BCDS Towards a Business Climate Development Strategy

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Rachel Richard
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1 BCDS Towards a Business Climate Development Strategy Joint initiative of the OECD, World Bank, EU Commission and MENA Steering Group 3 rd meeting of MENA-OECD Working Group on SME Policy, Entrepreneurship and Human Capital Development 26 October 2009 Anthony O Sullivan Head of Division Private Sector Development Directorate for Financial and Enterprise Affairs

2 BCDS is a co-operative process defining where and how to improve a country s business environment BCDS aims BCDS Approach The Business Climate Development Strategy (BCDS) is a process that defines where and how a country should reform to improve the business climate and country competitiveness. It is targeted at improving the business environment to increase investment and competitiveness, thereby contributing to growth and employment It is a co-operative and systematic approach following three steps 1 Define baseline 2 Set priorities 3 Implement Synthesis of existing evaluations using OECD methodology for policy prioritization. Stock-taking of existing business climate reform projects. Define time-bound strategic priorities with government leaders consultations with other stakeholders Support the design and implementation of improved policy at national and regional level

3 BCDS Five points of Value Added 1. 1 Provide a single comprehensive document defining a business climate reform strategy based on best practice in OECD countries; 2. 2 Leverage existing evaluations of the business climate including those by the OECD, The World Bank and the European Commission; 3. 3 Support leadership in the government to ensure coordination and consensus on priorities for reform throughout a broad range of policy areas affecting the business climate; 4. 4 Involve national government and private sector throughout the process to increase buy-in for business climate reform; 5. 5 Leverage established regional frameworks such as the MENA-OECD Investment Programme to address reforms. 4

4 Involve governments and private sector for maximum buy-in Country economic teams conduct self evaluation Joint definition of priorities MENA governments Private sector Chambers of Commerce and Foreign Investor Councils conduct independent evaluation World Bank, EU Commission and OECD Coordinate overall evaluation Leverage existing tools and databases Ensure rigour and independence of assessment 4

5 Example BCDS Assessment for Egypt January - March April - August September - November Period 1: Assessment starts Period 2: Analysis and Drafting Period 3: Finalisation of Assessment BCDS Phase 2: Priorities BCDS Kick-off 28 January 2009 Assessments due 23 March Assessment of BCDS grids by stakeholders Collaboration with local consultants, EC and World Bank First fact-finding mission to Cairo Several missions for individual BCDS dimensions OECD analysis and internal evaluation 1 st Draft Report Drafting of individual dimensions and overall report 12 October BCDS Workshop First country presentation of key findings Finalisation of findings Presentation of progress report at MENA-OECD Ministerial Meeting Ministerial Meeting 23 November 7

6 BCDS : A Comprehensive Assessment Framework I. Business Operational Environment 1. Investment Policy and Promotion 2. Privatisation Policy 3. Tax Policy and Administration 4. Trade Policy and Facilitation 5. Better Business Regulation 6. SME Policy and Promotion II. Rule of Law 1. Anti-corruption 2. Corporate Governance 3. Business Law and Commercial Conflict Resolution III. Factor Markets 1. Infrastructure Policy 2. Human Capital Development Policy 3. Financial Markets Development Covering all policy areas that can support investment and business climate reforms 9

7 Chapter III-3 Access to Finance: overview 7

8 BCDS Analysis is based on 250 policy indicators III 3: Access to finance 3.1 Effective regulatory framework 3.2 Access to bank finance 3.3 Access to capital market 3.4 Early-stage and other financial facilities 3.5 Guarantee schemes 3.6 Improving Skills Collateral and provisions requirements Collateral and provisions requirements BCDS Dimension BCDS Indicator 3.1 Effective regulatory framework Collateral and provisions requirements Registration systems for movable assets Cadastre Level 1 Level 2 Level 3 Level 4 Level 5 Very high collateral requirements (more than 200%). Restrictive collateral rigid provisioning uncollateralised loans. Collateral requirement ranging % of loan amount. Restrictive collateral rigid provisioning uncollateralised loans. Flexible collateral flexible provisioning loans under EUR Flexible collateral flexible provisioning loans under EUR and central collateral registry in place. Flexible collateral flexible provisioning loans under EUR and central collateral registry covering most bank loans. Each indicator is broken down into 5 levels of excellence 8

Enhancement of the Business Environment in the Southern Mediterranean National seminar for Palestine on Innovation 29 and 30 October 2014

Enhancement of the Business Environment in the Southern Mediterranean National seminar for Palestine on Innovation 29 and 30 October 2014 A project funded by the European Union 1. Project Context 3-year