Egyptian Regulatory Reform Activity Regulatory Reform: B uilding Egypts Competitive Advantage OECD/GfD Seminar April 30 th, 2008 Amman

Egyptian Regulatory Reform Activity

Regulatory Reform:Building

Egypt’s Competitive Advantage

OECD/GfD Seminar

April 30th, 2008

Amman

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

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

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.

What is ERRADA?

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.

Goals of the Egyptian Regulatory Reform Initiative

(1) 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;

(2) 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

(3) 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

(4) 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.

Productive Sector Ministerial Group

ERRADA Regulatory Reform Initiative

Board of Trustees - General Review Unit

Executive Director

TAPR IIHelp Desk

Business Advisory Council

Deputy Dir.Economics

Coordinates business sector input to ERRADA

Quality check on Inventory and Review Phases

Monitors progress / builds communications campaign

Functions

FunctionsFunctions

- Coordinates TA , training, and equipment support

-Provides strategic advice on ERRADA implementation

- Facilitates program management support t CRU and GMUs

GMUGMU GMU GMU GMU GMU GMU GMUGMU GMU GMU GMU

Deputy Dir.Legal

-Process Mgmt of Review

-Maintain Central Database

-Coordinates w GMUs

-Report Recommendations to NCRR

Inventory Phase / Ministry Database Inventory Phase / Ministry Database



•Coordinates business sector input to ERRADA

•Quality check on Inventory and Review phases of ERRADA

•Monitors progress / builds communications campaign

Functions

Ministries Inspectorates

List of laws,regulations

& norms

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:

1) Is it needed? If NO, eliminate.

2) Is it legal? If NO, eliminate.

3) Is it business friendly? If NO, simplify.

Inventory and First Self-review by Government Management Units (GMUs) of participating Ministries

1st Review



& norms

1) Is it needed?

2) Is it legal?

3) Is it business friendly?

Second Review by General Review Unit (GRU)

1st Review

2nd Review



& norms

1st Review

The review group considers the advice of businesses and develops the final list and legal amendments to create the electronic database.

Third Review by StakeholdersWho Report Their Views to the National Commission

2nd Review 3rd Review

1) Is it needed?

2) Is it legal?

3) Is it business friendly?



& norms

1st Review

This process is repeated for all new regulatory requirements affecting business.

GRU Prepares Package of Reforms for National Commission: Decision Taken on Entire Package

2nd Review 3rd ReviewERRADA CutLegal adoption Secure Legal

Electronic Register

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Implementation Strategies

Political Support Strategy The Ministerial Group of the Productive Sector

sponsors the initiative Participating Ministries are:

1. Trade and Industry

2. Agriculture

3. Local Development

4. Investment

5. Health and Population

6. Tourism

7. Housing

8. Finance

9. Transport

10. Petroleum

11. Administrative Development

12. Electricity

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.


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 regulations into separate packages during the review phase.


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)


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.


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 .

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

Project Timeline

Project implementation Steps Starts Ends

Recruiting GMU experts 4 October Ongoing

Allocation & Preparation of GMU Premises 4 October 30 April

Allocation & Preparation of GRU Premises 4 October 30 April

Procurement and installation of IT networks 8 December 30 April

Procurement and installation of operating system

30 January 15 May

Website online 1 March 1 April

Identifying the members of the board of directors and policy makers

1 March 15 May

Inventory training 17 February 31 May

Collecting regulations from Ministries-Inventory 15 May 15 August

Recruiting review experts at the GRU 1 June 30 June

Reviewing the laws and providing Recommendations

1 July 15 December

Documents

Egyptian Regulatory Reform Activity Regulatory Reform: B uilding Egypts Competitive Advantage OECD/GfD Seminar April 30 th, 2008 Amman