Creating

More documents

Recommendations

Info

58 DOING BUSINESS IN 2006 from which to develop the necessary profiles of traders, freight forwarders and the like. Reforms to introduce risk assessment—for example, the one started in 2004 in Timor-Leste—require patience. Go regional with reform of customs and transport Being landlocked is viewed as a curse. Yet in Europe being a trader in a landlocked country is not that different from being one elsewhere. It takes 1 day to get imports to Berlin from the port of Hamburg, and just 2 extra days to get them to Bratislava in landlocked Slovakia. European integration gets the credit. Once on land, the cargo moves effortlessly across borders. There are no further checks. African entrepreneurs like Fabien face delays of 65 days if importing to landlocked countries, but only 38 days to countries with a port. Yet there is no reason why landlocked Burkina Faso, Mali and Niger and the other countries of West Africa cannot replicate some of Europe’s reforms and move off the list of the most difficult countries for importing (table 9.4). In southern Africa, Botswana, Namibia, Lesotho and South Africa share customs forms. This reduces paperwork and cost. The next step for them is to remove border checks altogether and introduce harmonized transport rules. Beware of contracting out preshipment inspection and customs management When the reputation of the customs office is damaged, because of long delays or corruption, reformers may contract out the service to a private company. This reform was successful in Bulgaria, where it started in 2002. By the following year annual customs revenue rose by 18%, or nearly $500 million. 7 The number of fines for smuggling increased threefold, to 12,000 a year. It rarely works so smoothly. In Mozambique customs were contracted out in 1996. Few of the goals set in the management agreement had been met by 1999. One bright spot: the seizure of smuggled shipments tripled from 559 in 1997 to 1,709 in 1999. 8 But delays remained the same. Customs revenue increased somewhat, but mostly because of greater trade volume. The management agreement was extended in the hope of better results. In other countries contracting is blamed for increased corruption: several high-profile cases have made the news in recent years. 9 In many developing countries the contracting out of preshipment inspection has been a disappointment. Angola, Benin, the Republic of Congo, Côte d’Ivoire and Togo, among others, all have concession agreements for the management of cargo inspections. Two complaints are heard most often. First, to increase revenue, private inspection companies push for new regulation to make preshipment inspection mandatory for all cargo. This increases trade costs. Second, inspection companies introduce their own forms to fill out, on top of the documents already required by customs. If a trader sends goods to a country where preshipment inspection is contracted out to a company different from the one in his country, he has to fill out nearly 3 times as many forms. That’s the case for an entrepreneur in Angola sending goods to Togo, for example. Why reform? For manufactured exports, the cost of trade transactions in developing countries—which includes the cost of dealing with customs and the cost of inland transport— exceeds the cost imposed by tariffs in the European Union and the United States. Red tape is estimated to cost more than 10% of the value of exports in developing countries. 10 Trade costs represent 14% of the value of exports in Georgia and 18% in Nigeria. And inefficient customs and trade transport mean that businesses must hold larger inventories at their warehouse, adding 4–6% to production costs. 11 “Just in time” manufacturing is just a dream. The countries that have efficient customs and trade transport—fewer documents and signatures, less time necessary to comply with procedures—export and import more (figure 9.6). They also make it cheaper for exporters to operate. Studies suggest that each additional day in transport delays costs 0.5% of the cargo value for goods transported by ship or rail. In other words, if transporting a cargo now takes 20 days and reform can reduce transport time to 10 days, it may save the exporter 5% of the cargo’s value. 12 Even poor countries can make rapid progress, as the burden imposed by complicated procedures exceeds that imposed by poor transport infrastructure. Filing more documents is associated with more corruption in customs (see figure 9.6). Faced with long delays and frequent demands for bribes, many traders avoid customs altogether. Instead, they smuggle goods across the border. Smuggling defeats the very reason to
TRADING ACROSS BORDERS 59 have border control of trade: to ensure high quality of goods and levy taxes. That brings us back to Fabien, the shop owner in Burundi. High transport and customs costs may not be his biggest headache. Demand is low—a new bicycle is a luxury for most people in Burundi, where annual incomes average $90. And the police periodically come to his shop to receive “presents.” But if the government wants to make it easier to run businesses, reducing trade costs is a good place to start. Notes 1. Bhagwati (2004). 2. Freund (2000). 3. De Wulf (2004). 4. De Wulf (2004). 5. Alavi (2004). 6. Goorman (2004). 7. Velchev (2005). Some of this increase is due to a favorable exchange rate with the dollar during this period. 8. Mwangi (2004). 9. For example, a consultant for Société Générale de Surveillance (SGS), a Swiss company, is alleged to have channeled $9 million to a former prime minister of Pakistan, to persuade the government to retain SGS. See Miller and Balgobin (2002). 10. UNCTAD (2004). 11. See Hausman, Subramanian and Lee (2005) and Subramanian and Anderson (2005). 12. Hummels (2001).
Page 1:
Creating Jobs
Page 5:
Contents Doing Business in 2006: Cr
Page 8 and 9:
2 DOING BUSINESS IN 2006 to registe
Page 10 and 11:
4 DOING BUSINESS IN 2006 Less costl
Page 12 and 13:
6 DOING BUSINESS IN 2006
Page 15 and 16: 9 Starting a business Who is reform
Page 17 and 18: STARTING A BUSINESS 11 duced the mi
Page 19 and 20: STARTING A BUSINESS 13 Introduce st
Page 21 and 22: 15 Dealing with licenses Who is ref
Page 23 and 24: DEALING WITH LICENSES 17 plain that
Page 25 and 26: DEALING WITH LICENSES 19 Not in Sie
Page 27 and 28: 21 Hiring and firing workers Who is
Page 29 and 30: HIRING AND FIRING WORKERS 23 TABLE
Page 31 and 32: HIRING AND FIRING WORKERS 25 raised
Page 33 and 34: 27 Registering property Who is refo
Page 35 and 36: REGISTERING PROPERTY 29 In Latin Am
Page 37 and 38: REGISTERING PROPERTY 31
Page 39 and 40: 33 Getting credit Who is reforming?
Page 41 and 42: GETTING CREDIT 35
Page 43 and 44: GETTING CREDIT 37 But public regist
Page 45 and 46: 39 Protecting investors Who is refo
Page 47 and 48: PROTECTING INVESTORS 41 TABLE 7.2 I
Page 49 and 50: PROTECTING INVESTORS 43 TABLE 7.6 W
Page 51 and 52: 45 Paying taxes Who is reforming? W
Page 53 and 54: PAYING TAXES 47
Page 55 and 56: PAYING TAXES 49 What to reform? Tax
Page 57 and 58: PAYING TAXES 51 2004, despite the n
Page 59 and 60: 53 Trading across borders Who is re
Page 61 and 62: TRADING ACROSS BORDERS 55 Who is re
Page 63: TRADING ACROSS BORDERS 57 documents
Page 68 and 69: 62 DOING BUSINESS IN 2006 Who is re
Page 70 and 71: 64 DOING BUSINESS IN 2006 loans at
Page 73 and 74: 67 Closing a business Who is reform
Page 75 and 76: CLOSING A BUSINESS 69 What to refor
Page 77: CLOSING A BUSINESS 71 Such measures
Page 80 and 81: 74 DOING BUSINESS IN 2006 Working P
Page 82 and 83: 76 DOING BUSINESS IN 2006 Slovak St
Page 84 and 85: 78 DOING BUSINESS IN 2006 Economy c
Page 86 and 87: 80 DOING BUSINESS IN 2006 a procedu
Page 88 and 89: 82 DOING BUSINESS IN 2006 • Is 10
Page 90 and 91: 84 DOING BUSINESS IN 2006 Protectin
Page 92 and 93: 86 DOING BUSINESS IN 2006 Assumptio
Page 94 and 95: 88 DOING BUSINESS IN 2006 Assumptio
Page 97 and 98: 91 Ease of doing business: an appen
Page 99: APPENDIX 93 countries all rank in t
Page 102 and 103: 96 DOING BUSINESS IN 2006 Starting
Page 104 and 105: 98 DOING BUSINESS IN 2006 Hiring an
Page 106 and 107: 100 DOING BUSINESS IN 2006 Hiring a
Page 108 and 109: 102 DOING BUSINESS IN 2006 Getting
Page 110 and 111: 104 DOING BUSINESS IN 2006 Paying T
Page 112 and 113: 106 DOING BUSINESS IN 2006 Paying T
Page 114 and 115:
108 DOING BUSINESS IN 2006 Enforcin
Page 116 and 117:
110 DOING BUSINESS IN 2006 AFGHANIS
Page 118 and 119:
112 DOING BUSINESS IN 2006 AUSTRALI
Page 120 and 121:
114 DOING BUSINESS IN 2006 BENIN Su
Page 122 and 123:
116 DOING BUSINESS IN 2006 BULGARIA
Page 124 and 125:
118 DOING BUSINESS IN 2006 CENTRAL
Page 126 and 127:
120 DOING BUSINESS IN 2006 CONGO, R
Page 128 and 129:
122 DOING BUSINESS IN 2006 DOMINICA
Page 130 and 131:
124 DOING BUSINESS IN 2006 ETHIOPIA
Page 132 and 133:
126 DOING BUSINESS IN 2006 GHANA Su
Page 134 and 135:
128 DOING BUSINESS IN 2006 HONDURAS
Page 136 and 137:
130 DOING BUSINESS IN 2006 IRAN Mid
Page 138 and 139:
132 DOING BUSINESS IN 2006 JAPAN OE
Page 140 and 141:
134 DOING BUSINESS IN 2006 KUWAIT M
Page 142 and 143:
136 DOING BUSINESS IN 2006 LITHUANI
Page 144 and 145:
138 DOING BUSINESS IN 2006 MALI Sub
Page 146 and 147:
140 DOING BUSINESS IN 2006 MOLDOVA
Page 148 and 149:
142 DOING BUSINESS IN 2006 NETHERLA
Page 150 and 151:
144 DOING BUSINESS IN 2006 OMAN Mid
Page 152 and 153:
146 DOING BUSINESS IN 2006 PERU Lat
Page 154 and 155:
148 DOING BUSINESS IN 2006 RUSSIA E
Page 156 and 157:
150 DOING BUSINESS IN 2006 SERBIA A
Page 158 and 159:
152 DOING BUSINESS IN 2006 SOUTH AF
Page 160 and 161:
154 DOING BUSINESS IN 2006 SYRIA Mi
Page 162 and 163:
156 DOING BUSINESS IN 2006 TONGA Ea
Page 164 and 165:
158 DOING BUSINESS IN 2006 UNITED K
Page 166 and 167:
160 DOING BUSINESS IN 2006 VIETNAM
Page 169 and 170:
163 Acknowledgments Contact details
Page 171 and 172:
ACKNOWLEDGMENTS 165 Tibor Fabian BI
Page 173 and 174:
ACKNOWLEDGMENTS 167 Barthélémy Ke
Page 175 and 176:
ACKNOWLEDGMENTS 169 Ghislane Moise
Page 177 and 178:
ACKNOWLEDGMENTS 171 Bernt Juthstrom
Page 179 and 180:
ACKNOWLEDGMENTS 173 Kari Hrafn Kjar
Page 181 and 182:
ACKNOWLEDGMENTS 175 Ivan A. Zaitsev
Page 183 and 184:
ACKNOWLEDGMENTS 177 Samuel Tembenu
Page 185 and 186:
ACKNOWLEDGMENTS 179 Russell Lawn BU
Page 187 and 188:
ACKNOWLEDGMENTS 181 Jazmin Banal RO
Page 189 and 190:
ACKNOWLEDGMENTS 183 Ivan Petrovic L
Page 191 and 192:
ACKNOWLEDGMENTS 185 Wen-Horng Kao P
Page 193 and 194:
ACKNOWLEDGMENTS 187 Katherine Stone
Page 196:
Doing Business in 2006: Creating Jo
show all

Creating

Create successful ePaper yourself

Delete template?

Save as template?