International Trade in Services.pdf - DSpace at Khazar University

192 International Trade in Services
cost involved in dealing with construction in the business capitals of non-highincome
OECD countries with populations of more than 4 million each.
The discrepancy in administrative performance is remarkable even for
countries with similar levels of economic standards. For example, Kenya has a
seemingly effective administration of construction permits. It takes 100 days to go
through the 10 procedures at a cost of 46 percent of annual income per capita.
Only Singapore is noticeably more effective, with a shorter duration (38 days) and
lower cost as a share of income per capita (21 percent). In South Africa, it takes six
months to carry out the 17 procedures at a cost of 28 percent of income per
capita. In Kenya’s neighbor, Tanzania, it takes 10 months, 21 procedures, and more
than 2,000 percent of income per capita to obtain a construction permit. The
countries that operate the slowest and most expensive construction permit
bureaucracies are fragile states such as Afghanistan, Haiti, Niger, and Zimbabwe.
However, among the largest emerging markets, China and, particularly, Russia
administer relatively expensive and bureaucratic processes as well. Russians go
through 54 procedures—currently the worst record—that take, on average, 23
months and cost 2,600 percent of Russian income per capita. The Chinese must
wait 11 months for the completion of 37 procedures at a cost of 700 percent of
income per capita. The Brazilian administration of construction permits is slower
(411 days), but less expensive (47 percent), while the Indian administration is
more rapid (224 days) and more expensive (400 percent).
Tables 6.2 and 6.3 present a breakdown of the various procedures required to
build a warehouse in Kenya and Russia. In Kenya, the most costly and timeconsuming
procedure is the request for and issuance of a building permit (50 days).
In Russia, particularly time-consuming procedures include (1) the request for and
issuance of a conclusion on compliance form for a proposed building with appropriate
city planning and territory use registrations (152 days), (2) the request for
and issuance of a disposition of a prefect on the inception of a construction design
(60 days), and (3) the request for and issuance of a project approval by the appropriate
Moscow state expertise (60 days). In addition, the procedure for requesting
and obtaining the proper technical conditions for an electricity connection with
Mosenergo incurs an estimated cost of Rub 5.5 million. Overall, the most timeconsuming
procedures in many countries relate to the issuance of building permits
and zoning clearances, as well as electricity, water, and telecommunication
connections. The list of obscure documents and permits that are required and the
number of government agencies involved in the registration process can take on
Kafkaesque proportions (see table 6.2).
Thus, the data indicate that there are substantial differences across the world
and that the administration of construction permits in some countries is prohibitively
long and costly. Some of these differences occur because of legitimate