LOGISTICS PERFORMANCE INDEX AND

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LOGISTICS PERFORMANCE INDEX AND DOING BUSINESS
INDICATORS
Souleymane COULIBALY ECA Regional Trade
Coordinator Geneva, June 14th, 2011
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The Logistics Performance Index and Doing
Business Report
Two separate but complementary reports
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The Logistics Performance Index

• Measures the trade logistics efficiency of a
  country
• Fundamental premise Efficient logistics drives
  economic performance

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The Doing Business Report

• Provides measures of the ease of doing business
  (regulations) for local firms in a given country
• Fundamental premise economic activity requires
  effective regulations in all areas of setting up
  and operating a business

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Agenda
1. Overview of LPI 2010
2. Overview of Doing Business 2011
3. LPI Results CIS countries
4. DB Results CIS Countries
5. Want to Learn More?
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1. Overview LPI 2010
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The Logistics Performance Index

• First report in 2007, every three years
• Source of data is suppliers of logistics services
  (freight forwarders, express carriers)
• Rates logistical performance on a scale of 1 to 5

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• LPI Key messages
• Trade logistics is an important element of
  national competitiveness
• A countrys performance is only as good as its
  weakest link
• The LPI dataset can be used to identify key
  bottlenecks in your own country

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What are efficient logistics?
The LPI measures six dimensions of country
performance

• Efficiency of the clearance process
• Quality of trade and transport infrastructure
• Ease of arranging competitively priced shipments
• Logistics competence and quality of logistics
  services
• Ability to track and trace shipments
• Timeliness of shipment delivery

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Why Logistics Matter Result when a low income country reaches LPI of middle income average Why Logistics Matter Result when a low income country reaches LPI of middle income average
Indicator/policy area Increase in trade ()
Logistics Performance Index 15.2
All trade barriers reduced to 10 8.4
Regulatory reform measures 7.4
Tariffs reduced to 5 5.7
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• Key Policy Implications
• Expand the traditional development agenda beyond
  customs reform and infrastructure to be
  comprehensiveprocesses, services, and
  infrastructure.
• Increase border agency coordination
• Partner with the private sector
• Reform must be tailored to each countrys
  circumstances

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The Logistics Performance Index
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2. Overview Doing Business 2011
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The Doing Business Report

• First report in Sept 2003, yearly
• Covers 183 countries
• Surveys in-country specialists with knowledge of
  regulatory system
• Provides a basis for measuring, understanding and
  improving the regulatory environment for business
• creates methodology and a database for policy
  makers

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The Doing Business Report

• Doing Business does not measure all aspects such
  as
• macroeconomic stability
• corruption
• level of labor skills
• proximity to markets,
• regulations specific to foreign investment or
  financial markets

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Doing Business indicators 11 areas of business
regulation (9 included in the ranking)
Start-up Starting a business Minimum capital requirement, procedures, time and cost
Expansion Registering property Procedures, time and cost Getting credit Credit information systems, Movable collateral laws Protecting investors Disclosure and liability in related party transactions Enforcing contracts Procedures, time and cost to resolve a commercial dispute
Operations Dealing with construction permits Procedures, time and cost Paying taxes Payments, time and Total Tax Rate Trading across borders Documents, time and cost Getting electricity (annex I) Procedures, time and cost Employing workers (annex II)
Closing Closing a business Time, cost and recovery rate
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Doing Business Trading Across Borders
index What are best practices?

• Paper-free electronic data interchange (EDI)
  system
• Risk - based inspection systems (less than 10 of
  cargo physically inspected)
• Electronic Single Window for obtaining trade
  documents and approvals

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The Doing Business Report
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LPI and DB separate but complementary
LPI DB
Source of data 3rd country providers of Logistics services In-country entities with knowledge of business regulations
Concept Performance outcomes Analytic breakdown in component procedures
Frequency Every 3 years since 2007 Yearly since 2003
Significance Several indices of logistics performance Metric of broader business regulatory environment.
Countries 155 183
Both indices provide basic input for
policy-makers. Neither are in-depth analysis.
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3. LPI Results CIS countries
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LPI 2010 performance varies around the world
Logistics unfriendly
Partial performers
Consistent performers
Logistics friendly
No data
Countries are improving around the world
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More than income the logistics gap
With the right investment and policies, lower
income countries can also be high performers
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Overperformers and underperformers
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LPI 2010 Ranks
TOP 10 COUNTRIES
LOWER MIDDLE INCOME
TOP 10 COUNTRIES
LOW INCOME
TOP 10 COUNTRIES
UPPER MIDDLE INCOME
Country LPI Rank
South Africa 28
Malaysia 29
Poland 30
Lebanon 33
Latvia 37
Turkey 39
Brazil 41
Lithuania 45
Argentina 48
Chile 49
Country LPI Rank
China 27
Thailand 35
Philippines 44
India 47
Tunisia 61
Honduras 70
Ecuador 71
Indonesia 75
Paraguay 76
Syrian Arab Republic 80
Country LPI Rank
Vietnam 53
Senegal 58
Uganda 66
Uzbekistan 68
Benin 69
Bangladesh 79
Congo, Dem. Rep. 85
Madagascar 88
Kyrgyz Republic 91
Tanzania 95
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25 countries achieved significant improvement in
LPI
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25 countries achieved significant improvement in
LPI
25 countries improved between 2007 and 2010

• LICs Afghanistan, Chad, Haiti, Myanmar, Niger,
  Tajikistan, Tanzania, and Uzbekistan
• LMICs China, Djibouti, Honduras, Philippines,
  and Syria
• UMICs Brazil, Colombia, Costa Rica, Dominican
  Republic, Kazakhstan, Lebanon, Mexico, Poland,
  Russian Federation, and Uruguay
• HICs Saudi Arabia and the Czech Republic

Source Logistics performance survey data, 2010
and 2007
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LPI Scores by Region
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LPI Scores
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of the highest performer
LPI 2010
Highest performer Germany 100
Lowest performer Somalia 11
LPI 2007
Highest performer Singapore 100
Lowest performer Afghanistan 7
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Performance in the 6 areas of the LPI
2010 Average LPI Score
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Infrastructure quality
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Quality of services I
TRANSPORT SERVICES
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Quality of services II
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Border clearance procedures / corruption
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Positive trends in logistics performance since
2005
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4. Doing Business Results CIS Countries
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Top 30 economies on the ease of Doing Business
2009/10
1. Singapore 16. Korea, Rep.
2. Hong Kong SAR, China 17. Estonia
3. New Zealand 18. Japan
4. United Kingdom 19. Thailand
5. United States 20. Mauritius
6. Denmark 21. Malaysia
7. Canada 22. Germany
8. Norway 23. Lithuania
9. Ireland 24. Latvia
10. Australia 25. Belgium
11. Saudi Arabia 26. France
12. Georgia 27. Switzerland
13. Finland 28. Bahrain
14. Sweden 29. Israel
15. Iceland 30. Netherlands
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Eastern Europe and Central Asia is the second
best performing region in 2008/09

• CIS economies
• Georgia
• Kyrgyz Republic
• Armenia
• Azerbaijan
• Kazakhstan
• Belarus
• Moldova
• Russian Federation
• Tajikistan
• Ukraine
• 150 Uzbekistan

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Kazakhstan improved the most in the ease of doing
business in 2009/10
Economy Starting a business Dealing with construction permits Registering property Getting credit Protecting investors Paying taxes Trading across borders Enforcing contracts Closing a business
Kazakhstan ? ? ? ?
Rwanda ? ? ?
Peru ? ? ? ?
Vietnam ? ? ?
Cape Verde ? ? ?
Tajikistan ? ? ?
Zambia ? ? ?
Hungary ? ? ? ?
Grenada ? ? ?
Brunei Darussalam ?        ? ?    
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Percentage of countries with at least one
positive reform in 2009/10
Worldwide the pace of reforms making business
easier remains strong 216 in 117 economies.
Eastern Europe and Central Asia again with the
most improvements in the ease of doing business
in 2009/10, followed by East Asia and Pacific
84
Eastern Europe and Central Asia
OECD high Income
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Middle East and North Africa
East Asia and Pacific
South Asia
Latin America and Caribbean
Sub-Saharan Africa
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90 of the economies in the ECA region improved
their business environment
While 85 of economies worldwide improved
business regulation over the last 5 years.
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21 of 25 economies in Eastern Europe Central
Asia improved business regulations this year
6 economies eased trading across borders in the
region
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33 economies reformed making it easier to trade
across borders in 2009/10
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Implementation of electronic systems most popular
trade facilitation reforms in 2009/10
List of economies that made trading easier by
types of reforms
Bahrain Belarus Brunei Egypt Israel Kazakhstan Lat
via Lithuania Nicaragua Pakistan Peru Philippines
Swaziland Tunisia U.A.E Zambia
Armenia Egypt Ethiopia Fiji Grenada Mali Peru West
Bank Gaza
Burkina Faso Cambodia Kazakhstan Montenegro Rwanda
Spain
Angola Bahrain Kenya Nicaragua Pakistan Saudi
Arabia
Armenia Guyana Kazakhstan Peru
EDI system implementation
Risk based inspections
Customs administration
Document reduction
Port procedures
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Time to export and import in Eastern Europe
Central Asia still long, but improving

• Traders in the region typically still face delays
  over twice as long as in OECD high income
  economies
• But, average time to export and import in the
  region dropped over the years by 5 days for
  exporting and 6 days for importing

Note Time to trade includes the 4 processes
discussed in previous slide
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Eastern Europe and Central Asia economies also
made improvements in number of required documents

• Traders in OECD high income economies require
  less than 5 documents on average to export and
  import
• Whereas traders in Eastern Europe and Central
  Africa still require on average 2-3 additional
  documents

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Emphasis on trade facilitation in many developing
economies
Note shows number of cumulative reforms easing
trade across borders since DB2007 (counted as 1
reform per reforming economy per year)
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The trade facilitation reforms impacted lower
income countries the most
2006
- 0.9 days

• 2.9 days

- 4.0 days
- 4.7 days
2010
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Peru the economy that most eased trade in 2009/10

• New EDI system
• Improved risk-based inspections
• Payment deferrals of import duties and taxes

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5. Want to Learn More?
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Contact Us
The World Bank GroupInternational Trade
Department
www.worldbank.org/trade www.worldbank.org/tradefac
ilitation www.worldbank.org/tradelogistics www.wor
ldbank.org/lpi www.worldbank.org/tradestrategy Wa
shington Office 1818 H Street NW Washington DC
20433 Contact tradefacilitation_at_worldbank.org
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Thank you. For more informationwww.doingbusines
s.org
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