(2013) Pwofil Ekonomik: Ayiti Doing Business 2013

Economy Economy Profile: St. 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 2 Haiti Doing Business 2013 © 2013 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 15 14 13 12 A copublication of The World Bank and the International Finance Corporation. This work is a product of the staff of The World Bank with external contributions. Note that The World Bank does not necessarily own each component of the content included in the work. The World Bank therefore does not warrant that the use of the content contained in the work will not infringe on the rights of third parties. The risk of claims resulting from such infringement rests solely with you. 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Cover design: Corporate Visions, Inc. 3 Haiti Doing Business 2013 CONTENTS Introduction .................................................................................................................................. 4 The business environment .......................................................................................................... 5 Starting a business ..................................................................................................................... 14 Dealing with construction permits ........................................................................................... 24 Getting electricity ....................................................................................................................... 33 Registering property .................................................................................................................. 40 Getting credit .............................................................................................................................. 50 Protecting investors ................................................................................................................... 57 Paying taxes ................................................................................................................................ 66 Trading across borders .............................................................................................................. 74 Enforcing contracts .................................................................................................................... 83 Resolving insolvency .................................................................................................................. 93 Employing workers .................................................................................................................... 99 Data notes ................................................................................................................................. 106 Resources on the Doing Business website ............................................................................ 111 4 Haiti Doing Business 2013 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 11 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, resolving insolvency and employing workers. 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 185 economies, from Afghanistan to Zimbabwe, over time. The data set covers 46 economies in Sub- Saharan Africa, 33 in Latin America and the Caribbean, 24 in East Asia and the Pacific, 24 in Eastern Europe and Central Asia, 19 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, 2012 (except for the paying taxes indicators, which cover the period January–December 2011). 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 2013 presents the indicators, analyzes their relationship with economic outcomes and presents business regulatory reforms. The data, along with information on ordering Doing Business 2013, are available on the Doing Business website at http://www.doingbusiness.org. 5 Haiti Doing Business 2013 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 185 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 2013: 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). The employing workers indicators are not included in this year‘s aggregate ease of doing business ranking, but the data are presented in this year‘s economy profile. 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: 10,123,787 GNI per capita (US$): 700 DB2013 rank: 174 DB2012 rank: 173* Change in rank: -1 * DB2012 ranking shown is not last year‘s published ranking but a comparable ranking for DB2012 that captures the effects of such factors as data corrections and the addition of 2 economies (Barbados and Malta) to the sample this year. See the data notes for sources and definitions. 6 Haiti Doing Business 2013 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 2013 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 relative to comparator economies and relative to 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 2013 THE BUSINESS ENVIRONMENT Figure 1.3 How Haiti ranks on Doing Business topics Source: Doing Business database. 9 Haiti Doing Business 2013 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, last year Doing Business introduced the distance to frontier measure. This measure shows how far each economy is from the best performance achieved by any economy since 2005 on each indicator in 9 Doing Business indicator sets. 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? Note: The distance to frontier measure shows how far on average an economy is from the best performance achieved by any economy on each Doing Business indicator since 2005. The measure is normalized to range between 0 and 100, with 100 representing the best performance (the frontier). The overall distance to frontier is the average of the distance to frontier in the 9 indicator sets shown in the figure. See the data notes for more details on the distance to frontier measure. Source: Doing Business database. 10 Haiti Doing Business 2013 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 1 3 Haiti DB201 2 Dominican Republic DB201 3 Guyana DB201 3 Jamaica DB201 3 Puerto Rico (U.S.) DB201 3 Suriname DB201 3 Best performer g lobally DB201 3 Starting a Business (rank) 183 182 137 89 21 12 178 New Zealand (1) Procedures (number) 12 12 7 8 6 6 13 New Zealand (1)* Time (days) 105 105 19 20 7 6 694 New Zealand (1) Cost (% of income per capita) 286.6 314.2 17.3 13.9 6.7 0.9 110.9 Slovenia (0.0) Paid-in Min. Capital (% of income per capita) 21.0 23.2 49.3 0.0 0.0 0.0 0.4 91 Economies (0.0)* Dealing with Construction Permits (rank) 136 136 108 29 50 156 92 Hong Kong SAR, China (1) Procedures (number) 9 9 14 8 8 18 11 Hong Kong SAR, China (6)* Time (days) 1,129 1,129 216 195 145 189 461 Singapore (26) Cost (% of income per capita) 692.0 764.5 72.7 18.3 212.4 361.3 60.4 Qatar (1.1) 11 Haiti Doing Business 2013 Indicator Haiti DB 20 1 3 Haiti DB201 2 Dominican Republic DB201 3 Guyana DB201 3 Jamaica DB201 3 Puerto Rico (U.S.) DB201 3 Suriname DB201 3 Best performer g lobally DB201 3 Getting Electricity (rank) 71 73 122 148 123 37 39 Iceland (1) Procedures (number) 4 4 7 7 6 5 4 Germany (3)* Time (days) 60 66 87 109 96 32 58 Germany (17) Cost (% of income per capita) 4,599.0 4,032.8 322.3 542.9 557.0 384.0 634.4 Japan (0.0) Registering Property (rank) 130 130 110 114 105 128 171 Georgia (1) Procedures (number) 5 5 7 6 6 8 6 Georgia (1)* Time (days) 301 301 60 75 37 194 197 Portugal (1) Cost (% of property value) 6.6 6.6 3.7 4.6 7.5 0.9 13.7 Belarus (0.0)* Getting Credit (rank) 159 158 83 167 104 12 159 United Kingdom (1)* Strength of legal rights index (0-10) 3 3 3 4 8 9 5 Malaysia (10)* Depth of credit information index (0-6) 2 2 6 0 0 5 0 United Kingdom (6)* Public registry coverage (% of adults) 0.7 0.7 44.1 0.0 0.0 0.0 0.0 Portugal (90.7) Private bureau coverage (% of adults) 0.0 0.0 60.0 0.0 0.0 81.5 0.0 United Kingdom (100.0)* Protecting Investors (rank) 169 167 100 82 82 19 183 New Zealand (1) Extent of disclosure index (0-10) 2 2 5 5 4 7 1 Hong Kong SAR, China (10)* 12 Haiti Doing Business 2013 Indicator Haiti DB 20 1 3 Haiti DB201 2 Dominican Republic DB201 3 Guyana DB201 3 Jamaica DB201 3 Puerto Rico (U.S.) DB201 3 Suriname DB201 3 Best performer g lobally DB201 3 Extent of director liability index (0-10) 3 3 4 5 8 6 0 Singapore (9)* Ease of shareholder suits index (0-10) 4 4 6 6 4 8 5 New Zealand (10)* Strength of investor protection index (0-10) 3.0 3.0 5.0 5.3 5.3 7.0 2.0 New Zealand (9.7) Paying Taxes (rank) 123 116 98 118 163 104 49 United Arab Emirates (1) Payments (number per year) 46 46 9 35 36 16 29 Hong Kong SAR, China (3)* Time (hours per year) 184 184 324 263 368 218 199 United Arab Emirates (12) Trading Across Borders (rank) 149 146 46 84 106 96 97 Singapore (1) Documents to export (number) 8 8 6 7 6 6 8 France (2) Time to export (days) 33 33 8 19 20 15 23 Singapore (5)* Cost to export (US$ per container) 1,185 1,185 1,040 730 1,500 1,300 1,000 Malaysia (435) Documents to import (number) 10 10 7 8 7 9 6 France (2) Time to import (days) 31 31 10 22 17 15 21 Singapore (4) Cost to import (US$ per container) 1,545 1,545 1,150 745 1,560 1,350 1,165 Malaysia (420) Enforcing Contracts (rank) 97 95 84 75 129 101 180 Luxembourg (1) 13 Haiti Doing Business 2013 Indicator Haiti DB 20 1 3 Haiti DB201 2 Dominican Republic DB201 3 Guyana DB201 3 Jamaica DB201 3 Puerto Rico (U.S.) DB201 3 Suriname DB201 3 Best performer g lobally DB201 3 Time (days) 530 530 460 581 655 620 1,715 Singapore (150) Cost (% of claim) 42.6 42.6 40.9 25.2 45.6 25.6 37.1 Bhutan (0.1) Procedures (number) 35 35 34 36 35 39 44 Ireland (21)* Resolving Insolvency (rank) 160 165 156 138 32 24 158 Japan (1) Time (years) 5.7 5.7 3.5 3.0 1.1 2.5 5.0 Ireland (0.4) Cost (% of estate) 30 30 38 29 18 8 30 Singapore (1)* Outcome (0 as piecemeal sale and 1 as going concern) 0 0 0 1 1 0 Recovery rate (cents on the dollar) 8.3 5.8 8.7 17.6 63.1 73.4 8.6 Japan (92.8) Note: DB2012 rankings shown are not last year‘s published rankings but comparable rankings for DB2012 that capture the effects of such factors as data corrections and the addition of 2 economies (Barbados and Malta) to the sample this year. The ranking methodology for the paying taxes indicators changed in Doing Business 2013; see the data notes for details. For more information on “no practice” marks, see the data notes. Data for the outcome of the resolving insolvency indicator are not available for DB2012. * 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 2013 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 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 the entrepreneur will pay no bribes. And it assumes that the business:  Is a limited liability company, located in the largest business city.  Has between 10 and 50 employees.  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 2013 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 286.6% of income per capita and requires paid-in minimum capital of 21.0% 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): 21.0 Note: Time shown in the figure above may not reflect simultaneity of procedures. For more information on the methodology of the starting a business indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database. 16 Haiti Doing Business 2013 STARTING A BUSINESS Globally, Haiti stands at 183 in the ranking of 185 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 2013 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 DB2013 Rank .. .. .. .. .. .. .. .. 182 183 Procedures (number) 13 13 13 13 13 13 13 12 12 12 Time (days) 202 202 202 202 202 195 195 105 105 105 Cost (% of income per capita) 415.4 358.5 308.1 252.4 262.8 266.0 204.0 250.9 314.2 286.6 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 21.0 Note: n.a. = not applicable (the economy was not included in Doing Business for that year). DB2012 rankings shown are not last year‘s published rankings but comparable rankings for DB2012 that capture the effects of such factors as data corrections and the addition of 2 economies (Barbados and Malta) to the sample this year. Source: Doing Business database. 18 Haiti Doing Business 2013 STARTING A BUSINESS Equally helpful may be the benchmarks provided by the economies that over time have had 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 benchmarks help show what is possible in making it easier to start 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 2013 STARTING A BUSINESS Cost (% of income per capita) Paid-in minimum capital (% of income per capita) Note: Ninety-one economies globally have no paid-in minimum capital requirement. Source: Doing Business database. 20 Haiti Doing Business 2013 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 DB2008 No reform as measured by Doing Business. DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. 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. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. 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 ...] 108 Haiti Doing Business 2013 taxes on foreign companies, through taxes on sectors other than manufacturing or from natural resources (all of which are outside the scope of the methodology). 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 Doing Business 2013 presents results for 2 aggregate measures: the aggregate ranking on the ease of doing business and the distance to frontier measure. The ease of doing business ranking compares economies with one another, while the distance to frontier measure benchmarks economies to the frontier in regulatory practice, measuring the absolute distance to the best performance on each indicator . Both measures can be used for comparisons over time. When compared across years, the distance to frontier measure shows how much the regulatory environment for local entrepreneurs in each economy has changed over time in absolute terms, while the ease of doing business ranking can show only relative change. Ease of doing business The ease of doing business index ranks economies from 1 to 185. 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 2013: 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 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. 3 Construction of the ease of doing business index Here is one example of how the ease of doing business index is constructed. In Finland it takes 3 procedures, 14 days and 4% of annual income per capita in fees to register a property. On these 3 indicators Finland ranks in the 6th, 16th and 39th percentiles. So on average Finland ranks in the 20th percentile on the ease of registering property. It ranks in the 30th percentile on starting a business, 28 th percentile on getting credit, 24th percentile on paying taxes, 13th percentile on enforcing contracts, 5th percentile on trading across borders and so on. Higher rankings indicate simpler regulation and stronger protection of property rights. The simple average of Finland‘s percentile rankings on all topics is 21st. When all economies are ordered by their average percentile rankings, Finland stands at 11 in the aggregate ranking on the ease of doing business. More complex aggregation methods —such as principal components and unobserved components— yield a ranking nearly identical to the simple average used by Doing Business. 4 Thus, Doing Business uses the simplest method: weighting all topics equally and, 3 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). 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. 4 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. 109 Haiti Doing Business 2013 within each topic, giving equal weight to each of the topic components. 5 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, 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 0.37, and the coefficients between any 2 sets of indicators range from 0.19 (between dealing with construction permits and getting credit) to 0.60 (between starting a business and protecting investors). These correlations suggest that economies rarely score universally well or universally badly on the indicators. Consider the example of Canada. It stands at 17 in the aggregate ranking on the ease of doing business. Its ranking is 3 on starting a business, and 4 on both resolving insolvency and protecting investors. But its ranking is only 62 on enforcing contracts, 69 on dealing with construction permits and 152 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 5 A technical note on the different aggregation and weighting methods is available on the Doing Business website (http://www.doingbusiness.org). 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 2011/12 Doing Business 2013 uses a simple method to calculate which economies improved the most in the ease of doing business. First, it selects the economies that in 2011/12 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. 6 Twenty-three economies meet this criterion: Benin, Burundi, Costa Rica, the Czech Republic, Georgia, Greece, Guinea, Kazakhstan, Korea, the Lao People‘s Democratic Republic, Liberia, Mongolia, the Netherlands, Panama, Poland, Portugal, Serbia, the Slovak Republic, Slovenia, Sri Lanka, Ukraine, the United Arab Emirates and Uzbekistan. 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 A drawback of the ease of doing business ranking is that it can measure the regulatory performance of economies only relative to the performance of others. It does not provide information on how the absolute quality of the regulatory environment is improving over time. Nor does it provide information on how large the gaps are between economies at a single point in time. The distance to frontier measure is designed to address both shortcomings, complementing the ease of doing business ranking. This measure illustrates the distance of an economy to the ―frontier,‖ and the change in the measure over time shows the extent to which the economy has closed this gap. 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 6 Doing Business reforms making it more difficult to do business are subtracted from the total number of those making it easier to do business. 110 Haiti Doing Business 2013 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), Slovenia on the cost (0% of income per capita) and Australia and 90 other economies 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: except for the total tax rate. To do so, each of the 28 component indicators y is rescaled to (max − y)/(max − min), with the minimum value (min) representing the frontier—the highest performance on that indicator across all economies since 2005. For the total tax rate, consistent with the calculation of the rankings, the frontier is defined as the total tax rate corresponding to the 15 th percentile based on the overall distribution of total tax rates for all years. 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 frontier is indicated on a scale from 0 to 100, where 0 represents the lowest performance and 100 the frontier. The difference between an economy‘s distance to frontier score in 2005 and its score in 2012 illustrates the extent to which the economy has closed the gap to the frontier over time. And in any given year the score measures how far an economy is from the highest performance at that 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 2012). 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. The exceptions are the getting credit, protecting investors and resolving insolvency indicators, whose construction precludes outliers. Take Ghana, which has a score of 67 on the distance to frontier measure for 2012. This score indicates that the economy is 33 percentage points away from the frontier constructed from the best performances across all economies and all years. Ghana was further from the frontier in 2005, with a score of 54. The difference between the scores shows an improvement over time. The distance to frontier measure can also be used for comparisons across economies in the same year, complementing the ease of doing business ranking. For example, Ghana stands at 64 this year in the ease of doing business ranking, while Peru, which is 29 percentage points from the frontier, stands at 43. 111 Haiti Doing Business 2013 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 185 http://www.doingbusiness.org/rankings/ Data All the data for 185 economies—topic rankings, indicator values, lists of regulatory procedures and details underlying indicators http://www.doingbusiness.org/data/ 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 DB2013 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 9,600 specialists in 185 economies who participate in Doing Business http://www.doingbusiness.org/contributors/doing- business/ NEW! Entrepreneurship data Data on business density for 130 economies http://www.doingbusiness.org/data/exploretopics/e ntrepreneurship More to come Coming soon—information on good practices and data on transparency and on the distance to frontier 112 Haiti Doing Business 2013