Regulatory Reform: B uilding Egypt’s Competitive Advantage

1. Regulatory Reform:BuildingEgypt’s Competitive Advantage OECD/GfD Seminar April 30th, 2008 Amman

2. What is a Good Regulatory System? No ideal regulatory model, but…. Success as an open, innovative, competitive economy requires a low-cost, low-risk regulatory system that also reduces health, safety, and environmental risks and protects other public interests

3. The OECD Agenda for Low-cost, Low-risk: Tools of Regulatory Reform • I. Build a regulatory management system • Strategic medium-term regulatory reform policy (5 years) • Engines of reform at the centre of government • II. Build the institutions to carry out good regulation • Inspections reforms • Due process • III. Improve the quality of new regulations (flow) • RIA • Stakeholder consultation • Central quality checks • IV. Upgrade quality of existing regulations (stock) • Targeted deregulation, simplification, codification (Doing Business) • Broad-based reforms - ERRADA

4. What is ERRADA? • A demonstration of Egyptian perseverance in the drive toward an open market economy. • A rapid and transparent process for simplifying Egypt’s regulatory regime to support economic growth and competitiveness. • Designed to rapidly count and review a large number of regulations against agreed filters. • Eliminates regulations not needed and simplify regulations that are too complex.

5. Improving the Environment for Business in Egypt Vision Establish an effective environment for investments, through better regulations. Mission Support the nation's economic reform efforts by establishing a system to review and evaluate regulations with an aim of providing justice, efficiency, competitiveness and more job opportunities. Strategic Objectives • Create an inventory of business regulations and an electronic database that is accessible and clear. • Evaluate the impact of business regulations to achieve better economic welfare for Egyptians. • Establish private and public institutional framework to review the impact of business regulations to better confront competitive economic challenges. • Fight corruption through establishing transparency and integrity. • Increase local and international investments to create more job opportunities.

6. Goals of the Egyptian Regulatory Reform Initiative • Inventory of Regulations – in each of the participating Ministries will be created an inventory that encompasses all laws and subordinate regulations / decrees that affect individual citizens and businesses; • Review of Regulations – a review will be undertaken by a central authority in consultation with each of the participating Ministries that determines, on a specified date, the legality of the regulatory scope • E-Registry – the electronic registry of all laws and regulations will be the outcome of the combined inventory and review stages of this reform initiative • Regulatory Impact Assessment (RIA) – the overarching objective of this reform initiative is the adoption by the GOE of the principles of regulatory impact assessment as the foundation of economic governance for Egypt.

7. GMU GMU GMU Productive Sector Ministerial Group Business Advisory Council ERRADA Regulatory Reform Initiative Board of Trustees -General Review Unit Executive Director TAPR II Help Desk Functions Functions • Coordinates TA , training, and equipment support • Provides strategic advice on ERRADA implementation • Facilitates program management support t CRU and GMUs Coordinates business sector input to ERRADA Quality check on Inventory and Review Phases Monitors progress / builds communications campaign Functions • Process Mgmt of Review • Maintain Central Database • -Coordinates w GMUs • -Report Recommendations to NCRR Deputy Dir. Legal Deputy Dir. Economics Inventory Phase / Ministry Database Inventory Phase / Ministry Database GMU GMU GMU GMU GMU GMU GMU GMU GMU

8. Functions • Coordinates business sector input to ERRADA • Quality check on Inventory and Review phases of ERRADA • Monitors progress / builds communications campaign Business Advisory Council Business Advisory Council

9. Inventory and First Self-review by Government Management Units (GMUs) of participating Ministries List of laws, regulations & norms 1st Review Ministries Inspectorates • Inventory: A key output is a complete identification and mapping of all rules under the scope of ERRADA. • All regulations are justified as meeting the following criteria: • Is it needed? If NO, eliminate. • Is it legal? If NO, eliminate. • Is it business friendly? If NO, simplify.

10. Second Review by General Review Unit (GRU) List of laws, regulations & norms 1st Review 2nd Review Ministries Inspectorates • Is it needed? • Is it legal? • Is it business friendly?

11. Third Review by Stakeholders Who Report Their Views to the National Commission List of laws, regulations & norms 1st Review 2nd Review 3rd Review Ministries Inspectorates • Is it needed? • Is it legal? • Is it business friendly? The review group considers the advice of businesses and develops the final list and legal amendments to create the electronic database.

12. ERRADA Cut Legal adoption Public Access to Database via Internet GRU Prepares Package of Reforms for National Commission: Decision Taken on Entire Package List of laws, regulations & norms 1st Review 2nd Review 3rd Review Secure Legal Electronic Register Ministries Inspectorates This process is repeated for all new regulatory requirements affecting business.

13. Implementation Strategies Political Support Strategy • The Ministerial Group of the Productive Sector sponsors the initiative • Participating Ministries are:

14. Implementation Strategies • Communications and Consultation Strategy – • Communications campaign to support ERRADA developed by Egyptian professionals . • Branding approach to tools such as the development of the Regulatory Reform – Egypt website. • ICT Strategy – • At the core of the regulatory reform initiative. • ICT hardware/software are combined as an enabling networked service to enhance the stakeholders’ advocacy, with a DMS and database communications systems.

15. Implementation Strategies • Legal Strategy – crafting the ERRADA legal strategy to Egypt’s existing legal procedures and protocols is vital to success. Key areas of focus: • Elaboration of a clear definition of “legality” for the review phase. • Elaboration of legal analysis needed to determine if a regulatory revision can be done at the Government/Minister/or Parliament; • Development of method to package changes to laws and subordinate regulationsinto separate packages during the review phase.

16. Implementation Strategies • Management Support Strategy – resource deployment for the sound management of the reform initiative. The primary areas of focus will be: • Support the recruitment of Egyptian experts for the GMU and GRU teams • Design training activities for the Inventory and Review phases • Deployment of experts that support specific strategies of the initiative • Procurement of ICT equipment, TA, and training including study visits • Securing active support of private sector through the Business Advisory Council (BAC)

17. Implementation Strategies • Economic Impact and Monitoring Strategy – to build support for the reform initiative includes: • Adaptation of the Standard Cost Model to quantify the cost-savings of the Egyptian reform initiative; • Constructing through the BAC a matrix of indicators to monitor reduction of the regulatory burden on businesses operating in Egypt • Soliciting BAC participants to monitor measurable change of the regulatory burden; • Disseminating progress in measuring the Egyptian indicators to regional and international norms • RIA Development Strategy - GOE adopting the principles of regulatory impact assessment and building a new basic law defining the role of the state in the regulation of the business environment.

18. GMU Inventory Progress Ministry of Finance Initial inventory count reveals 8000+ decrees. Ministry of Housing Initial inventory showing 12000 published regulatory instruments Ministry of Trade and Industry Initial inventory showing 482 ministerial decrees Ministry of Transport Initial inventory count reveals 4904 decrees dating back to year 2000 Ministry of State for Administrative Development 9 laws reviewed. Currently collecting decrees.

19. GMU Inventory Progress Ministry for Local Development 48 laws and in the process of collecting presidential and ministerial decrees Ministry of Petroleum The premises established and collection of laws and regulations started. Ministry of Agriculture 31 laws to this date as well as ministerial decrees till 2007 Ministry of Investment In the process of collecting laws and decrees Ministry of Health Initial inventory count reveals 2208 ministerial decrees from 1936-2007; 174 laws from 1941-2004; 41 presidential decrees from 1960 till 2004

20. Project Timeline