ANNUAL 2015 REVIEW With support from: ©2016 The World Bank Group Contents 1818 H Street NW Washington, DC 20433 Telephone: 202-473-1000 265 Internet: www.worldbank.org All rights reserved. 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 Message from the Senior Director . . . . . . . . . 2 reforms 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 Main Achievements and Milestones . . . . . . . . . 4 Articles of Agreement. We encourage use for educational and non-commercial purposes. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Directors or Special Topic: Investment Policy & Promotion . . . 12 Executive Directors of the respective institutions of the World Bank Group or the governments they represent. The World Bank achieved in 75 client countries Group does not guarantee the accuracy of the data included in this work. Operational Highlights . . . . . . . . . . . . . . . . .18 FY12–15, exceeding target for Rights and Permissions cycle with one year to go Core Thematic Areas in Investment Climate The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission to reproduce Interventions . . . . . . . . . . . . . . . . . . . . . . .36 portions of the work promptly. 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Annex 1: FIAS Reform Totals and Descriptions . . . . . 68 About the Facility for Investment Climate Advisory Services (FIAS) Annex 2: Portfolio of FIAS-Supported Projects in FY15. 76 Through the FIAS program, the World Bank Group and donor partners facilitate investment climate reforms in developing Annex 3: Abbreviations . . . . . . . . . . . . . . . . . 79 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 FY 12–16, in new investment through of the World Bank Group. For more information, visit www.wbginvestmentclimate.org, www.worldbank.org/trade and FIAS-supported projects that www.worldbank.org/competitiveness. created thousands of jobs in underdeveloped regions. This report was written by the staff of the World Bank Group’s Trade & Competitiveness Global Practice and edited by John Diamond, with editing and design support provided by Lorenzo Nelli-Feroci and Boyan Stanoev. Cover and interior photo credits, inside back cover. 3 1 “T&C will enable FIAS to support an MESSAGE FROM integrated suite of cutting-edge analytical, advisory, financial, and convening services to THE SENIOR DIRECTOR help countries compete in global markets.” Thirty years ago the International Finance Global Practice (T&C). The merging of a highly emphasis on conflict-affected countries, transparency and political economy, green Corporation embarked on an effort to help skilled and experienced Bank Group team members of the International Development competitiveness, and a focus on high-growth developing countries attract more foreign with a well-established program of helping Association, and the Sub-Saharan Africa businesses will cut across the entire FIAS direct investment to benefit their economies. developing countries bodes well for the future region. Over the course of the cycle this work portfolio. The program grew rapidly to include all the of FIAS and for the countries we serve. As we has benefited more than 75 countries by major institutions of the World Bank Group celebrate the 30th anniversary of FIAS, it gives streamlining business regulation, rationalizing On behalf of the T&C team, I would like to and expanded its mission to encompass me great pleasure to present the FIAS 2015 tax policies, promoting trade and investment, convey our heartfelt thanks to our FIAS donors domestic as well as foreign investment Annual Review, outlining our achievements and increasing the competitiveness of their and partners for continuing their strong strategies. Today the Facility for Investment in working with poor and conflict-affected businesses large and small. support in FY15 and for working with us Climate Advisory Services (FIAS) is at work countries as we pursue the Twin Goals of toward the next chapter in the FIAS effort to across the developing world, particularly in the eliminating extreme poverty and boosting Planning is well under way for an even more ensure that the benefits of economic growth most vulnerable countries, fostering policies shared prosperity. ambitious program for the FY17–21 cycle. reach the poorest and most vulnerable people. and sharing expertise to encourage robust, T&C will enable FIAS to support an integrated sustainable, and inclusive growth led by the With one year still to go in the FY12–16 suite of cutting-edge analytical, advisory, private sector. strategy cycle, FIAS support as of the end financial, and convening services to help of FY15 has exceeded the target goal of 250 countries compete in global markets. The Fiscal 2015 marks the first year in which reforms benefiting the business environment work will focus on three strategic pillars: Anabel Gonzalez the programs supported by the FIAS Trust and private sector activity in client countries. improving business environments in client Senior Director Fund have been implemented by the World For FY15, the total of 68 reforms achieved countries; expanding market opportunities; Trade & Competitiveness Global Practice Bank Group’s new Trade & Competitiveness in 40 client countries reflects continued and strengthening firm competitiveness. World Bank Group The thematic areas of gender and inclusion, 2 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 3 1 FISCAL YEAR 2015 MAIN ACHIEVEMENTS AND MILESTONES MAIN ACHIEVEMENTS From streamlining construction regulations in Benin to expanding trade in the Balkans to ensuring the safety of trekking trails in the Himalayas, FIAS support for projects promoting inclusive growth achieved significant successes in FY15 through a more versatile World Bank AND MILESTONES Group structure. The Trade & Competitiveness Global Practice (T&C), a joint World Bank/ IFC organization, was launched in FY15 and took over responsibility for implementing FIAS- supported programs. T&C’s expansive footprint—with staff located in over 80 offices, including its Istanbul, Singapore, and Vienna hubs—ensures proximity to clients and a In FY15 the Trade & Competitiveness unique rapid-response capability. The evolution of FIAS entails a shift in emphasis from the Global Practice began implementing quantity of reforms to their quality and depth. A more robust system for measuring results FIAS-supported programs, exceeding and impact enables FIAS to measure benefits in terms of jobs, investment, and economic targets for reforms and investment growth. T&C’s commitment to innovation puts good ideas into practice on a foundation of generation strong research and analytics, with a firm commitment to effective implementation. Impact and Reform: Five-Year Target Exceeded in Four Years FIAS FY15 FINAL REFORM COUNT Preliminary Count 68 • FIAS-supported programs implemented by T&C of which in FCS 23 34% contributed to 68 reforms in 40 client countries and one region (76 reforms in 39 countries in FY14). of which in IDA 43 63% • With one year still to go in the FY12–16 strategy cycle, of which under Trade 25 37% FIAS has helped bring about 265 reforms, exceeding of which under Competitive Industries 1 1% the five-year target of 250 reforms for the strategy cycle of which under Investment Climate 42 62% (see Annex 1.1, FIAS FY12–16 Reform Totals, p. 68). These have taken place in 75 countries across all of which in EAP 1 1.5% developing regions. of which in ECA 14 20.6% • The Bank Group’s Doing Business report records 43 of of which in LAC 7 10.3% the FY15 reforms, or 63 percent (in FY14: 74 percent; of which in MENA 0 0.0% see FIAS-supported reforms table on p. 11). of which in SA 1 1.5% • FIAS-supported efforts contributed to $170 million in of which in SSA 45 66.2% new investment generated in FY15 for an energy- of which DB Validated* 43 63% efficient power plant project in Bangladesh. For of which DB16 validated 36 53% FY12–15, private sector investment generated with * FIAS support totals $1.36 billion, well above the target 7 reforms have been validated by DB15 and reported retroactively. of $1 billion.  IAS support helped achieve $20.8 million in direct compli- • F REGIONAL DISTRIBUTION OF REFORMS, FY15 ance cost savings (CCS) in FY15, reflecting lower business 100% = 68 Reforms costs due to streamlined regulation and permitting. $170 68 $20.8 n Sub-Saharan Africa, 45 (66.2%)  he FY12–16 strategy cycle seeks to achieve a total of • T $600 million in cost savings as a result of investment n Europe and Central Asia, climate projects and related reforms ($350 million in CCS 14 (20.6%) and $250 million in trade-related savings). Actual savings achieved have surpassed the overall target, reaching $626 n Latin America and the Caribbean, 7 (10.3%) million through FY15. Trade-related cost savings of $433 million reforms investment generated FIAS-supported work by million in direct compliance cost • million far exceed the target. The $193 million in CCS is expected to increase by the end of FY16. Doing Business 2016 lists 10 countries as showing n East Asia and Pacific, 1 (1.5%) n South Asia, 1 (1.5%) supported by FIAS in FY15. the World Bank Group savings in FY15 due to the most improvement across three or more areas Total FDI for cycle: $1.36 contributed to 68 reforms streamlined regulation and measured in the report. Of these, six countries— billion, 36% above target in 40 client countries. lower business costs Benin, Costa Rica, Jamaica, Kenya, Senegal, and Uganda—benefited from FIAS-supported projects and implemented reforms with FIAS support. 4 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 5 Trade & Competitiveness Global Practice: Development percent. This was the first year in which client satisfaction was measured for T&C, which assumed In the early years, FIAS was the only part of Effectiveness and Client Satisfaction responsibility for implementing FIAS-funded programs the Bank Group fully dedicated to investment • The Development Effectiveness rating for FIAS-funded in FY15. The client satisfaction rating for these projects increased 12 percentage points to 100 percent programs in FY14 was 91 percent. climate reform. More recently, World Bank in FY15. and IFC advisory services became important • Satisfaction with Quality of IFC Service increased in • Five client-facing FIAS-funded projects closed in FY15. FY15 from 92 percent to 95 percent, while satisfaction players in this area. As FIAS-supported work All five received a positive (“successful”) rating. with Timeliness and Responsiveness increased from drew from the resources and expertise of the • Overall client satisfaction with advisory services 86 percent to 88 percent. World Bank and MIGA, in addition to IFC, the provided in FY15 by the Trade & Competitiveness • FIAS-supported projects also received an overall client FIAS program became the only tripartite World Bank Group operational entity. Global Practice, through which a majority of FIAS- satisfaction rating of 89 percent in FY15 (88 percent in funded programs are implemented, totaled 89 FY14). Originally the “F” in FIAS stood for ‘foreign,’ as in foreign direct investment, a high-priority goal of developing countries. Beginning with the FY12–16 strategy cycle, the “F” stood for facility, reflecting the broader FIAS mission as a financial instrument for supporting not only increased FDI but also FIAS DEVELOPMENT EFFECTIVENESS RATINGS, FY08-FY15 TRADE & COMPETITIVENESS GLOBAL PRACTICE CLIENT (Share of completed projects with positive ratings) SATISFACTION, FY08-FY15* development and expansion of domestic investment in developing countries. Over time, the focus of (Share of clients satisfied) FIAS-supported work shifted from diagnostics to the design of solutions and implementation of reforms. 100% FISCAL YEAR 2015 MAIN ACHIEVEMENTS AND MILESTONES A key part of this success was the ability to leverage and collaborate with IFC field-based advisory 100% 100% 94% 92% 88% 89% 91% 91% 89% 86% 83% 88% 85% services, World Bank lending programs, and MIGA technical assistance activities. 80% 80% FIAS-supported investment climate work has strong links to the efforts of developing countries to 60% 60% improve their ranking in the World Bank Group’s annual Doing Business reports. Over the past four 40% 40% years, 28 out of the 40 countries to make the annual top 10 most-improved list in Doing Business have implemented projects with FIAS support; 21 of those countries achieved one or more reforms. 20% 20% The FIAS story continues with the approach of the FY17–21 strategy cycle. Extensive planning 0 0% FY12 FY13 FY14 FY15 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 undertaken by T&C in FY15, in consultation with donors, has led to a robust proposal now going through FY08-FY11 *Client satisfaction ratings for Investment Climate Business Line final review and approval. The strategy envisions a broader FIAS mandate supported by one of the only average (61%) from FY08-FY14. two Global Practices that encompasses both World Bank and IFC elements. Portfolio Information: Focus on Priority Client Groups cycle (in FY14, FIAS supported projects in 19 of 36 FCS countries). Reform results for FY15 reflect continuing emphasis on FIAS priority client groups: • 63 percent of reforms were achieved in IDA countries (83 percent in FY14). • 34 percent of reforms were achieved in countries in • 66 percent of reforms were achieved in Sub-Saharan fragile or conflict-affected situations (30 percent in Africa (82 percent in FY14).1 FY14), the highest level achieved in the last five years. • The 68 reforms in FY15 exceed the yearly target of 50 • FIAS supported active projects in 21 out of the world’s reforms. 33 FCS countries in FY15, the highest number for the FIAS: Three Decades Helping Client Countries Grow their Economies FY15 marks the 30th anniversary of the FIAS trust funds. FIAS got its start as an IFC program, tracing its origins to a 1985 request from the Chinese government for advice on foreign investment legislation. With the support of an increasing roster of donors and partners, it rapidly grew to include programs and expertise spanning the Bank Group, with an expanding roster of client countries from across the developing world. Today it is one of the Bank Group’s longest-standing technical assistance programs. 1 The figures add up to more than 100 percent because of overlap between the FCS, IDA, and Sub-Saharan Africa categories. 6 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 7 FIAS Strategy Cycle Metrics, FY11–15 Balance in the FIAS Portfolio $8.4 million to knowledge management and product development projects ($7.2 million in FY14). With four years of the strategy cycle completed, the numbers indicate that steady-state expenditures are yielding As the figure below indicates, target spending, actual spending, and distribution of reforms by priority area are in • The share of expenditures on industry-specific more projects and reforms. FIAS-supported teams are now working in two-thirds of the FCS states and generating rough alignment in FY15. activities supported by FIAS totaled $1.57 million more reforms in more countries. (Figures for FY11 are shown to provide a pre-strategy cycle baseline.) in FY15, 15.9 percent of client-facing FIAS expenditures. This compares to 13.4 percent in FY14 TOTAL FIAS-SUPPORTED REFORMS IMPLEMENTED REFORMS RECORDED IN DOING BUSINESS RESULTS BY PRIORITY CLIENT GROUP , FY15 and 19 percent in FY13. Share of Client-Facing Project Expenditures and Total Reforms Strategy • The highest proportion of regional spending went 100 100% Cycle to Sub-Saharan Africa in FY15, accounting for 50 n Reforms 100% target: n Countries 76% percent, in keeping with the priority the FIAS 80 75 76 80% 75% 74% 50% 77% 68 *Yearly 69% 80% 70% program has placed on that region. reform 63% 60 62% 65% target: 50 60% • Funding administered via FIAS contributed to 19.8 46 60% 50% 50% percent of total T&C spending in FY15, and FIAS 40 42 41 39 40 40% funding was involved in projects that supported the 27 30 40% 31% 34% 27.5% implementation of 76 percent of all IFC advisory area 20 20% 20% reforms (68 of 89 reforms). 0 0% • The increasing share of expenditures devoted to FISCAL YEAR 2015 MAIN ACHIEVEMENTS AND MILESTONES FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 0 IDA-eligible countries Sub-Saharan Africa Fragile and conflict- knowledge and product development, from 40 affected situations percent in FY14 to 45 percent in FY15, reflects the emphasis on widely applicable knowledge products n Percent of Client-Facing Project Expenditures, Target in line with the FIAS strategy. n Percent of Client-Facing Project Expenditures, Actual REFORMS IN INTERNATIONAL DEVELOPMENT ASSOCIATION IMPLEMENTED REFORMS IN SUB-SAHARAN AFRICA n Percent of Total Reforms • Trade logistics drew the largest share of client-facing 100% Strategy 100% expenditures in FY15 with 18 percent, followed by Cycle 83% 82% FIAS Portfolio: Client-Facing, Knowledge and Product business regulation, indicator-based reform advisory, target: 80% 76% 80% and industry-specific work. 61% 63% 60% 65% 66% Development, Industry-Specific 60% 55% 60% • A FIAS-funded project in Bangladesh supporting a • FIAS funding was used to co-finance 69 projects low-carbon special economic zone won the Bank 45% 41% 40% implemented by T&C, including 17 non-client facing Group’s KNOWbel Award in the Client Solutions 40% projects focused on knowledge management and category, one of nine winners selected from among 20% 20% product development.2 387 entrants. The award celebrates teams that • Total project expenditures were $18.3 million in FY15, leverage knowledge for better business results and 0% 0% deliver high-impact benefits to clients, business, and FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 up slightly from $18 million FY14, with $9.9 million going to client-facing projects ($10.8 in FY14) and process impact. SHARE OF FIAS-SUPPORTED REFORMS ACHIEVED IN COUNTRIES FCS COUNTRIES, FIAS-SUPPORTED FCS PROJECTS AND IN FRAGILE AND CONFLICT-AFFECTED SITUATIONS REFORMS 100% 40 35 36 80% 33 33 33 30 24 60% 23 23 17 19 21 18 20 14 40% 11 33% 32% 30% 34% 10 7 24% 20% 0 0% FY11 FY12 FY13 FY14 FY15 n Total FCS Countries FY11 FY12 FY13 FY14 FY15 n FCS Countries with Active FIAS Projects n Number of Reforms 2 *Note: Target indicates goal per year for the FY12-16 Strategy Cycle. FIAS funding supported an additional 10 projects that had less than $10,000 in expenditures for the fiscal year. 8 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 9 FY12–15 Funding and Expenditures+ 2012 2013 2014 2015  FIAS-Supported Reforms by Region and Country, FY15 Investment Incentives Licenses and Permits Resolving Insolvency Construction Permits Registering Property Protecting Investors Enforcing Contracts Starting a business Property Transfers In US$, Share of In US$, Share of In US$, Share of In US$, Share of Tax simplification and compliance Investment Law Trade Logistics Contributions (Sources of Funds) Thousands Total Thousands Total Thousands Total Thousands Total Getting Credit management Competition Inspections Grand Total WORLD BANK GROUP CONTRIBUTIONS 12,089 36%  11,754   42% 9,917 19% 7,627 21% Tourism Core 8,188 24% 8,000 28% 7,600 14% 6,700 18% IFCa 4,088 12% 4,000 14% 4,500 9% 5,100 14% Region Country MIGA 2,500 8% 1,600 6% 1,500 3% - 0% EAST ASIA AND THE PACIFIC Philippines ü 1 World Bank 1,600 5% 2,400 8% 1,600 3% 1,600 4% EAST ASIA AND PACIFIC TOTAL 1 1 Project Specific/Other Contributions (IFC) 3,901 11% 3,754 13% 2,317 4% 927 3% EUROPE AND CENTRAL ASIA Albania ü** ü* ü* 3 Donor Contributions 21,390 63% 16,435 58% 42,584 81% 29,060 79% Armenia ü 1 Core 5,730 17% 5,532 20% 21,241 40% 7,872 21% Bosnia and Herzegovinab ü ü ü 3 Programmatic 6,678 20% 5,447 19% 15,410 29% 16,522 45% Kosovaa, b ü 1 Project Specific 8,982 26% 5,456 19% 5,933 11% 4,666 13% Kyrgyz Republic a ü* ü 2 Client Contributions 484 1% 90 0.3% 75 0.1% 50 0.1% Macedonia, FYR a ü 1 Total Contributions b 33,963a 100% 28,279 100% 52,577 100% 36,737 100% Montenegro ü 1 Less Trust Fund Administration Fees 1,122 1,021 2,507 1,421 Tajikistan ü** 1 Total Net Contributions 32,841 27,258 50,070 35,316 Ukraine ü* 1 EUROPE AND CENTRAL ASIA TOTAL 1 1 1 1 1 1 3 5 14 In US$, Share of In US$, Share of In US$, Share of In US$, Share of LATIN AMERICA Colombia ü** 1 FISCAL YEAR 2015 MAIN ACHIEVEMENTS AND MILESTONES Expenditures (Uses of Funds)a Thousands Total Thousands Total Thousands Total Thousands Total AND CARIBBEAN Costa Rica ü* 1 Staff Costs (including consultants) 19,740 70% 21,855 69% 22,439 81% 22,262 80% Dominican Republic ü** 1 Operational Travel Costs 5,847 21% 6,099 19% 3,643 13% 4,176 15% Guatemala ü** 1 Indirect Costs (including office and Honduras ü 1 9% 3,603 11% 1,792 6% 1,673 6% Jamaica ü** 1 operating costs) 2,455 Total Expenditures 28,042 100% 31,557 100% 27,875 100% 27,875 100% Peru ü 1 LATIN AMERICA AND CARIBBEAN TOTAL 1 3 1 1 1 7 SOUTH ASIA Bangladesha ü* 1 + Note: IFC Admin budget is included—this table does not match (donor) contributions in Table 1: Sources. SOUTH ASIA TOTAL 1 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 SUB-SAHARAN AFRICA Africa Regiona ü 1 FY15 provided by IFC to cover staff and travel costs of a number of mainstreamed Advisory Services (AS) positions related to the delivery of the FIAS Program. Angola ü* ü* 2 b FY12 donor contributions amended to correct a typographic error in the FY12 Expenditures table on page 6 of the FIAS 2012 Annual Review. Benin a ü* ü* ü* 3 Congo, Dem. Republic ü ü* ü* 3 Côte d'Ivoire a, b ü* ü** ü* ü* 4 Gabon ü* 1 Guinea a ü* 1 TOTAL EXPENDITURE BY THEMATIC PRIORITY CLIENT-FACING EXPENDITURE BY REGION, FY15 Kenya a ü 1 OF CLIENT-FACING PROJECTS, FY15 100% = $9,891,466 Madagascar a, b ü* ü* ü* ü* 4 100% = $9,891,466 Malawi a ü 1 Mali a, b ü* ü* 2 n International Trade and n Sub-Saharan Africa (50%) Mauritiusa ü 1 Investment (45%) n Europe and Central Asia (14%) Namibia ü* 1 n Business Regulation for n East Asia and Pacific (11%) Rwanda a ü ü* ü* ü* ü* 5 Enterprise Creation and n Latin America and Caribbean (10%) Senegal a ü* 1 Growth (37%) n Investment Climate for n Middle East and North Africa (6%) Seychelles ü 1 Industry (16%) n South Asia (6%) Sudan a, b ü 1 n Other (2%) n World (3%) Swaziland ü 1 Tanzania a ü 1 Togo a, b ü* ü* 2 Uganda a ü ü 2 PROJECT EXPENDITURES BY PRODUCT, FY15 PERCENT OF FIAS FY15 DIRECT PROJECT EXPENDITURES Zambia a ü ü* ü* 3 100% = $9,891,466 (Client-Facing and Non Client-Facing) Zimbabwea, b ü ü* ü* 3 100% = $18,331,183 SUB-SAHARAN AFRICA TOTAL 13 2 1 7 1 3 1 1 8 3 5 45 n Trade Logistics (18%) n Non Client-Facing KM/PD (46%) GRAND TOTAL 15 3 1 11 1 1 1 1 1 4 1 1 12 4 1 10 68 n Business Regulation (17%) n Client-Facing IDA (42%) Reforms captured by Doing Business 43 n Industry-specific IC: Real Sectors (16%) n Client-Facing Non-IDA (12%) FIAS Total of which in IDA 43 n Indicator-based Reform Advisory (16%) FIAS Total of which in FCS 23 n Investment Policy (14%) FIAS Total of which in AFR 45 n Business Taxation (13%) FIAS reforms under Investment Climate 42 n Debt Resolution & Business Exit (3%) FIAS reforms under Competitive Industries 1 n IC-Other (2%) FIAS reforms under Trade 25 International Development Association (IDA) country. a Fragile or conflict-affected situation. b * Of the 48 reforms under Doing Business topics, 36 were validated by Doing Business 2016 and 7 by Doing Business 2015. Five reforms reported under Doing Business topics do nto fall under the standarized Doing Business case study. ** These reforms are recognized retroactively; they were validated by Doing Business 2015, but not reported during FY14. 10 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 11 2 SPECIAL TOPIC INVESTMENT POLICY INVESTMENT POLICY & PROMOTION International production has become an essential force of globalization and has led trade & PROMOTION and investment to become two dimensions of the same economic phenomenon. Today, a global network of more than 90,000 multinational enterprises, with their 900,000 affiliates, generates a quarter of the world’s GDP. In 2014 they sold more than $25 trillion worth of goods and services with an added value of more than $7 trillion. This is occurring in an The FIAS-funded Investment Policy increasingly internationalized economy where the generation of higher value-added jobs and Promotion program grew rapidly tends to depend on technical knowledge and innovation embedded in the production of in FY15 and today is active in more both new goods and services. As a result, the development dilemma for most governments than 60 countries throughout the is no longer whether to accord privileged status to foreign direct investment (FDI) over developing world. domestic investment. Rather, the challenge is how to link the domestic private and regional level. How to assist countries in avoiding, sector of a country with the dynamism generated by cross- addressing, and gradually overcoming those barriers is the border trade and investment patterns involving both FDI main focus of the FIAS-supported IPP effort. and non-equity modes (NEMs) of cross-border investment. This is where the work of investment policy and promotion Keen Client Interest in the IPP Offer in FY15 (IPP), supported by FIAS and implemented by the Trade & During FY15, the new IPP technical assistance offering of Competitiveness Global Practice, comes in. T&C brought about a substantial increase in the number of Evidence shows that cross-border investments can provide projects and their geographic coverage in the investment many benefits to host countries, including productivity policy and promotion space. Participation by investment improvements, better jobs, and knowledge transfers. stakeholders also increased sharply. Today IPP projects It can serve as a vehicle for transformation of domestic are being implemented in more than 60 countries in all production and better integration with global value chains regions of the world (see map, p. 14). The number of (GVCs). But these benefits are not automatic. projects reached 53 during 2015, up from just 5 projects in 2012. During FY15 alone, 14 new reimbursable advisory services (RASs) were requested by clients, or more than A New Policy Approach to Attract, Retain and Maximize one new request per month, contributing to a trend that the Benefits of Foreign and Domestic Investment has resulted in nearly 60 percent of RASs implemented by T&C being investment climate-related. Among these Investment policies are needed to maximize potential programs, those in the IPP space are in greatest demand. FDI gains. Most countries actively seek investments both The trend suggests that the new IPP offering responds to foreign and domestic to help advance their socioeconomic client needs, as evidenced by their willingness to finance objectives. But paradoxically, a wide array of legal, these services out of their own resources. regulatory, and administrative measures—some of which 90k 53 14 may be intended to attract investment—frequently act as The innovative approach of the IPP offering of T&C barriers preventing countries from maximizing the potential has also caught the attention of many investment of investments. For example, policies that mandate the stakeholders. During FY15, the T&C IPP team was invited inclusion of local content as part of foreign investment can IPP by many governments—such as Australia, Canada, the deter FDI instead of encouraging it. Such local content European Union and the United States—to directly engage performance requirements may distort competition and in brainstorming on the links between international be inconsistent with international or regional trade and big firms projects new RAS investment agreements and domestic reform. The investment obligations. Barriers such as these tend to team also engaged with many other institutions on joint affect different dimensions of the investment life cycle, activities, including more than a dozen conferences including strategy formulation, investment attraction, and other learning events. These interactions involved with 900,000 affiliates generate active with FIAS support (reimbursable advisory services) investment establishment, investment protection and a wide range of private sector, international, academic, 25% of global GDP in 60 client countries projects requested by client retention, investment linkages, both at subnational, national and non-governmental organizations, among them, the countries in FY15 12 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 13 European Chamber of Commerce of New York and the nuanced policy discussion of such issues as the investment basis. It is a type of investment that many countries seek establishment of FDI, particularly in services sectors; and U.S. Chamber of Commerce; Asia-Pacific Economic life cycle and the various types of investments (grants, to attract due its potential to transform a host country’s streamlining and improving the transparency of procedures Cooperation, the Association of Southeast Asian Nations, loans, technical assistance, direct purchase of equities, exports. Data suggests that incentives do play an important affecting the establishment of investment. and the Organisation for Economic Cooperation and etc.) along with the accompanying policy reform options but not necessarily decisive role in attracting this kind of Development (OECD); the University of Barcelona, best suited to national development objectives. This can FDI. They certainly cannot offset a bad investment climate. (v) Investor Protection & Retention: Survey evidence Columbia and Georgetown Universities, and the Peterson include enabling a reform champion within a government to Countries, therefore, must make sure that their incentives shows that one in four investors in developing countries Institute of International Economics. coordinate the implementation of the reform agenda with are effective and efficient. The IPP offering attempts to fill either withdraws from an existing investment or cancels other government agencies. this need by taking stock of existing investment incentives, planned investment projects because of concerns related IPP advises client governments on tailored solutions for mapping and improving procedures for allocation of to government actions such as expropriations, arbitrary integrating domestic firms into GVCs through policy tools (ii) Investment Promotion: This long-standing area of investment incentives; conducting cost-benefit analysis to regulatory changes, transfer restrictions, or breaches of geared toward domestic firms with a high potential to World Bank Group support helps developing countries assess the effectiveness of incentives; and reducing the contract. The IPP offering enables governments to improve participate in GVCs. These interventions can range from organize their investment promotion efforts to maximize degree of potential distortion of incentives by increasing investor confidence and retain greater levels of investment. strengthening legal and regulatory institutions and helping FDI. IPP advises on the institutional and policy their compatibility with applicable international rules and The goal is to eliminate gaps between international firms comply with quality standards to the elimination of arrangements needed to implement a country’s FDI vision disciplines on subsidies and performance requirements. and domestic legal frameworks on key investment policies that interfere with developing linkages to GVCs and while offering advice on sector competitiveness for FDI. protection guarantees. This line of work helps client beneficial economic spillovers. FIAS-supported teams provide hands-on support to develop (iv) Investment Entry & Establishment: Despite a long- countries streamline procedures that affect the effective and build capacity in key implementation areas such as term trend in the direction of liberalization of FDI inflows, implementation of investment protection guarantees and Launched during FY14, the investment policy product investor facilitation, sector targeting, investor outreach, and protectionism has regained momentum in recent years. establish mechanisms to improve regulatory transparency continued to evolve in FY15, incorporating investment investor aftercare. Thanks to FIAS support, the investment One out of four new investment policy changes made by and effective implementation of key investment protection SPECIAL TOPIC: INVESTMENT POLICY AND PROMOTION promotion into its offering, fine tuning its initial work policy and promotion team (up until FY15 located in the countries each tends to obstruct rather than liberalize FDI guarantees. It also helps them improve investment aftercare streams, and developing more nuanced approaches in areas Investment Climate for Industry unit) has helped client flows. The IPP intervention on investment entry enables services. All these activities aim at increasing the retention of such as investment incentives and investment linkages and countries attract $1.36 billion of new investment generated client countries to enhance investment entry regimes investment, preventing investor-government disputes, and domestic value added. The IPP product currently delivers over the last four years (see box, p. 15). by reducing or eliminating discriminatory barriers to the boosting investors’ confidence in the host state. solutions in six core areas, described in greater detail below: (i) investment reform map (IRM); (ii) investment (iii) Investment Incentives: Increasing competition for promotion; (iii) investment incentives; (iv) investment entry FDI has led most countries in the world to use investment and establishment; (v) investor protection and retention; and incentives to attempt to attract investments. The degree (vi) investment linkages and domestic value addition. to which incentives influence decisions on where to invest Measuring the results of different IC T&C interventions depends on a series of variables, beginning with the type of (i) Investment Reform Map: The IRM helps clarify FIAS has a long record of supporting advisory services for the implementation of economy-wide or FDI being targeted by host economies. Efficiency-seeking the investment policymaking process guided by the sector-specific reforms that level the playing field for businesses, help make markets more competitive FDI, for example, occurs when a firm that has invested understanding that not all cross-border investment is the widely consolidates operations on a product or process and attractive to investors, and streamline regulatory processes. All of these initiatives are important to same nor has the same impact. The IRM allows for a increasing investment stocks, reducing costs of business operations, calibrating firm productivity, amplifying regulatory transparency, and achieving other improvements that eventually leading to job creation and a greater growth. T&C-Implemented IPP Projects Worldwide The FIAS-supported T&C Investment Policy and Promotion team (IPP) has worked over the years on methodologies to measure the results of its interventions, including seeking a consistent approach to investment generated for the various reforms undertaken in client countries. The effort allows the FIAS- supported teams to measure the results aimed at both generating and retaining foreign and domestic investment in the short, medium and long term in client countries. This can be achieved through broader policy reforms or work with investment promotion and related agencies enabling the realization of specific investment opportunities. Until FY15, IPP activities used a specific methodology adapted to the needs of a particular project context. In FY15, in an effort to present even more consistent and meaningful results across projects, the team integrated all IPP investment climate methodologies into a new framework. While still under development, the framework is already being used to measure the results of specific policy reforms. Examples of some of the key elements of the framework point up the commitment to stating results accurately (and not overstating them) in a way that provides useful baseline data and enables comparisons as projects move forward. In the case of investment generated work, the framework stipulates that teams measure foreign direct investment that has either commenced or been realized, not just promised or approved. In cases where reform work targets domestic as well as foreign investment, the results indicator will include both. The framework also differentiates between different types of reform, weighing results based on the level of restrictiveness that certain barriers addressed by reforms pose to investment. For example, if foreign ownership is simply not allowed in a country, or limited to 25 percent of voting capital, an intervention that relaxes those restrictions would be critical to FDI entry. Relaxation of lesser restrictions, such as lengthy approval processes required to allow investors to make bank deposits in foreign currency, can be helpful to promoting FDI, but likely at a lower scale. 14 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 15 (vi) Investment Linkages & Domestic Value Addition: the benefits of investor protection from the award of IPP undertook a detailed competitiveness survey and Kosovo Investment Climate IPP offers a variety of solutions which clients may employ incentives. The logic behind the law is that investors analysis of some 26 agribusiness sub-sectors in Vietnam as policies to enable linkages with domestic businesses, should be protected irrespective of whether they apply to identify the best opportunities for attracting FDI. Kosovo is a post-conflict state in which IPP is working increase domestic value added, and better integrate for incentives. In seeing that this is done, the law will The results are helping to MARD to create a smoother to improve the investment climate and competitiveness FDI into the local economy. While the intent to increase also help align domestic legislation with Myanmar’s reception and facilitation service for incoming foreign for both domestic and foreign investors. The work targets domestic value added is an important element of national international commitments under its Bilateral Investment investors. Vinh Phuc and Dong Thap provinces are also increased FDI in-flows, increased investor protection, investment strategies, misguided policies often lead to Treaties and the Association of Southeast Asian Nations using the results to build capacity to proactively promote streamlined investment incentives, and increased capacity opposite results. In particular, policies to mandate local Comprehensive Investment Agreement. Due to the for FDI in sectors such as fruit processing, specialty rice of the investment promotion authority. content by fiat can deter FDI by forcing on the economy election process in the fall of 2015, this law is expected milling, and seafood processing, and in export processing The project has recently delivered a reformed investment a local sourcing scenario that cannot be achieved. This to be approved during the first half of 2016. It has already zones for floriculture and horticulture. law for the country—the impact of which is being indirectly promotes corruption, frightening away serious generated the most extensive consultation process for measured. The FIAS-supported effort includes a support investors and stretches the administrative capacities of an economic affairs law in recent memory. As a result of client countries. Local content performance requirements positive expressions of interest from foreign investors, Guinea Investment Policy and Tax Project program for the Kosovo Investment and Enterprise The FIAS-supported team has been working with the Development Agency, including investment promotion often distort competition and consequently are often the MIC has revised its forecast for FDI to more than $5 government of Guinea to maximize the benefits of foreign activities and after care. Further the team has engaged the inconsistent with international investment agreements. billion for the fiscal year that began in April, surpassing the investment to the domestic economy. The mining sector private sector through an investor perception survey report earlier estimate of $4 billion. New ventures in energy and Investment climate interventions can contribute to added dominates investment flows in Guinea, with approximately on current and potential investors. As a result of efforts telecoms were a leading factor in these revised estimates. domestic value by helping client countries ensure that $30 billion in concessions signed in the last two years by the IPP team, the Ministry of Interior streamlined The new estimate may be conservative: in the first five their investment climate framework is best attuned to alone. Considering this, as well as IFC’s investments in and simplified work and residence permits for foreign months of the current fiscal year, the MIC has recorded allowing economic linkages to FDI and spillovers from FDI the Simandou mining project, the team has focused on employees; 305 companies will benefit annually from $3.32 billion in investments, more than double the amount wherever possible. helping Guinea develop an overarching investment policy these reformed licensing requirements. generated during the corresponding period a year earlier. and institutional framework which encourages, rather Project Examples Vietnam Agribusiness Investment Promotion than mandates, that these kinds of large investments In Vietnam, agriculture is crucial to economic significantly increase the degree of linkages and spillovers. Myanmar Investment Policy Project development and social stabilization. Working in close The World Bank Group has been working with the Though a constructive and sustained dialogue with the collaboration with a World Bank lending operation government of Myanmar in facilitating the process of Bank Group, Guinea has agreed to forego requiring and IFC’s Manufacturing, Agribusiness and Services opening its economy to international investment and specified degrees of local content in its linkages policy. department, T&C is providing advisory support to the markets. The overall objective of this project is to help The government has instead opted for a holistic approach government of Vietnam to help increase private sector Myanmar to become a more attractive destination which includes identifying promising services sectors, foreign and domestic investment in both agriculture for private investment through strengthened investor using mining as a growth pole. The policy simplifies production and agribusiness processing. The project protection, streamlined investment entry procedures, registration processes and requirements through an is enhancing sector competitiveness and sustainable clarification of the role of the Myanmar Investment automated one-stop shop and strengthens institutional development through a coordinated set of agribusiness Commission, and rationalization of the investment capacity, with a particular focus on the local content investment policy and regulatory reforms, for example in incentive regime. working group and coordinating agencies. The approach the area of seed reform, and also by providing targeted also entails developing a taxation and appeal system support for proactive investment promotion. As a first step toward these objectives, the project geared toward small and medium enterprises. supports the government in preparing a new investment The IPP team is providing support to the Ministry of law that would unify the two current laws—one for The project will continue to focus on investment climate Agriculture and Rural Development (MARD), including pilot foreign investment and the other for domestic investment. issues around extractives, as well as implementing work in selected provinces, to identify agribusiness sub- Together, these provisions would contribute to reducing activities under the linkages policy. Additional activities sectors that have a competitive opportunity to attract new the number of projects and sectors subject to screening, to be included relate to: activating a mechanism for FDI and build capacity to seek and win new FDI entrants. strengthening the rights of investors, and decoupling identifying and resolving issues between the mining sector and the government; targeted investment promotion and aftercare activities for services sectors ancillary to mining; and the design of behavioral incentives to increase local training and sourcing opportunities. Value Addition: Some guiding principles for policy makers include: • Prevent the use of mandatory local content performance requirements that may be ineffective and inconsistent with international agreements. • Rationalize incentives that may inadvertently distort markets and prevent local sourcing. • Explore development of support services around already existing productive clusters. • Explore the use of Non-Equity Modes of investment (NEMs)—such as outsourcing, management contracts, and franchising—as a vehicle to transfer knowhow between foreign and domestic businesses. • Consider other positive policies which can be used to upgrade local capacity of domestic firms to link with others already undertaking international business. 16 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 17 3 OPERATIONAL OPERATIONAL HIGHLIGHTS FY15 marked the first year of FIAS-funded operations coming under the management of the Trade HIGHLIGHTS & Competitiveness Global Practice. T&C’s make-up encourages the flow of expertise, solutions, and learning from region to region and sector to sector. At the end of FY15, FIAS funding supported a portfolio of 69 projects, including 17 non-client-facing projects in knowledge management and product development. This compares with 95 projects mapped to the Investment Climate Department or to IFC Advisory Services units in FY14, including 26 non-client-facing. The FIAS is supporting implementation of decline stems from the remapping of the debt resolution and business exit work program out of more reforms in more fragile states than T&C and to the closure of completed projects as the strategy cycle neared its conclusion. FIAS ever. T&C demonstrated its ability to support contributed to a project in Bangladesh that generated $170 million in investment, bringing respond rapidly with post-quake work the total investment generated for the FY12–16 strategy cycle to $1.36 billion, well above the in Nepal. $1 billion target with a year to go in the cycle. Compliance cost savings and trade sector savings to private sector firms due to reforms in client countries have reached $626 million, surpassing the $600 million target for the cycle. This chapter surveys FIAS-funded work touching work, T&C, in collaboration with FIAS donor partners, on the three major thematic areas outlined in the FY12– also began development of the FY17–21 FIAS strategy 16 strategy: business regulation and reform; programs cycle (see box below). The plan under development to promote investment and trade; and industry-specific combines continuity in these same investment climate work. For details on the projects highlighted below as areas with innovation and expansion brought about well as other FIAS projects, please visit the T&C portals by the additional capability enabled by the new Global at www.worldbank.org/trade, and www.worldbank Practice structure. .org/competitiveness. Along with its project-related Planning the Next FIAS Strategy Cycle Working in close concert with donor partners, the FIAS-supported T&C team in FY15 began planning for the FIAS FY17–21 strategy cycle. With the strategy details still under discussion, the outlines of the forthcoming cycle are emerging from donor feedback, from the results of FIAS and investment climate evaluations, from the needs of client countries amid shifting economic circumstances, and from opportunities created by the launch of the Global Practices. T&C enables FIAS-supported projects and programs to leverage all of the World Bank Group’s key tools and instruments, from advisory to technical support to lending and investment. The focus remains on achieving the Bank Group’s Twin Goals of eliminating extreme poverty and boosting shared prosperity. The FIAS program, drawing on expertise in both the World Bank and IFC, emphasizes the importance of fostering a robust private sector, which will be relied upon to create 90 percent of the 600 million new jobs needed by 2030. FIAS operates at the intersection of government and private enterprise to ensure that business environments enable private sector growth and are not unnecessarily burdensome. 66% 63% 34% The overarching aim of FIAS-supported work is to develop dynamic and resilient economies that promote economic inclusion through investment, job-creation, and higher productivity. As developing country economies gain a more competitive position to participate in international markets, new routes will open up to lift people out of extreme poverty. T&C brings together some 500 World Bank and IFC staff members working in more than 80 developing countries. The planning process for the FY17–21 cycle groups this work into three strategic pillars: improving business environments in client countries; expanding market opportunities; and strengthening firm competitiveness. of FIAS reforms in Sub- of reforms in IDA countries of reforms in FCS Saharan Africa Supporting these pillars are four thematic areas that will serve as guiding priorities across the portfolio: gender and inclusion, transparency and political economy, green competitiveness, and high-growth businesses. These themes will be embedded and mainstreamed within the FIAS pillars. 18 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 19 FIAS Focus on FCS States Project expenditures in FCS countries totaled $3.06 Targeted Advice on Key Investment Climate Indicators these interventions. These country-specific programs are million, or 31 percent of client-facing project spending fulfilling a FIAS priority to transition client country Doing Countries emerging from years of conflict need help ($3.3 million, or 31 percent of client-facing project As developing countries work to improve their ranking in Business programs into broader and deeper investment to get their economies up and running, which in turn spending in FY14). the World Bank Group’s annual Doing Business report, climate reform programs. promotes stability and reduces the chances of conflict the FIAS-supported Indicator-Based Reform Advisory flaring up again. FIAS remains committed to helping (IBRA) provides an effective and proven entry point for In the East Europe and Central Asia region (ECA), the states in fragile and conflict-affected situations (FCS) improving the economic climate for domestic and foreign regional IBRA project implemented by T&C has made a emerge from conflict and turn their focus to sustainable Starting Businesses and Fostering their Growth investment, sustainable growth, and job creation. IBRA significant contribution to delivering investment climate growth and inclusive economic development. In FY15, 23 In FY15, FIAS support under the strategic theme of can deliver technical assistance on a rapid-response reforms in client countries. The project has delivered of the 68 reforms, or 34 percent, achieved with the help fostering enterprise creation and growth made crucial basis to client countries working on one or more of nine rapid-response technical assistance enabled by a flexible of FIAS-supported projects occurred in 9 countries on the and measurable impact on client countries in the areas investment climate areas: business start-up, construction platform that responds to client demand and mobilizes FY15 Harmonized List of Fragile Situations (in FY14, 23 of promoting the formation and growth of domestic permitting, property registration, access to credit, investor experts from within and outside the Bank Group, laying out of 76 reforms, or 30 percent, in 12 countries). businesses, lowering the cost of business start-up protections, tax administration, trade logistics, contract the groundwork for other Bank Group operations. In FY15, and operations, fostering competition, and increasing enforcement, and resolution of insolvency. Technical the project has supported seven business environment In FY15, FIAS supported active country-specific or regional assistance includes legislative reviews, process mappings, reform efforts, including: productivity. An analysis of investment climate work projects benefiting 21 out of the world’s 33 FCS states: review of reform proposals, communications support, in Sub-Saharan Africa (see box below) found that Bosnia and Herzegovina; Burundi, Central African Republic, and advice for investment that would help implement the In Albania, the project has accelerated business startup FIAS-supported work in the area of starting a business Chad, the Comoros, Democratic Republic of Congo, Côte country’s reform agenda, for example, the creation of one- by streamlining registration procedures and eliminating provides one of the clearest means of measuring d’Ivoire, Eritrea, Guinea-Bissau, Haiti, Kosovo, Madagascar, investment promotion and job creation as a result of stop shops for business registration, establishment or the requirement to obtain a company seal. The process Mali, Myanmar, Sierra Leone, Solomon Islands, Somalia, investment climate work. re-organization of property and collateral registries. of property transfers has been improved by shortening Sudan, Timor-Leste, Togo, and Zimbabwe. (In FY14, FIAS the deadlines for property registration. Construction supported projects in 19 out of 36 FCS states.) Since 2007 the team has worked with more than 60 permitting is now a more transparent process thanks OPERATIONAL HIGHLIGHTS countries as a joint World Bank-IFC global product, to new regulations obliging municipalities to publish all implemented beginning in FY15 by T&C. More than documentation related to local plans and the process of 170 national reforms have been supported in over 50 permit-issuance—from application to final approval—in the Measuring the Role of Reform in Africa’s Economic Growth countries and 6 regions. IBRA also helps develop more Integrated Register of the Territory. The time required to comprehensive reform programs that go beyond the issue a social protection and pension, or SIN, number—a Africa has been growing at a rate of 5 percent per year for nearly two decades, rebounding from a similarly areas measured in the indicators. Since FY09, over 10 key step for a startup—in Tajikistan has been reduced lengthy period during which per-capita income fell by 1.3 percent per year. In FY15 the World Bank Group investment climate programs have developed out of from 14 days to 1 day with the help of IBRA technical and Britain’s Department for International Development (DFID) published an evaluation of investment climate reform in five countries over the course of six years.3 All five—Burkina Faso, Liberia, Rwanda, Sierra Leone, and South Sudan—have all been beneficiaries of FIAS-supported investment climate work. The study, done by the independent firm Economisti Associati, sought to measure the impact of programs Making Regulations Work for Clients—the Central Asian Way in these countries on investment, jobs, and private sector cost savings. More than a decade of experience with investment climate reform work in Central Asia has confirmed a From the outset the team understood that investment climate reform was not solely responsible for the view now applied across the Trade & Competitive Global Practice: Legal and regulatory reform to promote economic reform is important, but without effective implementation, it will not achieve the end goals of region’s economic progress. The end of the Cold War and associated reduction of armed conflict by about sustainable, inclusive growth and job creation. a third, structural adjustment reform, and global debt forgiveness were important factors. A boom in commodity prices and demand for natural resources were significant growth drivers. Nevertheless, the “For years, working with the governments of Tajikistan and Kyrgyz Republic on improving business study found that the reduction in costs and delays stemming from streamlining of business procedures inspections, we noticed that the issues of how to make regulations work—i.e., how to enable the private totaled $40 million across the five countries. In Liberia alone, a single reform to reduce the pre-shipment sector to respond to reforms with greater levels of investment and contribute to job creation—are becoming increasingly relevant for our government clients,” said Christopher Miller, T&C program manager in Central inspection fee from 1.5 percent to 1.2 percent saved traders $4.6 million. Asia. “The results overall, and with the Rwanda case in particular, suggest that investment climate The traditional view that upstream reform will automatically lead to effective downstream delivery is a fallacy. reform is usually necessary to clear out the morass of often dated regulations—many of Implementation is the critical missing link. which even date back to the colonial period in Sub-Saharan Africa—which constrain business growth and consign too many businesses to stay in the informal sector. ” Following the launch of the Bank Group Global Practices in FY15, this awareness of the importance of implementation brought T&C together with the Governance Global Practice in a joint effort to develop this —Evaluation of the World Bank Group’s Investment Climate Programs area of work. The challenge in the study—and going forward—lies in establishing a direct line-of-sight connection “We initiated this cross-practice work in Central Asia hoping that it will be picked up by other regions between reforms on the one hand and growth in jobs and investment on the other. The study found experiencing similar issues,” Miller said. the clearest results in Rwanda, where business registration reform enabled an accurate measurement Great laws, no matter how well worded, make no difference if they are not implemented consistently, of number of new businesses post-reform versus pre-reform, and from that, an estimate of additional professionally, comprehensively. The quality of implementation ultimately determines the degree of reform investment and job creation attributable to reform. The report found that this reform generated an success. additional $33 million to $88 million in investment and between 19,000 and 24,000 jobs. The first step was to understand where and why implementation failures occur and what solutions each The results point to the importance of pursuing investment climate reform as part of a holistic strategy practice can bring forward. The Central Asia team performed feedback loop exercises to get a better sense across a broad spectrum of areas that can deliver cumulative benefits to an economy, improving not only of why inspection laws were not working as intended in Kyrgyz Republic and Tajikistan. The results of the regulatory procedures but private sector perception of investment prospects. exercise helped clarify weaknesses in upstream regulatory design and downstream delivery. 3 Economisti Associati, Evaluation of the World Bank Group’s Investment Climate Programs: Focus on Impact and Sustainability, co-funded by IFC and Britain’s Department for International Development, Nov. 30, 2014, at http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/05/21/090224b082eadb01/2_0/Rendered/PDF/Evaluation0of00t0and0sustainability.pdf. 20 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 21 assistance. Construction permitting has been made easier by reducing the time to obtain a project clearance from project in Kosovo, and for the World Bank’s “Fostering Competitiveness for Growth and Jobs Project” in Ukraine. workshops were held over the course of the year, including a series of Doing Business training workshops Boosting Trade and Investment 45 days to 20 days and the time to connect to utilities The IBRA activities supported by FIAS in Latin America and video-conferences with practitioners from the in Developing Countries from 45 to 10 days. In the Kyrgyz Republic, IBRA has different indicators within Doing Business. and the Caribbean (LAC) in FY15 use established In FY15, FIAS expanded its work in supporting the efforts helped improve access to credit information both positive of client countries to stimulate and retain investment, and negative, which can be key to unlocking investment indicators, primarily those tracked by Doing Business, Investment Climate Rapid Response modernize their trade logistics systems to become more capital. And in Ukraine, the business registration process to identify areas for possible reform, recognize proven has been improved by eliminating the registration fee for regional models for reform, and provide an independent at Work in Sub-Saharan Africa competitive in international trade markets, and develop measure of a country’s reform success. The FIAS-supported Investment Climate Rapid Response more transparent and balanced business taxation systems legal entities and private entrepreneurs. (ICRR) program continued to support investment climate that will promote growth. (For more on FIAS-supported In addition to providing technical assistance on design and During FY15, the IBRA-LAC program has had far-reaching reform in Sub-Saharan Africa in FY15, delivering time- work in Investment Policy and Promotion, see Chapter implementation of investment climate reforms, the ECA impact in a broad range of countries. The team has sensitive assistance to reform efforts in Cabo Verde, 2.) At the end of FY15 the tax and debt resolution teams project has stimulated peer-to-peer knowledge exchange continued implementing advisory services in Costa Rica, São Tomé and Príncipe, Tanzania (on tax), and regional migrated to other Global Practices while continuing to and stakeholder learning by organizing conferences, the Dominican Republic, El Salvador, Guatemala, investment support in the Great Lakes Region of Africa. benefit from FIAS support. tours, and other events that have drawn more than and Trinidad and Tobago, in addition to moving forward ICRR serves as an important means of supporting 200 participants, including: an Investing in Women’s with new engagements in Dominica, Paraguay, and St. the expansion of investment climate reform in Sub- Effective and Transparent Business Taxation Mechanisms Employment in the Western Balkans event in Belgrade; Lucia. Projects in the pipeline include advisory work in Saharan Africa, launching reform efforts where there is In the area of business taxation, FIAS support helps a conference on Enabling Business Environment for Ecuador, Guyana, Panama, and Peru. new demand and ensuring continued momentum on clients improve the efficiency and transparency of tax Development, organized jointly with the Austrian Ministry implementation with existing reformers. ICRR business administrations, reduce the private sector tax burden, of Finance in Vienna; a One-Stop-Shop for Business Nine reforms brought about with the help of the FIAS- development efforts contributed to the launch of six new supported IBRA-LAC team in Colombia, the Dominican promote the formalization of businesses, and expand the Registration event in Tajikistan, including representatives projects in FY15 in Burundi, the Democratic Republic tax base. of the tax authority, pension fund, and statistics agency; Republic, Guatemala, Jamaica, Nicaragua, Saint Lucia, of Congo, the East African Community Regional OPERATIONAL HIGHLIGHTS and a study tour to Georgia for Tajikistan construction and Trinidad and Tobago were recognized in the 2015 Scorecard II, Madagascar, Senegal, and Zimbabwe. In Benin, the tax team worked with the country’s tax agency officials. Doing Business report. Reform work in El Salvador and FIAS supported continuing work in delivering diagnostics administration and Ministry of Finance to reform the tax Costa Rica was cited in the 2016 Doing Business report. or discrete reform support in Cabo Verde, Côte d’Ivoire, regime applying to micro and small enterprises (MSEs), At the organizational level the IBRA ECA project the Great Lakes Region, São Tomé and Príncipe, Sierra which was rolled out in the Finance Law of 2015. The significantly contributed to country engagement and Knowledge products produced by the IBRA-LAC team Leone, and Tanzania. new regime introduces a simple self-assessed turnover business development efforts of the Bank Group overall. In in FY15 included several technical reports, reform memorandums in Paraguay and Ecuador, a background tax to replace a complex system of four regimes applying Albania, the Ministry of Economy has requested additional ICRR supported completion of five country-level impact to different tax bases, which left assessment to the Bank Group assistance, including the Albania Jobs and note on investment climate in Uruguay, and a chapter case studies which are deepening T&C’s understanding of on investment climate and competitiveness as part of a discretion of the administration. A streamlined fixed- Competitiveness Development Policy Loan, currently under the impact of its business development interventions (see fee system was also introduced to micro-operators. development, which will build on the IBRA-supported flagship paper published during the World Bank Annual box below). In addition to work in specific countries, ICRR Meetings in October 2015 in Lima, Peru—more than The streamlined MSE taxation forms part of a more reform efforts. T&C will also sign an agreement with the continued to disseminate the findings of Sub-Saharan Africa comprehensive intervention to spur formalization of Ministry of Economy which will include technical assistance 20 reports in all. In addition, peer-to-peer knowledge- investment climate impact research through a number sharing events were held in Guatemala and El Salvador, businesses in Benin through the “Entreprenant” regime, a on agribusiness, investment policy, and construction of blog articles4 and the publication of a Viewpoints note new simplified legal status for individuals. The new system permits. This builds upon the technical assistance IBRA has where both public and private sector representatives on a decade’s worth of work in investment climate in from countries across the region gathered to share best was introduced by the reform law approved by 17 member already provided. Similarly, IBRA has laid the groundwork Sub-Saharan Africa. The results of this thinking on impact countries of the Organization for the Harmonization of for further technical assistance in trade logistics in practices and discuss challenges and lessons learned are feeding into the strategic focus of T&C’s business on investment climate-related reforms. Several other Business Law in Africa, known by its French acronym Tajikistan and Kyrgyz Republic, for the Investment Climate development efforts in Sub-Saharan Africa. OHADA. Initial results from this intervention have been encouraging, and the team has received a number of In São Tomé and Príncipe, support from FIAS helped requests for replicating this approach in other OHADA bring about an easing of key business constraints in FY15. member States. An electronic one-stop shop for business registration has been launched and fully enabled to register companies In early FY15, Uganda enacted legal- and policy-related online. Entrepreneurs can find important information reforms in the tax sphere developed with the help of the about business licenses on the one-stop shop portal, FIAS-supported team, helping to realize key outcome saving them time and hassle. Firms are also finding it targets. Specifically, tax simplification for small and medium easier to trade, thanks to FIAS support. In FY15, IFC enterprises (SMEs) led to a 20 percent reduction in provided technical assistance to the country’s customs compliance costs. An online filing system for micro, small administration to install the globally recognized ASYCUDA5 and medium enterprises (MSMEs) translated into annual single window system for processing imports and exports. cost savings of more than $3.74 million, or 41 percent, (For more on FIAS-supported trade programs, see the next benefiting 13,951 registered tax payers. The reform work section of this chapter.) Simplification of these processes included creation of a micro tax segment with a threshold is ongoing, but already traders have been relieved of of $4,000, exempting 5,021 registered taxpayers from the obligation to present a tax declaration and terminal the tax regime and related compliance cost burdens. The handling receipts as this information is now gathered presumptive tax threshold has been increased from $16,000 electronically through the single window. to $50,000, meaning that those below the new, higher threshold have moved from the regular and complicated income tax regime to the simplified turnover tax regime. 4 See, for example, David Bridgman, “Tracking the impact of investment climate reform in Sub-Saharan Africa,” Private Sector Development: News and Views on a Competitive Private Sector and a Excavators cleaning up, leveling and covering ash heap in the Republic of Kosovo. Resilient Financial Sector (World Bank blog), June 8, 2015, at http://blogs.worldbank.org/psd/tracking-impact-investment-climate-reform-sub-saharan-africa. (Photo by Lundrim Aliu, World Bank) 5 The UN Conference on Trade and Development Automatic Systems for Customs Data. 22 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 23 The value-added tax (VAT) annual registration threshold was With FIAS support, IFC helped the government of the short-term, with little evidence of major post-reform assistance in aligning their trade practices with the WTO increased from $16,000 to $50,000, similarly simplifying tax Georgia streamline international taxation procedures tax abuse. Some evidence surfaced of reduced tax Trade Facilitation Agreement, a historic trade accord compliance for SMEs below the higher threshold. The cash for multinationals to improve transparency, protect tax compliance by previously registered firms around the reached in Bali, Indonesia, in December 2013. The accounting threshold has been increased from $66,000 to revenues, and boost investor confidence. The IFC Georgia micro taxpayer threshold, but the problem appeared to Agreement, known as TFA, is still going through the $160,000, saving large numbers of taxpayers the burden of Investment Climate Project, implemented by T&C, advised be short-lived and largely disappeared after the first year ratification process. It seeks to simplify trade and customs paying taxes on invoices that have not yet been settled by on detailed guidelines, adopted in FY15, that provide after the new regime was introduced. (For more on FIAS- procedures and lower their costs, reducing delays at customers. The government now publishes tax expenditure auditors with clear and transparent rules for auditing supported impact work, see p. 46.) borders, rationalizing inspection regimes. Underlying TFA data and has discontinued issuance of discretionary tax companies in the area of transfer pricing. Transfer pricing is the idea that the costs involved in improving the flow of incentives except in the areas of agriculture and tourism, both is usually applicable when two related companies—such In other work in the knowledge sphere, the tax team trade more than pay for themselves in increased volumes, viewed as productive sectors. as a parent company and a subsidiary, or two subsidiaries completed a policy paper on micro- and small business revenues, and profit. The most recent Bank research of a common parent—trade with each other. The detailed taxation in transition economies. The paper reviewed suggests full implementation of the TFA promises global In Latin America and the Caribbean FIAS support helped guidelines help ensure fair taxation, give clarity on transfer good practices and trends in designing simplified taxation welfare gains of around $210 billion per year, and most deliver training to 60 tax administrators from the region pricing matters, and foster an attractive investment climate regimes for MSEs in the Europe and Central Asia region. importantly, that developing countries—since they tend on base erosion and profit shifting. The training sought and are in line with the best practices of the OECD. They The team also prepared two transfer pricing papers, one to lag wealthier countries in their trade logistics and to increase awareness among authorities of new tools to provide guidance on issues of major concern to developing on the availability of comparable information in emerging regulations—will benefit disproportionality. limit the ability of global corporations to take advantage of countries, thereby providing a high level of certainty for economies, the other on profit shifting in the oil and gas the digital economy to exploit gaps in double non-taxation. investors regarding their obligations in Georgia. Earlier in industry. Team members served as co-authors of “Options But the Agreement also places disproportionate burdens Fighting such practices could help strengthen the fairness 2014, the project helped develop a legal framework for for Low Income Countries’ Effective and Efficient use on developing countries, and so contains provisions calling and integrity of tax systems and reduce tax interference transfer pricing. of Tax Incentives for Investment, ” in collaboration with on the international community to assist eligible countries on competition within the private sector. other international organizations, and delivered to the in meeting their obligations under the agreement. This The team’s extensive work in Georgia led to a policy G20 Development Working Group. The Working Group is where TFSP comes in. TFSP is helping developing In Central Asia, the tax team continued work with paper, Small Business Tax Policy, Informality, and Tax requested the team’s help, along with other international countries implement trade facilitation reforms and improve OPERATIONAL HIGHLIGHTS Uzbekistan in FY15 on implementation of a country-wide Evasion: Evidence from Georgia which measured the organizations, in preparing two practical toolkits for trade facilitation systems and practices, thus leading to risk-based audit (RBA) system. RBA is a methodology for impact of SME tax reform directed at Georgian micro and developing countries. They cover “Options for Developing increased trade, investments, job creation, and private tax audits that aims to detect non-compliant businesses small enterprises (MSEs). The paper examined how the Countries’ Efficient and Effective Use of Tax Incentives for sector competitiveness. A dedicated trust fund under the during audit planning, eventually resulting in lower introduction of preferential tax regimes for micro and small Investment, ” and “A Practical Toolkit to Assist Developing FIAS umbrella supports TFSP initiatives. The effort partners compliance costs for honest taxpayers, higher tax audit businesses in 2010 affected formal firm creation and tax Countries Address Difficulties in Accessing Comparables the Bank Group with Australia, Canada, the European efficiency of the tax authority, and increased control over compliance. The paper was shared with other practitioners Data and Approaches to Apply Internationally Accepted Union, Norway, Switzerland, and the United States. planning and less room for corrupt practices. The project at a learning event during FY15. Principles in the Absence of Comparables. ” includes training events supporting the introduction of the The TFSP program has completed its first year in RBA modules in regional tax departments throughout the An impact evaluation of tax reform work in Georgia Working with other internal and external partners, T&C implementation. To date, 45 countries have formally country as part of an effort to build capacity for tax officials completed in FY15 found that the introduction of a in FY15 developed an agenda for the Association of requested support. In FY15, the TFSP team completed (see photo below). simplified tax regime led to increased formalization in Southeast Asian Nations (ASEAN) to move toward validation assessment missions in 31 countries: tax harmonization in two areas: provision and use of Bangladesh, Botswana, Burundi, Cabo Verde, Costa fiscal incentives, and engaging in a regional discussion of Rica, El Salvador, Ethiopia, Fiji, Grenada, Guatemala, principles of dealing with international tax issues affecting Honduras, Jamaica, Jordan, Lao People’s Democratic multinationals. Republic, Madagascar, Malawi, Myanmar, Nepal, Nicaragua, Pakistan, Papua New Guinea, Rwanda, Given the success of the Bank Group’s partnership with St. Kitts and Nevis, Samoa, São Tomé and Príncipe, OECD in Colombia on international tax policy as well as Solomon Islands, Sri Lanka, Tonga, Ukraine, Vanuatu, administration, Colombia has requested that the Bank and Zambia. Through TFSP , 12 countries have begun Group take the lead on the development of an Advance reform implementation: Bangladesh, Botswana, Pricing Agreement program, to allow taxpayers to gain Burundi, Cambodia, Jamaica, Lao PDR, Madagascar, certainty with the tax administration for years moving Malawi, Nepal, Rwanda, Sri Lanka, and Zambia. forward. The team assisted in drafting legislation, In addition, the Pacific Islands Forum Secretariat which is in process, conducted training, and designed and the Bank Group’s IFC signed a memorandum of customs policies and procedures for Colombia. An effort understanding (MOU) which will facilitate cooperation is now underway to help Colombia develop a Mutual in the provision of assistance to the six Pacific Island Agreement Program which will provide further certainty members of the WTO. to multinationals operating in Colombia by ensuring no double taxation for countries with which Colombia has “The high costs, bureaucratic procedures and signed a double tax convention. burdensome multiple documentation requirements related to the clearance of goods at the border form Supporting a Historic Trade Agreement some of the greatest obstacles to trade in Pacific Island countries,” said Dame Meg Taylor, Secretary General of FIAS support to achieve trade reforms during FY15 the Pacific Islands Forum. “By streamlining trade and included the launch and initial activities to implement increasing transparency, [the MOU] will boost exports, a major global trade agreement through the Trade lower costs for business, and deepen regional integration Facilitation Support Program (TFSP). Implemented among the Pacific islands. Leadership from the Pacific in by T&C, TFSP provides support for countries seeking 6 To read more about PIFS’ advances in trade facilitation, go to: http://www.forumsec.org/pages.cfm/newsroom/press-statements/2015-media-releases/support-for-pacific-islands-to-advance-work-on- trade-facilitation-agreement.html. 24 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 25 implementing the Trade Facilitation Agreement will send trade. This has been a hallmark of the trade team’s work goods, reducing their processing time from three hours forwarders, and in FYR Macedonia the project helped an important signal about the region’s support for the in the Western Balkans countries, which seek to improve to as little as ten minutes. The upgrade also eased the develop a data collection and data management system WTO and the TFA. ”6 and speed trade within the region and gain accession to data exchange interface with Kosovo customs. Kosovo in support of the risk-based sampling system that enabled trade with the European Union. customs, meanwhile, received guidance from the team the Macedonian Food and Veterinary Agency to cut its In addition to carrying out pending missions and on how to regulate its customs broker profession. sampling rate in half. prioritizing implementation efforts in client countries, the TFSP organized a peer-to-peer learning event to share Easing Trade Flows in the Western Balkans Region In Montenegro, the project supported the development of Capacity building and risk management work in the knowledge on reform experiences and challenges as From FY12 through FY15, IFC’s Western Balkans Trade software that reduces the number of documents required handling of food, plant, and animal products continued part of the WTO’s Fifth Annual Review of Aid for Trade Logistics Project operated with FIAS support in seven by Montenegro Customs to be presented by freight with Bosnia and Herzegovina, Montenegro, in Geneva at the end of FY15. The peer-to-peer learning countries—Albania, Bosnia and Herzegovina, Croatia, and Serbia. The Veterinary Office of Bosnia and workshop organized jointly by the Bank Group and WTO Kosovo, the former Yugoslav Republic of Macedonia, Herzegovina finalized its risk-based sampling risk was attended by 180 participants sharing their country Montenegro, and Serbia. All except Albania had been part methodology in the sanitary and phytosanitary sphere reform experiences and discussing different instruments of the former Yugoslavia and had experienced unrestricted (SPS) in mid-2015. The team helped Montenegro that the Bank Group and WTO are providing to help movement of goods and people within that territory. customs develop a post-clearance audit guide and countries to align with the TFA. T&C Senior Director Anabel Inefficiencies in the trade logistics supply chain of the standard operating procedures. Serbia’s newly formed Gonzalez told the participants, “We are ready and fully Western Balkans persist, as is evidenced by the World Serbian Port Governance Agency got advice on how to committed to taking forward the Trade Facilitation agenda Bank Group’s Doing Business report. On average, the best perform its regulatory role. to help developing countries who request assistance to Western Balkans continue to require three to five more implement the TFA. ” documents than OECD countries for export and import, Country-specific reforms included the following: and it takes four more days to trade in the Western The FIAS-supported TFSP team is working with Pakistan Balkans than in the OECD, resulting in 20 percent higher • Interagency synchronization of working hours in to cover trade facilitation on all border crossing points to costs for traders. Bosnia and Herzegovina, which, along with other OPERATIONAL HIGHLIGHTS the east and west. The effort is designed to support the actions, reduced time of trade clearance by 13 overall objectives of the Pakistan Integrated Transit Trade The Western Balkans Trade Logistics Project was percent. Management Project. Activities in FY15 included a donor tasked with bringing greater efficiency to the process Conference on the integrated project and completion of of clearing goods in the region so that they can be • Reduction of physical controls of imported goods a detailed study of the Wagah Border—the country’s only delivered to market more quickly and at lower cost. subject to excise tax from 100 percent to 23 percent border crossing with India—which measured every step The seven countries participating in the project, plus in Montenegro through the application of risk-based in the cargo clearance process: Integrated Transit Trade Moldova, are parties to the Central European Free controls. Management Project. The team also reviewed Pakistan’s Trade Agreement (CEFTA) and aspire to be members of the European Union. They are at various stages of the • Streamlining and automation of customs clearance transit trade regime and compliance requirements for Border-crossing point in the Western Balkans. accession process. A primary goal of the project was processes in Montenegro, which helped expedite the private sector in the context of the growing volume (Photo by G. Gabrielyan) to address and seek consensus on trade issues on the processing time by up to 50 percent. of goods crossing both the eastern and western borders. Training sessions on risk management, integrated transit regional level while undertaking capacity-building and • Reduction of time required for customs clearance by trade management, and inspections were also provided. reform activities at the country level. up to one full day through introduction of electronic In Albania, the project facilitated an upgrade of the payment of fees and duties and upgrading of the With the help of FIAS support, IFC is working with Albanian customs information technology system, customs electronic system in Albania. the revenue service of Georgia to modernize the country’s trade logistics system by streamlining which allowed for the introduction of “green channel • Introduction of a risk-based approach in SPS customs procedures, saving time and boosting cross treatment,” meaning no customs controls for low risk control in FYR Macedonia, resulting in a 40 border trade. IFC has partnered with the United Nations percent reduction of the sampling rate of imported Conference on Trade and Development (UNCTAD) to consignments. upgrade ASYCUDA World modules used to manage trade transactions. The resulting enhanced features help The project supported a number of research initiatives, modernize customs procedures in line with those of including a poll of border inspection practices performed major trading partners. The upgrade enables efficient by regional SPS agencies, and a study of time spent by and compatible data exchange between the revenue consignments of processed food products at regional service and other agencies. It also aims to improve borders. It also supported pioneering research by the information availability for the private sector and allows World Bank Group on the impact of customs reforms the service to manage risks more efficiently. In FY15, the on trade behavior in Albania and Serbia. These studies IFC Georgia Investment Climate Project was awarded were published in 2015 (see Key Publications Released the World Customs Organization’s Certificate of Merit for in FY15, p. 51). rendering exceptional service to the international customs community. Successful completion of the program has enabled an assessment of lessons learned in the Western Balkans Linking Developing Countries to Trade Networks project. Among them were the importance of prioritizing interventions to maximize benefit in multi-country While FIAS-supported trade work is often country environments where needs and interests often diverge. specific, trade is an inherently international enterprise, Prioritization focused the team’s efforts on reforms giving rise to strategies and programs that take a regional Map of the Western Balkans that were feasible. Strong inter-agency dialogue across or even global approach to fostering and promoting 7 Gagik Gabrielyan and Violane Konar-Leacy, "Implementing Trade Logistics Reforms in Complex Multi-Country and Regional Settings: The Case of the Western Balkans", SmartLessons series, IFC, June 6 To read more about PIFS’ advances in trade facilitation, go to: http://www.forumsec.org/pages.cfm/newsroom/press-statements/2015-media-releases/support-for-pacific-islands-to-advance-work-on- 2015, at http://smartlessons.ifc.org/smartlessons/lesson.html?id=1899. trade-facilitation-agreement.html. 26 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 27 in the IPP work-stream, continued to make significant frequent and sustained outages as the power system Supporting Trade Accession to the European Union progress in helping clients generate specific investment in sheds load to cope with excessive demand. Per capita major projects that might not have happened but for the energy use is only 180 kilowatt hours per year, one of T&C is applying FIAS support to assist Bosnia and Herzegovina in its effort to gain accession into the intervention of the team. The total generated in FY15 was the lowest in the world. The country’s electric power European Union. In FY15, the team provided programmatic assistance with regulatory, agribusiness, and down from the previous year, mainly due to the timing generation capacity is 5,500 megawatts as compared to investment policy tools to improve the country’s competitiveness. Implementation of reforms in these areas of a major investment in Brazil brought about in FY14 estimated demand of 6,600 megawatts. The shortfall to reduced the administrative burden to businesses, assisted regional and city governments in attracting with the help of the industry team. The results in FY15 meet demand continues to be a major constraint for the foreign direct investment (FDI), and helped enable single economic space for the free movement of goods were nevertheless considerable, and the team is making country’s economic growth. To address those issues, and services. The project had generated significant impact by linking reforms achieved at various levels of substantial progress on projects expected to yield results the government of Bangladesh has given top priority to government, achieving synergies and promoting collaboration. prior to the end of the FY12–16 strategy cycle. the development of the power sector while at the same time maintaining a commitment to energy-efficient, At the level of national regulatory reform, the team supported development of strategies to increase FDI In an offshoot of a major initiative working with green growth. The Project will add a much needed highly and join the EU by improving the regulatory, policy, and institutional framework for investment. The project Bangladesh on special economic zones, the team helped efficient power generation capacity to the Bangladesh secure a $170 million investment in FY15 for construction grid and create jobs during construction and operation of helped the country decrease regulatory impediments to attracting and retaining cross-border investments. of an energy efficient power plant that will fill an urgent the plant. Benefits will include a reduction in the country’s It supported institutions at both the national and subnational levels in reducing the administrative burden need for reliable power. The 193-megawatt plant will power deficiency and reduction in the cost of power to in import and export procedures in seven key sectors important to Bosnian industries: wood processing; generate power through a more efficient combined cycle consumers. IFC is lending $40 million in support of the machinery, electrical appliances, and metal processing; basic materials; dairy; meat; and fruits and reciprocating gas engine located on the site of an existing project and working to mobilize an additional $80 million in vegetables. The project helped assess the competitiveness of agribusiness value chains and assisted in power plant in Ashuganj, northeast of Dhaka in central financing. devising and implementing a strategy for generating investment in priority agribusiness sectors. Bangladesh. IFC is providing a loan in support of United Group, a Bangladeshi business consortium that will own T&C’s industry team has ‘scored’ the investment At the subnational reform level, the project assisted in simplifying business administrative procedures in and operate the plant. generated for the Bangladesh power plant through a OPERATIONAL HIGHLIGHTS 11 municipalities, three cantons, and two entity governments, with special emphasis on the agribusiness rigorous review and accounting methodology which sector. The effort focused on reducing administrative burdens in regions and localities with strong business Bangladesh is one of the most energy starved countries articulates the specific role provided by the team and activity. As part of the project’s exit strategy, the FIAS-supported team helped institute a mechanism to in the world. Nearly 75 million people in Bangladesh, or calculates impact based only on actual commitment of extend the regulatory reform work to other municipalities and cantons. about half the total population, do not have access to funds to a project (see box, page 15). With this project, electricity. This is the second largest population without the investment-generated totals for the FY12–16 strategy An independent assessment of the subnational work showed that employment increased by 6.4 percent access to electricity in the world after India. Those in cycle are: $108 million in FY12; $329 million in FY13; $750 in localities where the project helped with regulatory simplification as compared with localities that did no Bangladesh who do have electricity suffer through million in FY14; and $170 million in FY15, for a total of reform work. Total private sector savings as measured through compliance cost savings amounted to $7.9 million, 23 percent above the cumulative project target. The number of active firm-level investment leads more than doubled, from 44 as the project started to 115 leads at project closure. Project activities facilitated or generated $35 million in new investment. And a total of 27,736 businesses and entrepreneurs benefited from reformed procedures at all levels in the country. the region was critical to promoting and implementing (For more on FIAS-supported impact work, see p. 46.) reforms. And the team learned that there was no substitute for hands-on engagement with clients and stakeholders. These lessons are being shared with other regional project teams.7 Sustainable Investment in Key Industries Even before the beginning of FY15, the FIAS-supported An impact evaluation showed that the trade logistics work team had met or exceeded key benchmarks in generating in Albania contributed to a dramatic reduction in the rate investment in client countries, a key element of the of physical inspections by Albanian customs. The expected team’s work in unlocking sustainable and climate- median number of days spent in Albanian customs fell by 7 friendly investments in key industries, particularly percent when the probability that a shipment is inspected agribusiness, tourism, and light manufacturing. fell to less than 50 percent. Along with this reduction in Through FY14, the FIAS-supported industry team has time came an associated 7 percent increase in import contributed to generating $2.96 billion in new investment, value. Applying this figure to the value of Albania’s non-oil with $1.36 billion of that total in the form of FDI in priority imports produced a reform-induced trade cost savings sectors (surpassing the $1 billion target for FDI) and $1.6 estimate of approximately $12 million in 2012. billion invested by new firms following business entry reforms (approaching the target). With two years to go in The Serbia trade logistics impact evaluation calculated the strategy cycle, FIAS was already close to surpassing that one additional unexpected day of delivery time its total $3 billion investment generation target for new was roughly equal to 1 percent of the value of the domestic and foreign investment. shipment. Findings suggested that firms that adopted an in-house clearance program realized statistically significant reductions in their median time to clear Investment Generated: A Key Goal of Industry-Specific Work customs. However, the program did not have a statistically In FY15 the FIAS-supported industry team, working with significant impact on changes in firm-level imports. the Investment Policy and Promotion team now housed 28 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 29 $1.36 billion. This exceeds the target for the five-year cycle many of which leverage long-standing expertise in and reform. For example, in Mongolia, following the work and Grow Africa networks and activities are being of $1 billion in FDI priority sectors, with a full year left in agribusiness, for livestock reform with our partners. FIAS-supported efforts in drafting the Food Safety Law, in actively explored. Similar partnerships are being forged to the cycle. force now since 2013, the T&C advisory project identified enrich the portfolio’s regulatory work on food safety and The continued emphasis on coordinated agribusiness gaps in the reform implementation process through a phystosanitary standards through deeper collaboration The power plant project grew from FIAS-supported work solutions has yielded notable success. The approach comprehensive review and benchmarking of food safety with the WTO’s Standards and Trade Development Facility helping Bangladesh develop a road map for reducing of deliberately leveraging different expertise and related legislation in Mongolia against international best (see p. 32). carbon emissions from export processing zones (EPZs), interventions from across the World Bank Group and practices and coupled this with intensive research with which have become an increasingly vital part of the other development partners in the design of FIAS- private sector food business operators. This resulted in Knowledge for impact and international partnerships also country’s economy. A project in the Chittagong EPZ that supported advisory projects is showing promise even an evidence-based agenda around which a major public- grew and developed over FY15. The impact evaluation for generated investment and led to significant reduction in in the most challenging of environments. In FY15, the private dialogue event was organized, uniting all key the Rwanda green leaf tea pricing mechanism reforms carbon emissions in FY14 became a model in FY15 for Burundi Investment Climate Reform Program’s cross- reform stakeholders to gather at one table. As in Burundi, received early support from FIAS donors. Regulating efforts in other EPZs around the country. The road map Bank Group approach helped unlock a key bottleneck for this was achieved through the coordination of Agriculture farm gate prices to protect the returns to farmers in sets out guidelines for carbon emissions that are being the government’s coffee sector privatization program. global practice and other World Bank Group teams to agricultural commodity markets has been widespread replicated across the country’s EPZs. This FIAS-supported program has organized an innovative support a solution in this critical area to Mongolia’s growth globally, and justified by a range of market failures, development solution around inclusive and sustainable and market development. including asymmetries in market power. More often than Investment Climate Reforms in Agribusiness coffee sector by delivering on public-private dialogue not, however, these prices are not linked in any way to and investor outreach, while coordinating these inputs T&C’s work in key sectors has been particularly fruitful market signals and are subject to downward pressure, Despite the predicted movement of some 200 million poor with those of a T&C World Bank loan and the activities in agribusiness through the formation of strategic either through regulatory capture or bureaucratic lag in people from rural to urban spaces over the next 15 years, of several other Bank Group teams. The project has partnerships. For example, T&C work with the World updating prices. Green leaf tea prices (i.e., farm gate projected population growth implies that the absolute helped make the privatization more inclusive by designing Economic Forum (WEF) provided an entry point to prices) for tea growers in Rwanda have been historically numbers of rural poor will not change dramatically. ways for farmers and their organization to participate collaboration on WEF’s “Grow Africa” initiative, which set by the Rwanda tea board, a mechanism that the This makes the development of inclusive agribusiness in the privatization of coffee washing stations for the brings private sector investors together with government government sought to reform. The evaluation sought to a long-term priority for poverty reduction, as well as a OPERATIONAL HIGHLIGHTS first time, and by updating the privatization strategy counterparts to develop agribusiness opportunities. The measure the impact that FIAS-supported reform has had potential source of growth. The opportunity to do so is accordingly. The project developed financing options and synergies between the FIAS-supported agribusiness on prices, farmer incomes, production levels, tea quality strong. Food demand is expected to grow by 70 percent inclusive farmer-owned business models and conducted from 2005 to 2050, driven mostly by demand from the a successful investment promotion campaign that urban markets of the developing world. This points to has raised support and interest from six social impact the importance of facilitating the domestic, regional investors and large private sector agribusiness firms in and international movement of food. And since over 60 partnership with farmers. These efforts directly supported percent of the world’s poor work in the agriculture sector, the government’s other activities with the Bank Group on coordinated efforts along agricultural value chains, for food the country’s wider privatization program and the work of or non-food commodities alike, are essential to realizing the Agriculture Global Practice developing a new market- transformational change in the agricultural sector. based coffee sector competitiveness strategy, which was adopted. The integration of private sector stakeholders, The coming together of teams working in trade, from farmers to international investors, anchors the investment climate, and innovation and entrepreneurship reforms in the economic fabric of the sector and may into the Trade & Competitiveness Global Practice has serve to insulate the economic progress from the volatile further strengthened the capacity of the FIAS-supported political environment. agribusiness portfolio to meet these challenges. In line with T&C’s vision, the agribusiness work aims to expand Access to finance is a persistent problem for developing market opportunities in the agriculture sector and enable a country farmers and traders in agricultural products. Banks country’s private sector to develop these opportunities all face difficulties in assessing risks and are constrained along the value chain for inclusive economic growth. by the limited and fixed assets that could be used as collateral. In Senegal, agricultural production represents Drawing on a wider set of skills and experience 16 percent of GDP , but only 5 percent of formal credit from across T&C has strengthened the design and goes to the agricultural sector. FIAS is supporting a pilot implementation of agribusiness solutions in ongoing project in Senegal’s rice sector aimed at developing and new areas of activity. For example, in FY15 support warehouse receipt financing. This approach, which has to agribusiness has extended to the livestock sector been applied successfully in Ethiopia, South Africa, and in projects developed in Ethiopia and Tanzania that Zambia, among other countries, provides a method of aim to increase the access of smallholder farmers and inventory financing in which loans can be made against pastoralists to improved services and technologies and goods held as collateral. Warehouse operators issue to more stable, predictable income-generating market receipts for stored commodities, providing farmers, opportunities. The experience and expertise of T&C’s processors, and traders with a portable form of collateral global value chains approach brings to livestock the that can be used in applying for a bank loan. The project proven approaches to regulatory reform and investment aims to help Senegal enact warehouse receipt legislation promotion that have yielded results in crop production, based on best practices, including implementation as described in previous Annual Reviews. The work also support, and thus encourage an increase in the flow of strengthens the identification of market opportunities and capital along the entire rice value chain. design of interventions required for actors all along that value chain to upgrade and connect to markets. It serves Similar gains were seen through the portfolio’s support to as a cornerstone for the design of detailed interventions, public private dialogue in other key areas of market access 30 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 31 levels and investments in tea. FY15 saw the completion of and on the development of a tracking module for users These are among the reasons why FIAS supports the become financially burdensome and overly complex. As the baseline analysis, the results of which—namely, key to receive automatic notifications on the status of their tourism portfolio work implemented by T&C. In FY15, the a result, they are often ignored. Burgeoning informality differences in the demographics and level of awareness processes. In Honduras, the team proposed legal provisions FIAS-supported portfolio of industry-specific projects in places at risk tourists and the very endowments they of the reforms between tea and non-tea farmers—have to allow improvements to its national system. tourism included 13 active projects, with the addition of come to see. At the request of the national, regional, already informed the policy dialogue the government is a new project in Rwanda. Pipeline projects at the close and local governments, the FIAS-supported tourism having around the tea sector. The baseline analysis has T&C is involved in developing a new regional project in of FY15 are under review in Madagascar, Myanmar, team developed a program to improve compliance and been shared with industry and farmer stakeholders. Central America to support the implementation of the World and Peru, along with other selected countries in Latin reduce transaction costs for tourism businesses. The The government plans to incorporate the final impact Trade Organization’s Bali Trade Facilitation Agreement. Part America and the Caribbean. The program continues to project objective is to streamline procedures to obtain evaluation results in FY16 to further inform its policy of the Trade Facilitation Support Program, the project is deliver results with investments in India and Nepal, and licenses and permits for the startup and operation of position on tea sector reforms. also serving as a source of information and guidance to the reforms introduced in India, Lebanon, and Peru. Expertise businesses such as lodging establishments, restaurants WTO’s Standards and Trade Development Facility regarding in investment generation was supported by the delivery and tourism, and travel agencies. Following detailed With FIAS co-funding, T&C is implementing the Central e-phyto registries. (For more on TFSP , see p. 25.) of a successful half-day seminar “Growth & Investment analysis and mapping of existing procedures, the team in America Regional Agribusiness Trade Logistics Project in a in Tourism: Bringing Success to the States,” which FY15 introduced a number of reforms designed to more strategic alliance with USAID in Costa Rica, El Salvador, Enabling Investment Opportunities in Tourism addressed the management of public-private partnership effectively regulate the sector. To date 11 reforms have Guatemala, Honduras, and Nicaragua. The goal is to opportunities along the Buddhist Circuit as part of the been introduced and over 150 unnecessary procedures streamline, harmonize, and automate sanitary registration Tourism generated 4.7 million new jobs last year— “HIFI Investment Conference” sponsored by the Burba eliminated; 10 laws have been passed supporting the new procedures for processed food and beverages in the region five times more than the chemical or auto industries. Hotel Network. simplified procedures; and new information technology to enhance the potential for trade in these products. The More than half of these jobs are held by women, and solutions have been introduced. Over 600 public servants, project will create a regional system to facilitate mutual the tourism industry employs young people at almost With the launch in FY15 of the new Bank Group Global almost half of them women, have been trained in the new recognition of sanitary registration. During FY15, the team twice the rate of other industries. Nearly half of the Practices, demand for tourism-related support from systems. The government has requested that the project signed a cooperation agreement with the Central America one billion international tourist arrivals per year are in across the Bank Group expanded significantly. The be replicated in other key tourism destinations in Peru. Secretariat of Economic Integration (SIECA), which will developing economies; in 2010, tourists spent $240 FIAS-supported team provided assistance to other Bank OPERATIONAL HIGHLIGHTS billion in developing countries, almost triple the level of ensure the sustainability of the regional system and a more development assistance for that year. Tourism is included Group units for projects in Albania, Armenia, Azerbaijan, T&C Rapid Response Helps Nepal’s Tourism Industry solid cooperation between Central American stakeholders. Belize, Burundi, Benin, Bolivia, Cabo Verde, Côte d’Ivoire, In Nicaragua, the team provided technical assistance on the in the Poverty Reduction Strategies of more than 80 Ecuador, Egypt, Ethiopia, Georgia, Haiti, India, Iraq, Kenya, Recover from Quake implementation of its national sanitary registration system percent of low income countries. the Kyrgyz Republic, FYR Macedonia, Maldives, Morocco, The magnitude 7 .8 earthquake that struck Nepal on April Pacific Island states, Russia, Senegal, Sri Lanka, Tajikistan, 25, 2015, claimed an estimated 9,000 lives and injured Tanzania, Uganda, West Bank, and the nine member some 23,000. The quake, and another 7 .3 magnitude countries of the Organization of Eastern Caribbean States. quake on May 12, 2015, inflicted severe structural and economic damage on one of Asia’s poorest countries. Improving Trade Logistics for Agribusiness Collaboration and coordination remain key themes of the Among the impacts was a rash of cancelations by tourists industry work in the tourism sector. FIAS-supported teams planning to explore Nepal’s highly popular trekking Expediting the movement of food products requires the creation of efficient trade logistics systems and continue to build strong links to IFC Investment Services routes, a key source of income to scores of villages in the services that facilitate agribusiness trade while ensuring food safety and security. In Africa, for instance, and other teams working on tourism throughout the Himalaya region. according to the World Bank report, Africa Can Help Feed Africa, African farmers can potentially grow Global Practices. During FY15, the team consolidated the enough food to feed the entire continent and avert future food crises. “However, this potential has yet to process of developing an integrated approach to tourism Building on its FIAS-supported work with Nepal in be exploited,” according to the report, “because African farmers face more trade barriers in accessing the across the entire Bank Group following the introduction business regulatory reform and industry-specific work in inputs they need, and more trade constraints in getting their food to consumers in African cities, than do of the Global Practices on July 1, 2014. The team led tourism, T&C moved quickly following the quake to set suppliers from the rest of the world. ”8 To address these issues in Africa and elsewhere, the trade logistics the development of a proposal to establish a Sustainable up a quick-recovery project aimed at helping the vitally agenda expanded in FY15 with FIAS support. The work has encompassed a variety of initiatives including: Tourism Global Solutions Group, drawing on expertise important trekking industry resume operations in time for from across the entire Bank Group. The organization the peak fall season. The project focused on assessing • Building a framework to measure the cost of trade logistics in agribusiness in South Asia. has been approved and is now operational. In June, the damage along the popular Mount Everest base-camp trek, Tourism Group sponsored an international meeting— which annually draws some 40,000 adventure seekers. • Implementation of risk-based approaches to managing the quality of food products for import and “Measuring for Impact—Convening Thought Leaders in Revenue losses from the cancelation of travel plans export that are imported or exported in Kenya, Rwanda, and Zambia. Tourism”—to initiate a dialogue among global practitioners following the quake posed a threat to an already fragile to better measure and understand the impacts of tourism. economy. Tour operators reported cancellation rates of • Promotion of interconnectivity between agencies that implement sanitary and phytosanitary, food The event involved participation by several international more than 90 percent following the quake. Small-scale safety, and other regulations in the Caribbean, the Philippines, and South East Europe. agencies, private companies, non-governmental tour operators, hotels, pensions, and villages along the • And promoting recognition and adoption of international and regional standards, mutual recognition, organizations, and academic institutions, strengthening trekking route were facing severe economic losses on top relationships between FIAS-supported tourism staff of the quake damage they had already sustained. and equivalence in Central America. and external stakeholders. In collaboration with the FIAS support enabled T&C to help facilitate agricultural trade in the Philippines through two key reforms Investment Policy team, the tourism team advanced work The objective of the rapid assessment was to develop a on streamlining visa regulations to improve access to baseline understanding of the extent of the earthquake in the agricultural quarantine and maritime logistics sectors. In January 2015, the government enacted visitors and investors. damage to bridges, tourist accommodations, and a new policy to institute risk management techniques in quarantine inspections, leading to the repeal of other structures important to the trekking trade, mandatory import licenses for low-risk imported food products. In June 2015, the government passed new legislation to allow foreign vessels to transship import and export cargo throughout the archipelago, Improving the Tourist Experience in Cusco assess the safety of the region’s trekking routes, make recommendations to the government to take action on promoting more options for agricultural exporters to deliver their products to foreign markets. As the gateway to the famous UNESCO World Heritage Site of Machu Picchu, Peru, Cusco is one of the busiest tourist towns in Latin America. With rapid growth and multiple jurisdictions, regulations to control businesses and protect the ancient patrimony have 8 World Bank, Africa Can Help Feed Africa: Removing barriers to regional trade in food staples, Poverty Reduction and Economic Management, Africa Region, October 2012, at http://siteresources. worldbank.org/INTAFRICA/Resources/Africa-Can-Feed-Africa-Report.pdf. 32 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 33 shortage due to unresolved trade and trucking issues with neighboring India.) The Nepalese government was particularly appreciative of T&C’s rapid response. The The FIAS-supported tourism work in Nepal Nepal Investment Climate for Industry Team received an comprises product development, sector- IFC FY15 Performance Award for its work on the post- specific business climate, and safety. quake assessment and for support to the government effort to re-build the tourism industry. The project has to date attracted T&C’s work in Nepal continues to focus on the $70 government’s keen interest in business regulatory simplification and inter-agency connectivity and process automation. With the advent of a new constitution million and federalism, process coordination between central and state administrations will be even more important to minimize the time and cost burden of double administration on businesses. The FIAS-supported work in in new investment and has a tourism comprises product development, sector-specific pipeline for an additional business climate, and safety. The project has to date attracted $70 million in investment and has a pipeline for $130 an additional $130 million expected by FY17 . In addition, T&C is unfolding an image re-building project and a business sustainability quick-recovery project to minimize OPERATIONAL HIGHLIGHTS million the damage to the tourism industry and encourage the return of the Chinese visitors to Nepal. expected by FY17 KNOWbel Award Recognizes Industry Project in Bangladesh The World Bank Group’s 2015 KNOWbel Award in the Client Solutions category went to a T&C-implemented, FIAS-funded project in Bangladesh that established the first road map in a low-income country for reducing carbon emissions from special economic zones. The repairs and to industry to manage its risks and insure work focused on the Chittagong export processing zone, accordingly. T&C, with FIAS support, financed the generating energy savings, reducing operating costs, assessment of the Mount Everest base-camp trek at and boosting confidence of global firms that do business the request of Nepal’s Ministry of Tourism. Miyamoto with manufacturers in the EPZ, particularly in apparel and Engineers, an internationally recognized engineering other textiles. The low-carbon zones initiative is poised firm with extensive experience in earthquake damage to be replicated throughout the country, and has already assessment, conducted a rapid survey encompassing spawned other significant investments, including the $170 15 villages, 710 structures including accommodation and million energy-efficient power plant project (see p. 25). residential buildings, and nine bridges. The results, which The winning project was one of nine selected from among were shared with the insurance industry, showed that 83 387 entrants. 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 majority of accommodation structures and trails sustained minimal damage from the April earthquake and a second quake in May, the assessment found. Repair and reconstruction of damaged buildings was under way. After dropping off almost entirely, bookings for the peak season from September through December began to recover as a result of the public and media attention given to the assessment, with confirmations at about 20 to 25 percent of 2014 bookings. (The rate of recovery would have been higher but for the ill-effects of a severe fuel Mount Everest Base Camp Trekking Routes Geotechnical map: Lukla to Tengboche of Everest Base Camp trek Geotechnical Map: Tengboche to Gorak Shep of Everest Base Camp trek Source: Myamoto International Source: Miyamoto International 34 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 35 4 CORE THEMATIC AREAS CORE THEMATIC AREAS IN INVESTMENT CLIMATE INTERVENTIONS Underlying the FIAS-supported work in business regulation, trade and investment, and IN INVESTMENT CLIMATE industry-specific sectors, and the focus on fragile and IDA countries, and the Sub-Saharan Africa region are a series of six thematic priorities that influence all FIAS project planning and implementation. Four core thematic areas covering competition policy, gender INTERVENTIONS inclusion, transparency, and public-private dialogue bring to bear expertise from across the World Bank Group in endeavors devoted to inclusiveness, the widening of economic opportunity, and the elevation of business sectors in developing countries. Two other programs focus on the results of FIAS-supported work, covering impact measurement FIAS support for thematic approaches is and monitoring and evaluation. These are rapidly evolving areas of work in which FIAS helping T&C step up efforts to close the gender support is helping deepen and broaden the data derived from projects and programs to gap in economic participation and expand its ensure knowledge capture and a clear understanding of the economic impact generated by work in competition policy. investment climate work. Transforming Markets through Effective Competition the team—in collaboration with regional teams and sectoral colleagues—supported additional reform efforts Competition policy is a cornerstone of national agendas both in introducing pro-competition market regulations aimed at expanding market opportunities and enabling at the sector level and fostering effective antitrust private initiative. Competition fosters more productive enforcement in Colombia, Egypt, Honduras, Kenya, firms and industries while allowing consumers to Kuwait, Mali, Mexico, Panama, Peru, Philippines, have access to higher-quality goods and services at Romania, Rwanda, and Zambia. It also produced competitive prices. The FIAS-supported Competition analytical notes to help clients in Cameroon, Egypt, Policy Cluster within T&C works with over 40 countries Haiti, and Madagascar set policy priorities to develop to implement solutions that address their most market competition as part of country strategies and pressing market challenges, such as spurring growth of systematic country diagnostics (SCDs). Further, the team productivity and mobilizing efficient private investment in prepared a wide range of knowledge products, including key sectors. competition policy assessments and institutional effectiveness reviews in 12 countries across four regions The potential for competition policy work to deliver (Colombia, El Salvador, Honduras, Kenya, Kuwait, significant impact has been clearly demonstrated. Mali, Mexico, Namibia, Peru, Romania, Tajikistan, and For example, World Bank Group studies show that Uruguay). These reviews complement reform efforts substantially increasing competition in Tunisia and in in Colombia, Honduras, Kenya, Mexico, and Romania Turkey would boost labor productivity growth by at least to detect and eliminate anticompetitive price-fixing 5 percent in each country, and would enable a new agreements that artificially raise prices in intermediary generation of entrepreneurs to play a greater role in their input and food markets. In collaboration with the Latin economies.9 In Kenya, poverty could fall by 2 percent if America and Caribbean region and the Inter-American competition was more intense in the maize and sugar Development Bank, data collection efforts on product markets.10 market regulation and competition were expanded to an FIAS supports the delivery of advisory services to additional six countries (Bolivia, Ecuador, Guatemala, client countries in reforming the way they enforce Panama, Paraguay, and República Bolivariana de their competition laws, ensuring that regulations are Venezuela). Targeted advisory services improve more conducive to competition, and increasing their competition frameworks, and implementation of reforms implementation effectiveness. The FIAS-supported team in Kenya, Mali, the Philippines, Rwanda, Zambia, and provides advisory services through World Bank Group the Common Market for Eastern and Southern Africa operations (lending and technical assistance, knowledge (COMESA), and of a state aid control framework in generation, and advisory services that aim to foster Moldova are generating positive economic impacts. COMPETITION INFORMATION TRANSPARENCY GENDER GREEN PUBLIC- competition). During FY15, competition interventions COMMUNICATIONS REFORMS PRIVATE Specifically, in FY15, the FIAS-supported team helped were included in World Bank lending operations in Haiti, TECHNOLOGIES DIALOGUE bring about a sharp decline in costs for businesses in Kazakhstan, and Moldova, among other places, while 9 World Bank, “The Unfinished Revolution: Bringing Opportunity, Good Jobs and Greater Wealth to All Tunisians,” 2014. World Bank, Republic of Turkey Reform for Competitiveness Technical Assistance: Fostering Open and Efficient Markets through Effective Competition Policies, 2013. 10 Jonathan Argent and Tania Begazo, “Competition in Kenyan markets and its impact on income and poverty: a case study on sugar and maize,” World Bank Policy Research Working Paper 7179, 2015. 36 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 37 COMESA associated with merger review. FIAS support to track all financial and non-financial support measures were chosen for this first phase of the program given specifically acknowledged the World Bank Group’s role for T&C’s competition team helped member countries to firms. Guidelines on criteria for the design of state ”12 Based their “significant contribution to the economy. and marked the first step for this tool to be applied in all reduce the costs and time borne by private companies aid to minimize distortions to competition were issued on research conducted with FIAS support, poverty 50 states across Mexico. seeking to merge. At a time of dwindling flows of critical early in 2015. As a result, the transparency of support could fall by 2 percent if competition was more intense investment to fragile and conflict-affected states (FCS) measures granted in the previous two years increased in the maize and sugar Kenyan markets alone.13 These The competition policy team is following up on initial such as Burundi and Eritrea, and other low- and middle- as more than 170 public entities reported state aid to activities complement a broader competition advisory successes from previous fiscal years. Based on previous income COMESA countries, the new merger guidelines the Competition Council in 2014 compared with just a services program led by the FIAS supported team on technical assistance work, both the Philippines and eliminated obstacles for investment opportunities in the few in 2011 and 2012. Since the first reform in 2014, the anti-cartel enforcement, merger control, regulatory Romania passed reforms to improve their competition region, increasing predictability for the private sector and Moldovan Competition Council examined 20 alleged state quality and competition in payment systems and law enforcement frameworks. In the case of the dramatically reducing notification costs. Implementation support measures. Selected measures in the air services telecommunications. Philippines, the first competition law was enacted of the new guidelines potentially benefits all 19 COMESA were modified to reduce potential harm to markets. State in June 2015. In Romania, both the competition and member countries and, in FY15, directly contributed aid granted in Moldova has been declining as a result In Mexico, the FIAS-supported team scaled up an state law frameworks were adjusted to provide more measurable benefits to 12 countries that were recorded of these steps, and systematic screening of support innovative methodology that allows states to identify, effective implementation provisions. A competition as reforms. measures is expected to produce savings of at least prioritize and eventually align state and municipal-level reform intervention in the Philippines aimed at reducing 5 percent in public state aid funds, resulting in better regulations in key economic sectors with competition freight shipping rates by as much as 5 percent is Heather Irvine, a competition lawyer in South Africa, allocation of government resources. principles. A successful pilot in Oaxaca, third poorest being empirically evaluated as the beneficial effects of noted the considerable uncertainty around merger control state in Mexico, was rolled out in the states of increased competition materialize in a growing number of in the region prior to the adoption of guidelines in late FIAS supported a new mechanism to assess regulatory Tabasco and Mexico State during FY15. In January ports. 2014.11 The reform lowered the costs of complying with impact on competition in Kenya as well as the ongoing 2015, a government decree adopting this methodology the regional merger control regime for comparatively consultation phase with stakeholders. To implement a small businesses and for firms which do not have 2013 act that mandates assessing the impact of new significant operations in the region. The new rules enable statutory instruments on the private sector, the FIAS- CORE THEMATIC AREAS IN INVESTMENT CLIMATE INTERVENTIONS the COMESA Competition Commission to clear non- supported team worked with the Competition Authority Recognizing Innovation in Competition Advocacy problematic mergers in no more than 45 days. Previously, to design guidelines that include a checklist of potential Generating consensus for competition reforms requires political champions, clever advocacy, and strategic the clearance process took up to 140 days. Estimates ways in which the instrument may restrict competition. partnership with stakeholder groups and the media. It is not an easy task, since it often involves going up show that at least $4 million of compliance cost savings Subnational governments in Kenya have already against entrenched political and economic interests holding favorable positions. In FY15, the FIAS-supported for the private sector per year could have been generated identified regulatory issues that hamper competition in team continued to stimulate this policy dialogue in the second round of the Competition Advocacy Contest. if these guidelines had been applied in 2013. agriculture markets. In parallel, the FIAS-supported team The awards and honorable mentions recognize countries and governments that have implemented notable is strengthening the Competition Authority’s efforts to competition advocacy initiatives in one of three categories: fostering growth and reducing inequality; A second reform passed in March 2015 reduced the break up injurious cartel agreements by launching an promoting awareness of benefits of competition in a time of crisis; and balancing competition goals with other notoriously high merger filing fees to a maximum cap innovative compliance program. It calls for a temporary public interests. Due to the positive reaction from the previous year’s award ceremony, held at the Bank Group of $200,000, down from $500,000 previously. The amnesty allowing business associations that are violating Annual Meetings, the International Competition Network—the largest network of competition practitioners— same reform raised the notification threshold so that the competition law to halt that illegal activity before offered to co-host the 2015 contest. The winners ranged from initiatives in countries newly embracing only the most problematic merger cases came under risking incurring heavy fines and even imprisonment after competition policy to the efforts of more well-established competition authorities: scrutiny. Media coverage and opinions from the private the grace period. sector, academia, and practitioners commended the Malawi was recognized for taking steps to deal with a monopolistic situation affecting sugar warehouses improvement in the merger control system, particularly “There are trade associations currently using rules that and distribution systems, a key sector for growth in the country. Results included increased sugar regarding greater predictability and lower barriers for suppress the competitive landscape in their specific availability nationwide and new entrants in the distribution market. cross-border investment. sectors to the detriment of consumers, ” said Wang’ombe Kariuki, Director General of the Kenyan Competition Kenya engaged with private healthcare providers to prevent a 20 percent price increase of healthcare The positive experience at the regional level generated Authority. Financial services and agricultural markets services proposed by their trade association. This initiative had a tremendous impact in a sector critical reform momentum at the national level. With FIAS public welfare, saving more than $100 million in medical bills over a three-year period. support, Zambia passed a similar reform that creates El Salvador deployed an innovative app to enhance citizen participation in competition issues. It makes a more transparent and effective system, and reduces readily available public information pertaining the competition cases under review by the competition compliance costs, particularly for mergers that are not authority and enables citizens to comment and share related information. likely to raise competition concerns. The resources thereby freed up will be put to effective use in the initial New Zealand moved quickly after an earthquake in Christchurch to ensure that surging demand for leniency program, introduced with FIAS support, to construction materials did not spark consumer fraud. A one-stop shop website provided guidance on facilitate detection of harmful cartel agreements through competition and consumer law to all those supplying goods and services to the construction sector. whistle blowing. Further regional spillover effects are reaching Rwanda, where the FIAS-supported team Moldova created an on-line portal with information on state aid to enhance transparency in the allocation presented proposals to operationalize the competition of public resources and reduce selective support to specific firms. The registry has become a key tool for law passed in 2012 but not yet implemented. monitoring the impact of state aid on the competition environment. FIAS-supported work is helping Moldova minimize the Singapore tackled the competition issues raised by third-party taxi booking apps through strong cooperation market distortion caused by incentives and state aid to with the Land Transport Authority, showing that the entry of innovative technology like third-party apps can specific firms. In August 2014, the government adopted bring about benefits to commuters and the taxi industry as a whole. a regulation on state aid for airport infrastructure and Programs in the three award categories were recognized with honorable mentions to Finland, Greece, services that will foster competition in that business Iceland, Indonesia, Israel, Mexico, Portugal, Russia, and South Africa. sector. Later in 2014, an innovative portal was launched 12 Mugambi Mutegi, “Watchdog issues 10-month deadline to break cartels,” Business Daily, April 23, 2015, at http://www.businessdailyafrica.com/CAK-issues-10-month-deadline-to-break-cartels/- 11 Tom Madge-Wyld, “Comesa overhauls board and merger laws, Global Competition Review, April 10, 2015, at http://globalcompetitionreview.com/news/article/38384/comesa-overhauls-board-merger- /539546/2694206/-/2k7u96z/-/index.html. laws/. 13 Jonathan Argent and Tania Begazo, “Competition in Kenyan markets and its impact on income and poverty: a case study on sugar and maize.” World Bank Policy Research Working Paper 7179, 2015. 38 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 39 Work in the competition policy space focuses intensively zero in 2007 . More than 80 different software means that investors and financiers can weigh the risks In the Kyrgyz Republic in FY15, a FIAS-supported on knowledge generation and dissemination. In FY15 the applications are being deployed across all regions to of ventures more precisely. It means that businesses can investment climate project concentrated on investment team produced a number of publications and participated improve transparency, accessibility and accountability in see whether they are competing on a level playing field policy and regulatory governance and transparency. The in several significant learning events (detailed in the next government-to-business service delivery. In addition, ICT with other firms. It enables consumers to discover if they project produced reports analyzing existing investment chapter) and continued to deepen its collaboration with initiatives initially undertaken under advisory projects are are paying fair prices for food, construction materials, incentives as well as investor perceptions. For the partners such as OECD, Inter-American Development Bank increasingly being scaled up through follow-on lending and other basic necessities. It puts online or in other first time, the government adopted and publicized (IADB) and other World Bank Group elements, for example, operations. conveniently available platforms information about the an investment incentives register. It lists more than the Poverty Global Practice, on projects including the costs and regulations involved in starting a business. 80 types of investment incentives and procedures launch of the Global Network of Experts on Competition FIAS funding continues to support the development of Transparency lets business managers know whether for obtaining them, as well as details on related laws and Shared Prosperity and the TI GP where teams work “entry level” software applications, such as business their firms are being subject to the same frequency of and by-laws. Investors responded positively, saying and deliver advisory services in an integrated fashion licensing information portals, construction permit tax or safety inspection as competitors. And it promotes that the document significantly improved investment such as the case of Mexico for the assessment of the administration systems, and mobile phone-based apps a higher degree of public buy-in for pro-growth initiatives regime transparency and reduced the possibility official telecommunications wholesale broadband infrastructure. to collect private sector feedback on government service by helping governments articulate and disseminate their abuse by officials with the power to award incentives. delivery. These are generally provided to clients with economic strategies. Creation of the exhaustive list of incentives opened Leveraging Technology to Deepen Reform Impact no licensing costs as part of larger investment climate the door to further cost-benefits analysis and revision projects which also address legal and process reforms As described in Chapter 2, FIAS-supported work in the of the investment incentives regime in the country. World Bank Group reform programs supported by to improve government-to-business service delivery. field of investment policy and promotion emphasizes The enhanced availability of information on investment FIAS-funded expertise in the fields of information and In FY15, a FIAS-supported team implemented online transparency as a key element of client country incentives is expected to spur new investments inflows. communications technology increased in FY15. The services for business licensing in Mombasa and Nyeri investment entry regimes. This includes clarity in the The amount of new investments facilitated will assessed FIAS-supported team engaged in 61 active and pipeline counties in Kenya, as well as a system for construction procedures required of potential foreign investors and by the project. ICT project components in 43 country programs, covering permit administration in Mombasa. The latter allows transparency of regulations in the area of investment lending, advisory services, and reimbursable advisory architects and developers to submit their building protection guarantees. This can make the difference For regulatory governance and transparency, a flagship services, including two regional projects. By comparison, CORE THEMATIC AREAS IN INVESTMENT CLIMATE INTERVENTIONS plans online and track the review process through between FDI generated and FDI withheld, since fear international conference on regulatory governance was the team supported 50 ICT project components in their computer or mobile phone, as well as supporting of peremptory action by governments against foreign conducted jointly with T&C and other Global Practices FY14 across 32 countries, with two regional projects. back office processing of the applications within the investors is one of the major impediments to increasing of the World Bank Group, along with participants from Today over 40 percent of investment climate advisory county administration. In Ethiopia, a FIAS-supported FDI in developing countries. governments and private sectors of many countries. projects contain a technology component—up from team helped upgrade the Ministry of Trade’s business Held in Bishkek, the Kyrgyz Republic, the conference registry technology platform, improving its functionality and extending its reach to over 500 registration points nationwide. The tax team’s success in assisting Rwanda with an automated mobile tax payment system for micro, small, and medium enterprises, called “mDeclaration, ” provided material in FY15 for the sharing of lessons learned with colleagues working on SME-related tax programs in other countries. ICT-related research and knowledge management efforts in FY15 have focused on identifying emerging good practices in two areas: the integration of online service delivery through establishing one-stop transactional portals for investors; and improving regulatory oversight by interconnecting databases in key government agencies, such as the company registry, tax authority and business regulators. Many client countries are undertaking efforts in this area and request advice on technology options as well as on dealing with key issues such as the introduction of a unique business identifier across government to facilitate online data exchange among regulators. Enhancing Governance and Transparency in Client Countries In virtually all the client-facing work supported by FIAS, transparency has emerged as a crucial thematic area touching on everything from policy development to implementation to dialogue and stakeholder engagement. The word “transparency” appears throughout this report in connection with a range of projects from tax policy and competitive sectors to investment policy and promotion and public-private dialogue. Transparency 40 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 41 focused on helping the government improve regulatory economic participation remains vast. Women own fewer benefit women. FIAS support is helping to deepen T&C’s and sustained implementation. This is particularly transparency and provided assistance on improvement businesses, and businesses they do own tend to have engagement in gender issues. Some of the gender- true in spheres of reform that seek to move countries of professionalism among public officials and the fewer employees, lower sales, and lower invested capital related project highlights from FY15 are described below. away from long-established social norms that have introduction of an effective feedback mechanism for the than businesses owned by men. There are fewer women discriminatory effects. T&C is using gender tracking private sector. in the global labor market, and women in every economy Leveraging a spotlight provided by the Women, Business to help address implementation gaps experienced are paid less than men for their work. and the Law report, a project in the field of discriminatory by women, even when at face-value laws appear to Transparency is a critical factor in developing tax policy law has supported the passage and implementation of require equitable treatment of women. For instance, in that both protects government revenue and boosts To reduce this gap, T&C has developed a four-year groundbreaking legal reforms in Côte d’Ivoire which give Nepal, the FIAS-supported team worked on a business investor confidence. FIAS is supporting IFC work that proposal to enhance the importance of gender women the right to inherit property, secure registration registration automation project that now supports gender is helping Georgia streamline international taxation programming in FIAS operations. The program aims at and travel documents without the approval of a spouse, tracking. A project in the Republic of Yemen led to procedures to improve transparency, protect tax achieving reforms that reduce explicit discrimination and to benefit from income tax provisions. Legal the establishment of a “Female Business Registration revenues, and boost investor confidence (see p. 24). in laws or regulations, with a particular focus on amendments linking to four indicators from the Women, Department” that has begun receiving applications from The effort has involved the FIAS-supported tax team certain topical areas and sectors that affect women Business and the Law report were enacted in 2013, women entrepreneurs. In Cambodia, public-private working in concert with the OECD’s Global Forum for entrepreneurs. The proposal includes a scoping, and in FY15 the team worked with the client to review dialogue (PPD) was used to identify constraints for Transparency and Exchange of Information for Tax piloting, and innovation track for exploring potentially the implementation gaps and increase information female entrepreneurs and advocate for the reduction Purposes working toward a level playing field for private larger interventions that could provide greater impact dissemination to women. This implementation effort of import duties for 20,000 silk weavers. In an initiative companies and boosting competitiveness. Georgia in delivering results for women. A thought leadership sought to increase awareness of these new rights not applicable to projects in many client countries, the FIAS- joined the Forum for Transparency in 2011 and has since track designed as part of the program consolidates only to women but also to government officials to ensure supported team has developed a gender PPD checklist undergone successful peer review in demonstrating lessons learned from FIAS-supported country work and that enforcement and administration activities would be that includes gender components in the scoping its tax transparency to foreign investors. The Forum’s links to other gender programs within the Bank Group, firmly grounded in the newly amended laws. guidance documents for agriculture projects. report states that Georgia passed the Phase 1 review resulting in a community of practitioners in gender and In the Democratic Republic of Congo, FIAS supported in FY15, meaning that the country’s legal framework investment climate. T&C has hired a full-time gender the drafting of legal reforms to allow loans, bank Green Reforms: The FIAS Link to the Climate Change Agenda CORE THEMATIC AREAS IN INVESTMENT CLIMATE INTERVENTIONS is in compliance with international standards of tax lead to elevate FIAS-supported gender programming and transparency and information exchange. In FY15 Georgia implementation. accounts and work outside the home for women. Under T&C works with client countries to increase the began Phase 2, which will assess information exchange previous law, married women needed a husband’s competitiveness of their industries and supply chains by with other countries. As of FY14, approximately 20 percent of investment permission to sign a contract, open a bank account, promoting climate-efficient solutions, clean technology climate projects were flagged as having a gender focus, take out a loan, register a business, register land, or go development, best practices in green buildings, and the use of special economic zones as a lever in spreading the Addressing Gender Disparities in the Business Environment with a budget allocation of less than 3 percent of total to court. Under the draft legislation, such permissions use of climate-efficient business solutions. The strategy project expenditures, with a large majority of projects would no longer be necessary. Gender has emerged as a critically important thematic having 10 percent or less of expenditures devoted to recognizes that industries and their supply chains are area in the FIAS FY12–16 strategy cycle, and an area gender and only 3 projects (2.3 percent) in the entire Years of work in investment climate have shown that both key drivers of economic development and significant of high interest to FIAS donors. The gender gap in portfolio signaling that their activities predominantly the passage of reforms must be followed by effective contributors to climate change. Industries are expected Gender has emerged as In the a critically important Democratic Republic thematic area in the of Congo, FIAS FY12–16 strategy FIAS supported the cycle, and an area of drafting of legal reforms high interest to FIAS to allow loans, bank donors. The program accounts and work outside aims at achieving reforms the home for women. that reduce explicit Under previous law, married women needed discrimination in laws a husband’s permission or regulations, with to sign a contract, open a particular focus on a bank account, take certain topical areas and out a loan, register a sectors that affect women business, register land, entrepreneurs. or go to court. Under the draft legislation, such permissions would no longer be necessary. 42 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 43 to account for more than a quarter of the increase in contributes expertise and advisory inputs to the EDGE of Punjab in establishing an energy efficiency and launched in July 2015 (the beginning of FY16), a new greenhouse gas emissions from 2005 to 2030. Through program in the area of legislative and regulatory design conservation cell within its energy department. This PPD strategy that seeks to build on and integrate technological innovation, industry can also be a major and implementation. In FY15, IFC launched a green- program will help the agency assess its capacity to learning from previous efforts and respond to increasing contributor to climate change mitigation and adaptation. building certification program in Vietnam to encourage support industrial resource efficiency projects and regional demand. Continuing client country demand the construction of more resource-efficient buildings. activities overall through capacity building knowledge has validated the flexible PPD approach in place for the Climate poses significant risks to developing countries Vietnam is the first market in East Asia to introduce exchanges with KEA. past three years. The strategy also reflects the reality of in terms of food production and a number of other EDGE, which stands for Excellence in Design for Greater the changing business environment at the Bank Group. economic sectors. Changing climate and rainfall patterns Efficiencies. EDGE empowers developers to reduce A crucial part of the Punjab program is assistance to Citizen engagement, for example, is now a key element threaten food production, particularly in semi-arid regions energy and water consumption in their buildings by the new agency in focusing on the efficiency of electric of PPD efforts. The FIAS-supported team is developing such as the Sub-Saharan African Sahel, where many 20 percent while lowering greenhouse-gas emissions. motors, with a particular emphasis on fans. Electric this institutional agenda, including pilot approaches such FIAS-supported programs concentrate. Climate change is EDGE offers free software that allows designers to motors are responsible for 40 percent of industrial energy as “e-PPD, ” currently under design in Rwanda. The also increasingly linked with the competitiveness of firms choose technical solutions while showing the extra costs use, and fans account for about 14 percent of that. This new strategy includes a renewed focus on innovation and industrial sectors. The FIAS team in FY15 began to build green and the payback period to break even on area of focus was identified jointly through the efforts and piloting of new ideas, reflecting the interest from planning for the next five-year strategy cycle, developing energy-efficient designs. Buildings account for more of KEA and the IFC advisory team, major consumers other Bank Group units covering such issues as jobs new and expanded offerings in the climate change than 30 percent of the total energy use in fast-growing of energy within industries, and also in the residential and competition policy, to name a few examples. The space. FIAS support seeks to help governments and economies like Vietnam, hence improving energy sectors. The application of energy-efficient technologies team will also explore delivering on an expanded gender industries maximize green growth along supply chains, efficiency in new buildings is critical. Other priority could improve the availability of energy to the country. A agenda and seek to identify potential PPD interventions. enhance competitiveness, and minimize negative effects countries participating in the EDGE program include general power shortage in Pakistan has been hampering on climate by promoting innovation, enabling better Costa Rica, India, Indonesia, and South Africa. economic performance due to irregular supply and Included among the selected highlights from FIAS- use of energy and water, and supporting more efficient brownouts. It is estimated that the project should improve supported PPD work in FY15, in Somalia, the Somaliland management of waste. The Climate Efficient Industries initiative in Pakistan cost-savings for firms and help avoid harmful greenhouse Chamber of Commerce, Industry and Agriculture—a is working with the government of Punjab to promote gas emissions by 375,000 metric tons per year, equivalent Private Sector Apex Chamber—and the government These efforts build on years of FIAS-supported work CORE THEMATIC AREAS IN INVESTMENT CLIMATE INTERVENTIONS competitiveness in industries through improved use to the annual emissions from 79,000 passenger cars. signed a PPD memorandum of understanding agreeing in legal and regulatory spheres to promote green of energy resources in textiles, food processing, and T&C worked with the Punjab Energy Department to to collaborate through evidence-based and inclusive growth, such as the IFC EDGE program, which helps other manufacturing sectors. In order to drive these organize a one-day public-private dialogue in January dialogue to improve the investment climate in Somaliland client governments establish green building codes initiatives, the World Bank Group with the support of the 2015 on electricity transmission and private energy (a region of Somalia). The memorandum included nine that lead to reduced greenhouse gas emissions. FIAS Korea Energy Agency (KEA) is assisting the Government production that drew about 100 public and private sector implementation guidelines reflecting PPD good practice. participants to discuss the need for regulatory reform in The Ministry of Trade and Investment, meanwhile, relation to transmission, private grids, and private sales agreed to provide an office and two staffers to manage arrangements. the secretariat for a PPD meeting on economic sector coordination. Fostering Public-Private Dialogue to Catalyze Reform EDGE EDGE PARTICIPATING COUNTRIES PROGRAMPARTICIPATING PROGRAM COUNTRIES In FY15 FIAS contributions continued to support strong stakeholder engagement through public-private dialogue In Côte d’Ivoire, the government committed in FY15 to draft a national PPD strategy due to the numerous (Excellence in Design for Greater Efficiencies) across projects in an expanding range of activities from sectoral and thematic PPD platforms in the country. This national strategy intends to set up a structure which will EDGE empowers developers to reduce energy and water consumption in their buildings by advisory to lending to analytic exercises. FIAS-supported permit better coordination of all PPDs. 20 percent while lowering greenhouse-gas emissions. teams delivered tailored PPD offerings to governments and the private sector with the aim of improving the A two-day workshop in Madagascar on public-private efficiency and effectiveness of private sector reforms. dialogue drew 50 stakeholders representing the government and the private sector. The workshop A total of 54 active projects made up the portfolio, focused on the challenges and success factors of EDGE PROGRAM INDIA GREEN BUILDINGS compared to 64 in FY14. The modest decline in the dialogue, including setting agendas, communication EDGE empowers Vietnam was the number of projects stemmed not from a reduction in and monitoring-and-evaluation, and activity planning led developers to reduce first market in Asia work but from organizational restructuring in which some to agreement on establishment of working groups to energy and water VIETNAM to introduce EDGE. projects were remapped to other World Bank Group Global A green building implement agendas focused on fiscal issues, mining, and consumption in their Practices. An additional two projects were completed and buildings by certification program commerce, among others. closed in FY15. Total portfolio value at the end of FY15 was 20 percent while was initiated to approximately $15.6 million versus $17 million in FY14. Of lowering greenhouse- encourage the the total project portfolio, 23 projects were in fragile and Improved M&E System to Deepen Results Insights gas emissions. construction of more resource-efficient conflict-affected states, up from 18 in FY14. In FY15, T&C’s Monitoring and Evaluation (M&E) team buildings. worked with regional and thematic teams to develop FY15 marked the end of the three-year PPD strategy. an improved results framework for the Global Practice, SOUTH AFRICA During that time, PPD efforts included eight published including FIAS-supported programs. The effort builds COSTA RICA reports, 36 projects that directly benefitted from PPD on valuable experiences from the work done under the team input and expertise, workshops that drew 280 Investment Climate Department, the T&C prospectus, participants, and six training events. Among others, key and the launch of the Global Practice on July 1, 2014, the INDONESIA projects were designed and initiated for Côte d’Ivoire, beginning of FY15. The result of this work is an integrated Myanmar, Somalia, and Tunisia. Other countries results framework that is based on typical challenges and supported by PPD work were Bangladesh, Egypt, theories of change of each of the solution areas. Ethiopia, Guinea, Mali, and Togo. The T&C results framework applies to all projects across The FIAS-supported team developed in FY15 and all instruments. The adoption of results-based project 44 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 45 design and monitoring practices along with the use of savings derived from changes in laws and regulations measurement improvements focusing on three areas: but, so far, have had no effect on business practices or the new T&C results framework is expected to steer the affecting starting a business, construction permitting, performance. More specific results are also helping the Global Practice toward higher quality and more impactful licensing fees, and the time required of businesses to • Refining the log frame of standard indicators to government fine-tune the design of the program before results for our clients. The T&C management team has comply. In FY15 FIAS supported $20.8 million in CCS, better articulate the expected theory of change. it is scaled-up. For example, a higher impact was found endorsed both the results framework and the M&E down slightly from $22 million in FY14. This brings the on better-educated male business owners working in support approach. Implementation of the framework total CCS for the FY12–16 cycle to $193 million (as • Developing and tracking impact indicators as sectors other than trade and operating outside Dantokpa is well under way in FY16, and management will be against a target for the five-year cycle of $350 million). committed in the FIAS strategy. Market, one of the largest in West Africa. Also, the monitoring its progress. Indicators previously used under More CCS has been achieved but is still being measured. impact evaluation found that the businesses most likely • Incorporating impact evaluations in key operations FIAS, such as investment generated and compliance The five-year target for trade-related cost savings is $250 to formalize in response to the banking and tax packages through the Impact Program to fill critical knowledge cost savings, remain core measurements in the T&C million; the actual total through FY15 is $433 million. had characteristics similar to business already formalized. gaps and generate evidence on how to improve and FIAS agenda. New indicators have been added to Thus the combined CCS and trade savings for the private The qualitative data gathered under the impact evaluation operations to maximize their impact. the framework and still others are under development sector four years into the cycle stand at $626 million as proved extremely useful in identifying the specific services in an effort to capture and measure other impacts that against a five-year target of $600 million. Measurement of the effectiveness, results, and impact offered in each package. are at the core of the T&C offerings. These include new of the FIAS strategy is extending in much greater indicators on investment generation for investment As the FY17–21 strategy cycle approaches, FIAS has Short-term impacts in Malawi show that no-cost business depth into areas such as job creation, firm productivity, policy and potential indicators for trade interventions, met or exceeded most of its key targets for reforms, registration was very attractive to informal businesses and investment. Carrying out impact evaluations has productivity, and others. investment generation, and priority sectors and regions. and generated very significant program participation (or allowed testing of different solutions to the same policy The T&C team appreciates the vital importance not only up-take). In this case, it was the banking package that issue. This produces clearer answers to such critical Measuring Impact of building up the reform count but also of understanding questions as: What are the key constraints that need to added most value. In particular, zero-cost registration and measuring the impact this reform work has on alone increased formalization by 75 percent; when T&C’s M&E and impact teams go beyond the counting be tackled? What are the effects of T&C interventions private sector growth and competitiveness of client combined with the banking package the increase was 85 of specific reforms to examine the benefits generated on interest groups such as women or small and medium countries and developing regions. The team has made percent; and when combined with the tax package, by 69 by FIAS-supported programs. Direct compliance cost enterprises? And who are the indirect beneficiaries? In CORE THEMATIC AREAS IN INVESTMENT CLIMATE INTERVENTIONS significant advances in the tools and techniques of percent. The program costs are relatively low, suggesting savings (CCS) are one of those key measures. The the process, this allows the T&C practice, its partners, measuring impact. Drawing on input from donors, the potential for scaling up this intervention widely. CCS indicator measures the change in the cost of doing and its clients to improve the policy response and to use recent program evaluations, and global expertise, As in Benin, the evaluation showed that formalization business as a result of reform work. This can include limited resources most effectively.14 FIAS has supported considerable investment in impact alone seems insufficient to lead to changes in firm-level In this context, important results and lessons have come outcomes. Both governments are now in the final stages out of the Joint World Bank Group-Donor Impact of collecting data to assess longer-term impacts before Measurement Program in FY15, supported by FIAS and the pilot programs are expanded. with additional contributions from Canada, DFID, and Third, extensive data collection initiatives supported by USAID. Four key messages are emerging: the Impact Program are providing governments, T&C, First, impact evaluations elevate the quality of and development partners with large amounts of high- government debates on policy and reform. This is quality data. Four surveys and corresponding reports evidenced by the influence that completed impact were completed in FY15 in Benin, Malawi, Serbia, and evaluations are having in Albania and Georgia, where Tajikistan. These are large data-collection initiatives for findings have been disseminated in different government which detailed questionnaires and field procedures are agencies as well as in international research conferences. prepared and shared externally. In Benin and Malawi In Georgia, the tax reform exempts SMEs with income they involve over 3,000 informal firms per round. The below a threshold from paying taxes. The impact final datasets are used in technical papers and to inform evaluation results show that the reform increased tax government policies and programs. For example, the registration of firms with income below that threshold baseline survey in Kenya provided the government by 18 to 30 percent, but only during the first year. with the geo-location and characteristics of all the Interestingly, no evidence was found that firms were health facilities operating in three counties, enabling under-reporting income to qualify for the tax exception. the government to map the distribution, size, and other In Albania, results showed that trade facilitation reform characteristics of public and private health facilities. This, not only reduced the time to trade by 7 percent but, in turn, makes it possible to better target programs in the more importantly, that this reduction is associated with areas where they are most needed. a 7 percent increase in imports. Finally, impact evaluation activities contributed to Second, impact evaluations have been particularly capacity building for measuring impacts in client valuable when they not only provide data on the impact countries as well as in T&C and partner agencies in FY15, of reforms but point to ways to improve their design through workshops held with clients in Benin, Kenya, and and effectiveness. This is the case with the two impact Tajikistan; dissemination events in Albania and USAID; evaluations aiming at improving formalization programs in and the flagship T&C-DIME (Development Impact Benin and Malawi. In Benin, the government is assessing Evaluation) workshop held in Istanbul. Engagement whether offering registration support alone is more cost- with key institutional partners continued with the Inter- effective than packaging it with banking or tax support. American Development Bank in the context of single Initial results show that the banking and tax packages window impact evaluations under way in Colombia and added value in terms of promoting business formalization Costa Rica, and with the Jameel Poverty Action Lab. 14 The updated work plan and FY15 findings (as of July) can be found at: https://www.wbginvestmentclimate.org/results/impact-program.cfm 46 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 47 5 COLLABORATION, COLLABORATION, KNOWLEDGE, AND LEARNING The World Bank Group uses a number of tools to encourage the creation and deployment KNOWLEDGE, of project- and staff-generated knowledge and to communicate the priorities, initiatives, and accomplishments of FIAS-supported projects to key audiences. Tools such as blogs, AND LEARNING research publications, and workshops with internal and external contributors, among many others, are regularly used to share and disseminate information that can be applied in the field. These initiatives are critical to the knowledge-intensive work supported by FIAS and implemented by the Trade & Competitiveness Global Practice through its suite of core With FIAS support, T&C is focusing on offerings. T&C is committed to continuing improvement and investment in knowledge knowledge leadership in trade and and learning, and to effectively communicating FIAS priorities to internal and external competition policy and industry-specific audiences, partners, stakeholders, academia, and other practitioners. The goal is not work, and on effective communications just to collect and organize knowledge gained in past projects but to integrate it into the of lessons learned. expanding FIAS agenda in actionable terms. Creating and Disseminating Knowledge An exercise that mapped staff in headquarters and the six regions to technical communities of practice around FIAS funding continued to support a robust program, T&C topics, also completed in FY15, has allowed for now within T&C, to capture knowledge and channel more expedient information sharing and will enable technical expertise and experiences into published the practice to align community-of-practice activities resources and events. In FY15, the substance of and expertise with country and global programs. An publications reflected the breadth of relevant topics assessment of T&C staff learning needs, tailored to encompassed by T&C’s global themes—trade, staff profiles and country demand, identified gaps and investment climate, competitive sectors, and innovation opportunities to enrich technical talent. The next step and entrepreneurship—and its global advocacy role is the design and delivery of technical curriculum. T&C around trade and development, small and medium also began assembling vetted collections of technical enterprise development, and investment. Enhanced content—key tools and resources to support the delivery partnerships with the WTO, OECD, UNCTAD, and others of the practice’s core offerings as customized client supported groundbreaking work on key issues, such as solutions. The Role of Trade in Ending Poverty, a report developed in partnership with the WTO (see box, p. 51, for list of Communicating a New Delivery Model more than 35 key external knowledge resources released in FY15). The roll-out of the Bank Group Global Practices in FY15, including T&C, entailed an intensive strategic In FY15, FIAS support contributed to an expanded roster communications effort to ensure that FIAS donors, of events to encourage knowledge sharing, peer-to- client countries, partners, and other stakeholders peer learning, and the exchange of best practices and understood the new structure and its wider array of innovation. A total of 118 events in nine countries product offerings while being reassured of continuity attracted 2,737 attendees, including government in the execution of the FIAS program. The T&C officials and practitioners, private sector representatives, communications team participated actively in developing donor partners, World Bank Group staff, and other presentations on the new Bank Group architecture stakeholders. These seminars and conferences earned to FIAS donors at the November 2014 Consultative 268k 78k 2,737 an average quality rating of 4.5 out of 5 in participant Committee. The presentation articulated the new evaluations (see FY15 highlights of key learning events, offerings under the T&C umbrella, as well as those work p. 54). streams, such as tax and debt resolution advisory, which were being relocated to other Global Practices. The team Building Technical Communities and Expertise also helped produce a detailed prospectus on the T&C product offerings, many of which are supported by FIAS. The T&C knowledge agenda in FY15 targeted project page views to investment participants in 118 investment The prospectus went to Bank Group country directors, unique visitors to investment quality and optimal project staffing through initiatives to climate website climate-related events in clients, and other stakeholders and has played a role climate website identify and bolster staff skills and technical expertise. in ensuring a smooth transition from the Investment 9 countries The portal function to help match staff skills to projects, Climate Department to T&C in terms of implementing launched in FY14, was populated with predominantly the FIAS agenda. client-facing staff providing expertise in their specialties. This “SkillFinder” application has helped teams to deploy FY15 also saw the launch of the T&C Monthly Highlights staff fluidly and to better leverage expertise within T&C. newsletter, a multimedia forum for feature articles, 48 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 49 22,367 subscribers Key Publications Released in FY15 FIAS funding supported T&C’s development of a wide range of published resources to guide government policy makers and practitioners (within client governments and inside the World Bank Group) in designing to T&C Monthly Highlights and implementing reforms. In FY15, these resources were produced primarily to disseminate research and newsletter benchmarking data for application in the field, provide practical guidance and hands-on diagnostic tools, and determine reform impact and gaps in analysis. All publications are available at www.worldbank.org/publications 20,512 unless otherwise indicated. Reports Twitter followers Africa Competitiveness Report 2015 provides detailed competitiveness profiles for the 40 African countries of T&C included in the World Economic Forum’s Global Competitiveness Index. 61K Building Competitive Green Industries: The Climate and Clean Technology Opportunity for Developing Countries provides an overview and estimate of the market opportunity for climate and clean technology business in developing countries over the coming decade. COLLABORATION, KNOWLEDGE, AND LEARNING The Competition Policy Advocacy Awards: Changing Mindsets to Transform Markets showcases the unique visitors experiences and lessons of the World Bank Group’s 2014 contest winners—competition policy authorities that championed successful reforms to address anti-competitive policies and practices through advocacy within their to Investment Climate web site governments and with market stakeholders. (http://www.worldbank.org/en/events/2014/11/26/2014-competition-advocacy-contest) blogs, video features, and other communications Philippines, Timor-Leste, and Zambia attended, along Connecting Food Staples and Input Markets in West Africa: A Regional Trade Agenda for ECOWAS products focused on topics important to the T&C work with regional organizations including the Association Countries argues strong reasons exist to bring a more strategic focus on promoting regional trade in the region. program and to the FIAS investment climate agenda. The of South East Asian Nations (ASEAN), the Economic newsletter drew 22,367 subscribers in FY15. T&C had Community of West African States (ECOWAS), Does What You Export Matter? In Search of Empirical Guidance for Industrial Policies (Spanish edition 20,512 Twitter followers as of the end of the fiscal year, and the Secretariat for Central American Economic released in FY15) considers this question by reviewing literature and taking stock of what is known from a 67 percent increase over the previous year, with 1,259 Integration (SIECA). The event allowed participants conceptual, empirical, and policy viewpoints. mentions and 2,064 re-tweets. The Investment Climate to exchange knowledge and to discuss policy on web site drew 268,226 page views, 78,338 visitors, and trade facilitation best practices and lessons learned. It Export Diversification in Africa: The Importance of Good Trade Logistics looks at recent trends in the exports 60,832 unique visitors in FY15. featured presentations on emerging trends in global of five categories of light manufacturing and reviews progress in improving trade logistics in Sub-Saharan Africa, trade facilitation and logistics, constraints impacting the with a focus on Ethiopia, Kenya, Tanzania, Uganda, and Zambia. The communications team is committed to reaching key efficiency of agricultural supply chains, and international stakeholders with strategic messages. In the spring of best practices for risk-based quarantine compliance and How to Sustain Export Dynamism by Reducing Duality in the Dominican Republic analyzes export 2015, the FIAS-supported team organized the roll-out coordinated border management. competitiveness in the Dominican Republic, drawing from the Trade Competitiveness Diagnostic methodology of a major report on the role of trade in ending poverty. (Farole and Reis, 2012) and identifying main strengths and challenges. Bank Group President Jim Yong Kim and T&C Senior The T&C communications team works closely with Bank Director Anabel Gonzalez joined World Trade Organization Group communications officers worldwide in support of Improving Trade and Transport for Landlocked Developing Countries, produced by the World Bank Group and Director-General Roberto Azevêdo at the WTO’s 5th major public presentations, report roll-outs, and public the United Nations, provides a comprehensive 10-year review and assessment of progress made in improving Global Review of Aid for Trade meeting in Geneva for the engagement aspects of project work. In Nepal, for access of landlocked developing countries to global markets, identifies the remaining challenges these countries launch. The report is part of a broader effort to highlight example, communications support for a rapid-response face, and presents improved and innovative ways to overcome them. the importance of trade—particularly the lowering of effort to assess damage to the country’s trekking trade costs in low-income countries—to alleviating tourism industry following the April 2015 earthquake Little Data Book for Private Sector Development 2015 provides reliable cross-country data on aspects of private extreme poverty and boosting shared prosperity. included a significant public outreach component. A sector development for each of the World Bank member countries and other economies with populations of FIAS-supported engineering survey of structures and more than 30,000. In the fall of 2014, the communications team supported bridges along trekking routes showed that 83 percent a Bank group event on agribusiness trade attended New Voices in Investment sheds light on the characteristics, motivations, strategies, and needs of emerging of the surveyed buildings were structurally sound and by over 90 experts from regional and multilateral market investors, and it identifies differentiating factors among them that are associated with investment that none of the major suspension bridges along the organizations, private sector representatives and policy decisions. route appeared to have been affected by the quake. makers. Participants included representatives from The assessment report was widely disseminated by the The Role of Trade in Ending Poverty discusses how trade will make an essential contribution to ending extreme ministries of finance, trade, industry and agriculture, Tourism Recovery Committee (TRC) of the government poverty by opening up new opportunities for jobs; lowering prices for products consumed by the poor; improving customs, bureaus of standards, and port authorities and received positive media coverage, with at least 34 access to external markets for goods the poor produce; and bringing about structural changes in the economy as from dozens of countries in over 10 emerging markets. media mentions. As trekking bookings began to recover, export sectors expand and increase employment of low-skilled workers. Representatives from Bangladesh, Colombia, the government and the tourism industry expressed Guatemala, Honduras, Lao People’s Democratic appreciation for the timely support provided by T&C. The Small Entrepreneur in Fragile and Conflict Situations finds that, compared to entrepreneurs elsewhere, Republic, Kenya, FYR Macedonia, Myanmar, the (For more on the project, see pp. 33–35.) entrepreneurs in FCS have different characteristics, face significantly different challenges, and thus may be subject to different incentives and have different motives. 50 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 51 Trade Policy and Food Security: Improving Access to Food in the Wake of High World Prices discusses the problem of moving food, often across borders, from surplus production areas to deficit ones, at prices that Technical Papers and Notes low-income consumers in developing countries can afford. World Bank Policy Research Working Paper Series Trading Away from Conflict: Using Trade to Increase Resilience in Fragile States analyzes the extent to Can tax simplification help lower tax corruption? finds a significant link between the measure of tax which trade affects the risk of conflict by mapping and empirically testing the channels through which trade corruption and tax simplicity—a less complex tax system is shown to be associated with lower corruption in tax may affect conflict and political stability, using data from more than 120 developing countries and in-depth case administration. studies. Competition in Kenyan markets and its impact on income and poverty: A case study on sugar and maize investigates the link between competitive, well-functioning food markets and consumer welfare, arguing that Toolkits, Case Studies, and Guidance for sugar and maize in Kenya a variety of factors conspire to distort market prices upward, including import tariff Comparative Analysis of Certain Requirements of Food Legislation in the European Union and the policy, nontariff barriers, potential anticompetitive conduct by firms, and direct state intervention in markets. Customs Union of Russia, Belarus, and Kazakhstan aims to help guide food business operators and public Do special tax regimes for micro and small enterprises encourage formal firms creation? Do they lead authorities engaged in reforming national food safety systems in evaluating their capabilities and meeting firms to underreport revenues? is a policy note that summarizes the findings from the latest research using European Union legal requirements. administrative data from the Georgian Tax Authority to estimate the effects of special tax regimes for micro and (http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/07/16/090224b08300 small enterprises on formal firm creation and tax compliance.* 33c7/1_0/Rendered/PDF/Comparative0an0arus00and0Kazakhstan.pdf) Food prices, road infrastructure, and market integration in central and eastern Africa assesses the Doing, Learning, Being: Some Lessons Learned from Malaysia’s National Transformation Program COLLABORATION, KNOWLEDGE, AND LEARNING impediments to market integration in Central and Eastern Africa for three food staples: maize, rice, and sorghum, examines Malaysia’s Performance Management and Delivery Unit, an institutional innovation for making, using a large database on monthly consumer prices for 150 towns in 13 African countries and detailed data on monitoring, and revising ambitious plans for reform involving coordination between public and private actors the length and quality of roads linking the towns. and among government entities. (https://www.theciip.org/sites/ciip/files/documents/PEMANDU%20Study%20--Final.pdf) Global Experiences with Special Economic Zones: Focus on China and Africa summarizes the development experiences of special economic zones in China and Africa, lessons, and preliminary results of Chinese Getting Financed: 9 Tips for Community Joint Ventures in Tourism provides tips for all actors involved in this investments in African zones, and it makes recommendations on how to unleash the power of zones in Africa by arena—including governments, the private sector, communities, banks, and nongovernmental organizations— strategically leveraging the Chinese experiences. to reduce risk and greatly improve joint ventures’ access to commercial finance. The Global Trade Slowdown: Cyclical or Structural? focuses on the sluggish growth of world trade relative Growing Food, Products and Businesses: Applying Business Incubation to Businesss SMEs now features to income growth in recent years, using an empirical strategy based on an error correction model to assess 10 country case studies (to download), which highlight best practices and lessons learned from across the whether the global trade slowdown is structural or cyclical. globe for developing and sustaining agribusiness incubators. (http://www.infodev.org/articles/growing-food-products-and-businesses) Integrating border regions: Connectivity and competitiveness in South Asia illustrates the underexploited potential for intraregional commerce between five contiguous districts in India, Nepal, and Bangladesh. Investment Promotion: A Guide to Investor Targeting in Agribusiness provides a step-by-step guide for developing and executing targeting campaigns and practical tools for implementation. Investment climate reforms and job creation in developing countries: What do we know and what should we do? reviews the literature on the role of investment climate reforms in job creation.* Public Expenditures on Science, Technology, Innovation aims to help countries assess the quality of public spending in these areas through a framework and analysis that yield actionable measures combining Integrating Qualitative Methods into Investment Climate Impact Evaluations summarizes key principles and institutional and policy reforms with strategic investments. practices underpinning mixed methods evaluations in development, highlights examples, and offers guidelines.* Supporting Growth-Oriented Women Entrepreneurs: A Review of the Evidence and Key Challenges Short-term impacts of formalization assistance and a bank information session on business registration reviews the outcomes of programs supporting female growth entrepreneurs and draws lessons from available and access to finance in Malawi provides initial results of the short-term impacts of business registration on evidence to inform the design of more effective programs. financial access and usage.* (http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/11/02/000333037_201 41102234229/Rendered/PDF/922100BRI0Box30epreneurs01002014web.pdf) Small Business Tax Policy, Informality, and Tax Evasion: Evidence from Georgia examines how the introduction of preferential tax regimes for Georgian micro and small businesses in 2010 affects formal firm Valuing Services in Trade: A Toolkit for Competitiveness Diagnostics provides a framework, guidelines, and creation and tax compliance.* a set of practical tools to conduct a thorough analysis and diagnostic of trade competitiveness. Survival is for the fittest: Export Survival Patterns in Georgia analyzes the determinants of export flow survival in Georgia, using a unique Georgian firm-level data set, in which firms’ characteristics and output dynamics are matched with their customs’ export transactions, for the period 2006–12. Trade effects of customs reform: Evidence from Albania provides information about the reduction in the rate of physical inspections by Albanian customs to estimate the effects of fewer inspection-related delays on the level and composition of imports.* Understanding the operations of freight forwarders: Evidence from Serbia reports the results from a survey of 153 freight forwarding firms in Serbia.* * These are products of resources developed by the T&C Impact Team. 52 2014 > FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 2015 ANNUAL REVIEW • 53 Technical Papers and Notes (continued) Viewpoint Note Series Contract Farming: Risks and Benefits of Partnership between Farmers and Firms reviews the literature to reveal three main findings: contract farming can raise farm income, mainly for high-value crops; firms are willing to work with small farms in many cases; and conflicts are common between buyers and farmers, suggesting an opportunity for alternative dispute resolution.* Export Competitiveness: Why Domestic Market Competition Matters reviews the literature and finds that industries with more intense domestic competition export more; competition law enforcement can be traced to export performance and is complementary to trade reforms; and, pro-competition market regulation that reduces restrictions and promotes competition is an important determinant for trade.* Investment Climate in Africa: The Impact of Reform on Sub-Saharan Africa’s Growth finds some connection between investment climate reform and economic growth in Africa, but the authors conclude that establishing more concrete evidence of causation will require greater focus at the country level and on SMEs. Primary Care for the Poor: The Potential of Micro-health Markets to Improve Care cites recent studies in arguing that the micro-health sector needs to be better understood and suggests a more evidence-based approach to better target investments and interventions and help providers fulfill a role serving the poor. COLLABORATION, KNOWLEDGE, AND LEARNING Risk Management in Customs—Benefits of Customs Reform: Evidence from Albania finds that significantly reduced rates of physical inspection of import shipments in Albania reduced the length and variability of customs clearance times and increased import flows; and, reforms induced changes in the composition of trade and favored imports from EU trading partners.* Journal article ” in “Fostering Private Sector Development in Fragile States: Why Public-Private Dialogue is Part of the Recipe, ECDPM, discusses how private sector development is playing a crucial role in the expanding field of post-conflict economic development and poverty alleviation strategies in fragile states. http://ecdpm.org/great-insights/fostering-private-sector-development-fragile-states-public-private-dialogue- part-recipe * These are products of resources developed by the T&C Impact Team. Photo: Claudio Sieber Sharing Best Practices, Seizing Opportunities: “Global Value Chains, Megaregionals, and Prospects for “From Investment Policy Design to Implementation— can support greater trust and confidence for businesses ” Panel experts discussed Multilateral Trade Cooperation. Making Investment Climate Reforms Happen, ” held in to trade and invest. In Kampala, Uganda, the World Bank FY15 Event Highlights dynamics of trade in the context of global value chains, Washington, D.C., examined synergies between the Group, in partnership with INSOL International, hosted In FY15, FIAS funding continued to support World Bank vertical integration, and WTO trade negotiations. OECD’s Policy Framework on Investment (PFI) and related the annual peer-to-peer Africa Roundtable on insolvency Group staff in organizing numerous external events which activities, and investment climate assistance provided reform around the theme, “Jobs in Africa: How Insolvency brought together diverse audiences to share insights and An entirely new ecosystem of innovative micro and small by the World Bank Group. The peer-to-peer forum for Regimes Impact Economic Growth. ” reform experiences on topics such as industrial policy, businesses in the developing world is taking advantage practitioners, “From Design to Delivery: The Art and trade dynamics, investment climate regulatory reforms, of Internet platforms to sell and provide digital goods Science of Effective Regulation,” held in Bishkek, the T&C’s work in competition policy featured prominently competition policy, and sector and trade competitiveness. and services that can be downloaded and streamed. Kyrgyz Republic, explored links and synergies between in FY15 flagship and peer-to-peer events. In partnership Several are highlighted here. Pioneers in this space gathered for a full-day conference, regulatory reform and reform of governance systems with the OECD, the Bank Group led the inaugural, one- “Harnessing Digital Trade for Competitiveness and and their role and importance in ensuring both public and day conference in Washington, D.C., on “Promoting Three conferences held in Washington, D.C., explored Development, ” to discuss policy-oriented and empirical private sectors reap the benefits of changes introduced by Effective Competition Policies for Shared Prosperity new approaches for developing countries to capitalize work that illustrates the opportunities digital trade new legislation. and Inclusive Growth, ” which explored the role of on growth and trade in a rapidly changing environment. presents developing economies—particularly for SMEs— competition policy as a tool to promote more sustainable “New Growth Strategies: Delivering on the Promise” and address impediments to the use of digital trade in The second international Inspection Reform Conference, and inclusive economic growth. As part of the Bank examined the impact of new industrial policy efforts— promoting economic growth and boosting prosperity for “Breaking Down Barriers to Trade and Investment, ” Group’s Global Engagement on Competition Policy, this what has worked and not worked, how and why different the world’s poorest. organized by the United Kingdom’s Better Regulation conference included leading academics, policy makers, outcomes have arisen from relatively comparable Delivery Office and the World Bank Group and held in practitioners, and senior officials from international interventions, and metrics, measurement techniques, Several events focused on regulatory aspects, London, was developed in partnership with the U.K.’s organizations and focused on understanding the and indicators. In partnership with the Bank Group, the governance, and impacts of investment climate reform. Foreign and Commonwealth Office, OECD, and with relationship between (lack of) competition on welfare and Peter G. Peterson Institute for International Economics The joint World Bank Group/ Organisation for Economic the support of the U.K. Department for International increasing the effectiveness of World Bank Group efforts in Washington, D.C., hosted a moderated discussion, Co-operation and Development (OECD) meeting, Development’s iFUSE program. The three-day conference in implementing competition policy in client countries. The explored how changing the way regulation is delivered event featured a roundtable discussion of award-winning 54 2015 ANNUAL REVIEW > 2013 • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 55 stories from the 2014–15 Competition Advocacy Contest, Colombia, Guatemala, Honduras, the Lao People’s ” organized “Inclusive Growth for Shared Prosperity, Democratic Republic, Kenya, F YR Macedonia, Myanmar, by the World Bank Group in collaboration with the the Philippines, Timor-Leste, and Zambia, among others. 22 International Competition Network. The flagship T&C-DIME impact evaluation workshop The Confederation of Danish Industry, the World was held in May 11-14, 2015, in Istanbul. A total of 163 The Awards Ceremony of the first World Bank Group Bank, and the Ministry of Foreign Affairs of Denmark, participants attended the workshop and advanced the Competition Advocacy Contest, held in October during conducted the “8th International Workshop on Public- impact evaluation plans of 22 projects. Following the the World Bank Annual Meetings in Washington, D.C., Private Dialogue” in Copenhagen, Denmark, in included presentation of the awards to the 2013 contest March. The workshop brought together about 300 workshop, the Impact Program and DIME have been winners (https://www.wbginvestmentclimate.org/advisory- representatives from governments, private enterprises, working together on the launch of a unified process to services/cross-cutting-issues/competition-policy/winners- PPD coordination units, business forums, investors’ support at least 10 additional impact evaluations from 2013-competition-advocacy-contest.cfm) and a moderated councils, competitiveness partnerships, community- projects FY16 with resources from both programs. roundtable, “Changing Mindsets to Transform Markets, ” based organizations, civil society and business where leaders from competition agencies, senior officials organizations, and development partners. of the World Bank Group, representatives from academia, non-governmental institutions, and the private sector The World Bank Group’s first Annual African Diaspora shared their experiences on how to overcome political Trade and Education Forum, “Engaging the Africa economy constraints and successfully reform markets Diaspora: Partnering for Long-term Trade, Investment for the benefit of consumers. More than 100 delegates and Skills for Workforce Development in Africa, ” held attended the event, and it was followed via web-stream in in Washington, D.C., engaged donors, entrepreneurs, all regions. investors, and other stakeholders for a full day of discussions on trade, investment, and mentorship COLLABORATION, KNOWLEDGE, AND LEARNING A peer-to-peer forum held in Chile in partnership with the opportunities in Sub-Saharan Africa. The event attracted U.K. Foreign & Commonwealth Office brought together 360 participants and 1,500 livestream webpage representatives from competition authorities and the visitors. private sector, donor agencies, and the Regional Center for Competition in Latin America to discuss the use of The “Measuring for Impact—Convening Thought market studies as a tool to promote competition policy Leaders in Tourism” forum, the first of a series of in the region. Participants included representatives from events, convened a focused group of specialists and 10 competition authorities in the region and others in the experts in Washington, D.C., to stock-take, define United States, the United Kingdom, and the European priorities and objectives, and identify possible next Union. steps to improve the Bank Group’s ability to effectively and transparently monitor the effects, scale, and value Two peer-to-peer workshops, “Promoting Effectiveness of travel and tourism’s diverse impacts worldwide. in Anti-Cartel Enforcement: Investigative Methods, Interrogation Techniques, and IT Forensics,” were The flagship T&C-DIME impact evaluation workshop held in Bogota, Colombia and Panama City, Panama. was held in May 11-14, 2015, in Istanbul. A total of The workshops were co-financed by the competition 163 participants attended the workshop and advanced authorities. In Bogota, the workshop was attended by the impact evaluation plans of 22 projects. A mix of 50 officials from the Superintendencio de Industria y projects practitioners, researchers, clients, partners, Comercia and focused on implementing tools to help the and management, allowed a rich dialogue that also authority better detect and prosecute illegal business helped improved the current design of these projects. practices that prevent markets from functioning well and Following the workshop, the Impact Program and harm consumer welfare. In Panama City, the workshop DIME have been working together on the launch of a was attended by 40 officials from six regional competition unified process to support at least 10 additional impact authorities (in Costa Rica, the Dominican Republic, evaluations from FY16 with resources from both El Salvador, Honduras, Panama, and Nicaragua) and programs. judges from the Competition Court of Panama, and the program introduced a “dawn raids” checklist as a tool for implementing anti-cartel enforcement. Several events engaged stakeholders in practical sessions on topics related to sector and trade competitiveness. The peer-to-peer learning event, “Leveraging Opportunities for Agri-Food Agencies in the Post-Bali Era,” held in Manila, the Philippines, encouraged exchange of best practices and fostered policy dialogue on addressing trade logistics barriers along agribusiness supply chains. The conference brought together more than 90 experts from regional and multilateral organizations, private sector representatives and policy makers from Bangladesh, 56 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 57 6 FINANCIAL RESULTS FINANCIAL RESULTS AND RESOURCE USE FIAS-supported activities covered in the FIAS 2015 Annual Review were cofinanced via a set of AND RESOURCE USE FIAS trust funds managed by the World Bank Group’s Trade & Competitiveness Global Practice (T&C). Beginning July 1, 2014, the start of FY15, FIAS has been fully embedded in T&C as part of the overall reorganization undertaken by the World Bank Group. In addition to FIAS trust funds, T&C manages other World Bank and IFC trust-funded platforms such as infoDev, the Competitive Industries and Innovation Program, and the Trade Facilitation Support Program. Strong donor support continues to T&C also manages funds received from IFC for operational and administrative tasks directly characterize FIAS trust fund activities related to the delivery of the FIAS program (in the regions). The financial results reported in administered by T&C and bodes well this section cover the funds managed by T&C under the FIAS trust fund structure as well as for the next five-year strategy cycle. supplemental funds earmarked for the implementation of the FIAS strategy. In administering the FIAS program, T&C followed IFC’s ● Republic of Korea standard accounting policies and procedures, as noted ● Luxembourg (C) below.15 FIAS financial reports use cash-based reporting in alignment with the quarterly financial reports on IFC’s ● Multilateral Investment Guarantee Agency (C) donor-funded operations. ● The Netherlands Norway (C) Funding ● ● Spain Since the start of the FY12–16 strategy cycle, FIAS-related contributions were received from the following donors, ● Sweden (C) World Bank Group partners, and clients and are gratefully ● Switzerland (C) acknowledged: ● Trademark East Africa n Direct contributions to FIAS trust funds:* ● United Kingdom (C) ● Australia ● United States ● Austria (C) Most donors who supported FIAS during the FY08–11 ● Canada (C) cycle also provided consent to roll over the unused ● European Union portions (fund balances) of their FY08–11 contributions to the FY12–16 strategy cycle. ● France ● Bill & Melinda Gates Foundation n Client contributions: ● International Bank for Reconstruction and ● Morocco Development (C) Additional client contributions were received by IFC regions $143.7 $18.3 $9.9 ● International Finance Corporation (C) for IFC region-managed projects receiving cofinancing from FIAS trust funds. Such client contributions are accounted for • Ireland (C) at the regional program level. ● Japan ● Ewing Marion Kauffman Foundation million million million total contributions FY12–15, on in FY15 project expenditures, of total for client-facing pace to exceed $155 million with more for knowledge, project project expenditures 15 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 target for FY12–16 cycle development in FY15 of 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 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”. 58 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 59 Core and Programmatic Funding significantly in FY15 from the $7.8 million recorded in FY14. This was due to a combination of factors including a In FY15, FIAS donors, clients, and the World Bank Group shift in donor focus from smaller project-specific activities contributed a total of $30.9 million (including trust fund to larger programmatic initiatives and T&C’s decision to administration fees of $1.4 million) to the various FIAS fund global knowledge management and product design trust funds, supporting the implementation of a broad- $25.0M $30+M and development projects (implemented under the FIAS based investment climate reform program under the FIAS umbrella) using FIAS core funding. In previous years, umbrella (see details in Tables 1 and 2 pp. 62-64). An these activities (approximately $1.8 million) were funded additional $3.1 million was made available by IFC in the from project-specific FMTAAS allocations16 provided form of regular administrative budget to cover salaries and In FY16 T&C by IFC. FY15, FIAS trust related costs of a small number of staff working mostly expects to spend on FIAS-related projects. While total FY15 contributions fund expenditures Client contributions received in FY15 totaled $0.05 for investment between $30 were below the FY15 funding target of $33.1 million, with million, as noted above, from Morocco, similar to the million and $32 climate reform cycle-to-date contributions totaling $143.7 million FIAS is previous year and below the funding target set forth in million. activities reached on track to exceed the funding target of $155 million for the FIAS FY12–16 strategy. The potential to generate $25.0 million. the FY12–16 FIAS strategy cycle, with one year remaining significant cash contributions from clients remains modest in the cycle. due to the high concentration of FIAS activities in IDA as well as fragile and conflict-affected countries. Also, in the World Bank Group core contributions totaled $3.6 case of FIAS cofinanced projects managed by IFC regional million in FY15, including $2.0 million from IFC, and $1.6 units, client contributions typically are accounted for under million from the World Bank, a decrease of $1.5 million the regional programs. from FY14 due to the withdrawal of the Multilateral FINANCIAL RESULTS AND RESOURCE USE Investment Guarantee Agency (MIGA) as a core Other contributions from IFC, received in the form of contributor to FIAS in FY15. For the first three years FMTAAS allocations, amounted to $0.9 million in FY15; of the FY12–16 strategy cycle MIGA contributed $6.4 million in support of the FIAS investment climate reform $.04 million for administrative activities indirectly related to Use of Funds and Fund Balance expenditures with the remaining 17 percent for general projects, including initial product design and development, and administration.17 program. It should be noted that IFC’s total contribution to In FY15, FIAS trust fund expenditures for investment portfolio management, monitoring and evaluation, and FIAS in FY15 was approximately $5.1 million; $2.0 million climate reform activities reached $25.0 million (see Table Administration fees are collected by IFC to cover trust knowledge sharing associated with the global portfolio as a direct contribution to the FIAS core trust fund and 1, Sources and Uses of Funds, p. 62); a slight decrease in fund administration costs and are deducted from donor implemented under the FIAS umbrella, and $.05 million to $3.1 million as administrative budget to cover sustaining FIAS expenditures from FY14 ($25.6 million). In addition, contributions at the time of receipt. In FY15, IFC collected support regional advisory service business development costs associated with the management of FIAS and IFC’s $3.1 million of expenditures were incurred against the trust fund administration fees of $1.4 million from FIAS activities under the broader T&C work program. Investment Climate Advisory Services global business. administrative budget provided by IFC, bringing the total donor contributions.18 Including the $3.1 million of administrative budget from expenditures to $28.1 million, below the average annual Contributions outside FIAS’ Regular Financial Structure spending target of $31 million. In FY16 T&C expects to At the end of FY15, fund balances in the various FIAS trust IFC, the World Bank Group’s core contribution to FIAS was $6.7 million. Indirect contributions for FIAS-related advisory activities spend between $30 million and $32 million to bring overall funds totaled $47 .8 million,19 including $21.6 million of core were made available to T&C via non-FIAS specific spending more in line with strategic spending targets. funds and about $26.2 million of program- and project- Core contributions received from donors amounted to funding mechanisms (see Table 3, Other Funding, p. 64). specific funds received under multi-year donor agreements. $7.9 million in FY15. This is a significant decrease from Administrative budget ($3.1 million) provided by IFC to In FY15, project-related expenditures (both direct While the level of yearend fund balances was expected FY14 core contributions of $21.2 million, which included cover the staff costs of certain “mainstreamed” Advisory and indirect) accounted for 95 percent of total FIAS to drop as FIAS activities were scaled up, a number of a one-time contribution from Canada of $16.4 million. Services positions associated with the management of expenditures with the remaining 5 percent for general and factors contributed to the accumulation of these relatively Overall, the total amount of core funding received in FY15 FIAS and IFC’s Investment Climate Advisory Services administration including rent, communications, information high fund balances. This includes higher-than-anticipated from the World Bank Group and donors amounted to global business. As noted above, IFC’s total FY15 technology, equipment, and other non-overhead costs donor contributions in FY14 and lower-than-expected $14.6 million, consisting of $7 .9 million in contributions contribution to FIAS was $5.1 million, including $2.0 such as back-office support staff (see Table 4, Expenditures project spending due in large part to the transition of the from donors and $6.7 million from the World Bank Group. million as direct contribution to the FIAS core trust fund by Advisory Services Activity, p. 65). While there was FIAS Program to the new Trade & Competitiveness Global As noted above, the World Bank Group’s core contribution and $3.1 million as regular administrative budget. a slight decrease in expenditures overall, direct project Practice and the overall restructuring of the World Bank includes $3.1 million of IFC regular administrative budget. implementation expenditures increased 2 percent in FY15. Group. It should be noted that T&C strategically manages In-Kind Support Via Staff Exchanges and Secondments In comparison, average project-related expenditures for FIAS resources with a view to successfully transitioning Programmatic contributions from donors, made the FY08-11 cycle accounted for 83 percent of total FIAS into the new FIAS FY17–21 strategy cycle. available through thematic and regional FIAS Trust Funds, Throughout the FY12–16 strategy cycle the FIAS program totaled approximately $16.5 million in FY15 compared to has benefited from in-kind resources that several donors $15.4 million in FY14. have made available in the form of secondments and staff exchanges. In FY15, a senior staff member from the Korean Ministry of Trade, Investment and Energy was Project-Specific Funding seconded to work on FIAS-funded activities. Such staff In FY15, project-specific contributions from donor exchanges and secondments offer an attractive way for partners amounted to approximately $4.7 million, including FIAS partners to be directly involved in the program and a client contribution ($0.05 million) from Morocco (see establish direct connections between their respective Table 2, Project-Specific Donor and Client Contributions, private sector development programs and FIAS. p. 64). Project-specific contributions decreased 17 In July 2010, IFC implemented a new cost allocation methodology for Advisory Services which resulted in a redistribution between direct and indirect project costs. As a result of this change, some figures in Table 4 are not consistent with figures reported in FIAS Annual Reports/Reviews, FY08-10. General and administration expenditures, however, are not affected by this change in methodology (see Table 4, p. 72). 18 FIAS trust funds established after July 1, 2009 are subject to the standard IFC trust fund administration fee of 5 percent. Trust fund administration fees collected by IFC are included in Table 1, 16 FMTAAS is IFC’s Funding Mechanism for Technical Assistance and Advisory Services. Sources of Funds. 19 FIAS trust fund cash balances less outstanding consultant commitments. 60 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 61 Table 1: Sources and Uses of Fundsa – In US$ Thousands Table 1: Sources and Uses of Fundsa – In US$ Thousands (continued) FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 SOURCES OF FUNDS United Kingdom (Western Balkans) 497 440 - - - - WORLD BANK GROUP CORE CONTRIBUTIONS United Kingdom (Tax) 1,426 183 96 - - - IFCb 8,000 2,000 2,000 4,000 2,863 2,800 2,200 2,000 United Kingdom (Tax Transparency) - - - - - - 1,150 983 IBRD 2,000 1,600 1,600 1,600 1,600 1,600 1,600 1,600 United States (Doing Business) 632 1,150 724 1,704 978 501 456 225 MIGA 4,000 3,500 3,000 2,700 2,500 2,400 1,500 - Subtotal Programmatic Donor Contributions 8,620 8,830 7,466 7,413 6,203 5,447 15,410 16,522 Subtotal World Bank Group Core Contributions 14,000 7,100 6,600 8,300 6,963 6,800 5,300 3,600 DONOR CONTRIBUTIONS (PROJECT SPECIFIC)e 5,525 4,436 8,868 8,267 9,457 5,456 5,933 4,666 WORLD BANK GROUP PROJECT-SPECIFIC AND OTHER CONTRIBUTIONS Total Donor Contributions 18,455 21,667 23,080 20,231 21,390 16,435 42,584 29,060 IFC IC Business Line - Project-Specific 3,800 2,672 1,862 1,915 2,968 3,084 1,759 - TOTAL WBG AND DONOR CONTRIBUTIONS 36,255 31,589 31,942 33,013 32,255 26,989 50,201 33,587 IFC IC Business Line - Administration - - - 1,687 934 670 558 - CLIENT CONTRIBUTIONS 129 1,093 1,830 283 484 90 75 50 IFC AS - Other Contributions - Business Development - - - - - - - 478 TOTAL RECEIPTS 36,384 32,682 33,772 33,296 32,739 27,079 50,276 33,637 IFC AS - Other Contributions - Administration - - - - - - - 449 Trust Fund Administrative Feesf 1,099 973 1,140 1,212 1,122 1,021 2,507 1,421 IFC AS Contingency - - - 880 - - - - TOTAL (NET) RECEIPTS 35,285 31,709 32,632 32,084 31,617 26,058 47,769 32,216 IFC Global Fund - 150 400 - - - - - TOTAL AVAILABLE FUNDS 38,316 46,971 47,530 51,998 53,342 52,721 70,134 76,767 Total World Bank Group Contributions 17,800 9,922 8,862 12,782 10,865 10,554 7,617 4,527 CORE DONOR CONTRIBUTIONS USES OF FUNDSg Australiac 800 676 1,502 - - - - - STAFF COSTS Austria 368 373 355 331 708 621 660 667 Staff 9,961 11,636 11,181 13,128 12,036 14,934 13,512 11,976 Canada - - - - - 985 16,392 - Consultants and Temporaries 9,322 10,268 7,634 8,101 6,570 5,939 6,807 7,186 Francec - 1,281 1,403 - - - - - Total Staff Costs 19,283 21,905 18,815 21,229 18,606 20,873 20,319 19,162 Iceland 45 - - - - - - - TRAVEL Ireland 735 - - - 205 186 428 199 Total Travel 6,217 6,488 5,229 5,678 5,618 5,893 3,477 4,176 Italy - 1,414 - - - - - - FINANCIAL RESULTS AND RESOURCE USE INDIRECT COSTS Luxembourgc 273 539 - 829 - 1,033 548 - Office Occupancy 683 1,071 1,018 1,073 102 274 119 105 Netherlands (Global Program)d 559 2,350 1,950 1,550 1,870 750 - - Office Equipment 116 53 57 47 84 114 321 559 New Zealand 399 276 384 - - - - - Other Operating Costs 214 863 242 528 635 711 817 539 Norway 475 475 475 1,138 - - - 3,843 Other Costs 108 1,693 2,256 1,718 1,634 2,491 530 470 Spain - - - - - - - - Total Indirect Costs 1,122 3,681 3,573 3,366 2,455 3,590 1,786 1,673 Sweden 406 285 345 396 1,448 1,494 1,528 1,389 TOTAL USES OF FUNDS 26,622 32,073 27,616 30,273 26,679 30,356 25,583 25,011 Switzerland 250 240 - - 400 300 300 300 United Kingdom - 494 332 309 1,099 163 1,385 1,474 a.  The FIAS Annual Review is prepared as a reporting tool for FIAS donors and management, utilizing management accounting principles. IFC contributions during the FY08–11 strategy cycle amounted to $4.0 milllion per anum ($16 million over the duration of the cycle), with disbursements frontloaded in FY08 (by $4.0 b.  Subtotal Core Donor Contributions 4,310 8,401 6,746 4,552 5,730 5,532 21,241 7,872 million) and FY09 (by $2.0 million). 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, PROGRAMMATIC DONOR CONTRIBUTIONS $2.2 million in FY14 and $2.0 million in FY15), and IFC Advisory Services administrative budget ($1.2 million each in FY12 and FY13, $2.3 million in FY14 and $3.1 million in FY15) to cover Austria (IC Cooperation Program) - - - - 2,010 1,841 2,036 3,843 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 million in FY13, $4.5 million in FY14 and $5.1 million in FY15. Austria (Investment Generation) 2,571 2,608 2,489 2,287 - - - - 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.  Austria (Crisis Response) - 280 307 - - - - - 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 Australia (Trade Facilitation) - - - - - - - 1,745 were received and recorded in FY13. Netherlands core contributions are earmarked for activities in IDA countries. d.  Canada (Trade Facilitation) - - - - - - 1,821 - For details of FY15 project-specific contributions, see Table 2. e.  EU (ECOWAS Trade Logistics) - - - - - - 2,423 - Administration fees collected by IFC to cover cost of trust fund administration. f.  EU (ECOWAS Investment Policy) - - - - - - 5,330 - g.  The Uses of Funds table does not include the use of $3.1 million of regular administrative budget received from IFC in FY15 or the $1.2 million received in each of FY12 and FY13 and the $2.3 million received in FY14 provided by IFC Advisory Services (AS) (see note b). Ireland (Africa) 735 - 724 531 615 559 601 597 Italy (Africa) 508 - - - - - - - Korea (Industry) - - - - - - - 125 Korea (Trade Logistics) - - - - - 200 350 - Luxembourg (Crisis Response) - 750 - 263 - - - - Luxembourg (Tax Transparency) - - - - - 646 343 - Netherlands (Investing Across Borders) - - - - 200 - - - Netherlands (Tax Transparency) - - - - 300 - - - Netherlands (Trade Logistics) 503 400 400 - - - - - Netherlands (Secured Lending) - 450 - 600 - - - - Norway (Business Entry) - - 154 428 - - - - Norway (Trade Logistics) 300 340 150 500 500 500 - - Norway (Trade Facilitation) - - - - - - - 5,504 Sweden (Africa) 628 630 1,122 - - - - - Switzerland (Industry) - - - - 600 400 400 300 Switzerland (Secured Lending) - 500 400 400 - - - - Switzerland (Tax) - 500 300 200 700 500 500 400 Switzerland (Tax Transparency) - - - - 300 300 - 2,500 Switzerland (Trade Facilitation) - - - - - - - 300 Switzerland (Western Balkans) 820 600 600 500 - - - - Continued on next page 62 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 63 Table 2: Project-specific Donor and Client Contributions – In US$ Thousands Table 4: Expenditures by Advisory Services Activity PROJECT DONOR AMOUNT FY08 % FY08 FY09 % FY09 FY10 % FY10 FY11 % FY11 DONOR CONTRIBUTIONS STANDARD AS ACTIVITY EXPENDITURESa ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL OHADA Business Law Reform France 1,246 PROJECT RELATED EXPENDITURES Livestock Micro Reforms in Agribusiness Gates Foundation 2,742 of which: Direct Project Expendituresb 17,620,579 66% 21,993,742 69% 18,988,606 69% 19,057,472 63% Investment Climate Reform in East Africa Trademark East Africa 250 of which: Indirect Project Expendituresc 4,117,228 15% 3,734,697 12% 3,322,980 12% 7,679,623 25% Impact and Knowledge Management USAID 428 Total Project Related Expenditures 21,737,807 82% 25,728,439 80% 22,311,586 81% 26,737,095 88% Subtotal Donor Contributions 4,666 General & Administration Costsd 4,883,706 18% 6,344,667 20% 5,304,256 19% 3,535,986 12% CLIENT CONTRIBUTIONS TOTAL STANDARD AS ACTIVITY EXPENDITURES 26,621,513 100% 32,073,106 100% 27,615,842 100% 30,273,081 100% Morocco: Doing Business Reform Morocco 50 Subtotal Client Contributions 50 TOTAL FY15 PROJECT-SPECIFIC DONOR AND CLIENT CONTRIBUTIONS 4,716 TABLE 4: Expenditures by Advisory Services Activity (continued) FY12 % FY12 FY13 % FY13 FY14 % FY14 FY15 % FY15 Table 3: Other Funding – Indirect Support to FIAS Program – in US$ Thousands STANDARD AS ACTIVITY EXPENDITURESa ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL OTHER FUNDING - INDIRECT SUPPORT TO FIAS PROGRAM DONOR AMOUNT PROJECT RELATED EXPENDITURES IFC ADVISORY SERVICES ADMINISTRATIVE BUDGET ALLOCATION of which: Direct Project Expendituresb 19,116,172 72% 22,943,307 76% 17,930,234 70% 18,331,183 73% AS administrative budget-staff-related costsa IFC 3,100 of which: Indirect Project Expendituresc 5,252,790 20% 5,282,040 17% 6,383,990 25% 5,523,341 22% TOTAL FY15 OTHER FUNDING 3,100 Total Project Related Expenditures 24,368,962 91% 28,225,347 93% 24,314,224 95% 23,854,523 95% General & Administration Costsd 2,310,393 9% 2,130,521 7% 1,268,306 5% 1,156,603 5% Advisory Services administrative budget is provided by IFC for certain mainstreamed IFC Advisory Service positions associated with the management of Advisory Services and FIAS- a.  related activities. IFC’s FY15 total contribution to FIAS: $5.1 million, consisting of $2.0 million as direct contribution to the FIAS core trust fund and $3.1 million as administrative budget. TOTAL STANDARD AS ACTIVITY EXPENDITURES 26,679,355 100% 30,355,868 100% 25,582,530 100% 25,011,126 100% IFC’s direct contribution to FIAS ($2.0 million) is included in Table 1: Sources of Funds. Due to the change in IFC’s cost allocation methodology, some figures in Table 4 are not consistent with figures reported in FIAS Annual Reports/Reviews, FY08-10. The new cost a.  allocation methodology re-distributes expenditures between direct and indirect project costs. Althought General & Adminstration expenditures are not affected by the change in the cost allocation methodology, FY08-FY10 G&A expenditures restated to exclude trust fund administration fees previously reported as expenditures. Trust fund administration fees are reported FINANCIAL RESULTS AND RESOURCE USE Direct Project Expenditures include project preparation, implementation and supervision costs. on Table 1: Sources and Uses of Funds as a reduction to receipts. b.  Direct Project Expenditures include project preparation, implementation and supervision costs. b.  Indirect Project Expenditures include program management and operational support costs i.e. product development, M&E, knowledge sharing & staff development, donor relations, and c.  public relations previously reported separately and consolidated under the new IFC cost allocation methodology introduced in July 2010. General & Administration includes overheads (rent, communications, equipment, etc.) and other non-overhead costs such administrative and back-office support staff. d.  Total FIAS FY15 Expenditures PERCENT OF FIAS FY15 PERCENT OF FIAS FY15 DIRECT PROJECT EXPENDITURES TOTAL EXPENDITURES (Client-Facing and Non-Client-Facing) 100% = $25,011,127 100% = $18,331,183 n Client-Facing IDA (42%) n Client-Facing (40%) Direct Project Expenditures n Client-Facing Non-IDA (12%) n Non-Client-Facing (34%) Direct Project Expenditures n Non-Client-Facing KM/PD (46%) n Non-Client-Facing (22%) Indirect Project Expenditures n General and Administrative (5%) Total FIAS FY15 Donor Contributions Percent of FY15 Source of Funding (Gross) Receipts* 100% = $36,737,000 n Programmatic Donor Contributions (45%) n Core Donor Contributions (21%) n World Bank Group Core Contributions (21%) n Project Specific Donor Contributions (13%) n Client Contributions (0%) *Includes administrative fees of $1,421,000 and $3,100,000 IFC Advisory Services administrative budget to cover staff costs of certain “mainstreamed” Investment Climate Business Line positions. 64 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 65 7 Annex 1: FIAS Reform Totals and Descriptions, p. 68 ANNEXES 1.1: FIAS FY12–16 Reform Totals (through, FY15), p. 68 1.2: FIAS/T&C FY12–16 Strategy Cycle Scorecard–Summary, p. 70 1.3: Reforms and Results from FIAS-Funded Projects, p. 71 n Reform totals and descriptions Annex 2: Portfolio of FIAS-Supported Projects in FY15, p. 76 n Portfolio of FY15 Projects 2.1: FIAS-Funded Client-Facing Projects Mapped to the WBG Trade and Competitiveness Global Practice, p. 76 n Abbreviations 2.2: FIAS-Funded Knowledge Management and Product Development Projects Mapped to the World Bank Group, p. 78 Annex 3: Abbreviations, p. 79 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 66 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 67 ANNEX 1 : FIAS REFORM TOTALS AND DESCRIPTIONS ANNEX 1 : FIAS REFORM TOTALS AND DESCRIPTIONS 1.1 FIAS FY12–16 Reform Totals (through FY15) 1.1 FIAS FY12–16 Reform Totals (through FY15) (continued) FY12 FY13 FY14 FY15 FY16 TOTAL FY12 FY13 FY14 FY15 FY16 TOTAL GRAND TOTAL 46 75 76 68 0 265 SUB-SAHARAN AFRICA 19 49 62 45 0 175 EAST ASIA AND THE PACIFIC 0 1 2 1 0 4 Africa Region COMESA 0 0 0 1 1 Philippines 0 0 1 1 2 Angola 0 0 0 2 2 Timor-Leste 0 1 0 0 1 Benin 0 2 4 3 9 Vietnam 0 0 1 0 1 Burkina Faso 0 2 2 0 4 EUROPE AND CENTRAL ASIA 13 10 8 14 0 45 Burundi 3 6 0 0 9 Albania 1 0 2 3 6 Cameroon 0 1 3 0 4 Armenia 1 3 0 1 5 Central African Republic 0 0 1 0 1 Belarus 1 1 0 0 2 Chad 0 1 1 0 2 Bosnia and Herzegovina 0 0 0 3 3 Comoros 0 2 1 0 3 Georgia 1 0 2 0 3 Congo, Dem. Rep. 0 1 5 3 9 Kazakhstan 1 0 0 0 1 Congo, Rep. 2 0 1 0 3 Kosovo 2 3 0 1 6 Côte d’Ivoire 0 4 5 4 13 Kyrgyz Republic 0 0 0 2 2 Djibouti 0 1 1 0 2 Macedonia FYR 0 0 0 1 1 Equatorial Guinea 0 0 1 0 1 ANNEXES Moldova 3 2 0 0 5 Gabon 0 2 1 1 4 Montenegro 1 0 0 1 2 Ghana 0 0 1 0 1 Russian Federation 1 0 3 0 4 Guinea 0 2 3 1 6 Tajikistan 1 0 1 1 3 Guinea-Bissau 0 1 1 0 2 Ukraine 0 1 0 1 2 Kenya 0 0 2 1 3 LATIN AMERICA AND CARIBBEAN 11 14 4 7 0 36 Lesotho 2 0 0 0 2 Colombia 1 2 1 1 5 Liberia 0 1 1 0 2 Costa Rica 3 2 0 1 6 Madagascar 0 0 0 4 4 Dominican Republic 0 0 0 1 1 Malawi 1 1 1 1 4 El Salvador 0 1 0 0 1 Mali 3 0 1 2 6 Guatemala 1 2 0 1 4 Mauritania 0 1 2 0 3 Haiti 0 1 0 0 1 Mauritius 0 0 0 1 1 Honduras 0 1 2 1 4 Mozambique 0 3 0 0 3 Jamaica 0 1 1 1 3 Namibia 0 0 0 1 1 Mexico 1 0 0 0 1 Niger 0 2 1 0 3 Nicaragua 0 1 0 0 1 Rwanda 3 7 4 5 19 Panama 2 2 0 0 4 São Tomé and Príncipe 0 1 2 0 3 Peru 2 0 0 1 3 Senegal 0 1 5 1 7 Trinidad and Tobago 0 1 0 0 1 Seychelles 0 0 0 1 1 Uruguay 1 0 0 0 1 Sierra Leone 2 0 1 0 3 MIDDLE EAST AND NORTH AFRICA 2 0 0 0 0 2 Sudan 0 0 0 1 1 Algeria 1 0 0 0 1 Swaziland 0 2 1 1 4 Morocco 1 0 0 0 1 Tanzania 1 0 2 1 4 SOUTH ASIA 1 1 0 1 0 3 Togo 1 1 4 2 8 Bangladesh 1 1 0 1 3 Uganda 1 2 2 2 7 Zambia 0 2 2 3 7 Zimbabwe 0 0 0 3 3 Continued on next page 68 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 69 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 CUM­U­ FY12–16 DOING FY08-11 LA­TIVE STRATEGY NO. BUSINESS STRATEGIC THEME INDICATOR CYCLEa FY12 FY13 FY14 FY15 FY12-15 TARGET COUNTRY REFORM TOPIC REFORMS REFORM DESCRIPTION VALIDATED 1. Number of investment climate (IC) reforms supported by 51 46 75 76 68 265 250 EAST ASIA AND PACIFIC Focus on delivering FIAS significant business Philippines Competition 1 Government implemented two new regulations streamlining the issuance of ship licenses in the Philippines  of which reforms validated by Doing Business report * - 47 36 56 56 43 191 125 environment reforms and limiting the ability of incumbent firms to contest the entry of new shipping firms. The project team hand-  of which other reforms (i.e., not captured by Doing - 4 10 19 20 25 74 125 collected data on vessel licenses issued in Manila and tracked the impact of the reform in terms of reduced days Business report) required to issue ship licenses and number of licenses contested. The average number of days to issue a license Number of IC reforms supported by IC/T&C (including 68.5 68 102 102 89 361 n/a declined from 84 to 63. FIAS supported reforms) EUROPE AND CENTRAL ASIA  of which reforms validated by Doing Business report - 48 51 59 59 56 225 n/a Albania Construction permits 1 A reform law on territory planning and development introduced the principle of tacit approval for construction 1  of which other reforms (i.e., not validated by Doing - 20.5 17 43 43 33 136 n/a permitting of low-risk buildings, in line with the project team’s recommendation. Municipalities must decide on Business) permit applications within 15 days or approval is deemed granted. The law eliminates seven procedures and For comparison: Total number of reforms reported in 247 201 238 230 231 900 n/a limits the number of permits to two, for development and construction. Doing Business Albania Starting a business 1 Albania improved business start-up by streamlining registration procedures and eliminating the company seal. 1 Share of IC reforms supported by FIAS in IDA countries 59% 61% 76% 83% 63% 72% 60% Albania Trade logistics 1 The project helped Albania Customs upgrade its automated system for customs data (ASYCUDA) processing. Share of IC reforms supported by FIAS in FCS countries n/a 24% 32% 30% 34% 31% n/a Among other features, this new system enables expedited “green channel” processing of goods. The upgrade ANNEXES Share of IC reforms supported by FIAS in Sub-Saharan n/a 41% 66% 82% 66% 66% n/a makes the Albanian Customs IT system compatible with its counterpart in Kosovo, which will facilitate the Africa implementation of transit reforms agreed by the two countries in early 2014. A new green-channel treatment for 2. Share of FIAS client-facing project implementation spend n/a 49% 47% 45% 37% 45% n/a low-risk goods in Albania reduces processing time from three hours to 10 minutes. Focus on strategic in Fostering Enterprise Creation and Growth Armenia Inspections 1 With IFC help and after intensive discussions, parliament adopted a new law on inspection bodies based on prioritiesb Share of FIAS client-facing project implementation spend n/a 30% 30% 36% 45% 35% n/a OECD best practices. Regulatory agencies are now operationally independent within their ministries with better in Facilitating International Trade and Investment trained and professionally supervised staff aided by an improved data and information-sharing system. The Share of FIAS client-facing project implementation spend n/a 18% 19% 13% 16% 17% n/a reform improved the inspections system and reduced average compliance costs from $832 to $69, benefitting in Unlocking Sustainable Investment in Key Sectors 33,462 firms. 3. Share of FIAS client-facing project implementation spend 70% 77% 78% 78% 77% 78% 70% Bosnia and Investment law 1 A major new reform law drafted with IFC help provides for a clear list of definitions and treatment of FDI and Focus on priority in IDA countries Herzegovina harmonizes Bosnia’s investor regulations with international standards. Foreign investors are now allowed to clients Share of FIAS client-facing project implementation spend 52% 69% 57% 58% 50% 59% 50% own more than a 49 percent share of capital in print or television broadcast media businesses. The 49 percent in Sub-Saharan Africa limit remains only for public TV and radio services. Foreign investors are guaranteed national treatment, Share of FIAS client-facing project implementation spend 29% 20% 28% 31% 31% 28% 25-30% protection against nationalization or expropriation, the right to dispose of profits and transfer funds, and in FCS the option to choose how to resolve disputes. The law signals the country’s commitment to attracting of new investment and to retaining and expanding existing investment, leading to job creation and sustainable 4. Client satisfaction: FIAS-supported projects (results from n/a 95% 92% 88% 89% 91% n/a economic development. Client satisfaction IFC client survey) and development Bosnia and Licenses and permits 1 The government adopted a regulatory reform strategy for 2013 through 2016 including a work plan on Development effectiveness: FIAS-supported projects 61% 86% 83% 88% 100% 89% n/a effectiveness Herzegovina institutionalization of regulatory quality mechanisms, capacity building, adoption of rule books, and coordination (share of projects rated satisfactory in terms of mechanisms with regional and local authorities. Licensing reforms at the subnational level have benefited more development effectiveness) than 20,000 firms and led to nearly $7 million in direct compliance cost savings. Client satisfaction: IC/T&C Global Practice (results from 89% 91% 94% 91% 89% 91% n/a Bosnia and Trade logistics 1 The project team worked with federal border inspectorates to extend and align working hours with those of IFC client survey) Herzegovina neighboring customs organizations at the three most-frequented border crossings with Croatia, responsible for Development effectiveness (share of IC/T&C projects 60% 71% 82% 80% 89% 81% n/a more than 70 percent of Bosnia and Herzegovina’s trade volume. The resulting reform shortened the lead time rated satisfactory) for clearing goods by the phytosanitary agencies by 13 percent within one year of implementation. Estimated 5. Share of client-facing expenditures on economy-wide 92-93% 87% 82% 84% 79% 83% 60-70% savings for the private sector from 2013 through 2015 are $1.75 million. The reduced fee for quality certificates FIAS focus on projects saved the private sector an estimated $650,000 per year. industry-specific vs. Share of client-facing expenditures on industry-specific 7-8%c 13% 17% 17% 21% 17% 30-40% Kosovo Trade logistics 1 IFC’s Western Balkans Trade Logistics Project facilitated the signing of a bilateral agreement on transit economy-wide projects facilitation between Albania and Kosovo. The project team helped find common ground on issues relating to 6. Direct compliance cost savings (in millions) n/a $118 $32 $22 $21 $193 $350 food and agricultural product safety. Inspections at border crossing points now take as little as 30 minutes, Measuring impact Investment generated via facilitation of FDI in priority n/a $108 $329 $750 $170 $1,357 $1,000d compared two hours before the agreement. Only one customs broker is required instead of the previous two, sectors (in millions) resulting in estimated cost savings for traders of $700,000 per year. Kyrgyz Getting credit 1 Kyrgyz authorities improved access to credit information by beginning to distribute both positive and negative 1 * Indicators shaded: directly attributed to or linked with FIAS program. a. Yearly average based on years for which data is available. Republic credit information. b. Data based on product classification. Kyrgyz Investment incentives 1 The team helped create an investment incentives registry listing all investment incentives. The registry will c. Value is an approximation. Republic aid economic and cost-benefit analysis to identify bottlenecks in investment policy, while also increasing d. $1 billion is the target for FDI impact via FIAS activities. The target for overall investment generated is $3 billion. transparency and reducing the risk of power abuse and rent-seeking. The Law mandates that government update the database and ensure it is available to investors. Continued on next page 70 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 71 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) DOING DOING NO. BUSINESS NO. BUSINESS COUNTRY REFORM TOPIC REFORMS REFORM DESCRIPTION VALIDATED COUNTRY REFORM TOPIC REFORMS REFORM DESCRIPTION VALIDATED Macedonia, Trade logistics 1 The Western Balkans Trade Logistics Project, in collaboration with the World Bank team structuring the Second Angola Tax simplification 1 With the IBRA team’s technical assistance, Angola made paying taxes less costly for companies by reducing the 1 FYR Competitiveness Development Policy Loan for Macedonia, supported the Macedonian Food and Veterinary and compliance corporate income tax rate from 54.7 percent to 48.4 percent of total profit. Agency and the Macedonian State Sanitary and Health Inspectorate in their efforts to introduce a risk-based management approach in their border controls. This led to development of an annual sampling plan expected to reduce the Benin Construction permits 1 A decree on building permits established a one-stop shop, with streamlined processes limiting the number of 1 sampling rate by half. More targeted inspections have reduced the sampling rate by 40 percent, yielding private required signatories on a building permit to two. A regulation was adopted limiting the time to provide water sector savings of $1 million in the second half of 2014 alone. connection to an applicant to two weeks after payment of fees when an extension is required, and to six days Montenegro Trade logistics 1 The project team helped streamline and automate a cumbersome process for customs officers examining import when no extension work is required. declarations and transactions that required freight forwarders and traders to either wait in the customs office Benin Starting a business 1 Sample statutes were made available online so that LLCs can register at a one-stop shop without costly 1 or make repeated visits to obtain updated information about their declaration. The private sector supported interaction with a notary. Elimination of the notary and minimum capital requirements was officially notified to this change by upgrading its own information systems to enable electronic communications with customs. the central and commercial banks and publicly advertised. Clearance time has been cut by two hours; inspection time for excise goods by more than four hours. Benin Trade logistics 1 A diagnostic report laid out the constraints to trade and provided recommendations for improved procedures. 1 Tajikistan Starting a business 1 Tajikistan made starting a business easier by enabling the statistics agency to issue statistics codes for new 1 Congo, Dem. Competition 1 Capacity building and technical support helped improve regulations on cross-border mergers involving firms businesses at the time of registration through the one-stop shop. The codes are created and shared via a secure Republic operating in COMESA countries. The new framework has reduced merger filing fees and shortened the VPN channel. evaluation period for mergers deemed unlikely to reduce on competition. Ukraine Starting a business 1 Albania improved business start-up by streamlining registration procedures and eliminating the company seal. 1 Congo, Dem. Construction permits 1 The government cut in half the cost of a building permit as part of a new fee schedule adopted in January 2015 1 ANNEXES LATIN AMERICA AND CARIBBEAN Rep. that stemmed from a recommendation was provided by the IBRA team. Colombia Getting credit 1 Colombia established a functional secured transactions system and a centralized, notice-based collateral 1 Congo, Dem. Starting a business 1 As a result of a business law reform act approved by ministers of the Organization for Business Law 1 registry. The law broadens the range of assets that can be used as collateral, establishes clear priority rules in Rep. Harmonization in Africa (OHADA) in 2014, the government issued decrees allowing shareholders to freely set bankruptcy for secured creditors, and allows out-of-court enforcement of collateral. the amount of capital to incorporate a limited liability company. A one-stop-shop delivers the tax registration number to the companies. The effort benefited from technical assistance by the IBRA team. Costa Rica Getting credit 1 Costa Rica adopted a secured transactions law that establishes a a centralized, notice-based collateral 1 registry. The law broadens the range of assets that can be used as collateral, establishes clear priority rules in Côte d’Ivoire Getting credit 1 Côte d’Ivoire improved its credit information system by introducing regulations that govern the licensing and 1 bankruptcy for secured creditors, and allows out-of-court enforcement of collateral. operation of credit bureaus. Dominican Protecting investors 1 The Dominican Republic strengthened minority investor protections by introducing greater shareholder rights 1 Côte d’Ivoire Enforcing contracts 1 Enforcement of contracts was made easier by introducing new provisions on voluntary mediation. 1 Republic and requirements for greater corporate transparency. Côte d’Ivoire Property transfers 1 Côte d’Ivoire made transferring property less costly by lowering the property transfer tax rate. The rate for 1 Guatemala Starting a business 1 Guatemala made starting a business easier by eliminating certain registration fees and reducing the time to 1 registering property declined from 6 percent to 4 percent. publish a notice of incorporation. Côte d’Ivoire Trade logistics 1 A single-window platform for importing reduced the time required for documentary compliance. 1 Jamaica Getting credit 1 Jamaica improved access to credit by establishing credit bureaus and by adopting a new secured transactions 1 Gabon Starting a business 1 Following adoption of the new uniform OHADA Company Act, Gabon made starting a business easier by 1 law that implements a functional secured transactions system, broadens the range of assets that can be used as reducing the paid-in minimum capital requirement. The project supported the OHADA Secretariat in enacting the collateral, allows a general description of assets granted as collateral, and establishes a modern, notice-based new OHADA Company Act. collateral registry. Guinea Starting a business 1 A presidential decree eliminated the requirements on minimum capital for business entry and on notary 1 Honduras Competition 1 The competition policy team helped in the preparation and adoption of more effective merger controls. These intervention when creating a company, making it easier to start a business. The investor protection act was new regulations reduce the burdens on businesses engaged in corporate restructuring, mergers, or acquisitions passed when parliament ratified the revised OHADA Treaty. and allows the competition agency to focus on the mergers more likely to hamper competition and harm Kenya Competition 1 Capacity building and technical support helped improve regulations on cross-border mergers involving firms consumers. The duration of the review process declined from an average of 170 days in 2011 to 15 days in 2013. operating in COMESA countries. The new framework has reduced merger filing fees and shortened the Peru Tourism 1 Seeking to encourage private sector investment in the culture and tourism sectors beyond the popular Cusco evaluation period for mergers deemed unlikely to reduce on competition. destination, the reform simplified procedures for opening and operating hotels, hostels, and lodges. The team Madagascar Getting credit 1 Following close collaboration with the IBRA team, Madagascar improved access to credit by broadening the 1 helped identify and eliminate duplication of procedures, reconcile prices with real operating costs, and reduce range of assets that can be used as collateral to include future assets, by allowing a general description of the number of procedures from five to three. assets granted as collateral, and by allowing a general description of debts and obligations. The IBRA team’s SOUTH ASIA support and technical assistance to a Getting Credit technical working group advising the government on international best practices led to the reform included in the new law. Bangladesh Tax simplification 1 IFC supported establishment of a public-private dialogue platform called “BUILD,” for Business Initiative Lending 1 and compliance Development. BUILD advocated for retionalization and reduction of the country’s high corporate income tax rates Madagascar Protecting investors 1 The IBRA team’s work with the Getting Credit technical working group also covered investor protection issues in 1 management and helped bring about a reduction in the main CIT rate to 35 percent, resulting in private sector compliance cost the area of secured transactions and secured creditor rights in or out of bankruptcy proceedings. savings of $5.3 million. Madagascar Registering property 1 The IBRA team delivered a Doing Business reform memorandum and organized several technical and high-level 1 policy workshops focusing on Doing Business and investment climate reform. The team helped tailor indicator- SUB-SAHARAN AFRICA specific action plans for the technical working groups, resulting in a budget act that reduces the property Africa Region Competition 1 The global competition policy project assisted the 19-member Common Market for Eastern and Southern Africa registration tax from 6 percent of property value to 5 percent. (COMESA) with implementation of merger control guidelines and amended rules. Mergers by small firms no Madagascar Trade logistics 1 The ongoing work by the IBRA team has led to significant improvement in the TradeNet system. All documents 1 longer require notification. Fees levied in cases that require notification have been cut by more than half. The can now be uploaded on the portal for imports, making it unnecessary to go in person to offices in Antananarivo, new thresholds have reduced notifiable mergers by 68 percent. Fees for large mergers declined on average Madagascar’s capital. The reform work has extended to investments in port infrastructure, reducing shipping from $500,000 to $200,000. Compliance cost savings from the reform are around $5.8 million per year. Non- delays. To help finance the improvements, port handling fees have increased problematic mergers can be cleared within 45 calendar days, down from more than 90 days. The average time for a phase-one merger is less than 30 calendar days. In FY15 the regional reform delivered specific benefits in Malawi Competition 1 Capacity building and technical support helped improve regulations on cross-border mergers involving firms 12 countries (see below). operating in COMESA countries. The new framework has reduced merger filing fees and shortened the evaluation period for mergers deemed unlikely to reduce on competition. Angola Starting a business 1 The Indicator-Based Reform Advisory (IBRA) team delivered a Doing Business reform memorandum outlining 1 short-, medium-, and long-term recommendations, including a reform relating to starting a business. The Mali Getting credit 1 Mali improved its credit information system by introducing regulations that govern the licensing and functioning 1 team also provided technical assistance to the government. Starting a business is easier thanks to improved of credit bureaus in the member states of the West African Economic and Monetary Union (UEMOA). registration procedures and reduced fees to register a company. The time required to register a business was Mali Trade logistics 1 Mali introduced an electronic data interchange system, reducing the time required to document border 1 reduced by 30 days, and the cost reduced from 124 percent of income per capita to 23 percent in 2015. compliance for export from 55 to 48 hours, and for import from 93 to 86 hours Continued on next page Continued on next page 72 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 73 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) DOING DOING NO. BUSINESS NO. BUSINESS COUNTRY REFORM TOPIC REFORMS REFORM DESCRIPTION VALIDATED COUNTRY REFORM TOPIC REFORMS REFORM DESCRIPTION VALIDATED Mauritius Competition 1 Capacity building and technical support helped improve regulations on cross-border mergers involving firms Zambia Tax simplification 1 Payment of business taxes was made easier by implementing electronic filing and payment for VAT. 1 operating in COMESA countries. The new framework has reduced merger filing fees and shortened the and compliance evaluation period for mergers deemed unlikely to reduce on competition. management Namibia Getting credit 1 An IBRA Doing Business reform memorandum and a series of technical methodology and validation workshops 1 Zimbabwe Competition 1 Capacity building and technical support helped improve regulations on cross-border mergers involving firms bringing together private and public sector stakeholders led to review of the law to allow borrowers to inspect operating in COMESA countries. The new framework has reduced merger filing fees and shortened the their own data. The recorded reform is a result of this recommendation. evaluation period for mergers deemed unlikely to reduce on competition. Rwanda Competition 1 Capacity building and technical support helped improve regulations on cross-border mergers involving firms Zimbabwe Getting credit 1 In Zimbabwe the credit bureau is now providing credit scores, a reform stemming from the engagement of the 1 operating in COMESA countries. The new framework has reduced merger filing fees and shortened the IBRA team at the request of the Ministry in Finance. A Doing Business reform memorandum followed by several evaluation period for mergers deemed unlikely to reduce on competition. methodology and validation workshops attended by government and private sector representatives led the Rwanda Getting credit 1 The credit bureau TransUnion Rwanda implemented a credit scoring service providing credit scores based on the 1 creation of technical working groups for the government’s priority indicators. positive and negative data in its database, as well as data obtained from other public sources in Rwanda. With Zimbabwe Protecting investors 1 As part of the IBRA team’s assistance in Doing Business reforms, Zimbabwe strengthened minority investor protections 1 the help of the IBRA team, the government’s Doing Business 2016 Action Plan identified the need for a credit by introducing provisions allowing legal practitioners to enter into contingency fee agreements with clients. scoring service. This reform allows Rwanda to maximize its Doing Business score under the Credit Information index of the Credit indicator; Rwanda ranks second globally on this indicator. Rwanda Protecting investors 1 Rwanda strengthened minority investor protections by introducing provisions allowing holders of 10 percent of 1 ANNEXES a company’s shares to call for an extraordinary meeting of shareholders, requiring holders of special classes of shares to vote on decisions affecting their shares, requiring board members to disclose information about their directorships and primary employment, and requiring that audit reports for listed companies be published in a newspaper. Rwanda Resolving insolvency 1 Rwanda improved its insolvency system by introducing provisions on voidable transactions and the approval of 1 reorganization plans, and by establishing additional safeguards for creditors in reorganization proceedings. The IBRA team provided technical assistance on Doing Business methodology as well as best practices in the area of resolving insolvency, which contributed to the recorded reform. Rwanda Starting a business 1 Rwanda made starting a business easier by eliminating the need for new companies to open a bank account 1 in order to register for value added tax. The IBRA team assisted Rwanda with its Doing Business 2016 Action Plan, including advice on how to streamline company registration procedures. Senegal Starting a business 1 Senegal further reduced the minimum capital requirement following the adoption of OHADA Uniform Acts. 1 Seychelles Competition 1 Capacity building and technical support helped improve regulations on cross-border mergers involving firms operating in COMESA countries. The new framework has reduced merger filing fees and shortened the evaluation period for mergers deemed unlikely to reduce on competition. Sudan Competition 1 Capacity building and technical support helped improve regulations on cross-border mergers involving firms operating in COMESA countries. The new framework has reduced merger filing fees and shortened the evaluation period for mergers deemed unlikely to reduce on competition. Swaziland Competition 1 Capacity building and technical support helped improve regulations on cross-border mergers involving firms operating in COMESA countries. The new framework has reduced merger filing fees and shortened the evaluation period for mergers deemed unlikely to reduce on competition. Tanzania Competition 1 Capacity building and technical support helped improve regulations on cross-border mergers involving firms operating in COMESA countries. The new framework has reduced merger filing fees and shortened the evaluation period for mergers deemed unlikely to reduce on competition. Togo Starting a business 1 The country’s tax administration adopted a regulation eliminating the fees collected at registration, reducing the 1 amount paid at the tax office significantly. Overall LLC registration costs declined from $97 to $47 and, for sole proprietorships, from $70 to $50. Togo Trade logistics 1 A government decree established a single window for import and export procedures. The single window reduced 1 costs and delays by providing an electronic platform connecting several agencies and institutions, including the port of Lome, the customs agency, National Shippers Council, customs brokers, banks, consignees and stevedores. Uganda Competition 1 Capacity building and technical support helped improve regulations on cross-border mergers involving firms operating in COMESA countries. The new framework has reduced merger filing fees and shortened the evaluation period for mergers deemed unlikely to reduce on competition. Uganda Tax simplification 1 IFC assistance focused on crafting a legal regime to eliminate the requirement for manual tax returns. In and compliance practice, e-filing for MSMEs has resulted annual compliance cost savings of $3.45 million and benefited 13,951 management registered tax payers. Zambia Competition 1 Capacity building and technical support helped improve regulations on cross-border mergers involving firms operating in COMESA countries. The new framework has reduced merger filing fees and shortened the evaluation period for mergers deemed unlikely to reduce on competition. Zambia Getting credit 1 The credit bureau improved credit reporting by beginning to provide credit scores. 1 Continued on next page Continued on next page 74 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 75 ANNEX 2 : PORTFOLIO OF FIAS-SUPPORTED PROJECTS IN FY15 ANNEX 2 : PORTFOLIO OF FIAS-SUPPORTED PROJECTS IN FY15 (continued) 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 FYTD FY15 FIAS TOTAL FYTD FY15 FIAS REGION COUNTRY PROJECT NAME FUNDING EXPENDITURES EXPENDITURES STAGE REGION COUNTRY PROJECT NAME FUNDING EXPENDITURES EXPENDITURES STAGE East Asia and Pacific Cambodia Cambodia Investment Policy $1,156,777 $233,850 $924 PIPELINE South Asia Bangladesh Low-Carbon Industry Initiative in Bangladesh $859,744 $22,407 $22,407 COMPLETED East Asia and Pacific East Asia and Pacific EAP Tax Transparency Program $515,468 $349,711 $329,520 PORTFOLIO South Asia India Buddhist Circuit Tourism: Facilitating Growth Corridors $3,597,378 $368,614 $164,362 PORTFOLIO Region in UP and Bihar East Asia and Pacific Mongolia Mongolia Business Inspection Reform $3,847,573 $779,947 $19,015 PORTFOLIO South Asia India India Rajasthan Investment Climate Reform $3,369,600 $164,958 $(43,489) PORTFOLIO East Asia and Pacific Mongolia Mongolia Investment Policy and Investor Protection $815,000 $74,741 $74,741 PIPELINE South Asia India Madhya Pradesh Competitiveness Partnership $1,650,075 $17,612 $354 PIPELINE Confidence South Asia India Odisha Inclusive Growth Partnership $2,797,651 $551,597 $152,896 PORTFOLIO East Asia and Pacific Myanmar Myanmar IC Reforms $1,967,998 $468,882 $150,433 PORTFOLIO South Asia Nepal Nepal ICRP Regulatory Reform $3,542,721 $131,751 $58,581 PORTFOLIO East Asia and Pacific Myanmar Myanmar Investment Policy $2,082,133 $544,327 $158,284 PORTFOLIO South Asia Nepal Nepal Investment Climate for Industry $2,029,872 $464,065 $202,528 PORTFOLIO East Asia and Pacific Papua New Guinea PNG SME tax simplification $2,231,602 $148,637 $106,027 PORTFOLIO Sub-Saharan Africa Africa Region IC Rapid Response III $1,801,706 $830,533 $816,387 PORTFOLIO East Asia and Pacific Philippines Philippines Agribusiness Trade Competitiveness $3,227,619 $575,397 $90,188 PORTFOLIO Sub-Saharan Africa Africa Region Indicator-Based Reform in Sub-Saharan Africa $1,326,970 $374,185 $374,573 PORTFOLIO East Asia and Pacific Solomon Islands Pacific Investment Climate Rapid Response $689,900 $212,373 $101,023 PORTFOLIO Sub-Saharan Africa Benin Benin Investment Climate Reform Program $1,427,761 $291,793 $62,046 PORTFOLIO East Asia and Pacific Timor-Leste Timor-Leste Tibar Bay Investment Plan (TBIP) - Spatial $825,383 $15,846 $15,846 PIPELINE Sub-Saharan Africa Burundi Burundi Investment Climate Reform Program $2,413,207 $- $- COMPLETED and GVC Cluster Development Sub-Saharan Africa Cameroon Cameroon Investment Climate Reform Program $1,670,065 $256,108 $118,660 PORTFOLIO East Asia and Pacific Timor-Leste Timor-Leste Business Registration and Licensing $1,954,679 $188,796 $542 PORTFOLIO Sub-Saharan Africa Côte d’Ivoire Côte d’Ivoire Investment Climate Reform Program - $2,307,725 $445,614 $128,380 PORTFOLIO Reform Project Business Regulation ANNEXES East Asia and Pacific Timor-Leste Timor-Leste Trade Logistic $1,847,266 $541,796 $48,643 PORTFOLIO Sub-Saharan Africa Eastern Africa Region East African Community IC Phase 2 $8,080,035 $391,130 $267,716 PORTFOLIO East Asia and Pacific Vietnam Viet Nam Debt Resolution $3,005,064 $522,596 $- PORTFOLIO Sub-Saharan Africa Ethiopia Livestock Micro Reforms for African Agribusiness $4,575,000 $111,549 $111,549 PIPELINE Europe and Central Asia Albania ECA DR Western Balkan $2,855,276 $578,137 $124,490 PORTFOLIO Sub-Saharan Africa Mali Mali Investment Climate Program - Phase 3 $1,840,000 $239,272 $245,873 PIPELINE Europe and Central Asia Armenia Armenia Investment Climate II $1,500,000 $216,091 $140,211 PORTFOLIO Sub-Saharan Africa Mali Mali investment Climate Program Economy Wide $1,690,000 $112,592 $121,693 PORTFOLIO Europe and Central Asia Armenia Armenia Investment Climate Reform Project $1,606,702 $142,952 $21,306 COMPLETED Sub-Saharan Africa Rwanda Rwanda Investment Climate Reform Program III - $8,087,000 $150,016 $104,220 PIPELINE Europe and Central Asia Belarus Belarus: National Quality Infrastructure and Business $3,130,174 $1,116,712 $8,409 PORTFOLIO Transforming Local Economies Regulatory Reform Program 2014 - 2016 Sub-Saharan Africa São Tomé and Príncipe São Tomé and Príncipe Investment Climate Project $1,197,190 $22,579 $(1,605) PORTFOLIO Europe and Central Asia Bosnia and Herzegovina Bosnia and Herzegovina Investment Climate Project $3,013,881 $557,543 $94,544 PORTFOLIO Sub-Saharan Africa Tanzania Tanzania IC Program $920,000 $113,708 $46,792 PORTFOLIO (ISCRA) Sub-Saharan Africa Togo Togo Investment Climate Reform Program $771,130 $148,693 $148,693 PORTFOLIO Europe and Central Asia Eastern Europe Region Indicator Based Reform Advisory in ECA $783,500 $298,750 $299,596 PORTFOLIO Sub-Saharan Africa Uganda Uganda IC Industry Program $1,138,481 $177,552 $3,337 PORTFOLIO Europe and Central Asia Georgia Georgia IC Project $1,894,000 $365,000 $300,333 PORTFOLIO Sub-Saharan Africa Uganda Uganda Investment Climate Program $1,988,797 $135,838 $135,838 COMPLETED Europe and Central Asia Kyrgyz Republic Central Asia Tax Project $3,377,931 $1,127,483 $157,997 PORTFOLIO Sub-Saharan Africa Western Africa Region Investment Policy Reform for West Africa Regional $1,116,730 $1,116,730 PORTFOLIO Europe and Central Asia Kyrgyz Republic Kyrgyz Republic Investment Climate $2,356,000 $678,043 $9,940 PORTFOLIO Organizations $10,350,000 Europe and Central Asia Serbia Trade Logistics South East Europe $2,731,924 $425,170 $215,740 PORTFOLIO Sub-Saharan Africa Western Africa Region OHADA Uniform Acts Reform phase 2 $3,769,027 $473,229 $463,328 PORTFOLIO Europe and Central Asia Southern Europe ECA Debt Resolution and Business Exit#UMB $253,447 $448 $448 PIPELINE Sub-Saharan Africa Western Africa Region West Africa Trade Logistics $4,588,846 $612,858 $612,858 PORTFOLIO Region Sub-Saharan Africa Zambia Zambia Iinvestment Climate Program II $2,857,209 $224,853 $69,674 PORTFOLIO Europe and Central Asia Southern Europe Western Balkans Investment Climate Agribusiness $51,329 $51,329 PORTFOLIO World World Region Competition Policy for Investment Climate $1,542,951 $258,045 $260,076 PORTFOLIO Region Competitiveness Project $10,700,000 World World Region Tax Transparency Exchange of Information - Client $1,500,000 $7,309 $7,309 PORTFOLIO Latin America and Colombia Trade Logistics Advisory Program in Colombia $1,977,030 $353,751 $288,124 COMPLETED Facing Caribbean Latin America and Latin America Region Central America Regional Agribusiness Trade $2,386,030 $324,989 $257,414 PORTFOLIO Grand Total $9,891,466 Caribbean Logistics Project Latin America and Latin America Region Indicator Based Reform Advisory in LAC $2,152,995 $632,218 $206,708 PORTFOLIO Caribbean Latin America and Latin America Region Taxation Knowledge Management in LAC $643,661 $185,471 $24,269 PORTFOLIO Caribbean Latin America and Peru Improving the Business Climate of Tourism in Cusco $847,754 $490,022 $246,226 PORTFOLIO Caribbean - Peru Middle East and North Egypt, Arab Republic of ICT Investment Policy in Egypt $2,478,689 $144,976 $144,976 PIPELINE Africa Middle East and North MENA Region IBRA Project in the MENA Region $923,091 $373,457 $245,638 PORTFOLIO Africa Middle East and North Morocco Morocco Quality of Public Service Delivery and $525,000 $44,962 $44,962 PORTFOLIO Africa Transparency to Improve the Investment Climate Middle East and North Pakistan Pakistan-India Trade Facilitation Project $2,632,505 $160,157 $116,214 PORTFOLIO Africa Middle East and North Pakistan Punjab Energy $2,548,225 $195,975 $25,637 PORTFOLIO Africa Continued on next page Continued on next page 76 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 77 ANNEX 2 : PORTFOLIO OF FIAS-SUPPORTED PROJECTS IN FY15 ANNEX 3: ABBREVIATIONS 2.2 FIAS-Funded Knowledge Management and Product Development Projects Mapped to the World Bank Group ASYCUDA Automated System for Customs Data (UNCTAD) CCS compliance cost savings Trade and Competitiveness Global Practice CEFTA Central European Free Trade Agreement TOTAL FY TOTAL FY FIAS EXPENDITURE EXPENDITURE % FIAS PROJECT COMESA Common Market for Eastern and Southern Africa REGION PROJECT NAME TOTAL FUNDING US$ SHARE EXPENDITURES STAGE DFID United Kingdom Department for International Development World Business Regulation Product Development and KM $853,109 $262,504 $262,504 100% PORTFOLIO DIME Development Impact Measurement Program World Business Taxation Product Design $2,722,000 $481,734 $481,734 100% PORTFOLIO World Climate Efficient Industries Product Development Project $994,881 $403,995 $382,317 95% PORTFOLIO ECA Europe and Central Asia World Cross BL PDP Initiative on Green Buildings $5,294,542 $880,169 $58,083 7% PORTFOLIO ECOWAS Economic Community of West African States World Debt Resolution $796,861 $285,861 $126,237 44% PORTFOLIO EDGE Excellence in Design for Greater Efficiencies World Debt Resolution and Business Exit $937,989 $(1,293) $(1,293) 100% COMPLETED EPZ export processing zones World Gender in Investment Climate $546,120 $93,967 $93,967 100% PORTFOLIO FCS States in fragile and conflict-affected situations World IC Agribusiness Supply Chain PDP $2,575,000 $696,919 $698,448 100% PORTFOLIO World IC Indicator Based Reform Advisory Global $1,033,091 $390,479 $396,942 102% PORTFOLIO FDI foreign direct investment World IC-Business Taxation (Tax Transparency) $600,000 $62,521 $62,521 100% PORTFOLIO FIAS Facility for Investment Climate Advisory Services World ICT-enabled Investment Climate Reform Theme Project $627,577 $228,317 $228,317 100% PORTFOLIO FMTAAS Funding Mechanism for Technical Assistance and Advisory Services (IFC) World Investment Climate for Tourism - Global $2,030,242 $357,913 $357,913 100% PORTFOLIO GDP gross domestic product ANNEXES World Investment Policy Product Development and Roll Out $1,940,895 $523,323 $523,323 100% PORTFOLIO GVCs Global Value Chains World Joint Donor/World Bank Group Program on Impact and Value $4,182,118 $1,070,753 $1,121,372 105% PORTFOLIO for Money IADB Inter-American Development Bank World Promoting Competition $2,050,000 $340,278 $353,050 104% PORTFOLIO IBRA Indicator-Based Reform Advisory World Public Private Dialogue Global KM $700,000 $76,613 $76,427 100% COMPLETED IBRD International Bank for Reconstruction and Development World Trade Logistics PDP (FY13-FY17) $6,000,000 $2,526,491 $2,642,151 105% PORTFOLIO ICRR Investment Climate Rapid Response World Transparency and Public Private Dialogue $530,000 $416,081 $416,081 100% PORTFOLIO Grand Total $8,280,093 ICT information and communication technologies IDA International Development Association IFC International Finance Corporation IPP Investment Policy and Promotion KEA Korea Energy Agency LAC Latin America and Caribbean M&E monitoring and evaluation MARD Ministry of Agriculture and Rural Development (Vietnam) MIGA Multilateral Investment Guarantee Agency MSE Micro and Small Enterprises MSME Micro, Small, and Medium Enterprises NEM non-equity modes of investment OECD Organisation for Economic Cooperation and Development OHADA Organization for the Harmonization of Business Law in Africa PPD public-private dialogue PSCS Private sector cost savings RAS reimbursable advisory services RBA risk-based audit SCD Systematic Country Diagnostics SIECA Secretariat for Central American Economic Integration SME Small and Medium Enterprises SPS Sanitary and Phytosanitary Sphere T&C Trade & Competitiveness Global Practice TFA Trade Facilitation Agreement (WTO) TFSP Trade Facilitation Support Program UNCTAD United Nations Conference on Trade and Development USAID U.S. Agency for International Development VAT value-added tax WEF World Economic Forum WTO World Trade Organization 78 2015 ANNUAL REVIEW • FIAS - the FACILITY for INVESTMENT CLIMATE ADVISORY SERVICES 79 PHOTO CREDITS Cover: Ghana, factory workers producing shirts for overseas clients, by Dominic Chavez/World Bank Group Chapter introduction photos: Chapter 1: Rwanda, border crossing, by Simone D. McCourtie/World Bank Group Chapter 2: Tunisia, port of Rades, by Dana Smillie/World Bank Group Chapter 3: Nepal, quick recovery project, by Rocky Prajapati Chapter 4: Guatemala, small business worker, by Maria Fleischmann/World Bank Group Chapter 5: Joint World Bank/OECD meeting, World Bank Group Chapter 6: Senegal, warehouse project Chapter 7: Press briefing on regional economic outlook for LAC, by Roxana Bravo/World Bank Group Other key photos: World Bank Group photos: pgs. 7, 9, 22, 24, 29, 31, 38, 40, 41, 42, 43, 46, 50 Bigstock images: pgs. 17, 34, 56, 80 Acknowledgments: Printer: District Creative Printing, Inc. Design Partner: Corporate Visions, Inc. 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.wbginvestmentclimate.org, www.worldbank.org/trade and www.worldbank.org/competitiveness.