China reduces State intervention in the economy

According to a newswire story dated 11 Dec. reported by The BRICS Post, China's cabinet has decided to further limit the approval role of the central government as part of its efforts to reduce intervention in the economy.
"China's cabinet released a statement outlining the removal of 82 powers from a number of central government ministries, including the powerful National Development and Reform Commission (NDRC) and the Ministry of Environmental Protection.
The list released on Tuesday includes the cancelling or dissolving of power to lower levels on coal production approvals, permission of setting up foreign commerce chambers and checks on returning imported cargoes.
Facing a domestic economic slowdown and a still fragile world economy, the Chinese leadership has made transforming government functions a top priority to spearhead broader reforms.
The latest decision followed similar steps earlier this year that saw the removal of more than 300 administrative approval items, which the government claims helped to drive a notable rise in the number of business registrations."

"Communist" red tape under the knife

Delightful story not requiring any comment, from BEIJING, Oct. 13 (Xinhua) -The discipline watchdog of the Communist Party of China (CPC) has begun the second stage of its campaign to cut red tape in its system. The second wave will run until June next year, and target regulations or normative documents from the founding of the New China in 1949 to 1978, according to a statement by the CPC's Central Commission for Discipline Inspection (CCDI) on Sunday. The move will give the commission a clear picture of the existing regulatory situation and clarify the fight against corruption using legal weapons.

The first stage of the CPC's campaign, which began in June last year, focused on rules introduced from 1978 to 2012. The Party had abolished nearly 40 percent of its intra-Party rules introduced since 1978 as of Aug. 28, and the CCDI abolished 37 and nullified 28 of 476 rules introduced by it since 1978. The central authority and local Party committees also overhauled their ruleboook

Chinese gvt to free economy from red tape

According to an article titled "China's new cabinet vows to cut red tape" published by People's Daily of March 19, the newly-elected State Council has given top priority to modernising "government functions". Premier Li Keqiang had chaired an executive cabinet meeting on the day before, "advocating that transforming government functions is the key to further reforming administrative systems and developing a market economy and an economy ruled by law. Cutting red tape will be a breakthrough in achieving the transformation of government functions, according to a statement from the meeting. In a bid to let the market play its role and empower social forces, the government has vowed to take drastic action to reduce items that demand official approval or transfer such power to lower levels, the statement said. To invigorate the economy and society, the government has also vowed to refrain from intervening in micro issues, the statement said. The government will strengthen macro management and focus more on key influential issues in a bid to improve its scientific management levels, the statement said." Behind the rather emphatic language, the determination to continue liberalising the economy seems genuine.

Japan PM makes regulatory reform "top priority"

As a member of OECD, Japan is no stranger to regulatory reform. In the early 2000s, a Council for Regulatory Reform conducted a number of projects which were assessed in an OECD review.
It now seems that the new government under Mr Abe has put the policy at the top of the government agenda. On 24 January, the Prime Minister attended the first meeting of the Regulatory Reform Council (the name has changed). According to the official site, "The Regulatory Reform Council is a council to respond to the consultation of the Prime Minister from the perspective of promoting measures on basic and important policies related to economy, to comprehensively research and examine the basic items on the reform on how the necessary regulation should be for carrying forth the structural reform of economy and society, and to give opinions to the Prime Minister on relevant items."
The PM makes an interesting distinction between his predecessor's policy "regulatory reform for its own good" and his own approach where "the purpose of the regulatory reform is clear. It is a regulatory reform for revitalizing the economy. It also aims to achieve economic growth through regulatory reform, and create employment. I expect that these purposes are set forth clearly" Japan is to use Regulatory Reform to fullfill the PM's ambition: "What we aim for becoming is number one in the world."
Work is proceeding swifty, according to Daily Yomiuri Online, who reports that during the second meeting of the council on 15 February, the secretariat presented 59 possible regulatory reform targets in four fields--health and medical care, energy and the environment, employment, and new enterprises and industrial revitalization. Controversial issues such as more flexibility in the labour market are being considered. A new growth strategy is to be compiled in June.

China tests regulatory reform at province level

The regulatory reform scene in China has up to now not provided much news, but this may be soon changing. According to the People's Daily online published yesterday, "the central government has made Guangdong Province a pilot region for reform of the state and provincial regulatory and administrative process by removing or adjusting 100 regulations that require government approval, the Guangzhou-based Nandu Daily reported Monday.
The State Council recently issued an official document that approves the trial reforms during the 12th Five-Year Plan period (2011-15). Thirty-four administrative approval items will be canceled and the administration of 34 other items will be transferred from the province to lower levels of government. In addition, 32 items will be handed over to industry associations. The decision was made at an executive meeting of the cabinet presided over by Premier Wen Jiabao in August, the newspaper said.
The move is in a bid to reduce approval requirements and let markets allocate resources more efficiently.
On the list of the 34 regulations that have been canceled are the annual examination of tour guides, approval of building companies that conduct small-volume trade with Taiwan and approval of used car appraisal agencies.
Administration of 32 items will be gradually handed over to associations of specific industries, which aims at reducing government intervention and giving full play to markets. This list includes the annual check of asset evaluation agencies, registration of software products and hotel star ratings.
Provincial government departments will administer 19 regulations, while 15 others will be regulated by lower level governments. This covers programs in energy, transportation, raw materials, mechanic manufacturing and establishing local enterprises.
"The reform of administrative approval will help transform the government's functions, clarify its responsibilities and make more room for social development. This is to build a bigger society and smaller government," Zhu Lijia, a public administration professor with the Chinese Academy of Governance, told the Global Times.

Three kinds of regulation (China)

Scholars and entrepreneurs exchanged insights at a symposium during the World Economic Forum's Annual Meeting of the New Champions in Tianjin. One of the key participants explained there were three kinds of regulations the government can make: hard, soft and smart. Smart regulation is defined as " an invisible hand to guide and promote innovation from the bottom up" especially in certain industries.

New advisory body to cut red tape (India)

  Last Friday, the government of India set up a 21-member panel, including representatives from the government and regulatory authorities as well as respected industry leaders to suggest ways for reforming regulatory environment for doing business in India. The panel is being set up at a time when concerns are being raised by the industry and investors, from India and abroad, about perception of policy paralysis and lack of required economic reforms.
The World Bank and International Finance Corporation 2012 report on the ease of doing business ranks India a lowly 132 out of 183 countries, well below the other BRICS and most of the South Asian Association for Regional Cooperation countries. The committee, headed by the former Securities and Exchange Board of India (Sebi) chairman , would prepare a detailed report within six months and submit the same to the government, the Ministry of Corporate Affairs (MCA) said in a press release. "There is a need to conduct an in-depth study into the entire gamut of regulatory framework and come out with a detailed roadmap for improving the climate of business in India in a time bound manner," the release said. The panel would comprise representatives from Sebi, Reserve Bank of India (RBI) and the Ministries of Corporate Affairs, Finance, Power, Petroleum, Highways, Commerce and Industry and Urban Development. Easing of business environment mandates extensive examination of regulations in different areas such as financial and governance reforms and liberalised policy framework, MCA said. For more, see article by Economic Times of India.

Chinese Taipei puts smart regulation on the curriculum

For the second year running, Chinese Taipei (known more commonly as Taiwan) has organised a 5 day course on regulatory reform, as part of the 27th Academy of International Economic Affairs, a training programme offered to some 30 younger government officials, including 8 from friendly countries in Eastern Europe and Latin America.
Organised as a series of sessions equally distributed between presentations, structured discussions/brainstormings and group breakouts, the 30 hours gave enough time to cover the whole spectrum of skills necessary for government officials to produce clear and relevant policy and regulation, geared to sustaining and boosting the quality of the business regulatory environment and hence the competitiveness of their country: policy making, including quantitative techniques such as RIA, and legislative drafting. Best practices from around the world were called to illustrate the most relevant, up-to-date and effective skills that need to be mastered by officials.
This morning, the course members were smiling: the looming typhoon had decided to go South, leaving them the prospect of a restful and well deserved weekend before they tackle the next subject on the heavy Academy curriculum.

Less Red Tape, More Fun (Philippines)

A new definition of "fun." A recent official press release of the Philippines Government has announced that the Asian Development Bank (ADB), under its Strengthening Institutions for an Improved Investment Climate program, is supporting several ministries in a major crackdown on red tape, with a view to improving the economy's Doing Business ranking and competitiveness.
In the 2012 World Bank Global Survey, the Philippines ranked 136th out of 183 countries in terms of ease in doing business. It also ranked 158th in starting a business, 126th in getting credit; 113th in protecting investors, 136th in paying taxes and 51st in trading across the borders.
The Department of Tourism (DoT) is collaborating with the Department of Labor and Employment (DOLE) and the Department of Finance (DOF) in a program to minimize bureaucracy, which includes the development and implementation of a national strategy for regulatory impact assessment (RIA) in government. The program complements the government's 2006 move in creating the National Competitiveness Council (NCC) which is tasked to develop strategies and instill a culture of excellence through public-private sector collaboration.
Under the program, the three ministries will pilot-test the Regulatory Impact Assessment (RIA). This includes tours, seminars, and consultations to arrive at the most optimal regulation.
"Fun means easy, convenient, and hassle-free, which should be evident across the tourism value chain," Tourism Secretary Ramon Jimenez said in a statement.
Jimenez said the initiative is necessary if the tourism sector is to realize its full potential and regulations must be in line with the expectations and demands of all tourism stakeholders.
"In keeping with our campaign, we would like to take 'fun' to a deeper level to mean good governance and competitive offerings that practice good business and proper management," Jimenez said.
For more, see Manila Bulletin article of yesterday.

In support of RIA (the Viet Nam practice)

RIA is of course applied in many countries as a matter of course, but a recent discussion on the LinkedIn Smart Regulation discussion page shows that there is still some discussion about its relevance and impact. Scott Jacobs started a discussion under the heading "in support of RIA" which attracted 28 technical contributions. One of the countries quoted was Viet Nam, for which a 2008 study showed that each full RIA was estimated to cost approximately US$500, but the introduction of RIA is expected to save the private sector 100, 000 times that amount through a reduced or more efficient regulatory regime. Today, Viet Nam News publishes an interview of Dr Phan, director of the Administrative Procedures Control Agency (APCA) about the role of impact assessments in the regulatory reform process. Here is an interesting quote: "Impact assessment can be understood simply as a process of subjecting a draft regulation to over 50 specific questions in a standard form, grouped in four criteria groups: necessity, reasonableness, legality and effectiveness. This assessment needs to take place before the draft is circulated for comment. In other words, a regulation must prove its necessity, reasonableness, legality and effectiveness rather than be based only on subjective factors and experiences of officials. This is a scientific approach and will prove effective if civil servants perform their duties with a sense of fairness and responsibility. Heads of administrative agencies must care about the quality of the regulation rather than the issuance process."

Anti-fixer campaign (Philippines)

In Manila, the Civil Service Commission (CSC) has designed new “Anti-Fixer Campaign” posters to underscore the need to campaign against any act of fixing. These posters are to be posted in conspicuous places in government agencies to inform the public about their rights. This policy builds on the impetus provided by the Anti-Red Tape Act (ARTA) of 2007, which imposes stiff penalty on fixers. In parallel, agencies receiving the public are being asked to provide all-day service, and the "no-noon break" policy is also widely advertised.
See previous post (December 2011). Because this is such a powerful idea to inform the public and combat corruption, this item is filed in our Best Practices category.

Comparative Reg Ref: Korea and Japan

An interesting comparison between these two countries is to be found in an online article of a Korean newspaper two days ago. It is based on how Korea and Japan reacted to crises and made the necessary structural adjustments, particularly by regulatory reform. Written by the editor-in-chief of http://www.mrglobalization.com/ and former OECD and ADB official, it shows how Korea's competitiveness advantage orginated in several reforms, unparalleled in Japan: lifting restrictions to market access, improving the regulatory environment of business, fighting bribery. Indicators such as the OECD FDI Regulatory Restrictiveness Index and the WBG Doing Business indicator have measured this progress.

Red Tape closely associated to corruption (Philippines)

According to news from the Philippines published yesterday, the struggle against red tape, closely linked to fighting corruption, is active though according to the Doing Business index, the country is still losing ground at 136/183, a region where it has been stuck since the beginnings of the ranking.
A press report yesterday gives some details about how the government combats bureaucracy, on the legal basis provided by the Anti-Red Tape Act (Arta) of 2007: among other tools, the Civil service commission conducts a Arta Report Card Survey at regional level (RCS) to gather feedback on how agencies, including local government units, follow provisions of their Citizen’s Charters. The RCS also rates the agencies performance and clients’ satisfaction in relation to frontline service delivery. Results of the survey may be used by the agencies in improving or modifying their frontline services and Citizens Charter.
The Philippine Public Transparency Reporting Project (a Human Rights group) gives some background about the main item of legislation (Arta), which was introduced in 2007 in an attempt to make government services more business-friendly and help stamp out corruption. One of its most salient provisions is to automatically grant requests for renewal of licenses, permits and authorization should a government office fail to act within a prescribed period. The Anti- Red Tape Act was in fact only the latest in a long line of attempts to address inefficiencies and corruption in government services in the Philippines. They included the "People First, Not Later" program in 1994 which encouraged a client who is dissatisfied with the service of a government office to file a complaint at the Civil Service Commission. The Commission was supposed to ensure immediate action is taken to investigate and resolve the complaint. The “People First” campaign was later reinforced through the program TEXTCSC where citizens were invited to report irregularities and allegations of corruption in public service to the CSC simply by texting 0917-TEXTCSC. Transparency Reporting describes in detail how the "fixer" system works (fascinating), and concludes: "More than a decade after these programs were launched, the general public sentiment is that the quality of government service has improved very little if not actually worsened." For other measures in PH, see posts dated 11 September and 19 August.

Smart Regulation slated to promote sustainable growth

Yesterday, your blogger attended the conference in Paris on "Smart Regulation and Sustainable Growth" organised by the Korean Legislative Research Institute and the University of Aix-Marseille (FR). The two communities of experts were represented and explored how they could better work together for more effective policy outcomes. This would include tapping the potential of the principles of Better/Smart Regulation to improve the long-term perspective in making and enforcing regulation, to enhance results in the areas of green growth, climate change and biodiversity. Contributions also addressed the effectiveness of regulations compared to other interventions, and means to enlist citizens in securing enforcement, including through easier and less costly access to litigation. Korea put forward the point that incentives could be a major factor for obtaining the right change of behaviors. Participants were referred, for further study, to the OECD publication "Towards Green Growth" (April 2011) which includes sections on how well conceived regulation can contribute to the policy (see pp 45 sq). This blog will report as proceeds are published online.

Visas hinder ease of doing business

Making it easier to enter the country for people bringing investment seems a pretty obvious way for a naitonal administration to increase business opportunities and returns by fostering FDI. But many countries have not yet been able to curb their bureaucratic tendencies and cease penalising themselves. This has recently been highlighted at the 5th Arabian Business Forum in Dubai. A quick look around the world shows that Singapore, top performer in business and competitiveness indexes, offers a variety of visas for potential workers and investors. The city-state has a specific Entrepreneur Pass for those intending to set up businesses, and a Multiple Journey Visa can be issued for up to five years.

Announcement: conference on Smart Regulation and Sustainable Growth

The Korea Legislation Research Institute and the Administrative Research Centre at Paul Cézanne Aix-Marseille III University invite all smart regulation experts to a conference on "Challenges and Opportunities for the Future: European and Korean Perspectives on Sustainable Growth and Smart Regulation."
Date: November 30th (Wed), 2011 Venue: Hotel Marriott Rive Gauche Paris.
The invitation is online, as well as the conference book.
RSVP by e-mail to klri @ koconex. com

ASEAN pursues regional regulatory dialogue

As reported in the international press (example Thailand), on 17 November 2011, ASEAN held its 19th ASEAN Summit in Bali, Indonesia, followed by a meeting with the ASEAN Business Advisory Council (ABAC). Key issues discussed at the Summit were ASEAN Community building by 2015 (see the Blueprint), the role of ASEAN in the global community and other regional and international issues of mutual interest.
At the end of the Summit, ASEAN Leaders signed a Bali Declaration on the ASEAN Community in the global community of nations and witnessed diverse technical agreements.
Regulatory reform remains high on the agenda to achieve regional integration, and is most visible in the third pillar, which calls for streamlining standards and technical barriers to trade including systems of standards, quality assurance, accreditation and measurement. Leaders called for the institutionalisation of the High-level Task Force on Regulatory Reform, whose first meeting was held in Jakarta on Aug. 3, 2011 (as reported on this blog.) For more on this event, see an article in Jakarta Post.

APEC promotes good regulatory practices

In complement to yesterday's post about the APEC ministerial, our network correspondent in Chinese Taipei, who was at the conference, draws our attention to the APEC Leaders' Honolulu Declaration ("Towards a seamless regional economy) published yesterday. Go to Annex D "Strengthening Implementation of Good Regulatory Practices" to see how member countries will try "to embed the concepts of non-discrimination, transparency, and accountability into the regulatory cultures of APEC economies", to help create jobs and promote economic growth. Experts will want to check the new formulation of principles of high-quality regulation contained in that document. Compared to the new OECD principles, which are now close to finalisation and publication, the APEC text provides a shorter and more general list of actions to be implemented by November 2013. On substance, there is little new in this document (except perhaps the notion of "incentives to review regulation") but we can hope that it will create some momentum for domestic reform in member countries.

APEC links RR with trade and green growth

There is a lot of conceptual material to be found in the proceedings of the 2011 APEC ministerial meeting held in Honolulu, Hawai, on 11 November and chaired by Ms Clinton. In a “Declaration of Honolulu – towards closer regional economic ties,” APEC Ministers committed to take action to strengthen economic integration and expand trade, promote green growth and advance regulatory convergence and cooperation, to achieve economic growth in the region. The statement published on the APEC site and the annex F on regulatory issues provide rich reading. Here are the main chapters (our unofficial summary):

• "Regulatory Cooperation on Emerging Standards and Regulatory Issues for green growth": the objective is to prevent unnecessary technical barriers to trade, support interoperable emerging standards for smart grids, green buildings, and solar technologies.
• Approval of a "Regulatory Cooperation Action Plan" to inter alia improve the efficiency and effectiveness of regulations, build public trust in regulations, improve consumer confidence in globally traded products and encourage implementation of the APEC-OECD Integrated Checklist on Regulatory Reform;
• Regulatory Convergence: streamlining approval procedures for Medical Products , harmonised classification of Chemicals, cataloguing regulations on Services, reducing unnecessary testing and streamlining paperwork on Wine certification and trade procedures, raising common Food Safety rules, including closer alignment on international standards (with APEC-World Bank collaboration).

In summary, a fine example of effective regional regulatory cooperation.

Viet Nam engages regulatory reform

According to a report from Viet Nam news, experts at a conference organised in Ha Noi last week by USAID and the Central Insitute for Economic Management agreed that Regulatory Reform was needed to encourage growth and competitiveness in a riskier global environment.
Officials in Viet Nam are concerned about the growth of the legal stock. Statistics from the National Assembly Office have shown that the number of regulations issued by central authorities increased from 1,043 in the year 2000 to 5,810 in 2010.
"The rapid increase in the number of new regulations makes it quite difficult for citizens and businesses to understand them all," Cuong said. The nation also lacked a focal-point agency to control the quality and consistency of regulations, leading to the issuance of unclear regulations that require additional documents to clarify them, he added.
Policy instability and bureaucratic inefficiency are concerns hightlighted by the Global Competitiveness Index, where VN lost 6 places in 2010-11.
Phan Ngo Hai, general director of the Administrative Procedures Control Agency, which has been overseeing the Prime Minister's master plan to reform administrative procedures, also known as Project 30, said the quality of regulations remained poor, though the project had delivered results impressive numerically.