The future of Doing Business
•
Sponsors: EURODAD, International Trade Union Confederation (ITUC), International Working Group on Trade-Finance Linkages
Panelists: Natalia Speer (Senior Advisor to the Executive Director for Brazil WBG), Sharan Burrow (General Secretary, International Trade Union Confederation), Carlos Benavente (Hemispheric Working Group on Trade-Finance Linkages), CHAIR: Aldo Caliari (Center of Concern)
Aldo Caliari
- independent panel review of Doing Business, we had some input
- Recommendations June last year, some of the recommendations which we found useful
- We were concerned about the rankings, very narrow set of measures that it measures
- Panel thought it would be good to just have scores separately
- But concerned that the recommendations doesn’t seem to be implemented
- Only recommendation taken up seem to be to move the design to research department of WB
Natalia Speer
- WB ED office Brazil, in the beginning already negative view of publication, others have joined us since
- Independent evaluation group looked at 2006 publication, critical methodology issues, also about strong bias towards all private sector interventions etc
- WB response was to make very superficial changes, most of the recommendations were not incorporate
- It did increase the introductory part of the report to clarify the purpose
- But once the report has been out for a while, so a sentence here and there in the introduction won’t change the perception
- Continue our fight against the report, other countries have joined
- Kim came in 2013 in the midst of CSO and other opposition, huge storm at the Board – agreement to form independent panel to look at the report, chaired by Trevor Manuel
- TOR were ample, including methodology, ranking, overall impact, way forward
- After then came back to the board, question on how to take forward
- When it was about to be released a big media campaign in favour of the ranking
- We thought if the recommendations would not be implemented, this would be a reputational risk
- They implemented a few of the less important recommendations of the report
- Moved from IFC to WB, but they are still located in the same place – not physically moved, argument that the reforms in the WB need to finish first
- But this is an important part of the changes
- Our position after the two reviews and work on this for almost 7 years – continue to criticise the report, including poor quality control of data, misleading public perception
- WB sends survey to the country, mostly responded by lawyers, after compilation, they send it to the ED office for agreement – in our case in the last year, even if you don’t make any changes, it is unlikely anything else will be changed
- We made lots of comments, they were all recognised
- Issue of sample size, no proof this has changed, just adding another city without addressing other things will not address the problems
- Indicators, adding x number of employees won’t address problems either
Sharan Burrow
- One of the best overviews I’ve heard of reasons why this is pure nonsense
- Doing business in a place where workers are oppressed etc, where it is a crime against humanity to do business, this report promotes
- Workers indicators is still in use
- Hard to believe a minimum wage etc is a threat against doing business
- Heard they want to reintegrate negative aspects
- Report is not just a business agenda, it does drive governments and give them an agenda
- They will win again if we are not vocal
- ITUC has been a strong opponent of Doing Business
- Harmed governments possibility of properly regulate
- At one stage we supported WDR on jobs – says labour market protection doesn’t have a distorting effect on growth, but then there is the Doing Business in the same institution
- We support all recommendations of Trevor Manuel report
- Distorting of reality and drive by certain aspects of the institution
- Want elimination of tax indicator, workers indicator
- We need to call for Doing Business to be buried, funded by public money, can’t argue such an agenda
- If Kim is serious about climate and environment, will he choose the business of people
- ITUC fighting back, next month we will release our own index on where not to work – groups countries in 1-5
- We rate Qatar at 5, with slave like labour, that’s what Doing Business indicates as a good environment
Carlos Benavente
- Latin American perspective, measures business climate globally according to the ease of doing business
- We think the report has lost legitimacy – ratings assigned to a country based on the degree of disclosure and foreign investor
- Failed to respond to criticism
- The panel recommendation on transparency has not been implemented
- The role of the private sector is important, but what is the appropriate way of promoting investment
- Investment with no contribution to national development, extractive and speculative character
- Should take into account broader debate on development, not just economic growth
- One size fits all, should also take into account specific context and circumstance to be a useful tool
- Has to be adapted to the change we are observing in the wake of the global crisis
- The indicators should be consistent with eradicating poverty and for equality
- Greater economic openness and practicality
- Some indicators should disappear, such as labour flexibility and right to work
- People based focus and not only on profit
- The independent panel report is a first step, support implementation of the recommendations
- Need long consultation with affected groups, including indigenous peoples, women’s movements
Jeroen Kvakkenbos
- the credibility of the WB is really at stake
- not just the employing workers, which we call the ease of fire, but also how the WB is establishing itself as a knowledge base
- problematic that a product, not being peer reviewed, and is used to develop a number of other products
- independent panel critique of not being rigorous
- CSO being critical on various areas
- If you are using a model firm, you are not looking at the needs of communities
- Inconsistency of the rankings
- Report should start with ‘content will do harm’ or something similar
- We now have the answers of what is weak with this
- We would like to see more development oriented outcomes
- Problematic that the report has been incorporated in various other tools, without having been designed to do so
Q: Unilever statement, if you do business without addressing human rights, etc, you don’t have a future – do we need to explore this kind of view from corporates, if genuine.
Q: West African Society of Business Ethics, would like to use to capture experiences in the region, to help improve ethical business practices. Would like to speak off line with WB about this.
Burrow
- Ruggie principles do argue for due diligence as fundamental
- Don’t think serious in his own beliefs, but shocked what goes on the ground
- We have to split the business communities – give them a choice
- But we need to have people behind us, be able to expose them
- Eg Wal-Mart in US supporting charity for its own workers
- Businesses have lost their moral compass
- Good initiative on West Africa
Speer
- Bangladesh tragedy, if we move towards better rights for labour, how would they do the Doing Business report
Kvakkenbos
- Example outlines disconnect from reality
- If we created a country based on the indicators, not a country where you would want to live
- Not useful as it is, in particular if it continues not to work, waste of resources
Q: Committed to combat world poverty, other aspect to prevent people from falling into extreme poverty – this is where DB comes from. Promote human rights is very important. This is our concern.
Q: IMF using DB, more details?
Peter Bakvis
- policy advise in reports referencing DB
Q: On methodology, we used an index to get press coverage, little meaning. IEG report with recommendations, either management accepted or not, shouldn’t they then implement them?
Q: Was on the original group evaluating, spent a couple of years going over it and making recommendations. Were told to fix it, we told them it’s not fixable, in particular on labour. WB is still talking about how to fix the indicators, what can we do – should instead focus on good governance.
Caliari
- it doesn’t go away, it doesn’t get fixed – NGOs that were in favour of the report they might be usefulness in having an index
- but when it is by a multilateral creates a problem, public interest agenda
Kvakkenbos
- represent CSOs with dispersed views
- personally think should be burned
- CSOs saying if we are to keep the report, then we will try and make it a different report
- Or don’t do it under WB
- Very little academic rigour, evidence to back it up
Benavente
- our main concern is about the people
- on tax policy, has been started by LA network on tax justice
- erosion of tax space due to big firms
- in Central America these companies put pressure to our governments
Burrow
- could you strip down report to what is useful
- DB used as rationale not to raise minimum wage in Moldova, it is being used
- If Manuel report not being taken seriously, civil society should say enough is enough
Speer
- DB is supposed to be about national SMEs, but it’s not what the product is about
- On accountability and methodology, it is a PR issue
- Today we have 10 indicators, some not relevant at all to the WB mission on poverty eradication
- On accountability in most recent discussion, China, France very vocal against report – with IEG and panel report, why are we still doing it
- Manuel report does recommend change in title
- Not sure if it is just good governance
- Wouldn’t be the first time WB has created an index and then passed on to an institution more suitable
Q: Would be good to do analysis from the angle of inequality.
Q: Tax indicator
Kvakkenbos
- Hopefully in the autumn we will know what the impediments to implementing the plan are
Q: Doing Business in Agriculture, Benchmarking Business in Agriculture, any thoughts on this?
Kvakkenbos
- BBA non transparent process, process has changed over time
- Now about annual report, deep dive, but unclear
Soren Ambrose, ActionAid
- Unclear about ranking, ambivalent messages
Speer
- if we don’t have support from CSOs, there are other shareholders who oppose our voice
