PUBLIC ADMINISTRATION REFORM AND ECONOMIC DEVELOPMENT

1. PUBLIC ADMINISTRATION REFORM AND ECONOMIC DEVELOPMENT SIGMA Regional Workshop on Public Administration Reform and EU Integration Budva, 4-6 December 2005

2. Progress and Challenges in Regulatory Reform Progress and Challenges in Regulatory Reform

3. Evolution of the Investment Environment in the SEE Region Regulatory reform is a key factor in increasing Foreign Direct Investment (FDI)

4. Progress and Challenges in Regulatory Reform SEE countries are increasingly aware of the importance of regulatory reform • At the 2003 Ministerial Meeting, SEE Ministers of Economy adopted the statement “Pushing ahead with reform: Removing obstacles to FDI ” • Recent reports have highlighted progress and challenges for the region: • EBRD BEEPS 2005; • World Bank “Cost of Doing Business”; • Investment Compact “Regulatory Governance Initiative”; • Investment Compact “Enterprise Policy Performance Assessments”; • “White Books” by Foreign Investors Councils at national and regional level.

5. Progress and Challenges in Regulatory Reform Main areas of concern for business The regulatory environment should be stable, transparent and predictable in order to ensure low costs of compliance • Company registration and de-registration; • Enforcement of contracts, commercial courts; • Fair and efficient tax administration; • Licenses, permits and other administrative procedures result in a “time tax” of considerable importance.

6. Progress and Challenges in Regulatory Reform Regulatory reform is a continuous process, that needs constant attention For example, all SEE countries have reviewed and simplified their business registration procedures… • E.g. in Montenegro a limited liability company can be registered for 1€, within four working days, and by submitting three documents • The one-stop-shop approach and the principle “silence is consent” are being implemented in many countries of the region • Reforms have been recently implemented also in Bulgaria, Serbia, and Macedonia

7. Progress and Challenges in Regulatory Reform Regulatory reform is a continuous process, that needs constant attention …but further work is still needed in order to simplify procedures for licenses and permits Administrative steps required to build a standardized warehouse Source: Cost of Doing Business 2006 (data for 2005)

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

9. IC’s Experience in Supporting the Reform Process The implementation of reforms relating to the investment climate are monitored though a detailed index (IRI)

10. Contacts Anthony O'Sullivan Head of SEE Investment Compact 2, rue André Pascal 75775 Paris Cedex 16 - France tel: +33 1 45 24 97 01 fax:+33 1 45 24 93 35 anthony.osullivan@oecd.org Antonio Fanelli Deputy Head of SEE Investment Compact 2, rue André Pascal 75775 Paris Cedex 16 - France tel: +33 1 45 24 97 07 fax:+33 1 45 24 93 35 antonio.fanelli@oecd.org • SIGMA • 2, rue André Pascal • 75775 Paris Cedex 16 - France • tel: +33 1 45 24 13 99/83 58 • fax:+33 1 45 24 13 05 • www.sigmaweb.org