards—for maize, sorghum, sunflower, warehouse finance field. Additional reports are underway FY16 with the addition of Madagascar. New projects Despite the political unrest in Lebanon the team groundnuts, and soybeans—thus reducing impediments to develop guidance on Leveraging Lead Firms to are expected to be approved in FY17 in Myanmar, Peru continues to support a client initiative to reform the to competition in input markets and allowing greater Promote the Growth of Agro-processing SMEs, and, and Tanzania. tourism sector and prepare the way for additional efficiency in primary production and trade in agricultural critically, on Improving Gender Outcomes through investment and job-creation. While the legal reforms, in outputs. A parallel national engagement in Uganda led Agribusiness. In India, the Buddhist Circuit project completed Phase particular the tourism decree, is delayed until the Council to development of a national seed policy and strategy I. The capital investment plan was launched by the of Minister resumes its sessions, work continued on the following consultations with a broad spectrum of Enabling Investment Opportunities in Tourism Ministry of Tourism and three state governments preparation for implementation with the new system for stakeholders. By being able to work at the national and (Bihar, India, and Uttar Pradesh) with recommendations automating the licensing process initiated in early 2016. supra-national level, the Bank Group is able to enhance Demand for tourism-related support from across the aiming to increase the presence of private investors In Odisha the total number of advanced investment its impacts and coordinate its inputs to ensure a Bank Group continued to expand during FY16. The global and operators in the state-owned hotels of the circuit. leads has reached six for the tourism sector and further coherent and strong agri-trade system. team provided assistance to other Bank Group units Preparatory work on investment generation in the sector announcements are expected soon. In line with the for projects in over 30 countries, providing technical has already highlighted investment in hotels valued recommendations of the team, the state government has In the agribusiness sphere, FIAS-supported work advice in program design and implementation as well as at $40 million and tourism-linked services across the issued an order to create a state-owned special purpose improving integration for inclusive economic growth specialized inputs to knowledge and economic sector circuit, including IFC investment projects in hotels. The vehicle for development of Shamuka, a key destination to involves the integration of agribusiness stakeholders into work. The FIAS-supported team leads the World Bank team completed the mapping of regulatory steps for be developed by the project. value chains by developing new approaches that connect Sustainable Tourism Global Solutions Group, drawing simplification, focusing on hospitality-linked licenses. In OPERATIONAL HIGHLIGHTS agribusiness entrepreneurs to enabling knowledge, on expertise from across the entire Bank Group. parallel, lobbying efforts of the project, alongside private Following the highly successful reform project in Cusco, markets, networks and capital. The effort ensures public- The proposal to establish the tourism group received sector and tourism ministry pressure, resulted in the gateway to world famous Machu Picchu, the global private dialogue (PPD) and gender-sensitive agribusiness Presidential support and is now operational. successful establishment of visa-on-arrival. Phase II of tourism team has been working to identify options for design. FIAS support to these objectives has utilized In December 2015, the tourism group organized the the project is expected to support the implementation of replicating the project elsewhere in Peru and extend its a number of instruments and approaches, such as 2015 World Bank Group Tourism Forum (December the reform and the investment projects recommended scope in post-implementation to measure and capture structured PPD, alternative dispute resolution for contract 8–9), which drew 400 attendees and more than 16,000 in the capital investment plan. not just cost-savings but the investment and jobs farming, warehouse receipt financing reform, SME unique viewers on World Bank Group Live, a record- generated as a results of the reform efforts. Moreover, innovation support, and the launch of work on Gender in breaking achievement for an event of this category. FIAS-supported work continued in Nepal in FY16 as after the completion of the project, four additional Agribusiness Guidelines. Opened with a speech by Bank Group President Jim part of a Bank Group rapid response to the devastating municipalities in Cusco have confirmed that they will Yong Kim, the plenary sessions that followed focused on earthquake of 2015. The tourism team worked with carry-on the reform-push showing that the team was Some of the most successful work in FY16 involved tourism’s contribution to reducing poverty and inequality reforms of the warehouse receipt system. WRS reform and how the Bank Group and global leaders can work work supported by FIAS in Kenya aimed to address together to deliver on an agenda important to helping key constraints to greater commercialization of the developing countries foster sustainable economic agricultural sector, namely, access to professional storage growth in a labor-intensive industry with a long- and access to finance. Reforms in Kenya sparked a swift established record of generating jobs for the poor and uptake by some 1,200 farmers, generating an additional disadvantaged. Participants in the forum included Bank $5.4 million in value chain financing over a very short Group clients, the CEOs of Hilton Hotels and AirAsia, and period. A FIAS-supported WRS project in Malawi has a range of tourism leaders from business, international managed to release $9 million in financing, exceeding the organizations, and non-governmental organizations from project target several-fold. In Côte d’Ivoire, this work has around the world. led to the introduction of the first ever WRS legislation in francophone Africa. FIAS support to agribusiness has The Global team also produced three important also allowed for the development of pilots to further the knowledge products in FY16. “Getting Financed—9 inclusion agenda, including supporting innovative and Tips for Community Joint Ventures in Tourism,” robust PPD platforms, initiating contract farming pilots was prepared in partnership with the World Wildlife (for example, in Vietnam) and developing tools for SME Fund to assist community tourism operators in raising linkages and gender inclusion. much needed capital. “An Introduction to Tourism Concessioning: 14 Characteristics of Successful Throughout all of these country examples, intervening Programs” is the first of a two-part series aimed at to improve the impacts of Bank Group interventions has assisting clients design and manage successful tourism necessitated the generation of knowledge through the concession programs in protected areas. The second garnering, codification, and operationalization of global publication will be released in FY17. In partnership best practices. FIAS funds have crucially supported with IFC investment research, the FIAS-supported the production of a set of widely-used toolkits, notably: team prepared “An Evaluation of the Development The Guide to Investor Targeting in Agribusiness (being Impact of IFC Hotel Investments” in association with translated into French due to high client demand); a Oxford Economics and Dalberg Global Development Food Safety Toolkit, and the newly released Reformer’s Advisors. This work measured the development impact Guide to Warehouse Receipt Financing. The latter was of a selection of IFC investee hotels. In addition to the report, the global team prepared a series of learning The World Bank team consults with villagers in Par Kun, Kanpetlet Township for the instrumental during FY16 in developing a robust portfolio Myanmar National Community Development Project. (IFC photo) 42 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 43 able to increase the capacity of the client enabling it to improved the skills and performance of some 750 public and the project implementation unit for a competitive In the Pacific region the work of the team to open new execute similar projects without Bank Group assistance. officers, 46 percent of them women. T&C helped Cusco enterprise development project in finalizing the source markets, develop new products in the cruise The FIAS-funded T&C-implemented project closed develop and deploy ICT systems for record management stakeholder mapping exercise that will provide a basis sector, and develop capacity for the public and private successfully in December 2015 having improved scores of tourism businesses. for development of safeguard principles that will guide stakeholders has been coupled with support for a broad of procedures relating to operating licenses, security the sustainable development of the tourism sector. An regional study. This study, entitled “Pacific Possible – inspections, and regulations concerning lodging and The team commenced a review of draft ministerial upcoming market analysis for Nature Based Tourism Tourism” was discussed at the 2015 World Bank Group restaurants. The duration and cost of procedures relating orders to streamline regulations in the tourism sector of in Uganda as well as a manual to facilitate and guide Annual Meetings and launched in the region in May 2016. to starting and operating a tourism business were Rwanda and produced a market assessment strategy concessions in conservation areas in the country will set reduced by a total of 1,130 days, 150 requirements, and that laid out investment opportunities. This strategy will the stage for higher levels of investment. $1,656. For example, Hilton Garden Inn recently obtained be the foundation for tourism investment promotion work all required licenses and permits in six months to operate around secondary cities to be executed by the Rwanda in Cusco, compared to wait times of more than eight Development Board in the near future. years prior to the reforms. Training events and activities The team supported the Uganda Wildlife Authority The effort to resume pre-quake work streams in Nepal focused on preparation of three tourism destination development plans in three tourism hubs: Pokhara, Eastern Nepal, and Western Nepal. The destination plans are part T&C Rapid Response to Nepal Post-Quake Tourism Recovery Effort Yields Results of a first-ever 10-year National Tourism Strategic Plan for Nepal to attract T&C’s FIAS-supported work helping Nepal recover its vital tourism industry following the devastating earthquake of April 2015 continued into FY16. The rapid-response plan provided critical support in a country quality tourists to particular destinations and to diversify tourism products. where tourism plays a key role in creating jobs and attracting investments in remote areas. About one in ten of Nepal’s workers have emigrated due to lack of economic opportunity, a trend that has been growing OPERATIONAL HIGHLIGHTS year by year. The industry-specific project assisted Nepal in resuming tourism operations along the highly popular trekking routes during high season in the fall of 2015. The post-earthquake response had three components: immediate response; six to eight months of quick recovery activities in the tourism sector through a media campaign focusing on a major market; and delivering on the pre-earthquake work program for continuity. The immediate component responded to a request by the Ministry of Tourism for support for a detailed assessment of the Everest and Annapurna trekking areas regarding their safety for a resumption of trekking tourism. An international geotechnical engineering firm assessed trekking infrastructure in 15 villages, including 710 residential and accommodation structures, and nine bridges. Based on the results, the government assessed that 83 percent of surveyed building and all bridges were “safe, ” and the information was widely disseminated by tourism industry. The findings were quickly accepted by the global tourism industry and associated sectors, resulting in a reduction in the warnings for travel to Nepal issued by major countries that are sources of much of the trekking trade. This was important for enabling tourists to obtain travel insurance and for trekking organizers and service providers to obtain liability insurance coverage for tourism. Trekking traffic was still down by more than two-thirds from the previous year, but the rapid response averted an almost total loss of the fall season. T&C has helped Nepal develop a concept note for repairing and rebuilding damaged areas of the trekking trails. Between September 2015 and June 2016, T&C worked with the Nepal Tourism Board on bringing back tourists from China, the highest growth market for Nepal. T&C provided strategic input through a sustained media campaign during Nepal’s participation in international tourism events in Kunming and Gunagzhou, China. Visits to Nepal by Chinese media representatives and key opinion leaders’ were organized to provide firsthand information on post-earthquake recovery and safety status issues. The campaign generated extensive and positive media coverage in China and Nepal about the Nepalese trekking routes, with coverage and mentions in both print and social media. FIAS support to the T&C effort helped the government of Nepal to reach out to at least 78 Chinese media outlets through interviews and media briefings. The effort to resume pre-quake work streams in Nepal focused on preparation of three tourism destination development plans in three tourism hubs: Pokhara, Eastern Nepal, and Western Nepal. The destination plans are part of a first-ever 10-year National Tourism Strategic Plan for Nepal to attract quality tourists to particular destinations and to diversify tourism products. Not only the quake but also a disruption of trade with India and changing leadership in key ministries and agencies has delayed implementation of the tourism strategic plan. Investments in the pipeline for hotels and other tourism-related infrastructure have reached an estimated $120 million. Handcrafts, Bhaktapur, Nepal. Wood carving, part of temple restoration work (IFC photo, Natalia Juanco Corral) in Nepal. (IFC photo, Natalia Juanco Corral) 44 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 45 4 CORE THEMATIC AREAS CORE The FIAS-supported work in the three priority areas of fragile and conflict-affected situations, IDA, and Sub-Saharan Africa focuses at the project level on addressing THEMATIC AREAS bottlenecks in business regulation, spurring trade and investment, and working with clients in industry-specific sectors. These efforts are bolstered by cross-cutting work in a number of thematic areas that influence FIAS-supported project planning and implementation. Eight thematic areas are outlined below: competition policy; the integration of information and communication technology (ICT) into reform work; transparency; gender; green FIAS support for thematic approaches is reforms; public-private dialogue; applied research; and national quality infrastructure helping T&C step up efforts to close the (NQI). These themes are increasingly being integrated into FIAS-supported projects at the gender gap in economic participation and design phase, sometimes as one element of a multi-pronged project, other times as the expand its work in competition policy. leading element. The thematic approach brings into play T&C’s commitment to moving knowledge seamlessly across Bank Group units. CORE THEMATIC AREAS Unlocking Market Potential through Vigorous Competition and advocate for a comprehensive set of rules, regulations, guidelines, and laws to ensure healthy Open and fair business competition, supported by competition in the marketplace and contribute to enabling competition policies, is central to expanding economic growth and shared prosperity. Research has market opportunities and unlocking the dynamic potential established a direct connection between appropriate of markets to boost productivity and welfare and develop competition policy and economic wellbeing. Simulations economic sectors that can compete for international conducted by the FIAS-supported team in Kenya, South trade. The trends toward deepening regional integration, Africa, and seven other African countries, as well as participation in global value chains, and the advance Brazil and Peru, have demonstrated that improving or of digital technology bring with them opportunities for eliminating anti-competitive regulations in service sectors businesses to invest, create jobs, and provide consumers contribute measurably to GDP growth. The South Africa with better deals. Whether these opportunities can be study showed that by eliminating the anti-competitive realized depends on how domestic and international price overcharges for key products generated by four markets function; government policies that enable cartels, effective competition policy could increase competition advance economies toward these goals. In welfare to an extent equivalent to lifting 200,000 people a global low-growth environment, competition policy can out of poverty. help boost productivity and innovation. T&C, with FIAS support, is working to ensure that these opportunities FIAS supports the delivery of advisory services to client reach economies, firms, and citizens in developing as countries to make competition policy more effective by well as developed countries. reforming the way governments intervene in markets and improving the way they enforce existing competition The problem is that developing countries often set laws. Since the beginning of the FY12–16 strategy cycle, up rules that restrict competition in various ways, for the team of competition experts has achieved over 60 example, by perpetuating the dominant market power of pro-competition reforms through World Bank Group a particular firm, or allowing harmful price-fixing between operations, including lending and technical assistance, competitors. Such barriers to competition artificially knowledge generation, and advisory services. raise prices, erode the quality of services, and reduce the quality and availability of products. Government- A new aviation policy in Armenia allows for competition imposed rules that close markets and unjustifiably with the incumbent airline and is expected to increase protect incumbents or certain types of firms thwart the welfare by an amount equivalent to 1.4 percent of GDP . development of innovative solutions, new and improved In the Philippines, certain shipping firms exercised veto products, and more efficient investments. Similar power over the ability of competing shippers to vie for COMPETITION INFORMATION TRANSPARENCY GENDER GREEN PUBLIC- APPLIED NQI effects are caused by the absence of effective rules and inter-island business. The FIAS supported team helped COMMUNICATIONS REFORMS PRIVATE RESEARCH institutions to deter anti-competitive business practices. remove that veto power, allowing shippers to compete TECHNOLOGIES DIALOGUE These problems affect other businesses, consumers, and for business along key routes. The reform is expected entire national economies. to increase investment in the transport sector by 40 percent. In Kenya, competition policy reform lifted a ban T&C’s thematic work in competition policy involves on private investment in a high-potential crop market. technical advisory services to help design, implement, 46 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 47 Since FY13, Increased competition in public procurement processes The competition principles advanced by the FIAS- and transport. In Honduras, the reforms are generating may save El Salvador’s government up to $14 million. supported team have shaped Bank Group interventions at least $30 million in annual private sector savings and a Mexico and Moldova have introduced programmatic that promote entry and investment in key sectors. In price reduction in pharmaceuticals of between 5 and 10 competition policy agendas that have generated 11 critical reforms in such key areas as subnational Honduras, smaller, younger agribusiness input providers had been blocked by overly complex procedures and percent. FIAS-supported work has regulations and state aid. These have been implemented directly through FIAS-funded advisory services. For unequal enforcement from registering their products as quickly as more established incumbents. T&C’s Massimo Mazzone, President and CEO of Farmacias del Ahorro, said that under previous rules that set minimum been helping Moldova Mexico, success could mean closing a 1 percent gap in intervention provided a more consistent and transparent distances between pharmacies, “The Association of minimize market distortions annual GDP growth associated with lack of competition. process through manuals and electronic databases. Pharmacists acted like a private monopoly, obstructing Without the resulting improvement in competition, competition through the process of issuing permits caused by incentives and Several other T&C client countries have improved the way agribusiness input prices would have been 4 percent and other types of barriers in favor of some association their competition authorities tackle cartel agreements, higher on average for pesticides and 7 percent higher for members. [The reform] has strengthened competition state aid directed at few ensure firms are not inhibited by competitors or and we are now able to open new outlets at more suppliers from operating in a market, and review merger fertilizers, and between 9 and 22 percent for individual products, such as urea, one of the most-consumed strategic location for our customer base, such as in the specific firms. and acquisition proposals to act on those that could agrochemical inputs in Honduras. vicinity of one large hospital where there’s been only one potentially restrict competition. The team has worked pharmacy for 10 years. ” with the Philippines and Kuwait to set up competition Mexico’s Oaxaca municipality relies on a high- frameworks and authorities, opening the way to performing tourism sector to generate jobs and business Since FY13, FIAS-supported work has been helping module of the MCPAT. In Zambia, within a week of substantial transformation in the way their economies opportunities for its poor population but, until recently, Moldova minimize market distortions caused by the training session in February 2016, news reports function. restricted commercial operating hours, limiting the ability incentives and state aid directed at few specific firms. discussed recent cartel investigations in maize milling of entrepreneurs to explore innovative models and adapt Moldova established an innovative state aid portal that and frozen fish as well as concerns about lack of While competition policy often empowers governments their offering to late-night customer demand. Through the shows the level of support to firms granted by 170 competition in domestic air transport. Increased media CORE THEMATIC AREAS to impose fines and other penalties on members of intervention of the FIAS-supported team, Oaxaca lifted public entities and the total support granted decreased understanding of market competition issues will be cartels that restrict competition, the T&C team has restrictions on the operating hours of convenience stores to 4 percent of GDP in 2013 from 5.2 percent in 2011. In key to accurate reporting on the competition authority worked with clients to develop more flexible, results- in December 2015, allowing them to stay open around FY16, the Competition Council of Moldova helped the inquiries into abuse-of-dominance cases in sugar and oriented approaches to fight cartels. Honduras, Kenya, the clock. Almost immediately, a national convenience government ensure greater transparency into allocations cement. The MCPAT was leveraged to analyze key Peru, and Romania, for example, have instituted store chain announced plans to open 24 new outlets of materials by the Agency of Material Reserves to sectors in Brazil, Kenya, Rwanda, and South Africa as leniency provisions that allow authorities to exempt in Oaxaca, and 26 existing establishments in this various beneficiaries, reducing discretion—and potential well as to provide guidance on antitrust enforcement in a cartel member from the fine in exchange for inside municipality have already extended their shop hours. unfairness—in granting advantages to certain beneficiary Egypt, Mali, Panama, and Peru. information on how the cartel operates. In Honduras, the The team estimates that the reform may increase in the companies. Lessons learned from this work has informed competition authority launched user-friendly guidelines annual average rate of retail sales growth in Oaxaca by FIAS-supported advisory services in Kazakhstan, where Flagship reports stemming from MCPAT for Haiti, Kenya, for business and trade associations to better understand 6.8 percent. This pilot reform is being replicated in all 32 authorities are now analyzing when and how operations and Peru were recognized in FY16 with Bank Group when coordination and interaction among competitors states of Mexico as part of a high-priority presidential of state owned enterprises, including the support they Vice Presidential Unit (VPU) awards. The subsequent may violate competition law and harm the country’s initiative. receive from central government, may tilt the playing field reforms promoted in Peru in FY16 prompted three firms competitiveness. In Kenya, through a special compliance against the private sector. to break cartel agreements and report the infringement program, 11 financial services and 7 agribusiness The Competition Authority of Kenya (CAK) is rolling out to authorities. The results were honored with an IFC Team associations have come forward to openly align their FIAS-supported guidelines for assessing the impact of Building on lessons learned from pilot reforms and Award. conduct to competition law and stop information regulation on competition and to screen regulations knowledge projects supported by FIAS, the competition exchange that could facilitate collusion. for potentially anti-competitive provisions. CAK has policy team developed a Markets and Competition The MCPAT was applied at the regional level, providing a mandate from the highest levels of government to Policy Assessment Tool (MCPAT) with FIAS funds to an assessment tool to help Asia-Pacific Economic In Colombia, Kenya, Panama, Peru, and Zambia, the propose alternative designs to achieve policy objectives systematically inform reforms and their implementation Cooperation (APEC) economies achieve their objectives FIAS-supported team is helping competition authorities while minimizing anti-competitive impacts. These in the developing world. A version of the tool adapted to to improve the performance of supply chains, and in improve the way they tackle and deter price-fixing and steps were motivated by a comprehensive competition Mexico’s subnational context has helped identify more Africa, through a flagship report examining competition market-sharing agreements among competitors. Such assessment by the FIAS-supported team showing that than 50 priority reforms across three states. Several of issues in several sectors. The Africa report, Breaking cartels can increase prices by as much as 50 percent for $218 million—equivalent to a 0.39 percentage point these in the retail sector were implemented in the states Down Barriers: Unlocking Africa’s Potential through key goods and services. Reforms supported over the increase in Kenya’s GDP—could be unlocked by removing of Oaxaca and Mexico over the last two years. The T&C Vigorous Competition Policy, was produced jointly past two years in these countries boosted investigative anti-competitive regulations in Kenya’s professional team is training 40 additional staff at Mexico’s Better with the African Competition Forum, a network capacities and technical independence in the authorities, services alone. The report provides sector-specific Regulation Authority in the application of the subnational of 33 competition agencies and ministries across leading to more consistent application of the law and of recommendations, in telecommunications, for example, MCPAT, as the government brings a sector-oriented Africa, including North Africa. This report, the first leniency programs. Colombia has increased the number to develop pro-competition policies for spectrum competition policy reform agenda nationwide to all 32 comprehensive regional competition assessment, of sanctions for cartel behavior from one in FY14 to six allocation, reduce or eliminating porting fees, and reduce states. In Kenya, dissemination and training on guidelines contributes to the understanding of how key markets in FY16. Twelve sugar mills were fined for obstructing consumer switching costs. A strong consensus has for assessing the impact of regulations on competition for competitiveness work, and raises the importance sugar imports and artificially raising domestic sugar built up around the goal of free and healthy competition has triggered requests for the competition authority’s of promoting competition and setting proper market prices over the course of a decade, a practice that had with the help of FIAS-supported public-private dialogue opinion on pro-competition sectoral regulations in regulations to deliver the best deals to African families made Colombian food and beverage processors less initiatives and training for journalists and editors on the sectors such as agriculture, professional services, air and firms. It also provides an overview of competition competitive in international markets. Complaints by the topic. transportation, maritime transportation, and taxi services, policy issues across countries that can inform affected processors led to the enforcement actions. among others. practitioners across the region. The report focuses on In Peru, authorities have opened an investigation into Elsewhere in Latin America, El Salvador, Colombia, cement, fertilizers, and telecommunications. Building alleged cartel behavior against 17 maritime agencies in Honduras, Mexico, and Panama passed competition In Zambia and Kenya, FIAS funds are supporting on the findings, the FIAS-supported team will roll out a the container traffic segment, potentially affecting half of policy reforms that promote market competition the design of a public-private dialogue platform on series of capacity-building workshops to advise public all goods exported via sea. economy-wide and in key sectors, such as retail, health competition and trained journalists and editors on officials and other stakeholders on how to implement the competition policy according to the political economy recommendations. 48 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 49 A sampling of the publications issued by the competition policy team in FY16 appears below. Additional Leveraging Technology to Deepen Reform Impact Today about 48 percent of investment climate advisory publications, blogs, and events in competition policy are listed in Chapter 5. projects include a technology component, with over FY16 saw continuing growth in demand for FIAS-funded 98 different software applications being deployed to o Unlocking Growth Potential in Kenya: Dismantling Regulatory Obstacles in Kenya, published by the technology expertise to support the deployment of support a variety of government-to-business (G2B) Competition Authority of Kenya, describes Kenya’s efforts to boost economic growth by strengthening web and mobile applications to improve government- services such as business registration and licensing, pro-competition policies and dismantling regulatory obstacles to growth. to-business service delivery under World Bank Group construction permit administration, investor dispute reform programs. The FIAS-supported technology resolution, and the provision of business-to-government o An article, “Transforming Romania’s competition architecture to make markets work” in Business team engaged in 65 ICT project components within 53 feedback on quality of public service delivery. A number Digest country programs and one regional initiative, including of these projects are described in Chapter 3 and below. o A Step Ahead: Competition policy For Shared Prosperity and Inclusive Growth presents an analytical advisory, lending and reimbursable advisory services. framework to study the effects of competition on poverty and shared prosperity, and compiles empirical studies presented at the first global conference on Competition Policy for Shared Prosperity and Inclusive Growth, jointly held with the OECD FIAS Supporting Thought Leadership in Competition Policy Advocacy o Mitigating political economy issues and strengthening competition policy reforms through dialogue The FIAS-supported competition policy team is working on a number of fronts to disseminate knowledge platforms: Approach and lessons for implementation, builds on the lessons learned in the implementation of pilots in Kenya and Zambia in setting up competition Public Private Dialogue platforms and awareness of the important linkages between competition policy and sustainable development— particularly the Bank Group’s Twin Goals of eliminating extreme poverty and boosting shared prosperity. Blog-Publications: Competition is defined as the process of rivalry between firms seeking to win customers’ business. While it might appear to be an entirely private sector dynamic, government policy profoundly impacts whether o How advocacy strategies can help boost competition and transform markets: http://blogs.worldbank. and how competition takes place. As awareness of the benefits of competition grows, public policy org/psd/how-advocacy-strategies-can-help-boost-competition-and-transform-markets CORE THEMATIC AREAS relating to competition is increasingly recognized as a critical driver of performance and innovation in o Breaking down barriers to competition: Unlocking Africa’s potential through a regional platform for national economies and therefore of economic growth and consumer welfare. At times, enforcement of cooperation: http://blogs.worldbank.org/psd/economic-success-requires-strong-competition-policy- pro-competition laws and regulations can be controversial when powerful vested interests are affected. new-evidence-africa In part for that reason, T&C has placed a high priority on broadening understanding of competition policy o Competition and poverty: How far have we come in understanding the connections: across governments, the private sector, and among consumers. A number of events and initiatives in FY16 http://blogs.worldbank.org/psd/competition-and-poverty-what-do-we-know-so-far advanced T&C’s effort to spread this awareness. o Disruptive innovations and new business models: The role of competition policy advocacy: To recognize the work of competition authorities worldwide, the Bank Group has joined with the http://blogs.worldbank.org/psd/disruptive-innovations-and-new-business-models-role- International Competition Network in sponsoring an annual Competition Advocacy Contest aimed at competition-policy-advocacy recognizing innovative public policies that promote free and fair competition. In April 2016, the Bank Group and ICN launched a new publication, Transforming Markets through Competition, recognizing the 2015 winners selected from entries submitted by competition authorities around the world, and assessing new developments and recent trends in competition advocacy. Among the initiatives recognized in the contest: Kenya pro-actively prevented an association of healthcare providers from increasing charges, saving consumers around $1.7 million a year; prices for domestic flights came down by 70 percent in Indonesia following the removal of restrictive air fare regulation; and Israel’s advocacy for changes in the area of debit card payments will help reduce inefficiencies in the payment market estimated to be costing the economy $100 million a year. The report, “A Step Ahead: Competition policy For Shared Prosperity and Inclusive Growth, ” prepared jointly by the Bank Group and the Organisation for Economic Cooperation and Development (OECD), was launched at the Bank Group Spring Meetings in Washington, D.C., in April 2016, with a high-level panel discussion on competition policy moderated by T&C Senior Director Anabel Gonzalez and attended by senior officials from Brazil, Egypt, Peru, and the Common Market for Eastern and Southern Africa (COMESA). “Pro-competition reforms are very important not only to transforming individual markets but furthermore to promote growth and shared prosperity, ” Gonzalez said. “But we have also heard that attacking some of these challenges is very difficult; it is very painful. That is why it is important that institutions like the World Bank Group, like OECD, working jointly, can provide tools to policymakers who are interested in pursuing these reforms.” As noted above, the Breaking Down Barriers report on competition issues affecting Africa was produced jointly by the Bank Group and the African Competition Forum. It estimates the gains that could be achieved by tackling anti-competitive practices and reforming policies to enable competition. For instance, reducing the prices of food staples by just 10 percent through tackling cartels and improving regulations that limit competition in food markets could lift half a million people in Kenya, South Africa, and Zambia out of poverty and save consumers more than $700 million a year. Women in the CERNAFA cooperative in Niger joined forces to build up their income by growing market crops. (IFC photo) 50 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 51 FIAS funding also continues to support the development to deploy an online system to manage and coordinate important departure from the traditional “one roof OSS” a number of areas related to good regulatory practices, and deployment of Bank Group-owned entry level business inspections, one of the first such initiatives in paradigm, where each relevant government agency including: software applications for many of the abovementioned the sub-region. This system will contribute to reducing staffs a separate desk which registers businesses or G2B services. These software solutions have been the compliance burden on businesses through risk-based accepts license applications. A guidance note and • Notice and comment systems through which developed using open source technologies and are targeting of inspection activities as well as improving the set of nine country cases studies on implementing businesses are provided opportunity to comment on provided license-free to client governments, consistent transparency and accountability of inspection processes. a unique business identifier in government—a key draft laws and regulations. with the ”Principles for Digital Development” adopted In Guinea, Bank Group-owned software was deployed to enabler of integrated service delivery—was published by the Bank Group and much of the donor and NGO establish an information portal which provides one-stop in FY16. Further research already underway will identify • Business-to-government feedback mechanisms on community. Such web and mobile applications have access to information on licenses and permits required good practices in the institutional design of integrated the quality of regulatory reform implementation. now been deployed in over 20 jurisdictions throughout in the mining sector, which is a key priority for the approaches to G2B service delivery, including the • Systematic investor grievance mechanisms to the developing world under Bank Group projects. This government. In Nepal, a FIAS-supported team assisted development of client-facing service organizations which capture and address investor grievances and has also contributed to increased capacity to service the government to implement a framework for enabling offer business registration and licensing services on systems to identify and address discretionary government clients among the local technology firms digital signatures as well as new web-based services behalf of government. behavior by regulators and thereby reduce involved their deployment. enabling investors to apply online for FDI permits and uncertainty of service delivery. visas. Regulatory reforms undertaken with the help of Enhancing Governance and Transparency in Client Countries To illustrate the nature and outcomes of these the project team are expected to reduce the time and In 2015, the Bank Group, with FIAS support, launched Lessons from the operational pilots will help refine technology initiatives, in FY16 a FIAS-supported team cost of compliance by 25 percent on average, and to a major program aimed at increasing transparency in approaches for subsequent mainstreaming across continued to deploy and upgrade software applications increase by 10 percent the number of formally registered the area of business regulations. The Good Regulatory the Bank Group and other donor-funded projects. for business licensing and construction permitting within businesses. Practices program aims to help governments enhance Seventeen such pilots initiated in FY16 are in various several county governments in Kenya. These online the quality of regulatory regimes and the outcomes they stages of implementation, many through FIAS-supported services have contributed to decreased processing time ICT-related research and knowledge efforts in FY16 have produce through effective, transparent, accountable, IFC advisory projects. FIAS also supports the overall and compliance costs, reduced revenue leakages through been focused on the integration of G2B service delivery, and consultative reform processes. The program, management of the GRP program. CORE THEMATIC AREAS the use of online payments, and increased transparency both through full service online platforms as well as and accountability within these regulatory processes. physical one-stop shops (OSS) where integrated back a collaboration between the T&C and Governance Global Practices and the Development Economics vice The diverse set of operational pilots spans four Bank office technology solutions support a business-centric Group regions: Europe and Central Asia; Latin America FIAS funding supported a pilot effort in Côte d’Ivoire “single window” approach to service delivery. This is an presidential unit (VPU), consists of operational pilots in Using Smart Data Exchange to Improve Sanitary Registration and Boost Regional Trade Imagine a fictitious entrepreneur named Laura, owner of an innovative small business in Central America. Her company makes the tastiest cookies in the country. Recently, Laura’s company created a new variety of cookies, with real fruit. Before she could begin selling them, Laura requested a sanitary registry to sell them in her country. The cookies were such a success that consumers from other Central American countries wanted them on their grocery shelves as well. Laura thought the opportunity to export her cookies would be a great boost to her business. However, to register her cookies for export in the region, she would have to travel to each Central American country and request recognition in person. The travel expenses and time involved made exporting her cookies a much less attractive idea. Such business roadblocks were becoming a frequent occurrence in the region, sometimes stymying small firms such as Laura’s, sometimes major corporations employing hundreds or thousands of people. To address the sanitary registry problem, the World Bank Group, with the support of FIAS and USAID, provided technical assistance to help create a regional information and communications technology (ICT) system to speed and simplify the process of obtaining sanitary registrations in Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. The Council of Ministers for Central American Economic Integration (COMIECO), the Secretariat for Central American Economic Integration, and the ministries of health in each country also contributed to this effort. The new ICT system, launched in FY16, reduces the number of days needed to complete the recognition process considerably, while also reducing the costs by 25 percent. Testimonials praising the new system have come from both the private and public sectors. Unilever called ” Arnaldo Castillo, Economic the system “user-friendly, and the process is simple and easy to understand. Development Minister of Honduras, and President-pro-tempore of COMIECO, called the system, “a concrete ” tool to increase competitiveness, and impact productivity in the Central American region. Currently, the ICT system only acknowledges processed food and beverages from Central America. However, in the future, medication, cosmetics, and fertilizers can also be included, as well as products from other regions. If Laura and her company did exist, soon enough all Central American countries would enjoy her delicious cookies, with real fruit. Small grocery shop in Shinyanga, Zambia. (Bigstock photo) 52 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 53 and the Caribbean; South Asia; and Sub-Saharan Africa. approaches in different country contexts. (For more on one FY16–21, the Bank Group has charted an ambitious path improving women’s ability to exercise voice and influence Participating countries vary widely, from India and of these pilots, in the Kyrgyz Republic, see box below.) toward gender equality by focusing on four interconnected in the business environment. Brazil, among emerging economies, to Bhutan and objectives: Jamaica among smaller economies, to conflict-affected FIAS Supports Significant Bank Group Developments T&C’s interventions will seek to achieve direct benefits Sub-Saharan African countries such as Somalia and • Improving human endowments. for women in terms of access to land, labor, capital, Togo. The topics covered are equally wide ranging, in Gender Strategy technology, knowledge, skills and services, labor market for example, construction permitting (Jamaica, Togo); To ensure inclusive, resilient, and dynamic private sector • Removing constraints to more and better jobs. participation, and control over economic resources. competition policy (Zambia); trade logistics (Belarus); growth, T&C strives to increase the equal participation of And by seeking to increase participation by women women in developing economies. A wide and persistent • Removing barriers to women’s ownership of and in enterprises and firms as employees, managers, business inspections (the Kyrgyz Republic); business gender gap in economic participation and equal treatment control over assets. owners, leaders, and members of corporate boards, T&C registration (Bhutan); investment protection (Colombia, the Dominican Republic); and regulatory governance in the workplace prevents countries from achieving their interventions will yield both direct and indirect benefits. • Enhancing women’s voice and agency, and engaging diagnostic (Ethiopia, Mongolia). The pilots involve a full economic potential. There are fewer women than men men and boys. With FIAS support, T&C will work to achieve its goals number of innovative themes, including: competition in the global labor market, and women in every economy among subnational governments (India, Sri Lanka); are paid less than men for their work. Globally, women through gender-informed design of gender-neutral In support of the strategy, T&C in 2016 reviewed its stakeholder awareness of and support for new own fewer businesses; and the businesses they do own policies, and through an increase in gender-targeted gender work and set out new priorities in a Gender agendas and institutions such as competition policy have fewer employees, lower sales, and lower invested interventions. Gender-informed design ensures that Practice Note which identifies demand drivers within and competition agencies (Zambia); service reform and capital. The economic benefits of gender equality are policies and programs developed with no explicit T&C’s portfolio for gender-targeted and gender-informed delivery at the subnational level (Kenya); crowd sourcing compelling. A survey of private sector leaders found that gender differences will not inadvertently disadvantage solutions. The note assesses T&C’s existing project (in Belarus, gathering data from truck drivers on wait 34 percent of companies polled reported increased profits women, and that women can fully access the benefits portfolio and establishes operational priorities for the next times and regulatory hassles at border crossings); and as a result of efforts to empower women in emerging that arise from them. Gender-targeted approaches four years based around two main objectives: improving a hackathon to develop applications for feedback (Sri markets.13 address situations where inequity in access to economic the business environment for women and expanding their Lanka). In the area of G2B service delivery, several pilots resources or in productive capacities exist, making it trade and market opportunities. Underpinning these two FIAS-supported gender activities in FY16 were necessary to remove explicit gender-based legal or CORE THEMATIC AREAS are exploring alternative ways of soliciting feedback, objectives, T&C will seek to strengthen the productivity including the use of ICT systems, to learn about the influenced and underpinned by several broader strategic regulatory barriers to women’s economic equality and and competitiveness of female workers and women-led cost-effectiveness and appropriateness of alternative developments. In its recently released Gender Strategy for address discriminatory enforcement of rights. Based on businesses by enhancing their skills and capacity and Figure 1: T&C Gender Program Theory of Change Improving Transparency and G2B Service Delivery in the Kyrgyz Republic Businesses in the Kyrgyz Republic have labored for years under an overly intrusive inspections regime. In some years and sectors, 90 percent of businesses—including small firms as well as large—had to undergo inspections. T&C, through a FIAS-funded IFC investment climate project, has helped the government THEORY OF CHANGE pass and implement risk-based inspections legislation that reduced the inspections burden to 70 percent. Promoting client growth and competitiveness necessitates gender equality. However, transparency of the inspections process and poor government-to-business (G2B) service delivery have remained constraints. To address these issues, the Ministry of Economy, with the help of the T&C team, launched a web portal—www.proverka.kg—that digitizes and manages risk-based inspections and also serves as an information portal. The software enables officials to plan, approve, conduct, and Improve the business environment monitor business inspections based on risk assessments. For officials, the system provides a database of for women entrepreneurs subject to inspections and assigns risk profiles for each company. For entrepreneurs, the portal not only informs businesses about relevant legislation, but also provides access to information about inspections plans, approvals, process, checklists. Through gender- Expand trade and market Women work in, start, informed & gender- The effort involves establishing a mechanism for collecting feedback on inspections processes that will opportunities for women lead and grow firms targeting policies, be available to the three largest inspectorates in the country. Taalaibek Asylbekov, State Secretary of effectively T&C intervenes to... the State Inspectorate of Ecology and Technical Safety, said the mechanism “not only helps us to build trustful relationship with entrepreneurs, but also helps us to see a real picture of overall work of the Inspectorate, especially in regional offices. This instrument allows us to see how inspectors perform and Strengthen the productivity and understand what should be done to improve our work. ” A feedback hotline had fallen out of frequent use competitiveness of female workers because calls rarely prompted government response. Under the new system, inspectors are instructed and women-led businesses through to collect emails of businesses and register them on the portal when reporting on inspection. After each enhanced skills and capacity inspection an automatic email is sent to entrepreneurs inviting them to fill in a short survey. Each link sent to entrepreneurs is unique and the answers are confidential. The results of the survey are immediately processed and added to charts available online. The web portal is continuously updated to introduce additional features and correct glitches that occur during implementation. Enhance women’s economic voice and agency 13 Dalberg Global Investment Advisors (October 2014). The Business Case for Women’s Economic Empowerment: An Integrated Approach. 54 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 55 Figure 2: Where is T&C Working on Gender? a portfolio analysis that examined what is working and mapping of discriminatory laws, the government what could be improved, T&C decided to place priority on requested help to reform local laws to provide for testing and scaling innovative approaches to learn more gender quotas on corporate boards, display penalties for Europe and Central Asia about what works, encourage more uptake of gender- workplace harassment, and regulate the creation of one- IFC Advisory (7) related work, gather appropriate data, and disseminate stop-shop business centers for female entrepreneurs World Bank Lending (16) knowledge more widely and effectively. and small and medium enterprise (SME) owners. And World Bank Advisory (10) in Bosnia and Herzegovina, technical assistance is FIAS-supported Gender Activities being provided to 20 municipalities to reduce regulatory burdens for women business owners. Support for Consistent with the FIAS FY17–21 strategy, all FIAS- enhancing outcomes for women in fragile and conflict- funded interventions will support broader Bank group affected situations—a FIAS priority area—was achieved South Asia and T&C goals. FIAS-funded activities work to: IFC Advisory (2) by financing projects in Myanmar, Sierra Leone, Togo, Middle East and World Bank Lending (0) • Reduce business environment disparities for and the West Bank. Additional national level projects, North Africa World Bank Advisory (9) East Asia Pacific male and female entrepreneurs through reforms further underscoring the FIAS priorities of Sub-Saharan IFC Advisory (7) World Bank Lending (1) IFC Advisory (4) that eliminate explicit discrimination in laws and Africa, FCS, and IDA—are described below. World Bank Advisory (32) World Bank Lending (0) Latin America & World Bank Advisory (8) regulations. the Caribbean In the area of improving the business environment IFC Advisory (3) • Ensure implementation of laws and policies in for women, T&C continued its longstanding work in World Bank Lending (2) a manner that advances equal opportunities for addressing legal and regulatory discrimination which World Bank Advisory (10) Sub-Saharan Africa female businesses. inhibits the ability of women to formalize businesses, IFC Advisory (25) World Bank Lending (22) earn a fair wage, and enter and compete in new markets. World Bank Advisory (36) • Improve the economic participation of and working In Togo, following a successful reform of its family code CORE THEMATIC AREAS environment for female employees in competitive to allow women to claim “head of household” status, Legend: Gender Flags in T&C industries such as agribusiness, tourism and light T&C worked to raise awareness of these reforms among IFC Advisory (29% of 153 projects) manufacturing. Togolese men, women, and officials through a well- World Bank Lending (69% of 70 projects) Closed, active, and pipelined projects for FY14-FY17 World Bank Advisory (21% of 582 projects) established paralegal network. As the government of • Disseminate and mainstream knowledge and Sierra Leone works to revise its core minerals policy lessons learned. with the help of Bank Group technical assistance, T&C supported these efforts by designing dialogue forums T&C shares with its partners the goal of widening and around removing restrictive labor laws that forbid women Figure 3: Spectrum of T&C Gender Interventions deepening the integration of gender considerations into from working in the mining sector. operational project work and to share knowledge more effectively and deepen data collection and analysis. T&C also worked during FY16 for more gender-informed To move toward that goal, T&C in FY16 issued its first application of laws and regulations. A project in Uganda Foundational Knowledge undertook a joint land titling exercise. Uganda’s statutory Employment Gender Request for Proposals to encourage demand for operational solutions. The RFP generated 26 proposals, property laws already provide for equal land rights for Formulate gender-sensitive economic policy 14 of which were selected to receive funding totaling men and women, but customary law often prevents Assets $1.2 million over FY16–18, roughly half of which came the exercise of these rights. In Pakistan, a business Provide signature date, analytical and diagnostic tools from FIAS. The FY16 allocation for gender totaled facilitation hub for female entrepreneurs will provide Formalization $359,000, and almost all of those funds were committed gender-informed services for business registration, skills Improving the Business Environment for Women Possible T&C Interventions over the course of the year, one indication of the strong development, and linkages to financing. demand for workable solutions in the gender space. The Areas of Demand Reform discriminatory laws, regulations & practices Growth/Productivity breakdown of funding by region for the three years of T&C worked to expand trade and market opportunities Provide feedback mechanisms, lead PPDs the gender initiative reflects the FIAS emphasis on Sub- for women during FY16 by linking them to value Entrepreneurship Saharan Africa, which garnered 48 percent of the funding chains, addressing sex segregation in key sectors, and Expanding Trade & Market Opportunities for Women granted. Further regional breakdown of the allocation is supporting skills development for female entrepreneurs. as follows: Europe and Central Asia, 17 percent; Latin This area of work seeks to help women identify market Trade & Competition access opportunities, develop entrepreneurial resilience, Map and analyze sectors and global value chains America and the Caribbean, 10 percent; East Asia and Pacific, 8 percent; global initiatives, 8 percent; Middle and gain access to networks, funding, and technology. Legal/Regulatory Barriers Improve trade facilitation and trade logistics East North Africa, 5 percent; and South Asia, 4 percent. Moldova’s national SME support organization launched a National Women’s Platform, with T&C advisory support, Provide spatial solutions As the regional allocations indicate, the gender RFP to address the unique needs of female entrepreneurs. Skill Development generated project proposals in each of the Bank Group’s The data collected via the platform will be used to guide Formulate gender-sensitive competition policy regions at the regional, national, and subnational levels. the design of a government incentive program for female Gender-based Violence The gender initiative also includes global projects. entrepreneurs. A T&C policy note on such incentives Deliver female entrepreneutship support programs programs, undertaken in FY16, will help other client Global data projects with Women, Business and the Law and Doing Business will provide opportunities to countries. analyze trends effectively. Subnationally, two projects are working to address economic outcomes for women. In T&C is working to develop specific methodologies the Punjab province of Pakistan, following a regulatory for sectors where women already predominate but nevertheless suffer certain disadvantages. A T&C 56 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 57 methodology for gender-informed agribusiness projects business, sign a contract, obtain national identity cards, to the negative impacts already evident from global national reforms and help track the implementation is now being finalized. FIAS funded a regional project leave the home, and work in the same sectors and warming. of actions needed to spur sustainable growth and in the Organization of Eastern Caribbean States professions as men. T&C will also collaborate with Doing opportunities for all in the Caribbean. The initiative, (OECS) to comparatively analyze Grenada and St. Lucia, Business to collect and analyze gender-disaggregated In FY16, with the help of FIAS funding, institutional facilitated by the Bank Group in partnership with the where tourism disproportionately employs women. data from business registries in 120 countries, a project capacity building and training was conducted in Lahore, Inter-American Development Bank and the Caribbean In this project, enterprise-level gender-disaggregated getting under way in FY17 . This collaborative data Pakistan, and Korea for the Punjab Energy Efficiency and Development Bank, advises stakeholders on how to data is being collected to understand women’s labor gathering and analysis will help project leaders identify Conservation Agency (PEECA), established by the Punjab improve the coordination and operationalization of reform force participation, earnings, and levels of formality in new intervention opportunities. Energy Department as part of the project to implement delivery. The project received a Bank Group VPU Award tourism value chains. The Abraham Path Initiative, an Pakistan’s first subnational five-year energy efficiency and in FY16. experiential tourism trail in the West Bank is examining T&C supported a number of innovative PPDs, business- conservation strategy. With the help of the T&C project the involvement of female workers and entrepreneurs to-government (B2G) feedback loops, and notice and team and the Korea Energy Agency, Punjab has taken In Côte d’Ivoire, the team provided support in two along similar lines. To better understand how women comment system projects during FY16 all intended to the lead in establishing PEECA as the designated agency areas: technical strengthening; and advice on the could feature more prominently in global value chains, strengthen women’s voice and influence in economic for climate change strategies under the country’s 2016 elaboration of the national PPD strategy with a focus on T&C launched an analysis of the wild harvesting sector matters. In Rwanda, an existing PPD program will national energy efficiency and conservation law. The sectoral (particularly agriculture) working groups. These in Armenia and Kosovo, and the honey value chain in evaluate whether the introduction of an SMS (short capacity building exercise focused on benchmarking the improvements will support parallel efforts to develop Moldova. message service) feedback platform increases the provincial energy efficiency and conservation program lending operations in which PPD will play an important participation of women. T&C financed projects to and its planning, implementation, and monitoring. It role at the regional and sectoral levels. In sectors that have not traditionally employed women, support technical capacity building for women’s business contributed to the institutional readiness of PEECA for T&C is addressing issues of occupational segregation by associations in Armenia, Kosovo, and Moldova. In implementing the 2016 conservation law at the provincial In Kenya and Zambia, PPD is being integrated into gender. In Guinea, T&C launched a project to encourage Bosnia and Herzegovina, focus groups with women- level. The activity also helped prepare PEECA to support competition policy work as a pilot to strengthen the women to enter the lucrative metalworking sector led businesses were launched to share knowledge the implementation of energy efficiency standards mandate of the country competition agencies and through greater resource allocation, training, and access and provide transparency around complex regulatory and labeling in Punjab, supported by a communication address political economy concerns. Diagnostics undertaken during FY16 resulted in several reports to CORE THEMATIC AREAS to professional networks. regimes. strategy and awareness campaign, complementing the objectives of the national energy efficiency and guide the design and development of PPDs managed by A key part of the FIAS-supported T&C gender initiative T&C has begun to develop a holistic approach to conservation law. Both the law and the PEECA Strategy the competition agencies. Among these, a knowledge revolves around impact evaluations to ensure integrating gender considerations in several of its complement the spirit of the Paris Agreement on Climate product drawing on experiences and lessons learned in that projects deliver the results and impact in the signature country projects, some of which receive FIAS Change in terms of encouraging needed domestic Kenya and Zambia about dealing with political economy gender field as intended, and promised. In FY16 T&C funding. A five-year investment climate advisory program mitigation measures based on conservations and issues in competition policy work was completed invested heavily in a number of impact evaluations, in Tanzania will integrate gender dimensions from the efficiency in the energy use. recently. The continuing work is expected to yield early several in collaboration with the Bank Group’s Africa design stage so that proposed policy changes consider results by the end of FY17. Gender Innovation Lab, to understand the impact and impact on women and youth, and so that data collection Fostering Public-Private Dialogue to Catalyze Reform T&C’s PPD work in FY16 prioritized innovation and the effectiveness of its gender-informed and gender-targeted can be standardized throughout the life of the program. interventions and to disseminate knowledge more The regional project in Punjab, Pakistan, includes a The beginning of FY16 saw the launch of a new piloting of new ideas, reflecting the interest from other dynamically. Five impact evaluations were financed range of gender-informed lending operations, analytics, public-private dialogue (PPD) strategy that builds on Bank Group units and external partners covering issues via the Gender RFP in Mexico, Myanmar, Rwanda, and advisory services designed to support women’s and integrates learning from previous efforts and such as jobs and competition policy. The team designed Uganda, and the West Bank. For example, in Mexico, participation in the country’s growth, development, and responds to steadily increasing regional demand. The and organized a highly visible and successful flagship the impact of a government entrepreneurship training competitiveness. The Bangladesh Investment Climate approach to PPD as a versatile ‘tool’ to be deployed event “Dialogue for Climate Action, ” on PPD and climate program on women is being assessed. Fund Phase 2 program embeds gender analysis in flexibly depending on country and project needs and change in cooperation with the government of Austria. all forthcoming diagnostics and includes gender as a circumstances has remained at the center of our The two-day forum was attended by more than 200 Effective gender projects and informative impact dimension for identifying reform opportunities. Potential interventions—and continuing strong client demand participants from government, civil society, international evaluations of the results depend on gender-based initiatives include value chain analysis in targeted sectors, has validated this approach. In FY16, FIAS contributions institutions, and the private sector from more than 25 data and diagnostics. In FY16, T&C sought to widen addressing regulatory implementation gaps for women in thus continued to support stakeholder engagement countries. The discussions, including presentations by and deepen its collection and analysis of data and its business, improving incentives for women entrepreneurs through a variety of PPD mechanisms across projects in high-profile speakers, were followed via live-streaming diagnostics capabilities through 11 projects financed and skills for female workers, and addressing wage gaps. activities ranging from advisory to lending to analytical by more than 1,700 people. Participants endorsed via the RFP that have begun collecting gender- exercises, both economy-wide and sector-specific. and launched six Principles on Dialogue for Climate FIAS-supported teams delivered tailored PPD activities disaggregated data. In some cases, this will provide first- Green Reforms: The FIAS Link to the Climate Change Agenda to governments and the private sector with the aim of Action—a set of tenets aimed at guiding businesses of-its-kind baseline data for the Global Practice. Projects and governments as they embark on productive in Armenia, Bosnia and Herzegovina, Grenada, In FY16, FIAS continued to support T&C’s efforts improving the efficiency and effectiveness of private conversations on how to cooperate effectively to fight Kosovo, Moldova, Pakistan, and St. Lucia include in furthering the climate change agenda, the Bank sector reforms. A total of 17 active PPD-focused projects climate change. Using the principles and its contributing data collection at the enterprise level. In Mexico and Group’s leading global environmental priority. T&C’s make up the portfolio of the FIAS-supported PPD team. members as a starting point, the Dialogue for Climate the West Bank, data is being collected from individual work in this area seeks to increase industry and The number of T&C projects integrating PPD elements Action forum kicked off a community of practice that will female entrepreneurs. In Togo, where citizens and sector competitiveness by advancing climate-efficient was 54 at the beginning of FY16 and continues to grow. carry out action on the climate change agenda and build officials around the country will be sensitized to recent technologies and strategies, encouraging the application Most projects (58 percent) were being implemented on the momentum from COP21 and other global events. family code reforms, and in Uganda, where land is of energy efficiency goals in economic zones, and in Sub-Saharan Africa, while a significant portion (35 being jointly registered in both husbands’ and wives’ expanding the adoption and implementation of green percent) contained a strong focus on sectors, particularly Furthermore, this year saw the production, contribution names, data is being collected at the household level to building codes. FIAS support is helping client countries tourism and agribusiness. Key projects were supported to and dissemination of a number of analytical pieces and understand the effects of these reforms. close the knowledge gap on energy efficiency and in Bangladesh, Cameroon, the Caribbean, Côte knowledge-management publications—a Stakeholder green growth. This thematic approach, which will be d’Ivoire, Kenya, Madagascar, Tanzania, and Zambia. Mapping Toolkit, a variety of project briefs showcasing Joint data analysis in collaboration with the Bank Group’s a priority area in the FY17–21 strategy cycle, engages New projects were launched towards the end of FY16 in PPD interventions, an introductory “What is PPD?” annual report on Women, Business and the Law was clients in a number of sectors, including agribusiness, Ghana and Macedonia. overview, PPD implementation guides for competition also launched in FY16. Regional heat maps will be tourism, manufacturing, and economic zones, advancing policy projects, a Jobs guidance note, as well as a created to identify where economic legal discrimination innovations and regulatory improvements that advance The Caribbean Growth Forum provides a platform publication on PPD for Competitive Cities. still exists in areas such as in women’s ability to start a green growth and help clients build resiliency and adapt for private sector and civil society to give feedback on 58 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 59 competitiveness that affect the development of specific reform efforts, the global financial crisis slowed The Elements of Public-Private Dialogue include: fact gathering and data analysis; mapping of economic sectors or activities. These methodologies may Armenia’s economy significantly. Sustained growth, potential linkages between a new PPD and existing PPD is a structured engagement among an inclusive initiatives, projects or dialogues; understanding the be used for identifying and removing binding investment ambitious reforms, as well as inflows of capital and set of relevant and local stakeholders that seeks to prevailing political economy and decision-making history; climate constraints affecting a country’s priority sectors. remittances, have helped create and sustain a market- identify, prioritize, and recommend consensus as well identifying the stakeholders and influencers; engaging in They also help to identify the sectors in a client country oriented environment, but important challenges remain as fact-based solutions to a specific need, challenge, strategic communications to engage, inform, persuade, (such as agriculture, tourism, or manufacturing) where in generating sufficient new jobs to stem emigration or problem. PPDs go well beyond standard stakeholder and gain the support of key audiences; design a PPD the removal of particular investment climate barriers and reduce poverty. More recently these problems consultation or simple exchange of opinion. PPDs process, including membership, leadership, steering would generate the greatest potential for economic have been accentuated by the deterioration of Russia’s establish an ongoing, sustained engagement rather than committee and working groups; launch the dialogue growth. economy, negatively affecting exports and remittances a one-time conversation. They are designed to be as platforms; and monitor the results. from migrant workers. The government recognizes the inclusive as possible, and use tools such as traditional In FY16, a joint World Bank-IFC team met with importance of FDI and non-equity modes of investment focus groups, surveys, redress mechanisms, “notice and government and private sector representatives in Lao (NEMs). T&C’s analytical report provided a framework for comment” periods, and ICT tools deployed for surveying Enhanced Investment Climate Diagnostics and Applied Research People’s Democratic Republic to assess the current Armenia to develop its vision for investment and facilitate stakeholders. T&C’s FIAS-supported Investment Climate team relies on system of investment incentives against international its implementation through investment policy reforms. a well-developed set of diagnostic instruments and strong best practices and provide recommendations for Through an interactive process that included government Critically, PPDs go beyond information gathering to knowledge of good practices and reform experiences, improvement. The mission identified a number of and private sector representatives, the report seek and reach agreement on a set of challenges and a allowing the team to develop integrated multi-instrument concerns among private sector representatives to the recommended that Armenia craft a well-define vision roster of possible solutions to those challenges that are solutions tailored to the needs and demands of clients. effect that the existing investment incentives regime is for investment and FDI generation, adopt (and publicize) based on data and research. To be effective, PPDs should The ability to mobilize expertise on a wide-range of policy discretionary and lacking in transparency, that legislation visible investment attraction policies, improve investor leverage a strong stakeholder communication strategy and regulatory issues across and beyond the Bank Group regarding incentives is confusing and constantly protection laws, increase inter-agency coordination, and to sensitize interested parties, officials, and potential is key to the effectiveness of the diagnostics initiatives. changing, and that the process for receiving incentives is establish sound representation of the country on the beneficiaries to the key issues. Effective communication overly cumbersome. The mission identified areas where Eurasian Economic Commission. CORE THEMATIC AREAS helps disseminate key knowledge and facts, increases On this foundation of experience, the IC team has been more data is needed and led to the development of a ownership of the agenda by local stakeholders, multiplies expanding its array of analytical tools for analyzing various number of reform proposals which the government has A result of an interactive process engaging key high- the voices advocating for change, and improves policy areas affecting the quality of a country’s investment taken on board. level and technical representatives from the Armenian transparency in decision making. climate. For example, multiple investment reform memos government and the private sector, the report serves as (IRMs) have assessed key investment policy barriers to At the beginning of FY16, the team provided the the starting point for targeted and development-oriented The Stakeholder Engagement Process: Key Actors attracting FDI in the quantity and variety client countries government of Armenia with a detailed set of policy investment policy reforms and offers policy-makers a set need to meet their development objectives. recommendations aimed at assisting in the country’s of tools to consider when examining investment policy Through its extensive implementation experience, the efforts to generate greater FDI. Despite continuous reform options and setting priorities. team has developed a sequence of events that can guide New methodologies are being developed to clients in developing effective PPDs. The key elements assess binding constraints in terms of a country’s Figure 4: The Stakeholder Engagement Process SECONDARY STAKEHOLDERS ACADEMIC INTERNATIONAL RESEARCH ORGANIZATIONS INSTITUTIONS PRIMARY STAKEHOLDERS PRIVATE PUBLIC COMMUNITY MEDIA OTHERS Armenian women selling their traditional Armenian bread in the bazaar of Yerevan market Armenia. (Bigstock photo) 60 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 61 In the first half of FY16, T&C’s Investment Climate team livelihoods on a commercially viable basis, either at scale established the Investment Climate Applied Research or scalable, to people living at the base of the economic (IC AR) program focused on a three-pillar agenda to: pyramid (BOP) making them part of the value chain of (1) develop analytical tools to better target, design, and companies´ core business as suppliers, distributors, measure investment climate policy intervention; (2) retailers, or customers. Yet many inclusive businesses fill gaps in data and knowledge through research and face external and internal constraints, both at the BOP analysis; and (3) foster outreach and partnerships with market level and at the company level. Constraints at analytics teams across the Bank Group, international both these levels have been identified along four broad organizations, development partners, think tanks, and dimensions: information, rules and regulations, financial academia. The strategic context for the IC AR program resources, and capacity. Where these can be reduced, is provided by several foundational T&C documents, inclusive businesses can grow and achieve greater in particular the T&C Roadmap and the FIAS FY17–21 impact. IC AR has been contributing policy research and strategy cycle document, Investing in Private Sector analysis aimed at identifying the needs and challenges of Growth, Jobs, and Inclusion. These strategies call for inclusive businesses and steps governments can take to thought leadership, global advocacy, advancing the T&C address them. knowledge agenda, and developing an analytical and empirical strategy for T&C operational engagements. The NQI: Helping Clients Participate in Increasingly Competitive IC AR program seeks to deliver on these objectives from the Investment Climate perspective. Markets As competition in global markets increases, a growing Under the analytical tools pillar, new sector-focused number of T&C clients face challenges accessing new diagnostic tools will be employed to help clients identify markets and competing with higher quality products. CORE THEMATIC AREAS new sectors with a strong potential for investment In response, governments are initiating reforms aimed and job creation by considering such questions as: at setting up a well-functioning National Quality Where does a country stand in terms of economic Infrastructure (NQI), aimed at assuring the quality of diversification: Is sector transformation feasible given products demanded by consumers both domestically the country’s available resources? Can cross-border and internationally. NQI encompasses the complete investment play a role in transforming a sector? And ecosystem of public and private institutions as well what benefits can a host country expect to gain should as the legal and regulatory framework required to its strategy succeed. Planned pilot countries include establish and implement standardization, accreditation, Colombia, Ethiopia, and Pakistan. metrology, conformity assessment (primarily testing and certification), and market surveillance. Responding The knowledge pillar of the IC AR program revolves to a rising number of client requests to support these around a new planned global report and associated global reforms, T&C in FY16 began developing new approaches investor survey aimed to provide new research, empirical and tools to strengthen existing knowledge on the evidence, and perspectives on the key dimensions of design and implementation of NQI reforms. The ensuing countries’ investment climates. The report will add to the work has included deepening our analysis and providing existing literature on investment climate by juxtaposing clear evidence of NQI’s linkages with participation in private and public sector perspectives on the drivers and global value chains (GVCs), improvements in investment benefits of private investment, and by leveraging new climate, and other development objectives. T&C analyzed data for cutting-edge research and analysis. The report In the fruit and vegetables market in the Marrakech Medina. (Bigstock photo) the current practices in designing and implementing will also blend global perspectives with regional insights NQI reforms to ensure that the Bank Group delivers and country-specific experiences. The report will rely on the best available solutions to clients. Such knowledge three core sources of new data and insight: the global has helped operational teams start the preparation of markets, and the streamlining and harmonization of Trade Organization. Working with the Bank Group, the investor survey of investor perceptions concerning lending operations supporting NQI reforms in Bosnia and specific technical regulations. The knowledge-sharing government tackled complex regulatory, institutional, and issues relating to investment climate; policy research Herzegovina, Ethiopia, Kosovo, Tanzania, and Ukraine. work promotes good practices, such as openness, infrastructure challenges that helped reduce technical papers showcasing new research of the T&C team; and transparency, impartiality, effectiveness, and relevance barriers to trade and significantly improve its capacity case studies examining key issues at the country and The NQI initiative works with clients to implement of NQI-related functions and oversight. Knowledge to deliver higher quality NQI services. Peru has made company level. both economy-wide and sector-specific reforms and sharing also involves motivating the private sector to important advances in fostering a better export-oriented also supports knowledge sharing from partners and adhere to quality standards, peer-to-peer learning events market. In partnership with the Bank Group, the country’s In its outreach and partnerships work, IC AR has from other client country experiences. Economy-wide and workshops, and networking with key regional and NQI reform has contributed to a four-fold increase in total engaged with IFC and the United Nations Development solutions include diagnosis of issues relating to the international counterparts. exports, doubling of non-traditional exports, and a 50 Programme (UNDP) on a new G20 initiative to advance institutional and legal framework, infrastructure, and percent increase in the number of exporting SMEs. the understanding and application of inclusive business capacity to perform needed services. It also includes the To make the reform experience available to development approaches in developing countries. In 2015, the G20 development of legislation to bring clients in line with practitioners, T&C has developed a number of The FIAS-supported team has established partnerships Leaders adopted the Inclusive Business Framework, international best practices, including the elimination comprehensive reform case studies and practical with international partners that bring extensive expertise and earlier this year, the G20 launched the Global of unnecessary technical regulations, application of guidance for assessing a client’s NQI and designing in NQI-related fields: the International Organization for Platform on Inclusive Business—a global partnership modern ICT solutions, and establishment of impartial the most needed reforms. The Kyrgyz Republic, Standardization (ISO); the National Metrology Institute to support policymakers and accelerate the adoption and credible NQI institutions. Sector-specific work can for example, has embarked on an ambitious plan of Germany (PTB); the United Kingdom’s Regulatory of inclusive business policies and programs globally. include assessment of priority sectors, products, and of reforming and modernizing its NQI to reap the Delivery Directorate; and the United Nations Industrial Inclusive businesses provide goods, services, and benefits of accession and integration into the World Development Organization (UNIDO). 62 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 63 5 COLLABORATION, COLLABORATION, KNOWLEDGE, AND LEARNING The World Bank Group deploys a full range of knowledge and communications tools KNOWLEDGE, to encourage the creation and deployment of project- and staff-generated learning and expertise across sectors and regions, and to communicate the priorities, initiatives, and accomplishments of FIAS-supported projects to key audiences, including donor AND LEARNING partners, clients, potential clients, other international institutions, and the private sector. Blogs, research publications, workshops, boot-camp training sessions, videos, high-level events, periodicals, and social media are but some of the tools T&C uses to disseminate With FIAS support, T&C is focusing on knowledge, results, challenges, and goals. As the project narratives in this report show, knowledge leadership in trade and communications and knowledge dissemination are not add-ons enhancing FIAS-supported competition policy and industry-specific activities. Rather they are integral parts of what T&C does in delivering technical support work, and on effective communications and advisory services to clients. of lessons learned. Creating and Deploying Knowledge outcomes. TCdata360 provides simple and accessible tools to help a broad range of users— including policy FIAS funding continued to support a robust publishing makers and practitioners in government, researchers, program, which illustrated—through its volume and executives and analysts at private sector groups and breadth of topics—the essential role of knowledge firms, and media representatives—to analyze, visualize, creation in how T&C delivers for its clients. In FY16, download, and craft their own data experiences and T&C’s published resources reflected the practice’s stories. emphasis on analytics, empirical evidence, and the application of research toward innovative solutions, as The TCdata360 platform will draw data from a large illustrated by numerous studies released as World Bank and growing number of public sources (the first version Policy Research working papers and country-specific will feature over 2,000 indicators pulled from about trade and sector reports, and a new book, Making Global 25 different sources). Developers and technical users Value Chains Work for Development, a comprehensive will be able to access all data through an application resource for policy makers and practitioners featuring a programming interface. The tools and data on the strategic framework, analytical tools, and policy options site will make it easier to gather and analyze data for (see page 68 for list of more than 70 key publications projects, compare and reuse information, and establish a released in FY16). collaborative culture of knowledge sharing. FIAS support contributed to an expanded roster of Communicating for Impact and Results events to encourage knowledge sharing, peer-to-peer Since its formation in FY15, T&C has placed a high learning, and the exchange of best practices and lessons priority on strategic communications to leverage learned. A total of 132 events in 14 countries attracted awareness of the FIAS-supported mission, and T&C’s 8,188 participants (in-person and online)—nearly three role in furthering the Bank Group’s agenda of eliminating times the tracked attendance of FY15 events—including extreme poverty and boosting shared prosperity. During government officials and practitioners, private sector FY16 the communications team supported flagship representatives, development partners, researchers 22,432 70 8,188 events on tourism, competitive cities, competition policy, and technical experts, Bank Group staff, and other and trade, among other topics. The team participated stakeholders. These seminars and conferences earned in drafting and publishing the new FIAS strategy cycle an average quality rating of 4.4 out of 5 in participant document, Investing in Private Sector Growth, Jobs, evaluations (see Sharing Best Practices, Seizing and Inclusion: FIAS Strategy for FY17–21, released in Opportunities: FY16 Event Highlights, p. 73). June 2016. Twitter followers of T&C; 2 million Key publications participants in 132 investment Developing a Data Platform and Community In the project sphere, media engagement has been a key impressions; 3,638 retweens released in FY16 climate-related events in In FY16, T&C created the test version of TCdata360, part of the competition policy team’s efforts, as FIAS- 4 countries a data-driven website (formally launched in FY17) supported projects seek to widen public understanding— that makes it easy to access, use, and share trade through media channels—of the importance of free and and competitiveness information drawn from a large fair competition to economic growth, increased trade, number of sources. This website is designed to foster a and reasonable consumer prices. T&C’s rapid response community around this data and its potential to enhance to the post-earthquake recovery in Nepal included development decision making, project design, and media engagement in China and elsewhere to convey 64 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 65 information about safety assessments along Nepal’s highly In Nepal, communications support for a popular trekking routes. And media engagement has been part of T&C’s FIAS-supported efforts in the trade facilitation sphere, rapid-response effort to assess damage to including training and briefings for Central American journalists the country’s trekking tourism industry at a Washington, D.C., Bank Group conference during FY16. following the April 2015 earthquake The T&C newsletter as of the end of FY16 was reaching 22,037 unique subscribers. T&C also amassed 22,432 Twitter included a significant public followers, a 10 percent increase over FY15. They generated more than 2 million impressions, 3,638 retweets, and 15,792 outreach component. total engagements during the year. The Investment Climate web site, which is transitioning to a WorldBank.org platform in FY17 , drew 144,645 page views and 46,461 visitors. This was down from FY15 due to the transition to T&C’s two external web platforms, www.worldbank.org/trade and www. worldbank.org/competitiveness. The latter web page will be the new home of investment climate content, enabling it to be better integrated with other T&C materials, easier to find, easier to promote, and more visible to a larger audience. A key goal of the communications team is to make T&C’s external messaging relevant and insightful to specialists COLLABORATION, KNOWLEDGE, AND LEARNING and practitioners while keeping it accessible to general audiences. T&C senior leadership kept up a steady stream of communications in this sphere. During FY16, Senior Director Anabel Gonzalez published blog articles on competition policy advocacy, economic opportunity for women, global trade governance, and bridging the global innovation divide. Director Cecile Fruman blogged on the debate over the relative merits of FDI versus domestic investment in developing countries, the vital importance of public-private dialogue, women entrepreneurs, and making economic development zones work in Africa. Director Klaus Tilmes blogged on the WTO Trade Facilitation Agreement, the role of increased competition in creating jobs, and the importance of maximizing opportunities for small and medium enterprises in order to reach the Bank Group’s global job creation goals. These and other articles can be found on the trade and competitiveness web pages referenced above. The T&C communications team works closely with Bank Group communications officers worldwide in support of major public presentations, report roll-outs, and public engagement aspects of project work. In Nepal, for example, communications support for a rapid-response effort to assess damage to the country’s trekking tourism industry following the April 2015 earthquake included a significant public outreach component. A FIAS-supported engineering survey of structures and bridges along trekking routes showed that 83 percent of the surveyed buildings were structurally sound and that none of the major suspension bridges along the route appeared to have been affected by the quake. The assessment report was widely disseminated by the Tourism Recovery Committee (TRC) of the government and received positive media coverage, with at least 34 media mentions. As trekking bookings began to recover, the government and the tourism industry expressed appreciation for the timely support provided by T&C. (For more on the project, see pages 33–35.) Porters with heavy loads trekking up mountain ranges in Nepal. (Bigstock photo) 66 SERVICES 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 67 Key Publications Released in FY16 FIAS funding supported T&C’s development of a wide range of published resources to guide government Inclusive Global Value Chains: Policy Options in Trade and Complementary Areas for GVC Integration policy makers and practitioners (within client governments and inside the World Bank Group) in designing by Small and Medium Enterprises and Low-income Developing Countries focuses on making global value and implementing reforms. In FY15, these resources were produced primarily to disseminate research and chains more inclusive through policies that address constraints faced by smaller firms and access for low-income benchmarking data for application in the field, provide practical guidance and hands-on diagnostic tools, developing countries. and determine reform impact and gaps in analysis. All publications are available at www.worldbank.org/ publications unless otherwise indicated. Internationalizing Sub-Saharan Africa’s Education and Health Services calls for policy action in the areas of education, domestic regulation, trade policy, labor mobility, and information and communication technologies (ICT) at the national and international levels to improve trade in the two sectors in Eastern and Southern African Global and Regional Reports, Toolkits, and Guidance countries. A Step Ahead: Competition policy For Shared Prosperity and Inclusive Growth presents an analytical An Introduction to Tourism Concessioning: 14 Characteristics of Successful Programs offers a brief framework to study the effects of competition on poverty and shared prosperity, and compiles empirical overview of key messages to consider when starting work in this area for protected area managers, tourism studies presented at the first global conference on Competition Policy for Shared Prosperity and Inclusive authorities, and their advisors in the international development and non-governmental organization community. Growth, jointly held with the OECD. Investing in Private Sector Growth, Jobs, and Inclusion: FIAS FY17–21 Strategy elaborates the FIAS core Breaking Down Barriers: Unlocking Africa’s Potential through Vigorous Competition Policy, prepared by mission of helping developing countries strengthen their economies while innovating in a number of new areas the World Bank Group in partnership with the African Competition Forum, shows how competition policy can related to impact measurement, services, and themes. help African countries boost inclusive and sustainable development. COLLABORATION, KNOWLEDGE, AND LEARNING Making Global Value Chains Work for Development provides a framework, analytical tools, and policy options. Breaking Out of Enclaves: Leveraging Opportunities from Regional Integration in Africa to Promote It presents a methodology for quantifying the extent of a country’s participation in GVCs and proposes a strategic Resource-Driven Diversification looks at how regional approaches can increase the local employment and framework to guide policymakers in identifying the key objectives of GVC participation and development and in production effects of extractive resources projects. http://ccsi.columbia.edu/files/2015/03/Breaking-out-of- selecting suitable economic strategies to achieve them. Enclaves-2-17-16-web.pdf Public-Private Dialogue for City Competitiveness explores how traditional PPD approaches and techniques Connecting Green Technology Entrepreneurs: Implications for Public Program Design, based on a should be adjusted for application at the city level. series of public and private sector case studies, argues that innovation by green technology entrepreneurs in developing countries may best be fostered by “open innovation” and “technology brokering” strategies. Transforming Markets through Competition: New Developments and Recent Trends in Competition https://www.infodev.org/infodev-files/connecting-green-technology-entrepreneurs-full.pdf. Advocacy provides an assessment of new developments and recent trends in competition advocacy based on an innovative and comprehensive conceptual framework that builds on practical implementation across Competitive Cities for Jobs and Growth: What, Who, and How analyzes what makes a city competitive and jurisdictions. how more cities can become more competitive as a pathway to eliminating extreme poverty and promoting shared prosperity. Country-Specific Reports, Policy Notes, and Case Studies Dialogue for Climate Action, collaboratively drafted to reflect a community of practice involving the private sector, civil society, and the public sector, features a set of principles that will serve as good-practice guidelines Bangladesh: Toward New Sources of Competitiveness in Bangladesh: Key Insights of the Diagnostic in structuring stakeholder dialogues to inform the design and implementation of policies and initiatives to tackle Trade Integration Study lays out a path for Bangladesh to benefit fully from international demand and emerging climate change. opportunities for export-based job creation, including trade policy and institutions, logistics and infrastructure, and finance and foreign direct investment. G20 Inclusive Business Framework, endorsed by the G20 nations in November 2015, presents policy options for governments, companies, and international financial institutions in developed and Bosnia and Herzegovina: Closing the Licensing and Permit Regulatory Implementation Gap at the developing countries to promote and support inclusive business. This document was developed through Subnational Level in Bosnia and Herzegovina details how the authoring team identified the existence of a a partnership of IFC, the United Nations Development Programme, and T&C’s investment climate team. regulatory implementation gap and its causes, analyzes and describes the process of addressing the gap, details https://ifcwcm.ifc.org/wps/wcm/connect/f0784d004a9b1f2ea5f0ed9c54e94b00/Attachment+G+- the regulatory simplification process used to address the gap across jurisdictions, and distills lessons learned +G20+Inclusive+Business+Framework_Final.pdf?MOD=AJPERES during this process. Global Trade Watch: Trade Developments in 2015 reviews recent trade developments and suggests they Ethiopia: Unlocking Firm Level Productivity and Promoting More Inclusive Growth: The Role of Innovation reflect old and new cyclical factors as well as enduring structural determinants, such as the maturation of in Ethiopia presents a study designed to empirically analyze the extent of innovative activities that formal firms global value chains and the slower pace of trade liberalization. are undertaking in Ethiopia, conduct a review of the existing innovation landscape, and identify opportunities to foster innovations at the base of the pyramid. The Little Data Book on Private Sector Development 2016 provides reliable cross-country data on aspects of private sector development, including indicators on the economic and social context, the investment climate, Haiti: Haiti—Let’s Talk Competition: A Brief Review of Market Conditions presents an analysis of competition private sector investment, finance and banking, and infrastructure. conditions and market concentration in Haiti. Based on available import data and available information on economic group connections, it also presents a limited analysis of the economic groups and companies that Low-Income Developing Countries and G-20 Trade and Investment Policy, a background paper on the G-20 operate in Haiti, with a focus on highly concentrated markets. study, focuses on the role that trade and investment policies of G-20 countries play in creating an enabling environment for low-income developing countries. Kenya: Shifting Kenya’s Private Sector into Higher Gear: A Trade and Competitiveness Agenda originated with T&C’s recent stocktaking of its work in Kenya and is part of a programmatic approach that aimed to organize Implementing a Unique Business Identifier in Government: Guidance Note for Practitioners and Nine the knowledge, advisory, and convening services to address Kenya’s development challenges in the private Country Case Studies summarizes the experience to date and emerging good practices in implementing sector space. unique identifiers of legal entities in various transactions and regulatory interactions. This note includes organizational, technological, governance, and financial considerations. 68 • FIAS 2016 ANNUAL REVIEW • the FACILITY FIAS -- the for INVESTMENT FACILITY for INVESTMENT CLIMATE CLIMATE ADVISORY ADVISORY SERVICES SERVICES 69 Informal Enterprises in Kenya aims to assess the main constraints facing informal firms, identify patterns reform areas during 2012–15 following a comprehensive functional review of the Romanian Competition Council of productivity and firm dynamics, and better understand drivers for formalization. Three sector strategies for carried out by the World Bank in 2010. The article, “Transforming Romania’s competition architecture to make Kenya were published: Furniture Industry in Kenya: Situational Analysis and Strategy; Kenya Apparel and markets work, ” published in Business Digest, explains pro-competition reforms carried out through T&C technical Textile Industry: Diagnosis, Strategy, and Action Plan; Kenya Leather Industry: Diagnosis, Strategy, and assistance on competition policy. Action Plan. Unlocking Growth Potential in Kenya: Dismantling Regulatory Obstacles in Kenya, prepared by the T&C FIAS-supported competition team and published by the Competition Authority of Kenya, describes South Africa: South Africa Economic Update: Promoting Faster Growth and Poverty Alleviation through Kenya’s efforts to boost economic growth by strengthening pro-competition policies and dismantling regulatory Competition, examines the potential for competition policy— including competition law enforcement and pro- obstacles to growth. competition regulations—to spur gains in productivity, enhance competitiveness, and promote faster economic growth, all the while contributing to poverty reduction in South Africa. Kyrgyz Republic: Competitiveness of the Kyrgyz Economy in the Wake of Accession to the Eurasian Customs Union: Selected Issues and Opportunities explores the sectors that will be instrumental for positive Uruguay: Uruguay—Trade Competitiveness Diagnostic analyzes the country’s export dynamics over the Customs Union impact and competitiveness in the medium term, including an in-depth look at three high-growth period 2000–2013, benchmarking them against relevant comparator countries. sectors—agriculture, services, garments—most likely to be transformed by accession to the Customs Union and increased tariffs to countries outside the Eurasia Economic Union. Technical Research Papers and Briefs Investment Climate in the Kyrgyz Republic—Views of Foreign Investors presents an analysis of the results Competition and Poverty: How Competition Affects the Distribution of Welfare summarizes findings of a of a survey of foreign investors (those currently operating and those that have terminated their operations) literature review, showing that competition policy reforms can deliver benefits for the poorest households and to assess aspects of the investment policy and legal environment and help determine whether the current improve income distribution and a lack of competition in food markets hurts the poorest households the most regulations are investment-conducive or otherwise. (World Bank Group’s Viewpoint series, no. 350) COLLABORATION, KNOWLEDGE, AND LEARNING SmartLessons: Disrupting the Status Quo to Improve Transparency and Service Delivery: Business-to- Mind the skills gap! Regional and industry patterns in emerging economies analyzes the lack of adequate Government Feedback in the Kyrgyz Republic describes a FIAS-funded T&C and IFC initiative to support skills needed by firms to improve productivity, comparing regions and sectors (OECD Working Paper series, no. establishment of a user-friendly email-based system for soliciting and publishing feedback from businesses 329). http://www.oecd-ilibrary.org/development/mind-the-skills-gap-regional-and-industry-patterns-in- concerning government inspections with a goal of improving government response to private sector concerns. emerging-economies_5jm5hkp7v145-en;jsessionid=21uw8blr0l63h.x-oecd-live-03 Maldives: Maldives: Identifying Opportunities and Constraints to Ending Poverty and Promoting Shared Organizing Knowledge to Compete: Impacts of Capacity Building Programs on Firm Organization shows Prosperity discusses the findings of a systematic country diagnostic that aimed to identify the most critical how a capacity-building program for small and medium enterprises in Brazil impacts firm production hierarchy constraints and opportunities facing the country as it works towards promoting sustainable growth, reducing and discusses how changes in firms’ organization may interact with firms’ export performance. The paper was a poverty, and boosting shared prosperity. winner in the 2015 Research Academy Competition for best new research across the Bank Group. http://lacer.lacea.org/handle/123456789/53141 Moldova: A series of publications discuss the findings of the Moldova Trade Study, which was designed to contribute to a better understanding of the factors and challenges underlying Moldova’s foreign trade Small Business Tax Regimes: What Surveys Reveal about Tax System Use and Abuse presents survey performance and to identify policy interventions that can enhance the competitiveness of Moldova’s evidence from six developing countries suggesting that small business taxation based on simplified bookkeeping exporting firms and the value added of their exports. In addition to the Moldova Trade Study: Overview, or turnover is sometimes perceived as too complex for microenterprises in countries with high illiteracy levels; the series includes Note 1: Analysis of Trade Competitiveness; Note 2: Is the DCFTA Good for Moldova? and very simple, fixed tax regimes not requiring any books or records tend to be overly popular but prone to Analysis of Moldova’s Trade Options Using a Dynamic Computable General Equilibrium Model; Note 3: abuse (World Bank Group’s Viewpoint series, no. 349). Competitiveness in Moldova’s Agricultural Sector; Note 4: The Performance of Free Economic Zones in Moldova. The Security and Trade Facilitation Nexus: Options for South Asian Countries outlines key strategic reforms considered fundamental to achieving improved levels of trade facilitation and security in South Asian countries Nepal: From Evidence to Policy: Supporting Nepal’s Trade Integration Strategy attempts to determine (World Bank Group’s SARConnect series, issue 4). the extent to which obstacles resulting from slow growth and job creation that hinder the country’s export competitiveness can be alleviated by policy decisions, as well as exactly which policy decisions should be prioritized. A series of complementary policy notes support Nepal’s National Trade and Integration Strategy World Bank Policy Research Working Paper Series through an evidence-based approach: Trade Imbalances and Remittances: Ensuring Macro Stability; Building a Competitive City through Innovation and Global Knowledge: The Case of Sino-Singapore Nepal’s Integration into Value Chains: Stylized Facts and Policy Options; Diversifying Nepal’s Economy Suzhou Industrial Park examines the success factors and key lessons of one of the great special economic through a Dynamic Services Sector; Assessment of the Impact of the Cash Incentive to Promote Export zone success stories in China, which can be useful for other developing countries. Diversification in Nepal; Designing Institutions to Promote Trade and Investment in Nepal. China’s Slowdown and Rebalancing: Potential Growth and Poverty Impacts on Sub-Saharan Africa Peru: Productividad, Competitividad, y Diversificación Productiva argues that increases in Peru’s productivity explores the economic impacts of two related tracks of China’s expected transformation—economic slowdown levels will become increasingly important in a less favorable external environment. To increase productivity, more and rebalancing away from investment toward consumption—and estimates the spillovers for the rest of the efficient companies must have greater capacity and greater incentives to grow, absorbing workers and resources world, with a special focus on Sub-Saharan African countries. currently used with low productivity. The Core-Competency Model of Multi-Product Exporters reviews the implications of the ‘core-competence’ Poland: Toward an Innovative Poland: The Entrepreneurial Discovery Process and Business Needs model of multi-product firms and what firms could do to export more of their core products to foreign markets. Analysis presents a new approach to innovation policy-making designed and tested to help Polish authorities shift from a top-down to a bottom-up innovation policy approach that engages the private sector, science, and Deep Trade Agreements and Vertical FDI: The Devil Is in the Details analyzes how deep trade agreements public administration. affect the international organization of production, finding evidence that the depth of trade agreements is correlated with vertical foreign direct investment, and that this is driven by the provisions that improve the Romania: Building Landmarks, Smoothing Out Markets: An Enhanced Competition Framework in contractibility of inputs provided by suppliers, such as regulatory provisions. Romania presents the results of the World Bank’s Advisory Services designed to provide solutions in key 70 2016 ANNUAL REVIEW > 2013 • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 71 Sharing Best Practices, Seizing Opportunities: Trade policy and facilitation FY16 Event Highlights Two panel discussions hosted at the Peterson Institute of International Economics featured commentary on trends Depreciations without Exports? Global Value Chains and the Exchange Rate Elasticity of Exports analyzes The dissemination of knowledge acquired through in global trade policy and negotiations. At “The New how the exchange rate elasticity of exports has changed over time and across countries and sectors and how the research studies, field experiences, partnerships, and Global Trade Agenda”(November 2, 2015 in Washington, formation of global value chains has affected this relationship. collaboration with technical experts was a key priority D.C.) former WTO Director-General Pascal Lamy, former in FY16, fully embraced by T&C staff as reflected in World Bank President Robert B. Zoellick, and T&C Senior Finding a Path to Formalization in Benin: Early Results after the Introduction of the Entreprenant Legal numerous knowledge-sharing and peer-to-peer events Status presents the short-term results of a randomized impact evaluation testing three different versions of Director Anabel Gonzalez presented recent work on the that attracted increased numbers of participants. FIAS Trans-Pacific Partnership (TPP), the Transatlantic Trade the entreprenant status on business registration decisions, each version including incremental incentives to funding supported World Bank Group staff in organizing registration. and Investment Partnership (TTIP), and the prospects conferences, workshops, and seminars which brought of multilateral trade negotiations. A lively and topical together diverse audiences to share experiences and discussion of “The Global Value Chain Revolution and ICT Use, Competitive Pressures and Firm Performance in Mexico, a study which employs a novel firm- lessons, explain new approaches, build expertise, Trade Policy” (June 14, 2016 in Washington, D.C.) featured level data set on ICT use for Mexico, presents a set of stylized facts on the relation between ICT use, firm and delve into the issues and complexities of reform an analysis by Professor Richard Baldwin of the Graduate performance, and competition, finding that firms facing higher competition appear to have more incentives to implementation. Many of these events were characterized Institute in Geneva, and perspectives from Anabel increase their ICT use. by their substantive technical content and practical Gonzalez and J. Bradford Jensen, a senior fellow at the The Impact of Business Support Services for Small and Medium Enterprises on Firm Performance in applications. Several FY16 events are highlighted here, Peterson Institute. Low and Middle-Income Countries: A Meta-Analysis systematically reviews and summarizes 40 rigorous organized under key areas of focus. evaluations of small and medium enterprise support services in low- and middle-income countries, and it The P2P learning conference, “Trade Facilitation: The presents evidence to help inform policy debates. Africa’s growth and market potential Journey towards Implementing an Authorized Economic Operators Program” (June 21–22, 2016 in Batumi, Several events focused on Africa’s challenges and COLLABORATION, KNOWLEDGE, AND LEARNING The Impact of Investment Policy in a Changing Global Economy: A Review of the Literature presents an Georgia), facilitated knowledge exchange among opportunities, including two that targeted African countries implementing the Authorized Operator Program overview of the literature on the impact of foreign direct investment. diaspora communities. An all-day forum, “Sierra Leone (AOP) contained within the WTO Trade Facilitation Market Integration and Poverty: Evidence from South Sudan examines the effects of market integration on Diaspora Investment and Trade Study” (September 30, Agreement. The conference brought together an audience household consumption using data on seven food and two energy markets across South Sudan. 2015 in Washington, D.C.), presented key findings from a of representatives of national customs administrations, survey of more than 600 Sierra Leoneans in the diaspora. veterinary and phytosanitary agencies, and national Measuring Firm-Level Innovation Using Short Questionnaires: Evidence from an Experiment contributes More than 150 participants, representing donors, financial ministries of trade and the economy to discuss how to the literature by presenting the results of an experiment aiming to identify the survey instrument that better institutions, business entrepreneurs, and other key countries can move from implementation of an AOP to captures firm-level innovation in developing countries. stakeholders, explored actionable areas and discussed full implementation of an Authorized Economic Operator successful cases in engaging diaspora communities Program (AEO) consistent with the World Customs MSME Taxation in Transition Economies: Country Experience on the Costs and Benefits of Introducing for development. The African Diaspora Business Organization’s Framework on Safe and Secure Trade. Special Tax Regimes analyzes the design of simplified small business tax regimes in Eastern Europe and Central Dialogue, “Convening Stakeholders for Entrepreneurship, Asia and the impact of such regimes on small business tax compliance. Investments, SME and Skills Development in Africa” Two workshops, both in Guatemala, were organized (May 3, 2016 in Washington, D.C.), attracted 417 around regional projects in Central America: “Validation Opportunity versus Necessity: Understanding the Heterogeneity of Female Micro-Entrepreneurs exploits a participants (including more than 200 online) to discuss of trade facilitation support recommendations to align unique data set covering a wide array of characteristics for a large sample of female entrepreneurs in Mexico to opportunities presented by Africa’s growth, showcase the with the TFA and the discussion of technical assistance provide evidence on differences between entrepreneurs that voluntarily choose to start a business because they work of donors, investors, and entrepreneurs, facilitate priorities in the region” (September 29–30, 2015) and are able to identify and act on a good business opportunity and those forced to become entrepreneurs because partnerships among the continent’s diaspora, and envision “Scenarios of the architecture of the regional system they lack other alternatives. paths toward sustainable, inclusive growth that reaches all to facilitate sanitary registration and regional reforms” sectors of society. (October 1, 2015). More than 90 representatives from the Poverty and Shared Prosperity Implications of Deep Integration in Eastern and Southern Africa decomposes trade costs into trade facilitation, non-tariff barriers, and the costs of business services, and it public and private sectors in all Central American countries OHADA Day, “Incentivizing Investors to Enter the Dynamic participated, including some ministers and vice ministers assesses the poverty and shared prosperity impacts of deep integration to reduce these trade costs. African Markets” (September 17 , 2015 in Washington, of trade, and 15 Central American media channels covered D.C.), showcased examples of regional integration the workshops. Rwanda’s New Companies: An Overview of Registrations, Taxes, Employment, and Exports sheds light on through legal harmonization in Africa and attracted the effects of the introduction of the one-stop shop on company registrations, taxes, employment, and exports nearly 100 participants including investors, lawyers, between 2008 and 2012, finding sizable benefits to Rwanda’s efforts. ambassadors of OHADA countries accredited in the Attracting and retaining investment United States, and Bank Group staff. The second in a series of three technical workshops on Journal Articles and Publication Chapters tax incentives analysis, “Overview of Classification and T&C continued to provide advisory on promoting Estimation of Associated Costs” (September 22–25, 2015 “Connecting the dots between international trade and investment regulation, investment climate reform competition through tools developed under the FIAS- in St. Lucia), was organized jointly with the Ministry of and development: The World Bank’s investment reform map, ” a chapter in Current Issues in Asia Pacific supported Global Competition Policy Program across Finance. The discussion focused on developing detailed Foreign Direct Investment (Australian APEC Study Centre). http://mams.rmit.edu.au/cwgz1keqt2r8.pdf several countries including Ethiopia, Kenya, Mali, and country-specific models for tax expenditure analysis for an “Emerging Investment Rules in Mega Trading Blocs: Implications for Developing Countries, ” an article in Zambia. At a training workshop (December 10, 2015 in audience of specialists at finance ministries and revenue Commonwealth Trade Hot Topics (The Commonwealth iLibrary). http://www.oecd-ilibrary.org/commonwealth/ Nairobi, Kenya), 22 representatives from 10 agencies, departments. trade/emerging-investment-rules-in-mega-trading-blocs_5js6b23l2g9r-en three regional economic communities, and two consumer protection organizations in Africa received training on As part of a week of investment policy and promotion “Poverty Reduction through Regional Integration: Technical Measures to Trade in Central America, ” an analytical and operational tools to identify and address (IPP) learning events, T&C hosted a peer-to-peer event, article for the Journal of Economic Integration. http://econpapers.repec.org/article/risintegr/0672.htm anti-competitive provisions in regulations and enhance the “Investment Policy and Promotion Reforms in Practice: effectiveness of anti-cartel policy. Participants benefited Lessons from the Field and Bilateral Consultations from peer-to-peer learning from representatives of the with Clients and Partners” (October 15–16, 2015, in Israel, Colombia, and Pakistan competition agencies. Vienna, Austria) for government officials at investment 72 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 73 authorities. T&C organized an IPP learning conference that 2016, in Vienna, Austria). This global event convened highlighted actions countries can undertake to leverage governments, academics, and the private sector to discuss FDI in emerging markets in Europe and Central Asia and the conclusion of the Paris Agreement and its implications Africa (June 14 – 15, 2016, in Batumi, Georgia). Some for growth and competitiveness. A set of stakeholder 60 high-level representatives of ministries, agencies, guidelines, “Dialogue for Climate Action, ” was launched and the private sector attended, representing 16 nations: (see publication listing, p. 68). A two-day workshop Albania, Armenia, Austria, Azerbaijan, Bosnia and on “Energy Efficiency Standards and Labeling Program Herzegovina, Côte d’Ivoire, Georgia, Guinea, Kosovo, Design and Implementation” (May 26–27 , 2016, in Vienna, the Kyrgyz Republic, Mali, Moldova, Russia, Tajikistan, Austria) outlined key programmatic and analytical steps Turkmenistan, and Ukraine. to formulate and implement a successful program. The workshop included a comprehensive overview on the A T&C team conducted a training workshop on the use of analytical tools and case studies on the standards- “Fundamentals of Investment Policy and Promotion” setting process for residential, commercial, and industrial over a two-week period (March 2–16, 2016, in Ankara, appliances and equipment. Turkey), attracting more than 160 investment experts from 26 regional development agencies, 81 investment support offices and representatives from the Ministry of Business environment reform Development, Investment Support and Promotion Agency, A peer-to-peer learning event about Ethiopia, “Business and the Coordination Council for the Improvement of Environment & Regulatory Governance—Connecting Investment Environment. The activities took place under the Dots” (November 18–20, 2015, in Addis Ababa, the Regional Investment Climate Assessment project, Ethiopia) covered themes such as better diagnostics for which aims to reduce regional disparities in Turkey and better solutions, linking business environment reforms to contribute to its sustainable development by improving the institutional and governance reforms, regulatory delivery, investment climate at both the regional and national levels. data, and transparency. The agenda included separate meetings to plan concrete next steps between country Representatives from 23 states in Mexico gathered for representatives and staff from the Bank Group and the a workshop on “New Policy Trends to Attract, Retain and United Kingdom’s Better Regulation Delivery Office. Maximize Investment Benefits at the Subnational Level” (April 28, 2016, in Puebla, Mexico). Co-organized by the A knowledge-sharing and capacity-building event, “A Bank Group, Mexico’s Ministry of Economy, the National Technical Workshop on International Good Practices in Conference of Governors, and the Mexican Association Improving the Business Environment” (December 7–10, Shepherd in rural Morocco. (Photo: Scott Wallace/World Bank) of Secretaries of Economic Development, the forum 2015, in Rabat, Morocco), attracted more than 40 key introduced Mexican authorities to the latest trends in good public and private sector representatives with a stake in practices for attracting, retaining, and linking cross-border investment climate reforms. Participants from Malaysia, Industrial Development Organization, the International The Business Environment Forum (May 17–19, 2016, and domestic investment to the local economy. Montenegro, Morocco, Turkey, and the United Organization for Standardization, the United Kingdom’s in Washington, D.C.), brought together over 120 of Kingdom discussed key constraints to entrepreneurship, National Measurement and Regulation Office, and the BE Community of Practice members and other T&C teams conducted a high-level workshop, “Assisting private sector growth, and investment. The conference, Germany’s national metrology institute, Physikalisch colleagues. The forum featured guest speakers and Saudi Arabia during Times of Change: Working Towards “Impact of Business Regulation Reforms in Fragile and Technische Bundesanstalt (PTB), delved into the more than 50 speakers from across the Bank Group. The Economic Diversification” (May 15, 2016, in Riyadh, Saudi Post-Conflict Countries” (February 3–4, 2016, in Abidjan, fundamentals of NQI reforms and explored how quality program covered the fundamentals as well as cutting- Arabia) and a three-day, capacity-building program on Côte d’Ivoire), drew 86 participants from 11 countries upgrading is linked to innovation, exports, productivity, edge developments in business environment reforms, investment policy and promotion, for 80 Saudi government (Bosnia and Herzegovina, Côte d’Ivoire, Kosovo, and competitiveness. NQI reform case studies—from featuring sessions with experts on topics ranging from representatives, including leaders of the Saudi Arabia Georgia, Guinea, Sierra Leone, Liberia, Lithuania, Bank Group programs in Belarus, the Kyrgyz Republic, and drones, Uber, and high-growth businesses to more General Investment Authority. The workshop culminated a Mali, Mongolia, and Tajikistan) to share experiences and Peru—inspired discussions on international best practices, traditional topics such as informality. The sessions were six-month, intensive advisory effort as the Kingdom ramps lessons learned in implementing regulatory reforms. challenges, lessons learned, and ingredients for success. organized across three main themes: informality, entry, up efforts to adopt bespoke reforms to encourage FDI-led and operations; growth and market access; and organizing economic diversification. At the APEC Peru Meetings (February 26–27 , 2016, A workshop (April 25–29, 2016, in Washington, D.C.) government to improve service delivery. in Lima, Peru), T&C teams shared their expertise and focused on pioneering investment climate work to develop moderated interactive peer-to-peer workshop sessions Green growth and competitiveness on implementing one-stop shops in the areas of business a new approach for measuring and improving the quality Building competitive sectors of Morocco’s public services to firms. In partnership “Eco-Industrial Parks and Climate Efficient Industries” registration, construction permitting, and trade facilitation. Two conferences focused on the priority sectors of with the Commercial Law Development Program of the (October 26–28, 2015, in Seoul, Republic of Korea), Participants, including numerous delegations (Brunei tourism and agribusiness. “The World Bank Group U.S. Department of Commerce, T&C organized a training a peer-to-peer event co-hosted by T&C and the Korea Darussalam; China; Chile; Hong Kong SAR, China; Tourism Forum 2015: Driving Development through workshop for its partner in developing the approach, Industrial Complex Corporation shared global knowledge Indonesia; Malaysia; Mexico; Papua New Guinea; Peru; Tourism” (December 8–9, 2015, in Washington, D.C.) the Moroccan National Committee for the Business and lessons from different country experiences using the Philippines; Taiwan, China; Thailand; and Vietnam) brought together global thought leaders and proven Environment. The agenda featured sessions, led by T&C the eco-industrial park and low-carbon zone concepts to discussed best practices, challenges, lessons learned, and achievers to identify new ways to channel growth while technical experts, on how to identify key constraints to promote competitiveness. Participants included policy future reform actions. addressing the challenges and opportunities of developing competitiveness, develop a strong results measurement makers, zone authority representatives and developers, the tourism sector in emerging economies. The “Ukraine system, and ensure that reforms have traction on the and practitioners. T&C’s National Quality Infrastructure (NQI) working Agribusiness Conference” (June 21, 2016, in Washington, ground. Other sessions were led by representatives from group organized a workshop (March 29, 2016, in D.C.) discussed Ukraine’s potential as an agribusiness The Bank Group, in partnership with the Austrian Ministry the U.S. Office of Management and Budget, the Small Washington, D.C.) to officially launch the dialogue around exporter. The conference targeted Ukrainian government of Finance and several private sector stakeholders, Business Administration, the American Bar Association, the Bank Group’s NQI offering and future interventions. officials, international donors, agribusinesses, Bank Group hosted the “Dialogue for Climate Action” (May 24–25, and the Global Federation of Competitiveness Councils. High-level representatives from the United Nations government clients, and investors. 74 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 75 6 FINANCIAL RESULTS AND RESOURCE USE FINANCIAL RESULTS FIAS-supported activities covered in the FIAS 2016 Annual Review were co-financed via a set of FIAS trust funds managed by the World Bank Group’s Trade & Competitiveness Global Practice AND RESOURCE USE (T&C). Beginning July 1, 2014, the start of FY15, FIAS was fully embedded in T&C as part of the overall World Bank Group reorganization. In addition to FIAS trust funds, T&C manages other World Bank and IFC global trust-funds such as infoDev and the Competitive Industries and Innovation Program, as well as a number of regional trust funds. The Trade Facilitation Support Program is an initiative launched under the FIAS FY12–16 cycle (TFSP will continue in the FY17–21 cycle under its Strong donor support continues to own dedicated funding stream, separate from FIAS). T&C also manages funds received from IFC characterize FIAS trust fund activities for operational and administrative tasks directly related to the delivery of the FIAS program. The administered by T&C and bodes well financial results reported in this section cover the funds managed by T&C under the FIAS trust fund for the next five-year strategy cycle. structure as well as supplemental funds earmarked for the implementation of the FIAS strategy. In administering the FIAS program, T&C followed IFC’s ● Luxembourg (C) standard accounting policies and procedures, as noted ● Multilateral Investment Guarantee Agency (C) below.14 FIAS financial reports use cash-based reporting in alignment with the quarterly financial reports on IFC’s ● The Netherlands donor-funded operations. ● Norway (C) Spain Funding ● ● Sweden (C) Since the start of the FY12–16 strategy cycle, FIAS-related contributions were received from the following donors, ● Switzerland (C) World Bank Group entities, and clients and are gratefully ● Trademark East Africa acknowledged: ● United Kingdom (C) n Direct contributions to FIAS trust funds:* ● United States ● Australia Most donors who supported FIAS during the FY08–11 cycle ● Austria (C) also provided consent to roll over the unused portions (fund ● Canada (C) balances) of their FY08–11 contributions to the FY12–16 strategy cycle. ● European Union ● France n Client contributions: ● Bill & Melinda Gates Foundation Client contributions were received by IFC regions for IFC region-managed projects receiving cofinancing from FIAS ● International Bank for Reconstruction and trust funds. Such client contributions are accounted for at the Development (C) regional program level. $175.1 $40.9 $32 ● International Finance Corporation (C) Core and Programmatic Funding • Ireland (C) In FY16, FIAS donors, clients, and the World Bank Group ● Japan contributed a total of $31.3 million (including trust fund ● Ewing Marion Kauffman Foundation administration fees of $1.1million) to the various FIAS trust Republic of Korea funds, supporting the implementation of a broad-based million million million ● investment climate reform program under the FIAS umbrella total contributions FY12–16, in FIAS investment climate per year in FIAS exceeding $155 million target project expenditures for FY16; expenditures over FY12–16 14 Annual contributions from IFC 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 Parent Trust Fund account, as terms and conditions allow. Contributions from IFC in the form of allocations from the Funding Mechanism for Technical Assistance and Advisory Services (FMTAAS) are treated as an additional source of for FY12–16 cycle up significantly from FY15 cycle, in line with pre-cycle funding for FIAS-related activities. Contributions received from IFC in the form of regular administrative budget for Advisory Services mainstreamed positions are treated as separate from the trust fund contributions. The total of IFC’s contribution to the FIAS Core Trust Fund and its contribution to FIAS in the form of regular administrative budget reflect IFC’s core contribution in line with the funding target of $31 million per year targets in the FIAS FY12–16 strategy. * Donors contributing some or all of their funding in the form of core contributions are marked with “C”. 76 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 77 (see details in Tables 1 and 2, pp. 80-82). An additional $3.7 Table 2, Project-Specific Donor Contributions, p. 82). The more in line with strategic spending targets (on average its record of success, strong partnership with donors, and million was made available by IFC in the form of regular project-specific contributions from IFC supported a range $31 million per year). This goal has been achieved: At the commitment to evolving and adjusting its offering. FIAS administrative budget to cover salaries and related costs of global knowledge management and product design close of the FIAS funding cycle, FIAS expenditures reached remained relevant through its first 30 years as its mandate of a small number of staff working mostly on FIAS-related and development initiatives implemented under the FIAS $160 million, $148.5 million in trust fund expenditures and evolved from a narrow focus on FDI-related policy advice projects. Total FY16 contributions were below the FY16 umbrella. In addition to IFC’s FMTAAS allocation, T&C $11.5 million incurred against annual administrative budgets toward becoming an advisory facility that provides a funding target of $36.2 million (as set in the FY12–16 uses FIAS core funds to supplement these global product provided by IFC, an average of approximately $32 million comprehensive range of support on business environment strategy) mainly due to the reduced need for fresh funding activities. per year over the life of the cycle. reform and private sector development. at the closure of the strategy cycle and on fundraising for the new cycle. Despite lower FY16 mobilization figures, The potential to generate significant client contributions In FY16, project-related expenditures (both direct Throughout the FY12–16 strategy cycle and on into the FIAS total cycle contributions reached $175.1 million for remains modest due to the high concentration of FIAS and indirect) accounted for 97 percent of total FIAS FY17–21 cycle, FIAS development partners are part of an the cycle, far exceeding the $155 million fundraising target activities in International Development Association (IDA) expenditures with the remaining 3 percent for general important journey supporting and shaping a fast-paced and for the FY12–16 FIAS strategy cycle. The FIAS FY17–21 countries as well as countries in fragile and conflict-affected and administration including rent, communications, evolving agenda. In FY12–16, FIAS welcomed the following strategy document, published before the end of FY16, situations (FCS). In the case of FIAS-cofinanced projects information technology, equipment, and other non-overhead new donors: the Bill and Melinda Gates Foundation, estimated a $180 million fundraising results for the cycle managed by IFC regional units, client contributions typically costs such as back-office support staff (see Table 4, Canada, the Korea Energy Agency, and the Norwegian now completed. are accounted for under the regional programs, and are Expenditures by Advisory Services Activity, p. 83). With the Agency for Development Cooperation. The expansion of the therefore not included as part of the financial results significant increase in expenditures overall, direct project FIAS donor base confirms the overall facility’s success and World Bank Group core contributions totaled $3.6 million reported in the FIAS Annual Review. implementation expenditures increased 14 percent in FY16. robust endorsement from the donor community. in FY16, including $2.0 million from IFC, and $1.6 million Overall, project-related expenditures accounted for 95 from the World Bank. It should be noted that IFC’s total Other contributions from IFC, received in the form of percent of total FIAS cycle expenditures with the remaining In the cycle just ended, FIAS played an instrumental contribution to FIAS in FY16 was approximately $5.7 million; FMTAAS allocations, amounted to $0.5 million in FY16 5 percent for general administration. role supporting the launch of a new initiative, the Trade $2.0 million as a direct contribution to the FIAS core trust for administrative activities indirectly related to projects, Facilitation Support Program (TFSP) to help countries fund and $3.7 million as administrative budget to cover including initial product design and development, portfolio Administration fees are collected by IFC to cover trust reform their trade facilitation practices in a manner FINANCIAL RESULTS AND RESOURCE USE sustaining costs associated with the management of FIAS management, monitoring and evaluation, and knowledge fund administration costs and are deducted from donor consistent with the main components of the World Trade and IFC’s advisory services global business. The inclusion of sharing associated with the global portfolio implemented contributions at the time of receipt. In FY16, IFC collected Organization’s Trade Facilitation Agreement. Building IFC’s administrative budget, brings the World Bank Group’s under the FIAS umbrella. trust fund administration fees of $1.1 million from FIAS on earlier FIAS-funded work in the trade logistics area, core total FY16 contribution to FIAS to $7 .3 million. donor contributions.15 this partnership has gained momentum and received Contributions outside FIAS’ Regular Financial Structure strong support from seven development partners Core contributions received from donors amounted to $7 .1 At the end of FY16 fund balances in the various FIAS (Australia, Canada, the European Union, Norway, Sweden, Indirect contributions for FIAS-related advisory activities trust funds totaled $37 .2 million,16 including $10.8 million million in FY16. While this is below FY15 core contributions Switzerland, and the United Kingdom). The TFSP trust fund were made available to T&C via non-FIAS specific of core funds and about $26.4 million of program- and of $7 .9 million, contributions received from core donors now stands on its own, independent of FIAS. funding mechanisms (see Table 3, Other Funding, p. 82). project-specific funds received under multi-year donor over the life of the FY12–16 strategy cycle (approximately Administrative budget ($3.7 million) was provided by IFC to $47 .5 million) far exceeded the $26 million fundraising agreements. While this amount is relatively large, it is In FY16, donors were actively involved in the drafting of the cover the staff costs of mainstreamed Advisory Services significantly lower than the fund balances in the various strategy for the FY17–21 cycle and subsequently endorsed target outlined in the FIAS FY12–16 strategy. This positions associated with the management of FIAS and significant increase in FIAS core donor support provided FIAS trust funds ($47 .8 million) reported at the end of FY15. it at the November 2015 donor meeting. The strong IFC’s advisory services global business. As noted above, After two years of lower-than-expected project spending, financial support from donors in FY12–16 was used as a the needed flexibility to allocate FIAS funds to support the IFC’s total FY16 contribution to FIAS was $5.7 million, implementation of FIAS strategic priorities in the regions FY16 saw a concerted effort by T&C management to baseline for setting the FY17–21 cycle fundraising target including $2.0 million as direct contribution to the FIAS core maximize the use of donor funds in the last year of the of $200 million. T&C management appreciates that many and design and develop global knowledge products. Overall, trust fund and $3.7 million as regular administrative budget. the total amount of core funding received in FY16 from the FIAS strategy cycle. This, along with the consolidation FIAS donors embrace the core funding model and avoid World Bank Group and donors amounted to $14.4 million, of the Bank Group restructuring, resulted in a significant earmarking funds for specific project activities, an approach In-Kind Support Via Staff Exchanges and Secondments increase in expenditures in FY16 (63 percent over FY15) and that provides the necessary flexibility for FIAS to support consisting of $7 .1 million in contributions from donors and $7.3 million from the World Bank Group. As noted above, Throughout the FY12–16 strategy cycle the FIAS program a corresponding reduction in the trust fund balance that had innovative approaches and products under development the World Bank Group’s core contribution includes $3.7 has benefited from in-kind resources that several donors accumulated over the life of the cycle. In line with prudent and respond to changing client demands. T&C is looking at million of IFC regular administrative budget. have made available in the form of secondments and staff financial management principles, T&C strategically manages ways to streamline its trust fund architecture in a way that exchanges. In FY16, a senior staff member from the Korean FIAS resources with a view to successfully transition into ensures that donor priorities continue to be met. Programmatic contributions from donors, made available Ministry of Trade, Investment, and Energy was seconded the new FIAS FY17–21 strategy cycle with sufficient carry- through thematic and regional FIAS Trust Funds, totaled to work on FIAS-funded activities. Such staff exchanges over funds to ensure FIAS operations going forward. FIAS will continue to be a trusted participant in the approximately $12.0 million in FY16 compared to $16.5 and secondments offer an attractive way for FIAS partners investment climate reform space, and together with its million in FY15. This decline in programmatic contributions to be directly involved in the program and establish direct FY12–16 Cycle: Summing Up the T&C Partnership with Donors partners, will substantially contribute to achieving the World from donors in the last year of the strategy cycle is not connections between their respective private sector Bank Group’s Twin Goals, the Sustainable Development development programs and FIAS. The significant fundraising results and donor commitment Goals, and the Financing for Development agenda. unprecedented, particularly as large programs such as to support investment climate reforms demonstrate the tax and trade were prepared to be transferred to other development partners’ strong and continuing interest in implementing Global Practices. Use of Funds and Fund Balance the FIAS agenda. The support also represents a vote of In FY16, FIAS trust fund expenditures for investment confidence in T&C, a reliable partner of choice for growth- Project-Specific Funding climate reform activities reached $40.9 million, a significant oriented strategies at the subnational, national, regional, In FY16, project-specific contributions from donor increase in expenditures (approximately 63 percent) from and global levels. FIAS turned 30 in 2015 and celebrated partners and IFC amounted to approximately $8.1 FY15 expenditures of $25.0 million (see Table 1, Sources million, including $6.0 million from donor partners and and Uses of Funds, p. 80). This increase is due to a $2.1 million from project-specific allocations from the conscious effort on the part of T&C Management to use Funding Mechanism for Technical Assistance and donor funds to the fullest extent possible to close the FIAS 15 FIAS trust funds are subject to the standard IFC trust fund administration fee of 5 percent. Trust fund administration fees collected by IFC are included in Table 1, Sources of Funds. Advisory Services (FMTAAS) provided by IFC (see FY12–16 funding cycle and bring overall cycle spending 16 FIAS trust fund cash balances less outstanding consultant commitments. 78 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 79 Table 1: Sources and Uses of Fundsa – In US$ Thousands Table 1: Sources and Uses of Fundsa – In US$ Thousands (continued) FY12 FY13 FY14 FY15 FY16 FY12–16 FY12 FY13 FY14 FY15 FY16 FY12–16 SOURCES OF FUNDS TOTAL WBG AND DONOR CONTRIBUTIONS 32,255 26,989 50,201 33,587 31,260 174,292 WORLD BANK GROUP CORE CONTRIBUTIONS CLIENT CONTRIBUTIONS 484 90 75 50 - 699 IFCb 2,863 2,800 2,200 2,000 2,000 11,863 TOTAL RECEIPTS 32,739 27,079 50,276 33,637 31,260 174,991 IBRD 1,600 1,600 1,600 1,600 1,600 8,000 Trust Fund Administrative Feesf 1,122 1,021 2,507 1,421 1,080 7,151 MIGA 2,500 2,400 1,500 - - 6,400 TOTAL (NET) RECEIPTS 31,617 26,058 47,769 32,216 30,180 167,840 Subtotal World Bank Group Core Contributions 6,963 6,800 5,300 3,600 3,600 26,263 WORLD BANK GROUP PROJECT-SPECIFIC AND OTHER CONTRIBUTIONS USES OF FUNDSg IFC IC Business Line - Project-Specific 2,968 3,084 1,759 - 2,128 9,939 STAFF COSTS IFC IC Business Line - Administration 934 670 558 - - 2,162 Staff 12,036 14,934 13,512 11,976 18,205 70,663 IFC AS - Other Contributions - Business Development - - - 478 - 478 Consultants and Temporaries 6,570 5,939 6,807 7,186 14,260 40,762 IFC AS - Other Contributions - Administration - - - 449 521 970 Total Staff Costs 18,606 20,873 20,319 19,162 32,465 111,425 Subtotal World Bank Group Contributions 10,865 10,554 7,617 4,527 6,249 39,812 TRAVEL CORE DONOR CONTRIBUTIONS Total Travel 5,618 5,893 3,477 4,176 6,360 25,524 Australiac - - - - - - INDIRECT COSTS Austria 708 621 660 667 549 3,205 Office Occupancy 102 274 119 105 97 697 Canada - 985 16,392 - - 17,377 Office Equipment 84 114 321 559 745 1,823 Francec - - - - - - Other Operating Costs 635 711 817 539 556 3,258 Ireland 205 186 428 199 168 1,186 Other Costs 1,634 2,491 530 470 716 5,841 Luxembourgc - 1,033 548 - 669 2,250 Total Indirect Costs 2,455 3,590 1,786 1,673 2,114 11,618 Netherlands (Global Program)d 1,870 750 - - - 2,620 TOTAL USES OF FUNDS 26,679 30,356 25,583 25,011 40,939 148,568 Norway - - - 3,843 - 3,843 Sweden 1,448 1,494 1,528 1,389 1,204 7,063 a.  The FIAS Annual Review is prepared as a reporting tool for FIAS donors and management, utilizing management accounting principles. FINANCIAL RESULTS AND RESOURCE USE b.  IFC contributions during the FY12–16 strategy cycle include direct contributions to the FIAS core trust fund ($2.9 million in FY12, $2.8 million in FY13, $2.2 million in FY14 and $2.0 Switzerland 400 300 300 300 200 1,500 million in FY15 and FY16), and IFC Advisory Services administrative budget ($1.2 million each in FY12 and FY13, $2.3 million in FY14, $3.1 million in FY15 and $3.7 million in FY16) to United Kingdom 1,099 163 1,385 1,474 4,351 8,472 cover staff costs of a number of mainstreamed Advisory Services (AS) positions related to FIAS. As a result, total IFC core contributions to FIAS amounted to $4.1 million in FY12, $4.0 Subtotal Core Donor Contributions 5,730 5,532 21,241 7,872 7,141 47,516 million in FY13, $4.5 million in FY14, $5.1 million in FY15 and $5.7 million in FY16. Total IFC contribution to FIAS FY12-16 strategy cycle is $23.4 million. While Australia and France did not make fresh core contributions to FIAS, they provided consent to roll over their remaining shares in core funding from the FY08-11 cycle to the new c.  PROGRAMMATIC DONOR CONTRIBUTIONS FIAS cycle that started in FY12. Luxembourg signed a new Agreement with IFC in September 2012 to contribute core and other funding; Luxembourg contribution for FY12 and FY13 were Australia (Investment Policy and Promotion) - - - - 1,449 1,449 received and recorded in FY13. Australia (Trade Facilitation) - - - 1,745 1,472 3,217 d.  Netherlands core contributions are earmarked for activities in IDA countries. e.  For details of FY16 project specific contributions, see Table 2. Austria (IC Cooperation Program) 2,010 1,841 2,036 3,843 1,638 11,368 Administration fees collected by IFC to cover cost of trust fund administration. f.  Canada (Trade Facilitation) - - 1,821 - - 1,821 g.  Uses of Funds table does not include the use of regular administrative budget received from IFC to cover the costs of Advisory Services positions related to FIAS; $3.7 million in FY16; EU (ECOWAS Trade Logistics) - - 2,423 - - 2,423 $3.1 million in FY15; $2.3 million in FY14 and $1.2 million in both FY12 and FY13 (see note b). EU (ECOWAS Investment Policy) - - 5,330 - - 5,330 EU (Trade Facilitation) - - - - 4,338 4,338 Ireland (Africa) 615 559 601 597 505 2,877 Korea (Industry) - - - 125 - 125 Korea (Trade Logistics) - 200 350 - - 550 Luxembourg (Crisis Response) - - - - - - Luxembourg (Tax Transparency) - 646 343 - - 989 Netherlands (Investing Across Borders) 200 - - - - 200 Netherlands (Tax Transparency) 300 - - - - 300 Norway (Trade Logistics) 500 500 - - - 1,000 Norway (Trade Facilitation) - - - 5,504 - 5,504 Switzerland (Industry) 600 400 400 300 300 2,000 Switzerland (Secured Lending) - - - - - - Switzerland (Tax) 700 500 500 400 400 2,500 Switzerland (Tax Transparency) 300 300 - 2,500 - 3,100 Switzerland (Trade Facilitation) - - - 300 1,000 1,300 United Kingdom (Tax Transparency) - - 1,150 983 - 2,133 United Kingdom (Trade Facilitation) - - - - 754 754 United States (Doing Business) 978 501 456 225 - 2,160 Subtotal Programmatic Donor Contributions 6,203 5,447 15,410 16,522 11,856 55,438 DONOR CONTRIBUTIONS (PROJECT SPECIFIC)e 9,457 5,456 5,933 4,666 6,014 31,526 Total Donor Contributions 21,390 16,435 42,584 29,060 25,011 134,480 Continued on next page 80 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 81 Table 2: Project-specific Donor and Client Contributions – In US$ Thousands Table 4: Expenditures by Advisory Services Activity PROJECT DONOR AMOUNT STANDARD FY12 FY12 FY13 FY13 FY14 FY14 FY15 FY15 FY16 FY16 FY12–16 FY12–16 WORLD BANK GROUP CONTRIBUTIONS (IFC FMTAAS ALLOCATION) AS ACTIVITY Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual EXPENDITURES % % % % % % Business Regulations IFC 288 PROJECT RELATED EXPENDITURES Promoting Competition IFC 287 of which: Direct Project 19,116,172 72 22,943,307 76 17,930,234 70 18,331,183 73 35,577,999 87 113,898,894 77 Climate Competitive Industries IFC 336 Expendituresa Trade Logistics IFC 184 of which: Indirect Project 5,252,790 20 5,282,040 17 6,383,990 25 5,523,341 22 4,154,817 10 26,596,978 18 Tourism IFC 312 Expendituresb Agribusiness Supply Chain IFC 328 Total Project Related 24,368,962 91 28,225,347 93 24,314,224 95 23,854,523 95 39,732,816 97 140,495,872 95 Expenditures Public-Private Dialogue IFC 193 General & Administration 2,310,393 9 2,130,521 7 1,268,306 5 1,156,603 5 1,206,207 3 8,072,031 5 Competitive Cities IFC 200 Costsc Subtotal World Bank Group Contributions 2,128 TOTAL STANDARD DONOR CONTRIBUTIONS AS ACTIVITY 26,679,355 100 30,355,868 100 25,582,530 100 25,011,126 100 40,939,023 100 148,567,902 100 OHADA Business Law Reform France 1,103 EXPENDITURES East Africa: Investment Climate Reform Trademark East Africa 1,000 Direct Project Expenditures include project preparation, implementation and supervision costs. a.  Afghanistan: Investment Climate USAID 2,065 Indirect Project Expenditures include program management and operational support costs i.e., product development, M&E, knowledge sharing & staff development, donor relations, and b.  public relations. Belarus: Business Regulation USAID 495 c.  General & Administration includes overheads (rent, communications, equipment, etc.) and other non-overhead costs such administrative and back-office support staff. Central America Region: Investment Climate USAID 300 Central America Region: Trade Logistics USAID 48 Impact Program USAID 139 Mali: Advisory Work USAID 315 Mali: Improving Investment Climate (Phase 3) USAID 549 Subtotal Donor Contributions 6,014 TOTAL FY16 PROJECT-SPECIFIC DONOR CONTRIBUTIONS 8,142 FINANCIAL RESULTS AND RESOURCE USE Table 3: Other Funding – Indirect Support to FIAS Program – in US$ Thousands OTHER FUNDING - INDIRECT SUPPORT TO FIAS PROGRAM DONOR FY12 FY13 FY14 FY15 FY16 FY12–16 PROJECT-SPECIFIC DONOR FUNDING APPROVED UNDER IFC’S TECHNICAL ASSISTANCE TRUST FUNDS Tax Product Design Program Japan 320 - - - - 320 Total FIAS FY16 and FY12–16 Expenditures and Receipts Tax Transparency Technical Assistance Program Spain 320 - - - - 320 TOTAL FY16 FIAS EXPENDITURES TOTAL FIAS EXPENDITURES, FY12–16 Trade Logisticsa Korea - See Table 1 - - - - 100% = $40,939,023 100% = $148,567,902 IFC ADVISORY SERVICES ADMINISTRATIVE BUDGET ALLOCATION AS Administrative Budget—staff-related costb IFC 1,225 1,200 2,300 3,100 3,700 11,525 TOTAL OTHER FUNDING 1,865 1,200 2,300 3,100 3,700 12,165 n General & Administrative (3%) n General and Administrative (8%) a.  $200,000 provided by IFC’s Technical Assistance Trust Fund Program through “delegated” authority to the Investment Climate Department and included in Table 1: Sources of Funds. n Program Management n Program Management b.  Advisory Services administrative budget is provided by IFC for certain mainstreamed IFC Advisory Service positions associated with the management of Advisory Services and FIAS- & Support (10%) & Support (16%) related activities. IFC’s FY16 total contribution to FIAS: $5.7 million, consisting of $2.0 million as direct contribution to the FIAS core trust fund and $3.7 million as administrative budget. IFC’s FY16 contribution to FIAS core trust fund ($2.0 million) is included in Table 1: Sources of Fund. n Non-Client-Facing (36%) n Non-Client-Facing (29%) n Client-Facing (51%) n Client-Facing (48%) PERCENT OF FY16 SOURCE OF FUNDING (GROSS) RECEIPTS* PERCENT OF FY12–16 SOURCE OF FUNDING (GROSS) RECEIPTS* 100% = $34,960,000 100% = $186,515,840 n Client Contributions (0%) n Client Contributions (0%) n Project Specific Donor n Project Specific Donor Contributions (17%) Contributions (17%) n Core Donor Contributions (20%) n Core Donor Contributions (25%) n World Bank Group Core n World Bank Group Core Contributions (28%) Contributions (28%) n Programmatic Donor n Programmatic Donor Contributions (34%) Contributions 30%) *Includes administrative fees of $1,080,000 and $3,700,000 IFC Advisory Services administrative budget to cover staff costs of certain “mainstreamed” Investment Climate Business Line positions. 82 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 83 7 Annex 1: FIAS Reform Totals and Descriptions, p. 86 ANNEXES 1.1: FIAS FY12–16 Reform Totals (through, FY16), p. 86 1.2: FIAS/T&C FY12–16 Strategy Cycle Scorecard–Summary, p. 88 1.3: Reforms and Results from FIAS-Funded Projects, p.89 n Reform totals and descriptions Annex 2: Portfolio of FIAS-Supported Projects in FY16, p. 98 2.1: FIAS-Funded Client-Facing Projects Mapped to the WBG Trade and n Portfolio of of FIAS-Funded Projects, FY16 Competitiveness Global Practice, p. 98 n Abbreviations 2.2: FIAS-Funded Knowledge Management and Product Development Projects Mapped to the World Bank Group, p. 100 2.3: FIAS-Funded Client-Facing IBRD projects, p. 100 Annex 3: Abbreviations, p. 102 Reforms funded by FIAS Portfolio of FIAS funded Projects REFORM REFORMS REFORM PROJECTS IN FUNDING SPENDING COUNT BY REGION DESCRIPTION PORTFOLIO RECEIVED PER PROJECT PER PROJECT 84 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 85 ANNEX 1 : FIAS REFORM TOTALS AND DESCRIPTIONS ANNEX 1 : FIAS REFORM TOTALS AND DESCRIPTIONS 1.1 FIAS FY12–16 Reform Totals 1.1 FIAS FY12–16 Reform Totals (continued) FY12 FY13 FY14 FY15 FY16 TOTAL FY12 FY13 FY14 FY15 FY16 TOTAL GRAND TOTAL 46 75 76 68 76 341 SUB-SAHARAN AFRICA 19 49 62 45 50 225 EAST ASIA AND THE PACIFIC 0 1 2 1 1 5 Africa Region (COMESA, ECA) 0 0 0 1 1 2 Philippines 0 0 1 1 0 2 Angola 0 0 0 2 2 4 Timor-Leste 0 1 0 0 1 2 Benin 0 2 4 3 2 11 Vietnam 0 0 1 0 0 1 Burkina Faso 0 2 2 0 1 5 Burundi 3 6 0 0 1 10 EUROPE AND CENTRAL ASIA 13 10 8 14 15 60 Cameroon 0 1 3 0 2 6 Albania 1 0 2 3 3 9 Central African Republic 0 0 1 0 1 2 Armenia 1 3 0 1 0 5 Chad 0 1 1 0 2 4 Belarus 1 1 0 0 0 2 Comoros 0 2 1 0 2 5 Bosnia and Herzegovina 0 0 0 3 0 3 Congo, Dem. Rep. 0 1 5 3 2 11 Croatia 0 0 0 0 1 1 Congo, Rep. 2 0 1 0 1 4 ANNEXES Georgia 1 0 2 0 3 6 Côte d’Ivoire 0 4 5 4 4 17 Kazakhstan 1 0 0 0 0 1 Djibouti 0 1 1 0 0 2 Kosovo 2 3 0 1 0 6 Equatorial Guinea 0 0 1 0 1 2 Kyrgyz Republic 0 0 0 2 2 4 Gabon 0 2 1 1 1 5 Macedonia FYR 0 0 0 1 0 1 Ghana 0 0 1 0 0 1 Moldova 3 2 0 0 0 5 Guinea 0 2 3 1 3 9 Montenegro 1 0 0 1 0 2 Guinea-Bissau 0 1 1 0 1 3 Russian Federation 1 0 3 0 0 4 Kenya 0 0 2 1 0 3 Serbia 0 0 0 0 3 3 Lesotho 2 0 0 0 0 2 Tajikistan 1 0 1 1 1 4 Liberia 0 1 1 0 0 2 Ukraine 0 1 0 1 0 2 Madagascar 0 0 0 4 2 6 Uzbekistan 0 0 0 0 2 2 Malawi 1 1 1 1 1 5 LATIN AMERICA AND CARIBBEAN 11 14 4 7 6 42 Mali 3 0 1 2 3 9 Colombia 1 2 1 1 0 5 Mauritania 0 1 2 0 0 3 Costa Rica 3 2 0 1 0 6 Mauritius 0 0 0 1 1 2 Dominican Republic 0 0 0 1 1 2 Mozambique 0 3 0 0 1 4 Ecuador 0 0 0 0 1 1 Namibia 0 0 0 1 0 1 El Salvador 0 1 0 0 0 1 Niger 0 2 1 0 2 5 Guyana 0 0 0 0 1 1 Nigeria 0 0 0 0 2 2 Guatemala 1 2 0 1 1 5 Rwanda 3 7 4 5 1 20 Haiti 0 1 0 0 0 1 São Tomé and Príncipe 0 1 2 0 0 3 Honduras 0 1 2 1 0 4 Senegal 0 1 5 1 4 11 Jamaica 0 1 1 1 0 3 Seychelles 0 0 0 1 0 1 Mexico 1 0 0 0 0 1 Sierra Leone 2 0 1 0 0 3 Nicaragua 0 1 0 0 0 1 Sudan 0 0 0 1 0 1 Panama 2 2 0 0 0 4 Swaziland 0 2 1 1 0 4 Paraguay 0 0 0 0 1 1 Tanzania 1 0 2 1 0 4 Peru 2 0 0 1 0 3 Togo 1 1 4 2 3 11 St. Kitts and Nevis 0 0 0 0 1 1 Uganda 1 2 2 2 1 8 Trinidad and Tobago 0 1 0 0 0 1 Zambia 0 2 2 3 2 9 Uruguay 1 0 0 0 0 1 Zimbabwe 0 0 0 3 0 3 MIDDLE EAST AND NORTH AFRICA 2 0 0 0 0 2 Algeria 1 0 0 0 0 1 Morocco 1 0 0 0 0 1 SOUTH ASIA 1 1 0 1 4 7 Bangladesh 1 1 0 1 0 3 India 0 0 0 0 4 4 Continued on next page 86 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 87 ANNEX 1 : FIAS REFORM TOTALS AND DESCRIPTIONS ANNEX 1 : FIAS REFORM TOTALS AND DESCRIPTIONS 1.2 FIAS / T&C FY12–16 Strategy Cycle Scorecard - Summary 1.3 Reforms and Results from FIAS-Funded Projects BASELINE FY12–16 DB FY08–11 CUM­U­LA­TIVE STRATEGY COUNTRY PRACTICE TOPIC REFORM DESCRIPTION REFORM VALIDATED STRATEGIC THEME INDICATOR CYCLEa FY12 FY13 FY14 FY15 FY16 d FY12–16 TARGET EAST ASIA AND PACIFIC 1. Number of IC Reforms supported by FIAS 51 46 75 76 68 76 341 250 Focus on delivering Timor-Leste Trade Trading across A survey of firms based at the country's ports showed that the time required to clear cargo has 1  -of which reforms validated by Doing 47 36 56 56 43 66 257 125 significant business borders been cut in half, to an average of 8 days from FY15. The project supported the establishment Business report environment reforms of a new risk management unit and provided technical support and training for the new cargo  -of which other reforms (i.e., not captured 4 10 19 20 25 10 84 125 cleanance process. The risk management unit and a new self-assessment process at the customs by Doing Business report) office led to private sector reports of imported goods being released in as little as four hours. Number of IC Reforms supported by IC 68.5 68 102 102 89 107 468 n/a The capacity of customs officers has also improved. As a result of the project-supported customs Business Line (including FIAS supported IC brokers certification training, 26 customs brokers are fully licensed to operate in Timor-Leste. Reforms) Three certification courses supported by the project have been implemenented, substantially  -of which reforms validated by Doing 48 51 59 59 56 85 310 n/a contributing to the reduction in time to import. The director-general of customs and brokers has Business report requested support for a fourth training course to certify another 15-20 brokers by mid-FY17. The  -of which other reforms (i.e., not validated 20.5 17 43 43 33 22 158 n/a new system speeds clearance times in part by reducing the overall number of examinations and by Doing Business report) scans and more efficient document processing. For comparison: Number of reforms reported 247 201 238 230 231 283 1183 n/a EUROPE AND CENTRAL ASIA in DB report Albania Investment Construction In February 2016, a government decree ended a moratorium on the issuance of construction 1 1 ANNEXES % of IC reforms supported by FIAS in IDA 59% 61% 76% 83% 63% 78% 73% 60% Climate permits permits, allowing the implementation of new streamlined procedures and the piloting of a new countries online permitting system. Albania was listed as a 'no practice country' by the Doing Business 2016 % of IC reforms supported by FIAS in FCS n/a 24% 32% 30% 34% 29% 30% n/a report, ranking 189th out of 189 economies because of the moratorium. The Doing Business 2017 countries report no longer counts Albania as 'no practice.' % of IC reforms supported by FIAS in Africa n/a 41% 65% 82% 66% 66% 66% n/a Albania Investment Protecting In October 2014, Albania amended its law on entrepreneurs and commercial companies. 1 1 2. % of FIAS client-facing project n/a 49% 47% 45% 37% 33% 42% n/a Climate investors Among other things, the new law directly addresses disclosure requirements of transactions Focus on strategic implementation spend in Fostering Enterprise between interested parties, requiring immediate public disclosure by companies of the terms of prioritiesb Creation and Growth transactions and the nature of any potential conflict of interest. The amendment is highly relevant % of FIAS client-facing project n/a 30% 30% 36% 45% 46% 37% n/a to the Doing Business indicator concerning protecting minority investors. implementation spend in Facilitating Albania Investment Getting electricity Albania made getting electricity easier by speeding up the process for obtaining a new 1 1 International Trade and Investment Climate connection. % of FIAS client-facing project n/a 18% 19% 13% 16% 16% 16% n/a Croatia Investment Protecting In October 2015, Croatia amended its Companies Act, requiring that directors disclose to the 1 1 implementation spend in Unlocking Climate investors management and supervisory boards all relevant facts about the nature, relationship, and Sustainable Investment in Key Sectors existence of any conflict of interest. The amendment is highly relevant to the Doing Business 3. % of FIAS client-facing project 70% 77% 78% 78% 77% 70% 75% 70% indicator on protecting minority investors, as it directly addresses the disclosure requirements of Focus on priority clients implementation spend in IDA countries transactions between interested parties. % of FIAS client-facing project 52% 69% 57% 58% 50% 46% 55% 50% Georgia Trade Trading across Responding to recommendations by the project team, the government adopted a new, streamlined 1 implementation spend in Sub-Saharan Africa borders customs risk management policy in December 2015, improving the management of risk profiles. % of FIAS client-facing project 29% 20% 28% 31% 31% 34% 29% 25-30% Beginning in January 2016, only 2 percent of cargo went through risk inspection. During the first implementation spend in FCS half of calendar 2016, at least 6,162 companies (which submitted more than 3 customs import declarations during this period) benefited from the improved procedures. Based on estimates from 4. Client satisfaction: FIAS supported projects n/a 95% 92% 88% 89% 95% 92% n/a the first half of 2016, revenue generated through one of the country's main trade corridors has Client satisfaction (results from IFC Client survey) roughly doubled from 2013. and development Development Effectiveness: FIAS supported 61% 86% 83% 88% 100% 75% 87% n/a effectiveness Georgia Trade Trading across FIAS-supported implementation of the upgraded version of the Automated System for 1 1 projects (% of projects rated satisfactory in borders Customs Data World (ASYCUDA) has enabled the government to improve the functionality terms of development effectiveness) and performance of the system. Selected modules have been enhanced enhancing the online Client satisfaction: T&C GP (results from IFC 89% 91% 94% 91% 89% 92% 91% functionality of the Georgia Revenue Service in areas such as electronic cargo control and Client survey) periodic declarations. The private sector will benefit from acceleration of customs procedures Development Effectiveness (% of BL projects 60% 71% 82% 80% 89% 79% 80% n/a through the faster processing tools with simplified declarations and automatic processing through rated satisfactory in terms of development the use of barcodes, among other improvements. Authorized Economic Operators (AEOs) can now effectiveness) lodge simplified customs declarations with 50 percent less data requirements. Importers and 5. % Economy Wide 92-93% 87% 82% 84% 79% 81% 83% 60-70% exporters benefit from the integration of e-payments and e-certification as a basis for a paperless Focus on industry-specific environment. Freight forwarders will benefit from enhanced customs transit procedures such as vs. economy-wide % Industry-Specific 7-8%c 13% 17% 17% 21% 19% 17% 30-40% pre-arrival information and risk-management on transit transactions. Georgia Investment Tax simplification Georgia made paying taxes easier by abolishing the additional annex to corporate income tax 1 1 6. Direct Compliance Cost Savings $118 $32M $22M $21M $15M $208M $350M Climate and compliance returns and by improving the efficiency of the online system used for filing value-added tax Measuring impact Investment Generated via facilitation of FDI in $108 $548M $750M $170M $8M $1.59B $1Be management returns. priority sectors Kyrgyz Investment Registering In October 2014, the government amended its law on entrepreneurs and commercial companies. 1 1 Indicators in light brown: directly attributed to or linked with FIAS program. Republic Climate property Among other things, the new law directly addresses disclosure requirements of transactions a. Yearly average based on years for which data is available. between interested parties, requiring immediate public disclosure by companies of the terms of b. Data based on product classification. transactions and the nature of any potential conflict of interest. The amendment is highly relevant c. Value is an approximation. to the Doing Business indicator concerning protecting minority investors. d. Pending validation, particularly reforms data. e. $1 billion is the target for FDI impact via FIAS activities. The target for overall investment generated is $3 billion. Kyrgyz Investment Trading across In October 2015, the government amended its Companies Act, requiring that directors disclose 1 1 Republic Climate borders to the management and supervisory boards all relevant facts about the nature, relationship, and Continued on next page existence of any conflict of interest. The amendment is highly relevant to the Doing Business indicator on protecting minority investors, as it directly addresses the disclosure requirements of transactions between interested parties. Continued on next page 88 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 89 ANNEX 1 : FIAS REFORM TOTALS AND DESCRIPTIONS ANNEX 1 : FIAS REFORM TOTALS AND DESCRIPTIONS 1.3 Reforms and Results from FIAS-Funded Projects (continued) 1.3 Reforms and Results from FIAS-Funded Projects (continued) DB DB COUNTRY PRACTICE TOPIC REFORM DESCRIPTION REFORM VALIDATED COUNTRY PRACTICE TOPIC REFORM DESCRIPTION REFORM VALIDATED Serbia Investment Construction Serbia made dealing with construction permits less costly by eliminating the land development 1 1 India Investment Trading across India made exporting and importing easier by launching the ICEGATE portal and simplifying border 1 1 Climate permits tax for warehouses. Climate borders and documentary procedures. This reform applies to both Delhi and Mumbai. Serbia Investment Registering The government amended the law on state survey and cadastre, effective from December 2015, 1 1 India Investment Enforcing India made enforcing contracts easier by creating dedicated divisions to resolve commercial 1 1 Climate property to introduce effective time limits for the registration of the property rights at the Real Estate Climate contracts cases. This reform applies to both Delhi and Mumbai. Cadastre. Under the revised law, the Real Estate Cadaster is required to issue a final decision on SUB-SAHARAN AFRICA the registration of a property title within 15 calendar days. Angola Investment Starting a The project developed a reform memo and action plan recommending short-, medium-, and long- 1 1 Serbia Investment Starting a Serbia simplified the process of starting a business by reducing the time to register a company. 1 1 Climate business term reform measures aiming to improve the country's business environment. The team engaged Climate business closely and frequently with government officials, sensitizing them to Doing Business methodology Tajikistan Investment Trading across The project team supported a reform enabling customs declarations to be submitted eletronically 1 1 and the report cycle, and supporting government officials in attending a regional peer-to-peer Climate borders beginning in January 2015 thanks to development and modernization of the customs service's learning event in Nairobi. As a result of this process, Angola made starting a business easier by infrastructure. The reform is part of a broader project to develop a unified automated information eliminating the paid-in minimum capital requirement. system connecting relevant government agencies. The reform reduced the time for processing of Angola Investment Tax simplification The project developed a. reform memo and action plan recommending short-, medium-, and long- 1 1 customs declarations from three days to three hours. Customs brokers use an electronic key to Climate and compliance term reform measures aiming to improve the country's business environment. The team engaged access the system and submit declarations electronically. management closely and frequently with government officials, sensitizing them to Doing Business methodology Uzbekistan Investment Protecting Uzbekistan strengthened minority investor protections by clarifying ownership and control 1 1 and the report cycle, and supporting government officials in attending a regional peer-to-peer ANNEXES Climate investors structures. learning event in Nairobi. As a result of this process, Angola made paying taxes easier and less Uzbekistan Investment Registering Uzbekistan made transferring a property easier by increasing the transparency of information. 1 1 costly by reducing the frequency of advance payments of corporate income tax and increasing the Climate property allowable deductions for bad debt. At the same time, Angola made interest income tax a final tax LATIN AMERICA AND CARIBBEAN that is not deductible for the calculation of corporate income tax. Ecuador Investment Starting a Ecuador made starting a business easier by eliminating the publication of company charters in 1 1 Benin Investment Resolving "The council of ministers approved the new OHADA Insolvency Law in September 2015, and 1 1 Climate business local newspapers Climate insolvency the law went into effect in December 2015 for all member countries. The new law introduces the following reforms: (i) new conciliation procedure to encourage saving viable companies; (ii) Guatemala Investment Trading across Guatemala improved cross-border trading by reducing the documentary and border compliance 1 1 simplified regulations for small enterprises; (iii) new cross-border insolvency regime based on the Climate borders time for importing by making electronic submission of documents compulsory and eliminating the United Nations International Commission on Trade Law (UNCITRAL) Model Law; (iv) clarified order need for many hardcopy documents. of priority of creditors; (v) incentives to creditors who provide fresh money to troubled companies Guyana Investment Registering Guyana made registering property easier by increasing the transparency of the Lands & Survey 1 1 to facilitate their restructuring and recovery; and, (vi) a common legal framework to oversee the Climate property Commission: In May 2016, the Ministry of Business added to its website a section with public activities of insolvency practitioners as well as trustees. Benin made resolving insolvency easier information for companies concerning property transfer and registration. Information provided by introducing a new conciliation procedure for companies in financial difficulties and a simplified includes the list of documents necessary for a transfer of private land by deed or title, and for a preventive settlement procedure for small companies. transfer of public lands or leases. Also included is a list of fees levied by the Land Registry for its Benin Investment Starting a The investment climate project supported the President's Investment Council in implementing 1 1 services. This supplements information, published online since July 2015 by the Guyana Lands & Climate business reforms to improve country's Doing Business ranking. In addition to developing reform memos, Survey Commission, listing the fee schedule for obtaining certified copies and prints of updated the project provided training and shared knowhow. Benin made starting a business easier plans and surveys. This reform was a direct result of recommendations provided during the team's by eliminating the need to notarize company bylaws to activate a bank account following mission to Guyana in 2015. incorporation. The number of required procedures was reduced from seven to five and the average Paraguay Investment Trading across Paraguay made trading across borders easier by introducing a single window for exporting, which 1 1 time involved was cut from 12 days to 8 days. Climate borders reduced the time required for border and documentary compliance. Burkina Faso Investment Resolving The council of ministers approved the new OHADA Insolvency Law in September 2015, and 1 1 St. Kitts and Trade Trading across The St. Kitts and Nevis customs department introduced risk-based inspections to reduce the 1 Climate insolvency the law went into effect in December 2015 for all member countries. The new law introduces Nevis borders number of physical inspections of cargo. Under the trade logistics project, the FIAS-supported the following reforms: (i) new conciliation procedure to encourage saving viable companies; (ii) team helped build capacity for conducting risk-based inspections including the use of a inter- simplified regulations for small enterprises; (iii) new cross-border insolvency regime based on the agency risk management review group. The customs department has reported processing 78-80 United Nations International Commission on Trade Law (UNCITRAL) Model Law; (iv) clarified order percent of cargo through its 'green lane,' meaning that it is authorized for immediate release. of priority of creditors; (v) incentives to creditors who provide fresh money to troubled companies Dominican Investment Investment policy "A government decree issued in October 2015 established the Directorate of Foreign Trade and 1 to facilitate their restructuring and recovery; and, (vi) a common legal framework to oversee the Republic Climate - Protection International Trade Agreements Administration (DICOEX) as the lead agency for preventing activities of insolvency practitioners as well as trustees. Burkina Faso made resolving insolvency investor-government disputes. The decree puts in place the system for dispute prevention under easier by introducing a new conciliation procedure for companies in financial difficulties and a WTO agreements, free trade agreements or international investment treaties. Under the decree, simplified preventive settlement procedure for small companies. DICOEX is the lead agency for preventing international arbitrations pursuant to investment Burundi Investment Tax simplification The project developed Doing Business reform memo and implementation action plan. The team 1 1 treaties, free trade agreements, and the WTO agreements, and defending the Dominican Climate and compliance has continuosly supervised and guided the client throughout the implementation process. The Republic when such arbitrations take place. It also requires other government agencies to management Burundi investment climate program supported the country in simplifying the value-added tax share information with DICOEX regarding possible disputes. The project team provided advice filing process by reducing the number of documents to be annexed as well as the number of in the drafting of the decree as well as technical assistance in a number of areas relating to entries that must be captured in the monthly form, as detailed in the new regulation. The average implementation of the dispute prevention mechanism. As a result of the decree, two investor- time required to pay tax was reduced from 274 hours to 232 hours. state disputes were prevented, resulting in an estimated $8 million in cost savings. SOUTH ASIA India Investment Getting electricity India made getting electricity faster and cheaper by streamlining the process of getting a new 1 1 Climate commercial electricity connection. This reform impacts the city of Delhi. India Investment Paying taxes India made paying taxes easier by introducing an electronic system for paying employee state 1 1 Climate insurance contributions. This reform applies to both to Delhi and Mumbai. Continued on next page Continued on next page 90 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 91 ANNEX 1 : FIAS REFORM TOTALS AND DESCRIPTIONS ANNEX 1 : FIAS REFORM TOTALS AND DESCRIPTIONS 1.3 Reforms and Results from FIAS-Funded Projects (continued) 1.3 Reforms and Results from FIAS-Funded Projects (continued) DB DB COUNTRY PRACTICE TOPIC REFORM DESCRIPTION REFORM VALIDATED COUNTRY PRACTICE TOPIC REFORM DESCRIPTION REFORM VALIDATED Cameroon Investment Construction A 2013 decree in which Cameroon established a time limit for issuing building permits was not 1 1 Congo, Dem. Investment Construction The project produced a reform memo and action plan that led to a reform streamlining 1 1 Climate permits effectively implemented due to a lack of monitoring regarding the completeness of applications in Rep. Climate permits construction permiting, improving building quality control, and reducing the time required to the city of Douala. In April 2016, the Douala City Council put in place a reception desk in charge obtain a building permit. Further, the project supported a country deligation to attend a peer-to- of verifying that building permit applications have all the required forms properly filled out and peer learning event in Nairobi. The time to obtain a construction permit was reduced from 150 accompanied by the relevant supporting documents. The reform made the process more efficient. days to 122 days. In February 2016, the Douala City Council updated its website to include the legal basis, forms, Congo, Dem. Investment Resolving The council of ministers approved the new OHADA Insolvency Law in September 2015, and 1 1 and procedural information related to obtaining a building permit. Rep. Climate insolvency the law went into effect in December 2015 for all member countries. The new law introduces Cameroon Investment Resolving The council of ministers approved the new OHADA Insolvency Law in September 2015, and 1 1 the following reforms: (i) new conciliation procedure to encourage saving viable companies; (ii) Climate insolvency the law went into effect in December 2015 for all member countries. The new law introduces simplified regulations for small enterprises; (iii) new cross-border insolvency regime based on the the following reforms: (i) new conciliation procedure to encourage saving viable companies; (ii) United Nations International Commission on Trade Law (UNCITRAL) Model Law; (iv) clarified order simplified regulations for small enterprises; (iii) new cross-border insolvency regime based on the of priority of creditors; (v) incentives to creditors who provide fresh money to troubled companies United Nations International Commission on Trade Law (UNCITRAL) Model Law; (iv) clarified order to facilitate their restructuring and recovery; and, (vi) a common legal framework to oversee the of priority of creditors; (v) incentives to creditors who provide fresh money to troubled companies activities of insolvency practitioners as well as trustees. The Democratic Republic of Congo made to facilitate their restructuring and recovery; and, (vi) a common legal framework to oversee the resolving insolvency easier by introducing a new conciliation procedure for companies in financial activities of insolvency practitioners as well as trustees. Cameroon made resolving insolvency difficulties and a simplified preventive settlement procedure for small companies. easier by introducing a new conciliation procedure for companies in financial difficulties and a Congo, Rep. Investment Resolving The council of ministers approved the new OHADA Insolvency Law in September 2015, and 1 1 ANNEXES simplified preventive settlement procedure for small companies. Climate insolvency the law went into effect in December 2015 for all member countries. The new law introduces Central Investment Resolving The council of ministers approved the new OHADA Insolvency Law in September 2015, and 1 1 the following reforms: (i) new conciliation procedure to encourage saving viable companies; (ii) African Climate insolvency the law went into effect in December 2015 for all member countries. The new law introduces simplified regulations for small enterprises; (iii) new cross-border insolvency regime based on Republic the following reforms: (i) new conciliation procedure to encourage saving viable companies; (ii) the United Nations International Commission on Trade Law (UNCITRAL) Model Law; (iv) clarified simplified regulations for small enterprises; (iii) new cross-border insolvency regime based on the order of priority of creditors; (v) incentives to creditors who provide fresh money to troubled United Nations International Commission on Trade Law (UNCITRAL) Model Law; (iv) clarified order companies to facilitate their restructuring and recovery; and, (vi) a common legal framework to of priority of creditors; (v) incentives to creditors who provide fresh money to troubled companies oversee the activities of insolvency practitioners as well as trustees. The Republic of Congo made to facilitate their restructuring and recovery; and, (vi) a common legal framework to oversee the resolving insolvency easier by introducing a new conciliation procedure for companies in financial activities of insolvency practitioners as well as trustees. The Central African Republic made difficulties and a simplified preventive settlement procedure for small companies. resolving insolvency easier by introducing a new conciliation procedure for companies in financial Côte d'Ivoire Investment Construction "The Côte d'Ivoire investment climate project, in collaboration with the World Bank's revitalization 1 1 difficulties and a simplified preventive settlement procedure for small companies. Climate permits and corporate governance project (PARE/PME), helped create and strengthen a dedicated Chad Investment Resolving The council of ministers approved the new OHADA Insolvency Law in September 2015, and 1 1 Doing Business reform unit within the Center for the Promotion of Investment in Côte d'Ivoire Climate insolvency the law went into effect in December 2015 for all member countries. The new law introduces (CEPICI) under the sponsorship of the Prime Minister. The team coordinated the implementation the following reforms: (i) new conciliation procedure to encourage saving viable companies; (ii) of an annual Doing Business reform agenda in collaboration with multiple public and private simplified regulations for small enterprises; (iii) new cross-border insolvency regime based on the stakeholders. The project contributed to the drafting of a building classification regulation and United Nations International Commission on Trade Law (UNCITRAL) Model Law; (iv) clarified order helped develop a manual of procedures for issuance of construction permits. The government has of priority of creditors; (v) incentives to creditors who provide fresh money to troubled companies uploaded the relevant regulations to the website. to facilitate their restructuring and recovery; and, (vi) a common legal framework to oversee the Côte d'Ivoire Investment Getting credit The project team supported the implementation of the OHADA Uniform Act on Movable Collateral 1 1 activities of insolvency practitioners as well as trustees. Chad made resolving insolvency easier Climate and helped in the drafting of a national legal framework that includes implementation of a credit by introducing a new conciliation procedure for companies in financial difficulties and a simplified bureau. Further, the project advised on how to maximize registration coverage. preventive settlement procedure for small companies. Côte d'Ivoire Investment Resolving The council of ministers approved the new OHADA Insolvency Law in September 2015, and 1 1 Chad Investment Starting a Chad made starting a business easier by reducing the minimum capital requirement from about 1 1 Climate insolvency the law went into effect in December 2015 for all member countries. The new law introduces Climate business $1,600 to about $160. The reform became fully operational in January 2016. the following reforms: (i) new conciliation procedure to encourage saving viable companies; (ii) Comoros Investment Registering The Comoros adopted legislation making it easier, less expensive, and more transparent to 1 1 simplified regulations for small enterprises; (iii) new cross-border insolvency regime based on the Climate property register property. The reform process started more than three years ago with delivery of a United Nations International Commission on Trade Law (UNCITRAL) Model Law; (iv) clarified order diagnostic report recommending a reduction of property taxes and implementation of other of priority of creditors; (v) incentives to creditors who provide fresh money to troubled companies important reforms relating to property. Implementation of this recommendation was immediate to facilitate their restructuring and recovery; and, (vi) a common legal framework to oversee the on Moheli and Anjuan islands, but not on Grande Comore. Over the past two years, the activities of insolvency practitioners as well as trustees. Côte d'Ivoire made resolving insolvency Comoros investment climate Team engaged in private sector sensitization and worked closely easier by introducing a new conciliation procedure for companies in financial difficulties and a with the Lands Ministry to share international best practices, including support for conference simplified preventive settlement procedure for small companies. participation in Nairobi and Maputo. As a result of these efforts, the Grande Comore finally Côte d'Ivoire Investment Enforcing The project supported an amendment to the commercial court law in order to incorporate a 1 1 implemented the reduction in the property transfer tax and made transferring a property less Climate contracts simplified fast-track procedure for small disputes that allows for self-representation by parties. expensive. The transfer rate was reduced from 10.5 percent to 4.6 percent pf property value. The reform resulted in an improvement in the judicial processes index from 7 to 9 on a scale of 0 Comoros Investment Resolving The council of ministers approved the new OHADA Insolvency Law in September 2015, and 1 1 to 18, as per the Doing Business 2017 report. Climate insolvency the law went into effect in December 2015 for all member countries. The new law introduces Equatorial Investment Resolving The council of ministers approved the new OHADA Insolvency Law in September 2015, and 1 1 the following reforms: (i) new conciliation procedure to encourage saving viable companies; (ii) Guinea Climate insolvency the law went into effect in December 2015 for all member countries. The new law introduces simplified regulations for small enterprises; (iii) new cross-border insolvency regime based on the the following reforms: (i) new conciliation procedure to encourage saving viable companies; (ii) United Nations International Commission on Trade Law (UNCITRAL) Model Law; (iv) clarified order simplified regulations for small enterprises; (iii) new cross-border insolvency regime based on of priority of creditors; (v) incentives to creditors who provide fresh money to troubled companies the United Nations International Commission on Trade Law (UNCITRAL) Model Law; (iv) clarified to facilitate their restructuring and recovery; and, (vi) a common legal framework to oversee the order of priority of creditors; (v) incentives to creditors who provide fresh money to troubled activities of insolvency practitioners as well as trustees. The Comoros made resolving insolvency companies to facilitate their restructuring and recovery; and, (vi) a common legal framework to easier by introducing a new conciliation procedure for companies in financial difficulties and a oversee the activities of insolvency practitioners as well as trustees. Equatorial Guinea made simplified preventive settlement procedure for small companies. resolving insolvency easier by introducing a new conciliation procedure for companies in financial difficulties and a simplified preventive settlement procedure for small companies. Continued on next page Continued on next page 92 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 93 ANNEX 1 : FIAS REFORM TOTALS AND DESCRIPTIONS ANNEX 1 : FIAS REFORM TOTALS AND DESCRIPTIONS 1.3 Reforms and Results from FIAS-Funded Projects (continued) 1.3 Reforms and Results from FIAS-Funded Projects (continued) DB DB COUNTRY PRACTICE TOPIC REFORM DESCRIPTION REFORM VALIDATED COUNTRY PRACTICE TOPIC REFORM DESCRIPTION REFORM VALIDATED Gabon Investment Resolving The council of ministers approved the new OHADA Insolvency Law in September 2015, and 1 1 Malawi Investment Starting a Malawi made starting a business easier by eliminating the legal requirement to use a company 1 1 Climate insolvency the law went into effect in December 2015 for all member countries. The new law introduces Climate business seal. This recommendation was part of the Indicator Based Reform team's memorandum, the following reforms: (i) new conciliation procedure to encourage saving viable companies; (ii) delivered to the client two years ago. Since then, the team supported the government in simplified regulations for small enterprises; (iii) new cross-border insolvency regime based on the effectively implementing this measure. United Nations International Commission on Trade Law (UNCITRAL) Model Law; (iv) clarified order Mali Investment Getting credit The project produced a Doing Business reform memo, action plan, and training which led to 1 1 of priority of creditors; (v) incentives to creditors who provide fresh money to troubled companies Climate the government implementing a number of recommendations. Mali improved access to credit to facilitate their restructuring and recovery; and, (vi) a common legal framework to oversee the information by establishing a new credit bureau. activities of insolvency practitioners as well as trustees. Gabon made resolving insolvency easier Mali Investment Resolving The council of ministers approved the new OHADA Insolvency Law in September 2015, and 1 1 by introducing a new conciliation procedure for companies in financial difficulties and a simplified Climate insolvency the law went into effect in December 2015 for all member countries. The new law introduces preventive settlement procedure for small companies. the following reforms: (i) new conciliation procedure to encourage saving viable companies; (ii) Guinea Investment Resolving The council of ministers approved the new OHADA Insolvency Law in September 2015, and 1 1 simplified regulations for small enterprises; (iii) new cross-border insolvency regime based on the Climate insolvency the law went into effect in December 2015 for all member countries. The new law introduces United Nations International Commission on Trade Law (UNCITRAL) Model Law; (iv) clarified order the following reforms: (i) new conciliation procedure to encourage saving viable companies; (ii) of priority of creditors; (v) incentives to creditors who provide fresh money to troubled companies simplified regulations for small enterprises; (iii) new cross-border insolvency regime based on the to facilitate their restructuring and recovery; and, (vi) a common legal framework to oversee the United Nations International Commission on Trade Law (UNCITRAL) Model Law; (iv) clarified order activities of insolvency practitioners as well as trustees. Mali made resolving insolvency easier of priority of creditors; (v) incentives to creditors who provide fresh money to troubled companies ANNEXES by introducing a new conciliation procedure for companies in financial difficulties and a simplified to facilitate their restructuring and recovery; and, (vi) a common legal framework to oversee the preventive settlement procedure for small companies. activities of insolvency practitioners as well as trustees. Guinea made resolving insolvency easier Mali Investment Starting a Mali made starting a business less expensive by reducing the paid-in minimum capital 1 1 by introducing a new conciliation procedure for companies in financial difficulties and a simplified Climate business requirement. A law approved in May 2015 has facilitated the start-up of limited liability preventive settlement procedure for small companies. companies (LLCs) by revoking the minimum capital requirement of $2,000. Shareholders can Guinea Investment Investment policy A new investment law approved in May 2015 increased the number of sectors allowing foreign 1 now freely set the capital of their company, with the minimum capital requirement set at $10. Climate - Entry investment and decreased the number of sectors that prohibit foreign investment. Under the More than 400 new enterprises have been created taking advantage of the reduced capital previous investment law, senior government officials had the power and discretion to issue requirement. a list of priority sectors and restrictions by decree, creating confusion and uncertainty as to Mauritius Investment Registering The project developed reform a memo and action plan to support simplification of property 1 1 where and in what sectors investors could actually invest. The government agreed to the project Climate property transfers. Deeds registry officials, with project support, attended regional peer-to-peer learning team's recommendation that this provision be eliminated. The revised law concerning "reserved events in Dubai and Nairobi. The Indicator-Based Reform team also supported the Registry in sectors" lists activities where foreign participation is allowed but subject to a ceiling or cap. The communicating ongoing reform efforts in Mauritius to the Doing Business property registration restrictions are few in number within the norms of international practice, as they cover sectors team through several face-to-face meetings in Washington, D.C., and Nairobi. As a result of these regulated by more specialized laws, including media (television, radio and print), utilities (power interactions, the Doing Business 2017 report has recognized the country's newly digitized land generation and distribution, water distribution), banking and finance, telecommunications, and records system and streamlined processes. pharmaceuticals. In all other sectors, 100 percent foreign ownership is permitted. The project has already resulted in a threefold increase in announced investment, from roughly $185 million in Mozambique Investment Getting credit The project delivered a Doing Business reform memo in December 2015 that included a short- 1 1 2014 to $530 million in 2015. Realized investment generated data will be available soon. Climate term recommendation that the government implement a law allowing the establishment of a private credit bureau. Based on the memo, the government approved a Doing Business action plan Guinea Investment Investment policy As of June 2015, investment policy changes have unlocked some $2 million in stalled investment 1 in February 2016. Establishment of regulations concerning a private credit bureau was a priority Climate - Protection projects. Legislative changes approved in March 2013 have brought the country’s domestic under the plan. Through the World Bank Growth Poles Project, the team funded a reform advisor legal frameworks more in line with international standards governing expropriation, currency to help follow up on implementation of the reform. The regulations passed in March 2016 and transfer, publication, administrative transparency, non-discrimination, and dispute settlement. Mozambique established a new credit bureau. The new policies prohibit discrimination among foreign versus domestic investors. Expropriation or nationalization of property must be justified by the government beforehand and be fairly Niger Investment Resolving The council of ministers approved the new OHADA Insolvency Law in September 2015, and 1 1 compensated. Investment income may be converted to foreign currency and transferred abroad. Climate insolvency the law went into effect in December 2015 for all member countries. The new law introduces And arbitration and other dispute resolution mechanisms will adhere to international standards. the following reforms: (i) new conciliation procedure to encourage saving viable companies; (ii) simplified regulations for small enterprises; (iii) new cross-border insolvency regime based on the Guinea Bissau Investment Resolving The council of ministers approved the new OHADA Insolvency Law in September 2015, and 1 1 United Nations International Commission on Trade Law (UNCITRAL) Model Law; (iv) clarified order Climate insolvency the law went into effect in December 2015 for all member countries. The new law introduces of priority of creditors; (v) incentives to creditors who provide fresh money to troubled companies the following reforms: (i) new conciliation procedure to encourage saving viable companies; (ii) to facilitate their restructuring and recovery; and, (vi) a common legal framework to oversee the simplified regulations for small enterprises; (iii) new cross-border insolvency regime based on the activities of insolvency practitioners as well as trustees. Niger made resolving insolvency easier United Nations International Commission on Trade Law (UNCITRAL) Model Law; (iv) clarified order by introducing a new conciliation procedure for companies in financial difficulties and a simplified of priority of creditors; (v) incentives to creditors who provide fresh money to troubled companies preventive settlement procedure for small companies. to facilitate their restructuring and recovery; and, (vi) a common legal framework to oversee the activities of insolvency practitioners as well as trustees. Guinea Bissau made resolving insolvency easier by introducing a new conciliation procedure for companies in financial difficulties and a simplified preventive settlement procedure for small companies. Madagascar Investment Construction The team worked closely with Antananrivo Municipality, providing training to staff as well 1 1 Climate permits as to private sector clients, including architects and engineers, to increase transparency and compliance with municipal rules. The project organized a validation workshop for delivering the results of a construction permit mapping report. Following recommendations of the report, Madagascar increased the transparency of dealing with construction permits by publishing construction-related regulations online where they are available free of charge. Madagascar Investment Trading across The project undertook a diagnostic study to identify redundancies in export and import processes. 1 1 Climate borders The team then presented reform recommendations, including implementation of the TRADENET system. The effort involved frequent engagement with customs officials and private sector stakeholders to sensitize them to the value of best practices. As a result, Madagascar simplified cross-border trading processes, streamlined customs procedures, and implemented an electronic data interchange system that has reduced the time required for preparation and submission of Continued on next page trade documents from 59 to 49 hours for exports and from 68 to 58 hours for imports. 94 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 95 ANNEX 1 : FIAS REFORM TOTALS AND DESCRIPTIONS ANNEX 1 : FIAS REFORM TOTALS AND DESCRIPTIONS 1.3 Reforms and Results from FIAS-Funded Projects (continued) 1.3 Reforms and Results from FIAS-Funded Projects (continued) DB DB COUNTRY PRACTICE TOPIC REFORM DESCRIPTION REFORM VALIDATED COUNTRY PRACTICE TOPIC REFORM DESCRIPTION REFORM VALIDATED Niger Investment Starting a Following passage of the uniform OHADA Company Act, Niger made starting a business easier 1 1 Togo Investment Resolving The council of ministers approved the new OHADA Insolvency Law in September 2015, and the 1 1 Climate business by reducing the minimum capital requirement. The project supported the OHADA Secretariat in Climate insolvency law went into effect in December 2015 for all member countries. The new law introduces the achieving enactment of a uniform company law for member countries. following reforms: (i) new conciliation procedure to encourage saving viable companies; (ii) simplified Nigeria Investment Getting credit Nigeria strengthened access to credit by creating a centralized collateral registry. The registry 1 1 regulations for small enterprises; (iii) new cross-border insolvency regime based on the United Climate was developed as a result of efforts by the IFC Finance & Markets Global Practice (F&M) to create Nations International Commission on Trade Law (UNCITRAL) Model Law; (iv) clarified order of priority a secured transactions regime. The Indicator-Based Reform team worked closely with the Office of creditors; (v) incentives to creditors who provide fresh money to troubled companies to facilitate of the Vice President of Nigeria as well as the F&M practice to ensure operationalization of the their restructuring and recovery; and, (vi) a common legal framework to oversee the activities of registry, overcoming many technical glitches. The registry is now live. This reform applies to both insolvency practitioners as well as trustees. Togo made resolving insolvency easier by introducing a Kano and Lagos. new conciliation procedure for companies in financial difficulties and a simplified preventive settlement Nigeria Investment Starting a The Indicator-Based Reform project has been working with the government for nearly four 1 1 procedure for small companies. Climate business years. In this process, the team has closely engaged with the Corporate Affairs Commission of Togo Investment Tax simplification The project developed a reform memo and action plan to improve the county's Doing Business ranking. 1 1 Nigeria and recommended them to automate their services. This reform has been supported Climate and compliance The project team conducted a diagnostics exercise and provided training. Togo made paying taxes and overseen over several years. The IBR team engaged with the newgovernment in December management easier by streamlining the administrative process of complying with tax obligations. Togo eliminated 2015, an engagement that resulted in the identification of this reform measure as a quick win. one administrative procedure required to pay taxes. Within one year, the the average time involved in The Corporate Affairs Commission was thus authorized to operationalize it. The reform has paying taxes was reduced from 270 hours to 216 hours. subsequently been implemented both in Kano and Lagos, with the average time for starting a Uganda Investment Tax simplification The project supported the Uganda Revenue Authority in introducing an online tax return filing system 1 1 ANNEXES business reduced from 28 days to 24 days in Lagos. Climate and compliance as part of a broader effort by the team to help the government simplify the return filing process. The Regional Investment Licenses and The East African Community Scorecard identified restrictions in telecommunication services in 1 management country made paying taxes easier by eliminating a requirement for tax returns to be submitted in paper Climate permits EAC partner sates which were not compliant with the EAC Common Market Protocol. Beginning copy following online submission, reducing the average time required to file returns from 209 hours to in January 2015, three EAC Partner States (Kenya, Rwanda, and Uganda) have moved ahead on 195 hours. a directive to operationalize the One Network Area (ONA) for voice in the region. Regional calls Zambia Trade Competition The Zambia Investment Climate Program II has assisted the Competition and Consumer Protection 1 made by users in the member states are exempted from surcharges applied on international Commission in the preparation and adoption of merger control guidelines. In the first months of incoming calls, and any additional charges to subscribers stemming from roaming within the implementation, compliance cost savings of approximately $154 thousand per transaction have been region have been removed. All calls in the three partner states now incur the same charges, generated; the average number of mergers subject to notification has been reduced; and the time for resulting in a reduction in telephone calling costs of more than 50 percent within the region. assessing mergers has been trimmed by 14 percent, from 97 to 83 days. The merger control guidelines, Rwanda Investment Licenses and The East African Community Scorecard identified restrictions in the professional services in the 1 issued in August 2015, increased the clarity and predictability of the legal system by explaining what Climate permits EAC partner sates which conflicted with the EAC Common Market Protocol signed by the EAC transactions need to be notified as well as what economic tests would be applied to assess a merger. partner states in 2010. Rwanda recognizes accounting professionals from the other EAC Partner The guidelines also create a fast-track procedure to handle in a more efficient way mergers that are not States. likely to harm competition. According to the competition law in Zambia, the guidelines are binding. Senegal Investment Getting credit Senegal improved access to credit information by establishing a new credit bureau. The Indicator- 1 1 Zambia Investment Registering The project developed reform memo and action plan followed by hands-on technical assistance aiming 1 1 Climate Based Reform project helped communicate this reform effort to the Doing Business team and Climate property to simplifiy the property transfer system and reduce transaction costs. The country made it more sponsored a data collection mission by the team which resulted in positive recognition of the affordable to transfer property by decreasing the property transfer tax from 13.5 percent of property reform in the Doing Business report. value to 9.9 percent. Senegal Investment Resolving The council of ministers approved the new OHADA Insolvency Law in September 2015, and 1 1 GRAND TOTAL 76 66 Climate insolvency the law went into effect in December 2015 for all member countries. The new law introduces the following reforms: (i) new conciliation procedure to encourage saving viable companies; (ii) simplified regulations for small enterprises; (iii) new cross-border insolvency regime based on the United Nations International Commission on Trade Law (UNCITRAL) Model Law; (iv) clarified order of priority of creditors; (v) incentives to creditors who provide fresh money to troubled companies to facilitate their restructuring and recovery; and, (vi) a common legal framework to oversee the activities of insolvency practitioners as well as trustees. Senegal made resolving insolvency easier by introducing a new conciliation procedure for companies in financial difficulties and a simplified preventive settlement procedure for small companies. Senegal Investment Tax simplification Senegal made paying taxes less costly by reducing the maximum cap for corporate income tax 1 1 Climate and compliance and implementing more efficient accounting systems and software. The Indicator-Based Reform management project helped communicate this reform effort to the DB team and spnsored a data collection mission by the team which resulted in positive recognition of the reform in the Doing Business report. Senegal Investment Investment policy In an example of synergistic cooperation between T&C and IFC, the project team has reported $150 1 Climate - Protection million in investment generated (still being verified) resulting from the team's resuscitation of a $300 million solar energy transaction, supported by IFC, that had been stalled due to technical legal issues. The project team helped resolve the impasse by working with the government to modify an administrative practice in Senegal. The issue had to do with differences in investor protection provisions used by most international lenders (including IFC) and those used by Senegal, which are based on French civil law. Togo Investment Getting credit The project shared a reform memo and helpd develop an action plan to undertake this reform in the 1 1 Climate getting credit sphere. Togo improved access to credit information by introducing regulations that govern the licensing and functioning of credit bureaus in the West African Economic and Monetary Union (UEMOA) member states 96 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 97 ANNEX 2 : PORTFOLIO OF FIAS-FUNDED PROJECTS IN FY16 ANNEX 2 : PORTFOLIO OF FIAS-SUPPORTED PROJECTS IN FY15 2.1 FIAS-Funded Client-Facing Projects Mapped to the World Bank Group Trade and Competitiveness Global Practice 2.1 FIAS-Funded Client-Facing Projects Mapped to the World Bank Group Trade and Competitiveness Global Practice TOTAL TOTAL FYTD FIAS PROJECT TOTAL TOTAL FYTD FIAS PROJECT REGION COUNTRY PROJECT NAME FUNDING EXPENDITURES EXPENDITURES STAGE REGION COUNTRY PROJECT NAME FUNDING EXPENDITURES EXPENDITURES STAGE East Asia and Pacific Cambodia Cambodia IC Agribusiness $2,870,078 $91,878 $91,878 PIPELINE Middle East and North MENA Region IBRA Project in the MENA Region $1,033,091 $384,446 $247,279 PORTFOLIO East Asia and Pacific Cambodia Cambodia Investment Policy $1,227,751 $237,536 $158,978 PIPELINE Africa East Asia and Pacific Lao People’s Lao PDR Investment Climate Reform $2,000,000 $126,601 $126,601 PIPELINE Middle East and North Morocco Morocco Quality of Public Service Delivery and $525,000 $61,178 $61,178 PORTFOLIO Democratic Republic Africa Transparency to Improve the Investment Climate East Asia and Pacific Mongolia Mongolia Investment Policy and Investor Protection $870,000 $38,181 $376 PIPELINE Middle East and North Morocco E4E Logistics/ Tourism Morocco $1,094,980 $383,140 $137,293 PORTFOLIO Confidence Africa East Asia and Pacific Myanmar Myanmar Investment Policy $2,082,133 $503,319 $12,263 PORTFOLIO Middle East and North Pakistan Punjab Energy $1,541,568 $515,341 $62,997 PORTFOLIO East Asia and Pacific Philippines Philippines Agribusiness Trade Competitiveness $3,311,655 $575,900 $175,430 PORTFOLIO Africa East Asia and Pacific Solomon Islands Pacific Investment Climate Rapid Response $2,088,528 $961,043 $933,512 PORTFOLIO Middle East and North Pakistan Pakistan Trade Facilitation Project $1,332,505 $268,482 $78,854 PORTFOLIO Africa East Asia and Pacific Timor-Leste Timor-Leste Investment Policy and Promotion $150,000 $66,576 $66,576 PIPELINE South Asia Bangladesh TAC Programmatic TA in Bangladesh $20,260,000 $202,560 $202,560 PIPELINE East Asia and Pacific Timor-Leste Timor-Leste Trade Logistic $1,889,271 $706,926 $127,491 PORTFOLIO South Asia Bangladesh Low-Carbon Industry Initiative in Bangladesh $859,744 $1,124 $1,124 COMPLETED East Asia and Pacific Timor-Leste Timor-Leste Tibar Bay Investment Plan (TBIP) - Spatial $1,075,383 $395,261 $395,513 PIPELINE and GVC Cluster Development South Asia Bhutan Financial Infrastructure Project Bhutan $972,911 $252,004 $173,896 PORTFOLIO East Asia and Pacific Vietnam Vietnam Private Sector Competitiveness $4,150,000 $138,081 $138,08 PIPELINE South Asia India Odisha Inclusive Growth Partnership $2,706,384 $409,005 $87,199 PORTFOLIO Europe and Central Asia Albania Western Balkan Investment Climate Agribusiness $10,125,000 $296,399 $239,428 PORTFOLIO South Asia India Buddhist Circuit Tourism: Facilitating Growth Corridors $3,797,378 $121,548 $93,761 PORTFOLIO in UP and Bihar ANNEXES Europe and Central Asia Armenia ECA Gender Project $275,000 $20,013 $20,0131 PIPELINE South Asia India India Ease of Doing Business $2,742,638 $441,943 $336,314 PORTFOLIO Europe and Central Asia Armenia Armenia Investment Climate II $1,482,991 $494,601 $324,399 PORTFOLIO South Asia Nepal Nepal ICRP Regulatory Reform $3,652,721 $390,540 $390,427 PORTFOLIO Europe and Central Asia Azerbaijan Azerbaijan Agribusiness Competitiveness $2,400,000 $106,193 $106,193 PIPELINE South Asia Nepal Nepal Investment Climate for Industry $2,485,158 $678,774 $483,544 PORTFOLIO Europe and Central Asia Belarus Belarus: National Quality Infrastructure and Business $3,330,174 $838,151 $444,111 PORTFOLIO Regulatory Reform Program 2014 - 2016 South Asia Southern Asia Region SA Regional Trade $4,878,000 $865,364 $296,742 PORTFOLIO Europe and Central Asia Bosnia and Herzegovina Bosnia and Herzegovina Local Investment-Friendly $8,052,361 $366,349 $108,589 PORTFOLIO South Asia Sri Lanka Sri Lanka Investment Policy and Promotion Project $450,000 $58,294 $58,294 PIPELINE Environment (LIFE) Sub-Saharan Africa Africa Region Indicator-Based Reform in Sub-Saharan Africa $1,887,970 $759,721 $428,812 PORTFOLIO Europe and Central Asia Central Asia Region Trade Facilitation Support Program Europe and $1,000,000 $91,749 $91,749 PIPELINE Sub-Saharan Africa Africa Region IC Rapid Response III $2,041,397 $622,741 $469,243 PORTFOLIO Central Asia Sub-Saharan Africa Benin Benin Investment Climate Reform Program $1,554,982 $277,615 $255,081 PORTFOLIO Europe and Central Asia Eastern Europe Region Indicator Based Reform Advisory in ECA $971,835 $303,180 $303,180 PORTFOLIO Sub-Saharan Africa Burundi Burundi Investment Climate Reform Program 2 $507,496 $137,482 $127,203 PIPELINE Europe and Central Asia Georgia Georgia IC Project $1,894,000 $517,448 $484,288 PORTFOLIO Sub-Saharan Africa Cameroon Cameroon Investment Climate Reform Program $1,698,379 $488,788 $9,635 PORTFOLIO Europe and Central Asia Kyrgyz Republic Central Asia Tax Project $5,133,159 $771,405 $114,807 PORTFOLIO Sub-Saharan Africa Chad Chad Investment Climate Program $650,000 $213,764 $208,076 PORTFOLIO Europe and Central Asia Kyrgyz Republic Central Asia Trade Logistics Project $4,397,082 $251,818 $249,605 PIPELINE Sub-Saharan Africa Congo, Democratic Improving DRC's Investment Climate at National and $875,000 $448,895 $100,803 PORTFOLIO Europe and Central Asia Kyrgyz Republic Kyrgyz Republic Investment Climate $2,834,334 $748,648 $8,770 PORTFOLIO Republic of Provincial Levels Europe and Central Asia Moldova Investment Cliamte Reform Moldova $3,499,265 $2,054 $847 COMPLETED Sub-Saharan Africa Cote D'Ivoire Cote d'Ivoire Investment Climate Reform Program - $2,433,987 $536,438 $194,094 PORTFOLIO Europe and Central Asia Serbia Trade Logistics South East Europe $2,731,924 $21,540 $1 COMPLETED Business Regulation Latin America and Caribbean Region Trade Logistics in the Caribbean $2,435,233 $518,787 $481,810 PORTFOLIO Sub-Saharan Africa Eastern Africa Region East African Community IC Phase 2 $8,080,035 $580,502 $580,502 PORTFOLIO Caribbean Sub-Saharan Africa Ethiopia Ethiopia - Livestock - MIRA $2,100,000 $54,684 $54,684 PORTFOLIO Latin America and Colombia Investment Policy Colombia $855,000 $126,622 $126,622 PORTFOLIO Sub-Saharan Africa Ethiopia Livestock Micro Reforms for African Agribusiness $4,575,000 $308,291 $308,291 PIPELINE Caribbean Sub-Saharan Africa Guinea Guinea Business Regulation $1,900,520 $719,439 $49,715 PORTFOLIO Latin America and Latin America Region Indicator Based Reform Advisory in LAC $2,035,933 $311,272 $312,854 PORTFOLIO Sub-Saharan Africa Guinea-Bissau Guinea-Bissau Cashew Sector Development Project $1,175,000 $90,402 $90,402 PIPELINE Caribbean Sub-Saharan Africa Liberia Liberia Trade 2 $1,045,000 $133,014 $126,294 PORTFOLIO Latin America and Latin America Region Central America Regional Agribusiness Trade $2,617,038 $909,276 $475,837 PORTFOLIO Sub-Saharan Africa Madagascar Madagascar Investment Climate Reform Program $2,121,000 $685,869 $277,359 PORTFOLIO Caribbean Logistics Project Sub-Saharan Africa Malawi Promoting competition in SSA $1,300,000 $73,602 $73,602 PIPELINE Latin America and Peru Supporting Peru Raise to OECD Stabdards $954,000 $419,443 $419,443 PORTFOLIO Sub-Saharan Africa Mali Mali Investment Climate Program - Phase 3 $244,779 $30,254 $30,254 PIPELINE Caribbean Sub-Saharan Africa Mali Mali investment Climate Program Economy Wide $1,740,000 $824,998 $824,998 PORTFOLIO Middle East and North Afghanistan Afghanistan Investment Climate Program $12,711,000 $44,469 $44,469 PIPELINE Sub-Saharan Africa Mozambique Mozambique Investment Climate Program $1,024,229 $147,530 $125,458 PORTFOLIO Africa Sub-Saharan Africa Sao Tome and Principe Sao Tome and Principe Investment Climate Project $1,247,191 $183,676 $163,869 PORTFOLIO Middle East and North Afghanistan Afghanistan Business Registration and Licensing $2,000,000 $358,823 $358,823 PORTFOLIO Sub-Saharan Africa Senegal Warehouse Receipts System Development in Senegal $1,100,721 $226,115 $199,925 PORTFOLIO Africa Reform Phase II Project Sub-Saharan Africa Somalia Somalia Invesment Climate Reform Program $2,516,603 $795,246 $419,259 PORTFOLIO Middle East and North Egypt, Arab Republic of Egypt SubNational Doing Business 2013 $1,367,474 $96,599 $83,187 PORTFOLIO Sub-Saharan Africa South Sudan South Sudan Phase 3 (Client Engagement) $941,000 $477,360 $266,393 PORTFOLIO Africa Sub-Saharan Africa Tanzania Tanzania Livestock MIRA $2,100,000 $83,854 $79,000 PORTFOLIO Middle East and North Egypt, Arab Republic of Egypt Fast Track Investment Policy Technical $400,000 $160,501 $160,501 PIPELINE Africa Assistance Sub-Saharan Africa Togo Togo Investment Climate Reform Program $716,098 $52,654 $52,654 COMPLETED Middle East and North Egypt, Arab Republic of ICT Investment Policy in Egypt $2,514,126 $221,080 $221,080 PORTFOLIO Sub-Saharan Africa Togo Togo Trade Facilitation project $1,900,000 $104,204 $100,720 PIPELINE Africa Sub-Saharan Africa Uganda Uganda IC Industry Program $951,156 $170,898 $49,299 PORTFOLIO Middle East and North Egypt, Arab Republic of Egypt Energy Efficient Industries $2,300,000 $391,115 $246,080 PORTFOLIO Sub-Saharan Africa Uganda Uganda Investment Climate Program $1,988,797 - $0 COMPLETED Africa Sub-Saharan Africa Western Africa Region OHADA Uniform Acts Reform phase 2 $3,769,027 $464,203 $464,203 PORTFOLIO Middle East and North Jordan JOR Inspection Reform Project Phase II $4,842,520 $859,778 $28,137 PORTFOLIO Sub-Saharan Africa Western Africa Region West Africa Trade Logistics $4,788,847 $838,051 $738,590 PORTFOLIO Africa Sub-Saharan Africa Western Africa Region Investment Policy Reform for West Africa Regional $10,350,000 $1,368,873 $1,368,873 PORTFOLIO Middle East and North Jordan Jordan Investment Reform Project $400,000 $57,514 $57,514 PORTFOLIO Organizations Africa Sub-Saharan Africa Zambia Zambia Iinvestment Climate Program II $3,090,504 $543,596 $215,856 PORTFOLIO Middle East and North Lebanon Lebanon Simplification and Automation Phase 2 $1,733,910 $224,114 $98,461 PIPELINE World World Region Tax Transparency Exchange of Information - Client $7,309 $13,295 $13,295 OTHER Africa Facing World World Region Competition Policy for Investment Climate $2,007,900 $311,046 $311,046 PORTFOLIO Grand Total 98 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 99 ANNEX 2 : PORTFOLIO OF FIAS-SUPPORTED PROJECTS IN FY16 2.2 FIAS-Funded Knowledge Management and Product Development Projects Mapped to the World Bank Group Trade and Competitiveness Global Practice TOTAL FYTD FIAS % FIAS PROJECT REGION PROJECT NAME TOTAL FUNDING EXPENDITURES EXPENDITURE EXPENDITURES STAGE World Business Regulation Product Development and KM $1,153,109 $457,835 $457,835 100% PORTFOLIO World Gender in Investment Climate $1,161,120 $733,734 $733,734 100% PORTFOLIO World Promoting Competition $2,195,108 $1,165,310 $980,154 84% PORTFOLIO World ICT-enabled Investment Climate Reform Theme Project $877,577 $355,772 $355,772 100% PORTFOLIO World Joint Donor/World Bank Group Program on Impact and Value $4,006,979 $931,094 $879,941 95% PORTFOLIO for Money World Investment Policy Product Development and Roll Out $2,220,895 $975,147 $953,181 98% PORTFOLIO World Business Taxation Product Design $1,490,868 $67,560 $67,560 100% PORTFOLIO World Climate Competitive Industries Product Development Project $1,553,929 $972,514 $759,901 78% PORTFOLIO World Trade Logistics PDP (FY13-FY17) $6,500,000 $2,082,744 $2,082,744 100% PORTFOLIO World IC Indicator Based Reform Advisory Global $1,233,091 $505,030 $503,761 100% PORTFOLIO World Debt Resolution $1,164,605 $421,007 $392,414 93% PORTFOLIO World IC-Business Taxation (Tax Transparency) $3,063,944 $1,618,730 $1,618,730 100% PORTFOLIO ANNEXES World Investment Climate for Tourism - Global $1,291,155 $496,467 $496,467 100% PORTFOLIO World IC Agribusiness Supply Chain PDP $2,890,000 $1,378,282 $1,378,282 100% PORTFOLIO World T&C Manufacturing Product Development Project $860,000 $220,148 $220,148 100% PORTFOLIO World Good Regulatory Practice Program -- Governance GP $1,689,000 $287,967 $253,956 88% PORTFOLIO components World Good Regulatory Practices Program in T&C GP $1,440,000 $276,047 $276,047 100% PORTFOLIO World Public-Private Dialogue 3.0 $400,000 $426,768 $426,768 100% PORTFOLIO World Investment Climate Applied Research PDP $480,000 $480,112 $480,112 100% PORTFOLIO World T&C Skills for Competitiveness PDP $350,000 $331,245 $331,245 100% PORTFOLIO World IT Enabled Services PDP $100,000 $48,254 $48,254 100% PORTFOLIO World Competitive Cities Product Development Project $220,000 $199,567 $199,567 100% PORTFOLIO World National Quality Infrastructure $575,000 $196,862 $196,862 100% PORTFOLIO World Supporting High-Growth Businesses $100,000 $73,295 $73,295 100% PORTFOLIO World Creative Industries PDP $100,000 $91,368 $91,368 100% PORTFOLIO Grand Total 2.3 FIAS-Funded Client-Facing IBRD Projects TOTAL FYTD FIAS PROJECT REGION COUNTRY PROJECT NAME EXPENDITURES EXPENDITURES STAGE East Asia and Pacific Vietnam Vietnam Trade Facilitation $439,784 $271,758 PORTFOLIO Latin America and Latin America Region Regional CA project to support TFA $346,098 $74,415 PORTFOLIO Caribbean Latin America and Latin America Region Identification of reform areas $84,757 $84,757 PORTFOLIO Caribbean Latin America and Latin America Region Technical assistance to align with TFA $117,309 $117,309 PORTFOLIO Caribbean Latin America and Latin America Region Tracking of reform implementation - - PORTFOLIO Caribbean Sub-Saharan Africa Botswana Botswana Trade Facilitation $699,357 $652,081 PORTFOLIO Sub-Saharan Africa Malawi Malawi Growth and Competiveness ESW $638,569 $462,817 PORTFOLIO Continued on next page 1 0 0 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 101 ANNEX 3: ABBREVIATIONS ANNEX 3: ABBREVIATIONS (continued) ADR alternative dispute resolution NEM non-equity modes of investment AEO authorized economic operator NPL non-performing loan AOP authorized operator program NQI national quality infrastructure APEC Asia-Pacific Economic Cooperation OECD Organization for Economic Cooperation and Development AS advisory services OECS Organization of Eastern Caribbean States B2G business to government OHADA Organization for the Harmonization of Business Law in Africa BOP base of the economic pyramid OSS one-stop shop BSI business safety inspections P2P peer to peer CAK Competition Authority of Kenya PEECA Punjab Energy Efficiency and Conservation Agency CCS compliance cost savings PPD public-private dialogue CIDA Canadian International Development Association PTB National Metrology Institute of Germany COMESA Common Market for Eastern and Southern Africa SEZ special economic zone COMIECO Council of Ministers for Central American Economic Integration SIECA Secretariat for Central American Economic Integration DEC Development Economics Group, World Bank Group SIRM systemic investor response mechanism DFID United Kingdom Department for International Development SME small and medium enterprises ANNEXES DRBE Debt Resolution and Business Exit SPS sanitary and phytosanitary sphere EAC East African Community T&C Trade & Competitiveness Global Practice ECA Europe and Central Asia Region, World Bank Group TFA Trade Facilitation Agreement ECOWAS Economic Community of West African States TFSP Trade Facilitation Support Program EEC Eurasian Economic Commission TPP Trans-Pacific Partnership EEU Eurasia Economic Union TRS time-release study FCS states in fragile and conflict-affected situations TTIP Transatlantic Trade and Investment Partnership FDI foreign direct investment UNCITRAL United Nations Commission on International Trade Law FIAS Facility for Investment Climate Advisory Services UNCTAD United Nations Conference on Trade and Development F&M Finance & Markets Global Practice UNDP United Nations Development Programme FMTAAS Funding Mechanism for Technical Assistance and Advisory Services (IFC) USAID United States Agency for International Development FY fiscal year VAT value-added tax G2B government to business VPU vice presidential unit (World Bank Group GDP gross domestic product WAEMU West African Economic Monetary Union GVCs global value chains WCO World Customs Organization IBR Indicator-Based Reform WEF World Economic Forum IBRD International Bank for Reconstruction and Development WRS warehouse receipt system IC3 Mali Investment Climate 3 project WTO World Trade Organization IC AR Investment Climate Applied Research ICR implementation of commercial registry ICT information and communication technologies IDA International Development Association IFC International Finance Corporation INSOL International Association of Restructuring, Insolvency & Bankruptcy Professionals IPP Investment Policy and Promotion IRM investment reform map; investment reform memo ISO International Organization for Standardization KEA Korea Energy Agency LAC Latin America and Caribbean Region, World Bank Group LGIF Lebanese e-Government Interoperability Framework LLC limited liability corporation M&E monitoring and evaluation MCPAT Markets and Competition Policy Assessment Tool MIGA Multilateral Investment Guarantee Agency MSE; MSME micro and small enterprises; micro, small, and medium enterprises 1 0 2 2016 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 103 Through the FIAS program, the World Bank Group and donor partners facilitate investment climate reforms in developing countries to foster open, productive, and competitive markets and to unlock sustainable private investments in sectors that contribute to growth and poverty reduction. The FIAS program is managed by the Trade & Competitiveness Global Practice of the World Bank Group. For more information, visit www.worldbank.org/trade, www.worldbank.org/competitiveness, or Google ‘the Facility for Investment Climate Advisory Services’.