(2012) Profil économique : Haïti

Economy Profile: Haiti Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized © 2012 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org All rights reserved. 1 2 3 4 08 07 06 05 A copublication of The World Bank and the International Finance Corporation. This volume is a product of the staff of the World Bank Group. The findings, interpretations and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Rights and Permissions The material in this publication is copyrighted. 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Copies of Doing Business 2012: Doing Business in a More Transparent World, Doing Business 2011: Making a Difference for Entrepreneurs, Doing Business 2010: Reforming through Difficult Times, Doing Business 2009, Doing Business 2008, Doing Business 2007: How to Reform, Doing Business in 2006: Creating Jobs, Doing Business in 2005: Removing Obstacles to Growth and Doing Business in 2004: Understanding Regulations may be downloaded at www.doingbusiness.org. ISBN: 978-0-8213-8833-4 E-ISBN: 978-0-8213-8834-1 DOI: 10.1596/978-0-8213-8833-4 ISSN: 1729-2638 Printed in the United States 3 Haiti Doing Business 2012 CONTENTS Introduction .................................................................................................................................. 4 The business environment .......................................................................................................... 5 Starting a business ..................................................................................................................... 14 Dealing with construction permits ........................................................................................... 24 Getting electricity ....................................................................................................................... 33 Registering property .................................................................................................................. 39 Getting credit .............................................................................................................................. 49 Protecting investors ................................................................................................................... 56 Paying taxes ................................................................................................................................ 66 Trading across borders .............................................................................................................. 74 Enforcing contracts .................................................................................................................... 83 Resolving insolvency .................................................................................................................. 90 Data notes ................................................................................................................................... 96 Resources on the Doing Business website ............................................................................ 101 4 Haiti Doing Business 2012 INTRODUCTION Doing Business sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations. It measures and tracks changes in regulations affecting 10 areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. In a series of annual reports Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 183 economies, from Afghanistan to Zimbabwe, over time. The data set covers 46 economies in Sub- Saharan Africa, 32 in Latin America and the Caribbean, 24 in East Asia and the Pacific, 24 in Eastern Europe and Central Asia, 18 in the Middle East and North Africa and 8 in South Asia, as well as 31 OECD high- income economies. The indicators are used to analyze economic outcomes and identify what reforms have worked, where and why. This economy profile presents the Doing Business indicators for Haiti. To allow useful comparison, it also provides data for other selected economies (comparator economies) for each indicator. The data in this report are current as of June 1, 2011 (except for the paying taxes indicators, which cover the period January–December 2010). The Doing Business methodology has limitations. Other areas important to business—such as an economy‘s proximity to large markets, the quality of its infrastructure services (other than those related to trading across borders and getting electricity), the security of property from theft and looting, the transparency of government procurement, macroeconomic conditions or the underlying strength of institutions—are not directly studied by Doing Business. The indicators refer to a specific type of business, generally a local limited liability company operating in the largest business city. Because standard assumptions are used in the data collection, comparisons and benchmarks are valid across economies. The data not only highlight the extent of obstacles to doing business; they also help identify the source of those obstacles, supporting policy makers in designing regulatory reform. More information is available in the full report. Doing Business 2012 presents the indicators, analyzes their relationship with economic outcomes and recommends regulatory reforms. The data, along with information on ordering Doing Business 2012, are available on the Doing Business website at http://www.doingbusiness.org. 5 Haiti Doing Business 2012 THE BUSINESS ENVIRONMENT For policy makers trying to improve their economy‘s regulatory environment for business, a good place to start is to find out how it compares with the regulatory environment in other economies. Doing Business provides an aggregate ranking on the ease of doing business based on indicator sets that measure and benchmark regulations applying to domestic small to medium-size businesses through their life cycle. Economies are ranked from 1 to 183 by the ease of doing business index. For each economy the index is calculated as the ranking on the simple average of its percentile rankings on each of the 10 topics included in the index in Doing Business 2012: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. The ranking on each topic is the simple average of the percentile rankings on its component indicators (see the data notes for more details). 1 The aggregate ranking on the ease of doing business benchmarks each economy‘s performance on the indicators against that of all other economies in the Doing Business sample (figure 1.1). While this ranking tells much about the business environment in an economy, it does not tell the whole story. The ranking on the ease of doing business, and the underlying indicators, do not measure all aspects of the business environment that matter to firms and investors or that affect the competitiveness of the economy. Still, a high ranking does mean that the government has created a regulatory environment conducive to operating a business. ECONOMY OVERVIEW Region: Latin America & Caribbean Income category: Low income Population: 9,958,175 GNI per capita (US$): 650.00 DB2012 rank: 174 DB2011 rank: 166 Change in rank: -8 Note: See the data notes for sources and definitions. 1 Except for the ease of getting credit, for which the percentile rankings on its component indicators are weighted, the depth of credit information index at 37.5% and the strength of legal rights index at 62.5%. 6 Haiti Doing Business 2012 THE BUSINESS ENVIRONMENT Figure 1.1 Where economies stand in the global ranking on the ease of doing business Source: Doing Business database. 7 Haiti Doing Business 2012 THE BUSINESS ENVIRONMENT For policy makers, knowing where their economy stands in the aggregate ranking on the ease of doing business is useful. Also useful is to know how it ranks compared with other economies and compared with the regional average (figure 1.2). The economy‘s rankings on the topics included in the ease of doing business index provide another perspective (figure 1.3). Figure 1.2 How Haiti and comparator economies rank on the ease of doing business Source: Doing Business database. 8 Haiti Doing Business 2012 THE BUSINESS ENVIRONMENT Figure 1.3 How Haiti ranks on Doing Business topics Source: Doing Business database. 9 Haiti Doing Business 2012 THE BUSINESS ENVIRONMENT Just as the overall ranking on the ease of doing business tells only part of the story, so do changes in that ranking. Yearly movements in rankings can provide some indication of changes in an economy‘s regulatory environment for firms, but they are always relative. An economy‘s ranking might change because of developments in other economies. An economy that implemented business regulation reforms may fail to rise in the rankings (or may even drop) if it is passed by others whose business regulation reforms had a more significant impact as measured by Doing Business. Moreover, year-to-year changes in the overall rankings do not reflect how the business regulatory environment in an economy has changed over time— or how it has changed in different areas. To aid in assessing such changes, Doing Business 2012 introduces the distance to frontier measure. This measure shows the distance of each economy to the ―frontier,‖ a synthetic measure based on the most efficient practice or highest score observed for each Doing Business indicator across all economies and years included in the Doing Business sample since 2005. Nine areas of business regulation are covered. Comparing the measure for an economy at 2 points in time allows users to assess how much the economy‘s regulatory environment as measured by Doing Business has changed over time—how far it has moved toward (or away from) the most efficient practices and strongest regulations in areas covered by Doing Business (figure 1.4). The results may show that the pace of change varies widely across the areas measured. They also may show that an economy is relatively close to the frontier in some areas and relatively far from it in others. Figure 1.4 How far has Haiti come in the areas measured by Doing Business? Distance to frontier, 2005 and 2011 Note: For economies added to the Doing Business sample after 2005, the starting point is the year in which they were added: 2006 for Montenegro; 2007 for Brunei Darussalam, Liberia and Luxembourg; 2008 for The Bahamas, Bahrain and Qatar; and 2009 for Cyprus and Kosovo. See the data notes for more details on the distance to frontier measure. Source: Doing Business database. 10 Haiti Doing Business 2012 THE BUSINESS ENVIRONMENT The absolute values of the indicators tell another part of the story (table 1.1). The indicators, on their own or in comparison with the indicators of a good practice economy or those of comparator economies in the region, may reveal bottlenecks reflected in large numbers of procedures, long delays or high costs. Or they may reveal unexpected strengths in an area of business regulation—such as a regulatory process that can be completed with a small number of procedures in a few days and at a low cost. Comparison of the economy‘s indicators today with those in the previous year may show where substantial bottlenecks persist— and where they are diminishing. Table 1.1 Summary of Doing Business indicators for Haiti Indicator Haiti DB 20 12 Haiti DB 20 11 Dominican Republic DB2012 Guyana DB2012 Jamaica DB2012 Puerto Rico (U.S.) DB2012 Suriname DB2012 Trinidad and Tobago DB2012 Best performer g lobally DB2012 Starting a Business (rank) 180 176 140 87 23 173 74 New Zealand (1) Procedures (number) 12 12 7 8 6 13 9 Canada (1)* Time (days) 105 105 19 26 7 694 43 New Zealand (1) Cost (% of income per capita) 314.2 250.9 18.2 14.6 7.2 115.0 0.9 Denmark (0.0)* Paid-in Min. Capital (% of income per capita) 23.2 20.7 55.7 0.0 0.0 0.5 0.0 82 Economies (0.0)* Dealing with Construction Permits (rank) 139 135 105 28 49 98 93 Hong Kong SAR, China (1) Procedures (number) 9 9 14 8 8 11 17 Denmark (5) Time (days) 1129 1179 216 195 145 461 297 Singapore (26)* Cost (% of income per capita) 764.5 465.7 82.1 17.5 227.5 72.0 6.0 Qatar (1.1) 11 Haiti Doing Business 2012 Indicator Haiti DB 20 12 Haiti DB 20 11 Dominican Republic DB2012 Guyana DB2012 Jamaica DB2012 Puerto Rico (U.S.) DB2012 Suriname DB2012 Trinidad and Tobago DB2012 Best performer g lobally DB2012 Getting Electricity (rank) 75 70 123 144 112 38 24 Iceland (1) Procedures (number) 4 4 7 7 6 4 5 Germany (3)* Time (days) 66 66 87 109 96 58 61 Germany (17) Cost (% of income per capita) 4032.8 3345.3 356.7 518.7 354.6 647.1 7.9 Japan (0.0) Registering Property (rank) 131 129 105 104 103 170 175 New Zealand (3) Procedures (number) 5 5 7 6 6 6 8 Portugal (1)* Time (days) 301 301 60 75 37 197 162 Portugal (1) Cost (% of property value) 6.6 6.3 3.7 4.6 7.5 13.8 7.0 Slovak Republic (0.0) Getting Credit (rank) 159 139 78 166 98 159 40 United Kingdom (1)* Strength of legal rights index (0-10) 3 3 3 4 8 5 8 New Zealand (10)* Depth of credit information index (0-6) 2 2 6 0 0 0 4 Japan (6)* Public registry coverage (% of adults) 0.7 0.7 35.9 0.0 0.0 0.0 0.0 Portugal (86.2) Private bureau coverage (% of adults) 0.0 0.0 54.3 0.0 0.0 0.0 46.0 New Zealand (100.0)* Protecting Investors (rank) 166 166 65 79 79 181 24 New Zealand (1) Extent of disclosure index (0-10) 2 2 5 5 4 1 4 France (10)* 12 Haiti Doing Business 2012 Indicator Haiti DB 20 12 Haiti DB 20 11 Dominican Republic DB2012 Guyana DB2012 Jamaica DB2012 Puerto Rico (U.S.) DB2012 Suriname DB2012 Trinidad and Tobago DB2012 Best performer g lobally DB2012 Extent of director liability index (0-10) 3 3 4 5 8 0 9 Singapore (9)* Ease of shareholder suits index (0-10) 4 4 8 6 4 5 7 New Zealand (10)* Strength of investor protection index (0-10) 3.0 3.0 5.7 5.3 5.3 2.0 6.7 New Zealand (9.7) Paying Taxes (rank) 118 112 94 115 172 34 65 Canada (8) Payments (number per year) 46 46 9 35 72 17 39 Norway (4) Time (hours per year) 184 184 324 263 414 199 210 Luxembourg (59) Trading Across Borders (rank) 145 143 45 82 97 105 52 Singapore (1) Documents to export (number) 8 8 6 7 6 8 5 France (2) Time to export (days) 33 35 8 19 21 25 14 Hong Kong SAR, China (5)* Cost to export (US$ per container) 1185 1005 1040 730 1410 995 843 Malaysia (450) Documents to import (number) 10 10 7 8 6 6 6 France (2) Time to import (days) 31 33 10 22 22 25 19 Singapore (4) Cost to import (US$ per container) 1545 1545 1150 745 1420 1065 1260 Malaysia (435) Enforcing Contracts (rank) 96 95 83 73 126 178 169 Luxembourg (1) 13 Haiti Doing Business 2012 Indicator Haiti DB 20 12 Haiti DB 20 11 Dominican Republic DB2012 Guyana DB2012 Jamaica DB2012 Puerto Rico (U.S.) DB2012 Suriname DB2012 Trinidad and Tobago DB2012 Best performer g lobally DB2012 Time (days) 530 530 460 581 655 1715 1340 Singapore (150) Cost (% of claim) 42.6 42.6 40.9 25.2 45.6 37.1 33.5 Bhutan (0.1) Procedures (number) 35 35 34 36 35 44 42 Ireland (21)* Resolving Insolvency (rank) 162 159 154 138 26 157 133 Japan (1) Time (years) 5.7 5.7 3.5 3.0 1.1 5.0 4.0 Ireland (0.4) Cost (% of estate) 30 30 38 29 18 30 25 Singapore (1)* Recovery rate (cents on the dollar) 5.8 6.7 9.5 17.6 65.3 8.6 17.9 Japan (92.7) Note: The methodology for the paying taxes indicators changed in Doing Business 2012; see the data notes for details. For these indicators, the best performer globally is the economy that has implemented the most efficient practices in its tax system and is not necessarily the one with the highest ranking. For more information on “no practice” marks, see the data notes for details. * Two or more economies share the top ranking on this indicator. A number shown in place of an economy‘s name indicates the number of economies that share the top ranking on the indicator. For a list of these economies, see the Doing Business website (http://www.doingbusiness.org). Source: Doing Business database. 14 Haiti Doing Business 2012 STARTING A BUSINESS Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government. What do the indicators cover? Doing Business measures the ease of starting a business in an economy by recording all procedures that are officially required or commonly done in practice by an entrepreneur to start up and formally operate an industrial or commercial business—as well as the time and cost required to complete these procedures. It also records the paid-in minimum capital that companies must deposit before registration (or within 3 months). The ranking on the ease of starting a business is the simple average of the percentile rankings on the 4 component indicators: procedures, time, cost and paid-in minimum capital requirement. To make the data comparable across economies, Doing Business uses several assumptions about the business and the procedures. It assumes that all information is readily available to the entrepreneur and that there has been no prior contact with officials. It also assumes that all government and nongovernment entities involved in the process function without corruption. And it assumes that the business:  Is a limited liability company, located in the largest business city.  Conducts general commercial or industrial activities. WHAT THE STARTING A BUSINESS INDICATORS MEASURE Procedures to legally start and operate a company (number) Preregistration (for example, name verification or reservation, notarization) Registration in the economy‘s largest business city Postregistration (for example, social security registration, company seal) Time required to complete each procedure (calendar days) Does not include time spent gathering information Each procedure starts on a separate day Procedure completed once final document is received No prior contact with officials Cost required to complete each procedure (% of income per capita) Official costs only, no bribes No professional fees unless services required by law Paid-in minimum capital (% of income per capita) Deposited in a bank or with a notary before registration (or within 3 months)  Has a start-up capital of 10 times income per capita.  Has a turnover of at least 100 times income per capita.  Does not qualify for any special benefits.  Does not own real estate.  Is 100% domestically owned. 15 Haiti Doing Business 2012 STARTING A BUSINESS Where does the economy stand today? What does it take to start a business in Haiti? According to data collected by Doing Business, starting a business there requires 12 procedures, takes 105 days, costs 314.2% of income per capita and requires paid-in minimum capital of 23.2% of income per capita (figure 2.1). Figure 2.1 What it takes to start a business in Haiti Paid-in minimum capital (% of income per capita): 23.2 Note: For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database. 16 Haiti Doing Business 2012 STARTING A BUSINESS Globally, Haiti stands at 180 in the ranking of 183 economies on the ease of starting a business (figure 2.2). The rankings for comparator economies and the regional average ranking provide other useful information for assessing how easy it is for an entrepreneur in Haiti to start a business. Figure 2.2 How Haiti and comparator economies rank on the ease of starting a business Source: Doing Business database. 17 Haiti Doing Business 2012 STARTING A BUSINESS What are the changes over time? While the most recent Doing Business data reflect how easy (or difficult) it is to start a business in Haiti today, data over time show which aspects of the process have changed—and which have not (table 2.1). That can help identify where the potential for improvement is greatest. Table 2.1 The ease of starting a business in Haiti over time By Doing Business report year Indicator DB2004 DB2005 DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 Rank .. .. .. .. .. .. .. 176 180 Procedures (number) 13 13 13 13 13 13 13 12 12 Time (days) 202 202 202 202 202 195 195 105 105 Cost (% of income per capita) 415.4 358.5 308.1 252.4 262.8 266.0 204.0 250.9 314.2 Paid-in Min. Capital (% of income per capita) 53.6 45.6 38.7 31.2 32.2 26.6 19.8 20.7 23.2 Note: n.a. = not applicable (the economy was not included in Doing Business for that year). DB2012 rankings reflect changes to the methodology. Source: Doing Business database. 18 Haiti Doing Business 2012 STARTING A BUSINESS Equally helpful may be the benchmarks provided by the economies that today have the best performance regionally or globally on the procedures, time, cost or paid-in minimum capital required to start a business (figure 2.3). These economies may provide a model for Haiti on ways to improve the ease of starting a business. And changes in regional averages can show where Haiti is keeping up—and where it is falling behind. Figure 2.3 Has starting a business become easier over time? Procedures (number) Time (days) 19 Haiti Doing Business 2012 STARTING A BUSINESS Cost (% of income per capita) Paid-in minimum capital (% of income per capita) Note: The economy with the best performance regionally on each indicator, and the economy with the best performance globally, are included as benchmarks. In some cases 2 or more economies share the top regional or global ranking on an indicator. In the case of paid-in minimum capital, 82 economies globally and 21 economies in Latin America & Caribbean have no paid-in minimum capital. Source: Doing Business database. 20 Haiti Doing Business 2012 STARTING A BUSINESS Economies around the world have taken steps making it easier to start a business—streamlining procedures by setting up a one-stop shop, making procedures simpler or faster by introducing technology and reducing or eliminating minimum capital requirements. Many have undertaken business registration reforms in stages—and they often are part of a larger regulatory reform program. Among the benefits have been greater firm satisfaction and savings and more registered businesses, financial resources and job opportunities. What business registration reforms has Doing Business recorded in Haiti (table 2.2)? Table 2.2 How has Haiti made starting a business easier—or not? By Doing Business report year DB Year Reform DB2012 No reform. DB2011 Haiti eased business start-up by eliminating the review by the president‘s or the prime minister‘s office of the incorporation act submitted for publication. DB2010 No reform. DB2009 No reform. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. [... middle sections omitted for long document ...] 98 Haiti Doing Business 2012 automatic stay or moratorium (for example, if the movable property is in danger) or sets a time limit for the automatic stay. Second, because the ease of doing business index now includes the getting electricity indicators, procedures, time and cost related to obtaining an electricity connection were removed from the dealing with construction permits indicators. Third, a threshold has been introduced for the total tax rate for the purpose of calculating the ranking on the ease of paying taxes. All economies with a total tax rate below the threshold (which will be calculated and adjusted on a yearly basis) will now receive the same ranking on the total tax rate indicator. The threshold is not based on any underlying theory. Instead, it is meant to emphasize the purpose of the indicator: to highlight economies where the tax burden on business is high relative to the tax burden in other economies. Giving the same ranking to all economies whose total tax rate is below the threshold avoids awarding economies in the scoring for having an unusually low total tax rate, often for reasons unrelated to government policies toward enterprises. For example, economies that are very small or that are rich in natural resources do not need to levy broad-based taxes. Data challenges and revisions Most laws and regulations underlying the Doing Business data are available on the Doing Business website at http://www.doingbusiness.org. All the sample questionnaires and the details underlying the indicators are also published on the website. Questions on the methodology and challenges to data can be submitted through the website‘s ―Ask a Question‖ function at http://www.doingbusiness.org. Ease of doing business and distance to frontier This year‘s report presents results for 2 aggregate measures: the aggregate ranking on the ease of doing business and a new measure, the ―distance to frontier.‖ While the ease of doing business ranking compares economies with one another at a point in time, the distance to frontier measure shows how much the regulatory environment for local entrepreneurs in each economy has changed over time. Ease of doing business The ease of doing business index ranks economies from 1 to 183. For each economy the ranking is calculated as the simple average of the percentile rankings on each of the 10 topics included in the index in Doing Business 2012: starting a business, dealing with construction permits, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and, new this year, getting electricity. The employing workers indicators are not included in this year‘s aggregate ease of doing business ranking. In addition to this year‘s ranking, Doing Business presents a comparable ranking for the previous year, adjusted for any changes in methodology as well as additions of economies or topics. 4 Construction of the ease of doing business index Here is one example of how the ease of doing business index is constructed. In the Republic of Korea it takes 5 procedures, 7 days and 14.6% of annual income per capita in fees to open a business. There is no minimum capital required. On these 4 indicators Korea ranks in the 18 th , 14 th , 53 rd and 0 percentiles. So on average Korea ranks in the 21 st percentile on the ease of starting a business. It ranks in the 12 th percentile on getting credit, 25 th percentile on paying taxes, 8 th percentile on enforcing contracts, 7 th percentile on resolving insolvency and so on. Higher rankings indicate simpler regulation and stronger protection of property rights. The simple average of Korea‘s percentile rankings on all topics is 21 st . When all economies are ordered by their average percentile rankings, Korea stands at 8 in the aggregate ranking on the ease of doing business. More complex aggregation methods —such as principal components and unobserved components— 4 In case of revisions to the methodology or corrections to the underlying data, the data are back-calculated to provide a comparable time series since the year the relevant economy or topic was first included in the data set. The time series is available on the Doing Business website (http://www.doingbusiness.org). The Doing Business report publishes yearly rankings for the year of publication as well as the previous year to shed light on year-to-year developments. Six topics and more than 50 economies have been added since the inception of the project. Earlier rankings on the ease of doing business are therefore not comparable. 99 Haiti Doing Business 2012 yield a ranking nearly identical to the simple average used by Doing Business. 5 Thus, Doing Business uses the simplest method: weighting all topics equally and, within each topic, giving equal weight to each of the topic components. 6 If an economy has no laws or regulations covering a specific area—for example, insolvency—it receives a ―no practice‖ mark. Similarly, an economy receives a ―no practice‖ or ―not possible‖ mark if regulation exists but is never used in practice or if a competing regulation prohibits such practice. Either way, a ―no practice‖ mark puts the economy at the bottom of the ranking on the relevant indicator. The ease of doing business index is limited in scope. It does not account for an economy‘s proximity to large markets, the quality of its infrastructure services (other than services related to trading across borders and getting electricity), the strength of its financial system, the security of property from theft and looting, its macroeconomic conditions or the strength of underlying institutions. Variability of economies’ rankings across topics Each indicator set measures a different aspect of the business regulatory environment. The rankings of an economy can vary, sometimes significantly, across indicator sets. The average correlation coefficient between the 10 indicator sets included in the aggregate ranking is 0.36, and the coefficients between any 2 sets of indicators range from 0.17 (between protecting investors and getting electricity) to 0.57 (between starting a business and protecting investors). These correlations suggest that economies rarely score universally well or universally badly on the indicators. 5 See Simeon Djankov, Darshini Manraj, Caralee McLiesh and Rita Ramalho, ―Doing Business Indicators: Why Aggregate, and How to Do It‖ (World Bank, Washington, DC, 2005). Principal components and unobserved components methods yield a ranking nearly identical to that from the simple average method because both these methods assign roughly equal weights to the topics, since the pairwise correlations among indicators do not differ much. An alternative to the simple average method is to give different weights to the topics, depending on which are considered of more or less importance in the context of a specific economy. 6 A technical note on the different aggregation and weighting methods is available on the Doing Business website (http://www.doingbusiness.org). Consider the example of Canada. It stands at 12 in the aggregate ranking on the ease of doing business. Its ranking is 3 on both starting a business and resolving insolvency, and 5 on protecting investors. But its ranking is only 59 on enforcing contracts, 42 on trading across borders and 156 on getting electricity. Variation in performance across the indicator sets is not at all unusual. It reflects differences in the degree of priority that government authorities give to particular areas of business regulation reform and the ability of different government agencies to deliver tangible results in their area of responsibility. Economies that improved the most across 3 or more Doing Business topics in 2010/11 Doing Business 2012 uses a simple method to calculate which economies improved the most in the ease of doing business. First, it selects the economies that in 2010/11 implemented regulatory reforms making it easier to do business in 3 or more of the 10 topics included in this year‘s ease of doing business ranking. 7 Thirty economies meet this criterion: Armenia, Burkina Faso, Burundi, Cape Verde, the Central African Republic, Chile, Colombia, the Democratic Republic of Congo, Côte d'Ivoire, The Gambia, Georgia, Korea, Latvia, Liberia, FYR Macedonia, Mexico, Moldova, Montenegro, Morocco, Nicaragua, Oman, Peru, Russia, São Tomé and Príncipe, Senegal, Sierra Leone, Slovenia, the Solomon Islands, South Africa and Ukraine. Second, Doing Business ranks these economies on the increase in their ranking on the ease of doing business from the previous year using comparable rankings. Selecting the economies that implemented regulatory reforms in at least 3 topics and improved the most in the aggregate ranking is intended to highlight economies with ongoing, broad -based reform programs. Distance to frontier measure This year‘s report introduces a new measure to illustrate how the regulatory environment for local businesses in each economy has changed over time. The distance to frontier measure illustrates the distance of an economy to the ―frontier‖ and shows 7 Doing Business reforms making it more difficult to do business are subtracted from the total number of those making it easier to do business. 100 Haiti Doing Business 2012 the extent to which the economy has closed this gap over time. The frontier is a score derived from the most efficient practice or highest score achieved on each of the component indicators in 9 Doing Business indicator sets (excluding the employing workers and getting electricity indicators) by any economy since 2005. In starting a business, for example, New Zealand has achieved the highest performance on the time (1 day), Canada and New Zealand on the number of procedures required (1), Denmark and Slovenia on the cost (0% of income per capita) and Australia on the paid-in minimum capital requirement (0% of income per capita). Calculating the distance to frontier for each economy involves 2 main steps. First, individual indicator scores are normalized to a common unit. To do so, each of the 32 component indicators y is rescaled to (y − min)/(max − min), with the minimum value (min) representing the frontier—the highest performance on that indicator across all economies since 2005. Second, for each economy the scores obtained for individual indicators are aggregated through simple averaging into one distance to frontier score. An economy‘s distance to the frontier is indicated on a scale from 0 to 100, where 0 represents the frontier and 100 the lowest performance. The difference between an economy‘s distance to frontier score in 2005 and its score in 2011 illustrates the extent to which the economy has closed the gap to the frontier over time. The maximum (max) and minimum (min) observed values are computed for the 174 economies included in the Doing Business sample since 2005 and for all years (from 2005 to 2011). The year 2005 was chosen as the baseline for the economy sample because it was the first year in which data were available for the majority of economies (a total of 174) and for all 9 indicator sets included in the measure. To mitigate the effects of extreme outliers in the distributions of the rescaled data (very few economies need 694 days to complete the procedures to start a business, but many need 9 days), the maximum (max) is defined as the 95 th percentile of the pooled data for all economies and all years for each indicator. Take Colombia, which has a score of 0.21 on the distance to frontier measure for 2011. This score indicates that the economy is 21 percentage points away from the frontier constructed from the best performances across all economies and all years. Colombia was further from the frontier in 2005, with a score of 0.43. The difference between the scores shows an improvement over time. 101 Haiti Doing Business 2012 RESOURCES ON THE DOING BUSINESS WEBSITE Current features News on the Doing Business project http://www.doingbusiness.org Rankings How economies rank—from 1 to 183 http://www.doingbusiness.org/rankings/ Reports Access to Doing Business reports as well as subnational and regional reports, reform case studies and customized economy and regional profiles http://www.doingbusiness.org/reports/ Methodology The methodologies and research papers underlying Doing Business http://www.doingbusiness.org/methodology/ Research Abstracts of papers on Doing Business topics and related policy issues http://www.doingbusiness.org/research/ Doing Business reforms Short summaries of DB2012 business regulation reforms, lists of reforms since DB2008 and a ranking simulation tool http://www.doingbusiness.org/reforms/ Historical data Customized data sets since DB2004 http://www.doingbusiness.org/custom-query/ Law library Online collection of business laws and regulations relating to business and gender issues http://www.doingbusiness.org/law-library/ http://wbl.worldbank.org/ Contributors More than 9,000 specialists in 183 economies who participate in Doing Business http://www.doingbusiness.org/contributors/doing- business/ 102 Haiti Doing Business 2012