TRANSITION REPORT 2014 Innovation in Transition

Meth Notes Tables

Table N.1.1.1 - Transition cut-off points

Cut-off points
Transition gaps (MS/MI) Potential scores

Large/Large

from 1 to 2+

Medium/Medium

from 2+ to 3+

Small/Small

from 3+ to 4

Negligible/Negligible

4+

Corporates

Table N.1.2.1

Table N.1.2.1 – Rating transition challenges in the agribusiness sector

Components Criteria Indicators

Market structure [50%]

Liberalisation of prices and trade [15%]

Wheat: producer price to world price ratio (FAO GIEWS and PriceSTAT, latest available)

Simple average MFN applied tariff for agricultural products (WTO, 2013)

NRA to agriculture, average 2009-11 (World Bank Distortions to Agricultural Incentives, 2013)

WTO membership (WTO)

Development of private and competitive agribusiness [40%]

Wheat: yields per ha, average 2010-12 (FAO ProdSTAT, 2014)

Wheat: average change in yields per ha in the period 2007-12 (FAO ProdSTAT, 2014)

Mass grocery retail sales in per cent of total grocery retail (BMI, latest available data)

Processing mark-up in agriculture (EBRD calculation based on UNIDO, 2013)

Development of related infrastructure [25%]

EBRD railways infrastructure (EBRD Transition Report, 2013)

EBRD road infrastructure (EBRD Transition Report, 2013)

Tractors per 100 ha arable land (World Bank World Development Indicators (WDI), 2014)

Pump price for gasoline (World Bank WDI, 2014)

Development of skills [20%]

Ratio of a percentage of tertiary graduates in agriculture over a percentage of agricultural share in GDP (EBRD calculations based on UNESCO and CEIC, 2014)

Value-added per worker in agriculture (World Bank WDI, 2014)

Market-supporting institutions and policies [50%]

Legal framework for land ownership, exchanges and pledges [40%]

Tradeability of land (EBRD Transition Report, 2009, updated in 2014)

Warehouse Receipt Programmes (FAO Investment Centre Working Paper, 2009)

Building a warehouse: dealing with construction permits (World Bank Doing Business, 2014)

Registering property (World Bank Doing Business, 2014)

Enforcement of traceability of produce [40%]

Quality control and hygiene standards [40%] Overall TC 34 (ISO, 2014)

Hygiene standard implementation (EBRD assessment, latest available)

Creation of functioning rural financing systems [20%]

Ratio of percentage of lending to agriculture relative to percentage of agricultural share in GDP (EBRD calculations, latest available)

Table N.1.2.2

Table N.1.2.2 – Rating transition challenges in the general industry sector

Components Criteria Indicators

Market structure [60%]

Market determined prices [20%]

Subsidies in % of GDP (CEIC, latest available data)

Energy intensity (World Bank WDI, 2013)

Competitive business environment [40%]

MFN applied tariff, simple average, non-agricultural products (WTO, 2014)

Lerner index (EBRD calculation based on UNIDO, 2010)

Large-scale privatisation (EBRD Transition Report, 2013)

Productivity and efficiency [40%]

Expenditures on R&D in % of GDP (UNESCO, 2014)

R&D effectiveness (EBRD calculation based on WIPO and UNESCO, 2014)

Value-added, manufacturing, per employee (UNIDO, 2010)

Knowledge Index (World Bank, 2012)

Market-supporting institutions and policies [40%]

Facilitation of market entry and exit [40%]

Starting a business (World Bank Doing Business, 2014)

Resolving insolvency (World Bank Doing Business, 2014)

Per cent of firms identifying business licensing and permits and as a major constraint (EBRD and World Bank, 2013)

Enforcement of competition policy [30%]

Competition policy indicator (EBRD Transition Report, 2013)

Corporate governance and business standards [30%]

Composite country law index (EBRD Legal Transition Team, 2014)

ISO certification (EBRD calculation based on ISO and World Bank data, 2014)

Protecting investors (World Bank Doing Business, 2013)

Corruption Perceptions Index (Transparency International, 2013)

Table N.1.2.3

Table N.1.2.3 – Rating transition challenges in the real estate sector

Components Criteria Indicators

Market structure [40%]

Sufficient supply of quality assets in all subsegments (warehouse/office/retail/hotels) [60%]

Class A industry supply per capita (Colliers, DTZ, King Sturge, CB Richard Ellis, Jones Lang LaSalle)

Modern office space per capita (Colliers, DTZ, King Sturge, CB Richard Ellis, Jones Lang LaSalle)

Prime retail space per capita (Colliers, DTZ, King Sturge, CB Richard Ellis, Jones Lang LaSalle)

Hotel room supply per capita (WEF Travel & Tourism Competitiveness Index, 2013)

Market saturation and penetration of innovative construction technologies [40%]

Market saturation index (EBRD, 2012)

Index on penetration of innovative construction technologies (EBRD, 2012)

Market-supporting institutions and policies [60%]

Tradeability and accessibility of land [20%]

Accessing industrial land: lease rights (World Bank, 2010)

Accessing industrial land: ownership rights (World Bank, 2010)

Access to land (BEEPS IV, 2008)

Development of an adequate legal framework for property development [30%]

Quality of primary legislation in the property sector (EBRD, 2012)

Quality of secondary legislation in the property sector (EBRD, 2012)

Mortgage market legal efficiency indicators (EBRD, 2014)

Presence and effectiveness of energy efficiency support mechanisms [10%]

Sustainability of government support mechanisms (EBRD, 2012)

Adequacy of property-related business environment [40%]

Registering property (World Bank Doing Business, 2014)

Dealing with construction permits (World Bank Doing Business, 2014)

Property rights (WEF Travel & Tourism Competitiveness Index, 2013)

Level of corruption for construction-related permits (BEEPS V, 2012)

Table N.1.2.4

Table N.1.2.4 – Rating transition challenges in the telecommunications sector

Components Criteria Indicators

Market structure [50%]

Competition and private sector involvement: mobile telephony [40%]

Expansion of services to rural areas, proxied by % of population covered by mobile signal (World Bank, 2014)

Mobile penetration rate (International Telecommunication Union, 2014)

Percentage of private ownership in the incumbent mobile operator (Global Insight, BuddeComm)

Market share of the largest mobile operator (Business Monitor International, Global Insight, BuddeComm)

Mobile number portability (Business Monitor International, Global Insight, BuddeComm)

Level of competition for mobile telephone services (World Bank, 2014)

Competition and private sector involvement: fixed telephony [20%]

Fixed-line teledensity (International Telecommunication Union, 2014)

Percentage of private ownership in fixed telephony incumbent (Business Monitor International, Global Insight)

Market share of the largest fixed telephony provider (Global Insight, BuddeComm)

Fixed number portability (Business Monitor International, Global Insight)

Level of competition for international long-distance services (World Bank, 2014)

Mobile and fixed-line subscribers per employee (World Bank, 2009)

IT and high-tech markets [40%]

Internet users penetration rate (International Telecommunication Union, 2014)

Broadband subscribers penetration rate (International Telecommunication Union, 2014)

International internet bandwidth (World Bank, 2014)

Level of competition for internet services (World Bank, 2014)

Piracy rates (Business Software Alliance, 2011)

Market-supporting institutions and policies [50%]

Regulatory framework assessment [70%]

Market liberalisation (EBRD, 2012)

Sector organisation and governance (EBRD, 2012)

Market entry for wired networks and services (EBRD, 2012)

Market entry for wireless networks and services (EBRD, 2012)

Fees and taxation on electronic communication services (EBRD, 2012)

Progress towards implementation of information society (EBRD, 2012)

Preparedness of the country to develop a knowledge economy [25%]

Knowledge Economy Index: Economic Incentives (World Bank, 2012)

Knowledge Economy Index: Innovation (World Bank, 2012)

Knowledge Economy Index: Education (World Bank, 2012)

Freedom of media [5%]

Freedom of press (Reporters Without Borders and Freedom House, 2014)

Energy

Table N.1.3.1

Table N.1.3.1 – Rating transition challenges in the electric power sector

Components Criteria Indicators

Market structure [40%]

Restructuring through institutional separation, unbundling and corporatisation [33%]

Extent of corporatisation (setting up of joint-stock companies, improved operational and financial performance)

Extent of legal unbundling of generation, transmission, distribution and supply/retail

Extent of financial unbundling of generation, transmission, distribution and supply/retail

Extent of operational unbundling of generation, transmission, distribution and supply/retail

Private sector participation [33%]

Degree of private sector participation in generation and/or distribution

Competition and liberalisation [33%]

Degree of liberalisation of the sector (third-party access to network on transparent and non-discriminatory grounds)

Ability of end-consumers to freely choose their provider

Degree of effective competition in generation and distribution

Market-supporting institutions and policies [60%]

Tariff reform [40%]

Presence of cost-reflective domestic tariffs

Existence of cross-subsidisation among consumers

Degree of payment discipline as measured by collection rates and payment arrears

Development of an adequate legal framework [20%]

Energy law in place to support full-scale restructuring of the sector and setting up of a regulator

Quality of taxation and licensing regime

Existence and relative strength of the regulatory framework for renewables

Establishment of an independent energy regulator [40%]

Degree of financial and operational independence of the regulator

Level of standards of accountability and transparency

Table N.1.3.2.1

Table N.1.3.2.1 – Natural resources subcomponent: oil and gas sector

Components Criteria Indicators

Market structure [40%]

Restructuring through institutional separation and corporatisation [40%]

Degree of unbundling of different business lines into separate legal entities (joint-stock companies)

Existence of separate financial accounts for different lines of businesses

Extent of unbundling of different business lines into separate legal entities

Extent of measures adopted to improve operational and financial performance

Private sector participation [20%]

Degree of private sector participation in upstream and downstream/supply

Competition and liberalisation [40%]

Degree of liberalisation of the sector (third-party access to network)

Ability of end-consumers to freely choose their provider

Degree of effective competition in upstream/extraction, supply and retail

Market-supporting institutions and policies [60%]

Tariff reform and price liberalisation [40%]

Presence of cost-reflective tariffs

Existence of cross-subsidisation among consumers

Degree of payment discipline as measured by collection rates and payment arrears

Development of an adequate legal framework [40%]

Energy law in place to support full-scale restructuring of the sector and setting up of a regulator

Quality of taxation and licensing regime

Extent of transparency and accountability on revenues from extractive industries (e.g. EITI/PWYP compliance)

Regulatory structure [20%]

Degree of financial and operational independence of the regulator

Level of standards of accountability and transparency

Table N.1.3.2.2

Table N.1.3.2.2 – Natural resources sub-component: mining sector

Components Criteria Indicators

Market structure [50%]

Private sector participation [40%]

Degree of private sector participation in direct mining and processing activities

Diversification of supply chain

Price liberalisation, market access and competition [20%]

Extent of commodities price liberalisation

Extent of free market access and free trade

Degree of effective competition in the sector

Development of related infrastructure [20%]

Availability and quality of rail/road/port infrastructure

Development of processing facilities

Knowledge and technology [20%]

Distance from the technology frontier

Availability of skilled labour

Extent of foreign participation (technology transfer)

Level of EHS&S technology in use in the sector relative to Best Available Technologies

Relative carbon intensity of the sector

Market-supporting institutions and policies [50%]

Institutional framework [40%]

Independent mining regulation agency

Independence of judicial bodies

Clarity and stability of licensing and tax regimes including royalties

Independent environmental/social regulatory agency

Development of adequate legal and regulatory framework [40%]

Mining law/code: adequacy/quality of legislation/regulation

Adequacy/quality of licensing and tax regimes

Adequacy of corporate governance and reporting requirements and implementation

Status of disclosure/reporting transparency and of accountability on revenues (e.g. EITI/PWYP compliance)

Corruption index

EHS&S legislative and regulatory framework [20%]

Extent and quality of specific EHS&S legislation for mining sector

Adequacy of environmental legislation/regulations (including tailings/rock management, water management, emissions controls) and effectiveness of enforcement

Adequacy of public information and public participation requirements and effectiveness of enforcement

Adequacy of public health and safety standards and effectiveness of enforcement

Voluntary market incentives: presence and adoption of international standards and market-based mechanisms for EHS&S, cyanide and so on.

Table N.1.3.3

Table N.1.3.3 – Rating transition challenges in the sustainable energy sector: energy efficiency (EE), renewable energy (RE) and climate change (CC)

Components Criteria Indicators

Market structure [67%]

Market determined prices [50%]

Quality of energy pricing: end-user cost-reflective electricity tariffs

Level of enforcement of pricing policies: collection rates and electricity bills

Amount of wastage: transmission and distribution losses

Quality of tariff support mechanisms for renewables (tradeable green certificate schemes/feed-in tariffs/no support)

Presence of carbon taxes or emissions trading mechanisms

Outcomes [50%]

Level of energy intensity

Level of carbon intensity

Share of electricity generated from renewable sources

Market-supporting institutions and policies [33%]

Laws [25%]

Index on laws on the books related to EE and RE (such as those that support renewable technologies, compel minimum standards in various areas of energy use, provide guidance for sectoral targets in terms of energy savings and provide incentives and penalties for achieving desirable targets)

Stage of institutional development in implementing the Kyoto Protocol

Agencies [25%]

Existence of EE agencies or RE associations (autonomous/departments within government)

Index on employment, budget and project implementation capacity of agencies

Index on functions of agencies: adviser to government, policy drafting, policy implementation and funding for projects

Policies [25%]

Sustainable energy (SE) index: existence, comprehensiveness and specific targets of policies on SE

Renewable energy index: existence of specific sectoral regulations for RE (renewables obligation, licensing for green generators, priority access to the grid)

Climate change index: existence of policies (emissions targets and allocation plans)

Projects [25%]

Index on project implementation capacity in EE, RE and CC

Number of projects in EE, RE and CC

Expenditure data on projects in EE, RE and CC

Infrastructure

Table N.1.4.1

Table N.1.4.1 – Rating transition challenges in the railways sector

Components Criteria Indicators

Market structure [60%]

Restructuring through institutional separation and unbundling [33%]

Extent of corporatisation of railways

Extent of unbundling of different business lines (freight and passenger operations)

Extent of divestment of ancillary activities

Private sector participation [33%]

Number of new private operators

Extent of privatisation of freight operations and ancillary services

Competition and liberalisation of network access [17%]

Extent of liberalisation of network access according to non-discriminatory principles

Number of awards of licences to the private sector to operate services

Institutional development [17%]

Extent of introducing good corporate conducts (for example, business plans, IFRS, MIS and so on)

Extent of introducing good corporate governance standards

Extent of introducing best practice energy and/or energy efficiency accounting and management

Market-supporting institutions and policies [40%]

Tariff reform [50%]

Extent of freight tariff liberalisation

Extent of introduction of public service obligations (PSOs)

Extent of cost recovery tariffs

Extent of elimination of cross-subsidies

Development of an adequate legal framework [25%]

Presence of railways strategy and railways act

Development of the regulatory framework [25%]

Establishment of a railway regulator to regulate the network access according to non-discriminatory principles

Degree of independence of the regulator and level of accountability and transparency standards

Level of technical capacity of the regulator to set retail tariffs and regulate access to the track

Table N.1.4.2

Table N.1.4.2 – Rating transition challenges in the roads sector

Components Criteria Indicators

Market structure [60%]

Restructuring through institutional separation and unbundling [33%]

Degree of independence of road management entities

Extent of divestment of construction from road maintenance, engineering and design activities

Private sector participation [33%]

Extent of private sector companies in construction and maintenance (BOT-type concessions, management or service contracts, other types of PPPs)

Degree of decentralisation of local roads responsibility

Competition [17%]

Index on rules for open tendering of construction and maintenance contracts

Index on practices for open tendering of construction and maintenance contracts

Degree of privatisation of road construction and maintenance units

Institutional development [17%]

Extent of introducing good corporate conducts (for example, business plans, IFRS, MIS and so on)

Extent of introducing good corporate governance standards

Extent of introducing best practice energy and/or energy efficiency accounting and management

Market-supporting institutions and policies [40%]

Tariff reform [50%]

Level of road maintenance expenditures (that is, it should be sufficient to maintain the quality of state roads and motorways)

Introduction of road user charges based on vehicles and fuel taxes

Level of road user charges (that is, it should be sufficient to cover both operational and capital costs in full)

Comprehensiveness index of road user charges (extent of accordance with road use, extent of incorporation of negative externalities and so on)

Development of an adequate legal framework [25%]

Existence and quality of road act and other road-related legislation

Extent and quality of PPP legislation

Development of the regulatory framework [25%]

Extent to which the regulatory and policy-making functions are separate from the road administration functions

Degree of regulatory capacity on road safety, environmental aspects, pricing and competition for road construction and maintenance, and so on

Table N.1.4.3

Table N.1.4.3 – Rating transition challenges in the urban transport sector

Components Criteria Indicators

Market structure [50%]

Decentralisation and corporatisation [33%]

Extent of decentralisation (that is, transfer of control from the national to the municipal or regional level)

Degree of corporatisation of local utilities to ensure financial discipline and improve service levels, including in smaller municipalities

Commercialisation [33%]

Level of financial performance (no concern for financials/a few financially sound utilities in the country/solid financial performance is widespread)

Level of commercial investment financing (only through grants/selective access to commercial finance/widespread access to commercial finance)

Level of operational performance: progress in tackling cost control (labour restructuring, energy cost control, reduction of network losses), demand-side measures (metering and meter-based billing, e-ticketing), focus on quality of service

Private sector participation and competition [33%]

Extent of legal framework and institutional capacity for PPPs and competition

Extent and form of private sector participation

Market-supporting institutions and policies [50%]

Tariff reform [50%]

Degree of tariff levels and setting (cost recovery, tariff methodologies)

Existence of cross-subsidisation among consumers

Contractual, institutional and regulatory development [50%]

Quality of the contractual relations between municipalities and utility operators

Degree of regulatory authority capacity and risks of political interference in tariff setting

Table N.1.4.4

Table N.1.4.4 – Rating transition challenges in the water and wastewater sector

Components Criteria Indicators

Market structure [50%]

Decentralisation and corporatisation [33%]

Extent of decentralisation (that is, transfer of control from the national to the municipal or regional level)

Degree of corporatisation of local utilities to ensure financial discipline and improve service levels, including in smaller municipalities

Commercialisation [33%]

Level of financial performance (no concern for financials/a few financially sound utilities in the country/solid financial performance is widespread)

Level of commercial investment financing (only through grants/selective access to commercial finance/widespread access to commercial finance)

Level of operational performance: progress in tackling cost control (labour restructuring, energy cost control, reduction of network losses), demand-side measures (metering and meter-based billing, e-ticketing), focus on quality of service

Private sector participation and competition [33%]

Extent of legal framework and institutional capacity for PPPs and competition

Extent and form of private sector participation

Market-supporting institutions and policies [50%]

Tariff reform [50%]

Degree of tariff levels and setting (cost recovery, tariff methodologies)

 

Existence of cross-subsidisation among consumers

Contractual, institutional and regulatory development [50%]

Quality of the contractual relations between municipalities and utility operators

Degree of regulatory authority capacity and risks of political interference in tariff setting

Financial institutions

Table N.1.5.1

Table N.1.5.1 – Rating transition challenges in the banking sector

Components Criteria Indicators

Market structure [35%]

Degree of competition [43%]

Asset share of five largest banks (EBRD Banking Survey, 2014; Raiffeisen Research and Bankscope, latest available)

Net interest margin (EBRD Banking Survey, 2014; Bankscope and official statistical sources, latest available)

Overhead cost to assets (EBRD Banking Survey, 2014; Bankscope and official statistical sources, latest available)

Ownership [29%]

Asset share of private banks (EBRD Banking Survey, 2014; Raiffeisen Research, Bankscope and official statistical sources, latest available)

Asset share of foreign banks (subjective discount relative to home/host coordination) (EBRD Banking Survey, 2014; EBRD assessment, latest available)

Market penetration [14%]

Assets/GDP (EBRD Banking Survey, 2014; Raiffeisen Research, Bankscope and official statistical sources, latest available)

Resource mobilisation [14%]

Domestic credit to private sector/total banking system’s assets ( EBRD Banking Survey, 2014; national statistical sources, latest available)

Market-supporting institutions and policies [65%]

Development of adequate legal and regulatory framework [40%]

Existence of entry and exit restrictions (EBRD assessment, latest estimates)

Adequate liquidity requirements (EBRD assessment, latest estimates)

Other macroprudential measures (EBRD assessment, latest estimates)

Supervisory coordination (home/host country) (EBRD assessment, latest estimates)

Dynamic counter-cyclical provisioning (EBRD assessment, latest estimates)

Deposit insurance scheme with elements of private funding (EBRD assessment based on official sources, latest estimates)

Enforcement of regulatory measures [50%]

Compliance with Basel Core principles (EBRD assessment, latest estimates)

Unhedged foreign exchange lending to the private sector/total lending to the private sector (EBRD Banking Survey, 2014; national statistical sources, latest available)

Banking strength: total regulatory capital to risk-weighted assets (IMF and national statistical sources, latest available)

Sophistication of banking activities and instruments (EBRD assessment, latest estimates)

Private sector deposits to GDP (EBRD Banking Survey, 2014; IMF and national statistical sources, latest available)

Non-performing loans (EBRD Banking Survey, 2014; IMF and national statistical sources, latest available)

Corporate governance and business standards [10%]

Proportion of banks which have good corporate governance practices (EBRD assessment, latest estimates)

Table N.1.5.2

Table N.1.5.2 – Rating transition challenges in the insurance and other financial services sector

Components Criteria Indicators

Market structure [45%]

Market penetration [60%]

Insurance premia (% of GDP) (UBS, World Bank, EBRD, AXCO and national insurance associations, latest available)

Life insurance premia (% of GDP) (UBS, World Bank, EBRD, AXCO and national insurance associations, latest available)

Non-life insurance premia (% of GDP) (UBS, World Bank, EBRD, AXCO and national insurance associations, latest available)

Leasing portfolio (% of GDP) (Leaseurope and national statistical sources, latest available)

Availability of insurance products (AXCO and EBRD assessments, latest estimates)

Mortgage debt/GDP (EBRD Banking Survey, 2014)

Type of pension system (Pillar I, II, III) (AXCO)

Pension fund assets/GDP (AXCO, Renaissance Capital and other official sources, latest available)

Competition [10%]

Market share of top three insurance companies (AXCO and EBRD, latest available)

Private sector involvement [10%]

Share of private insurance funds in total insurance premia (UBS, EBRD and national authorities, latest available)

Development of skills [20%]

Skills in the insurance industry (UBS and EBRD assessments, latest estimates)

Market-supporting institutions and policies [55%]

Development of adequate legal and regulatory framework [88%]

Existence of private pension funds (ISSA)

Pillar II legislation OECD, World Bank, EBRD and national official sources, latest available)

Quality of insurance supervision assessment (UBS and EBRD, latest estimates)

Legislation leasing (IFC, EBRD and national authorities, latest available)

Business standards [12%]

IAIS member (IAIS)

Internationally accredited actuarial body (official sources)

Table N.1.5.3

Table N.1.5.3 – Rating transition challenges in the capital markets sector

Components Criteria Indicators

Market structure [60%]

Market penetration [50%]

Stock market capitalisation/GDP (World Bank, FESE, FEAS and national stock exchanges, 2013)

Number of listed companies (World Bank, FESE, FEAS and official statistical sources, 2013)

Securities (bonds and stocks) traded as % of GDP (World Bank, FEAS, ASEA and official statistical sources, 2013)

Market infrastructure and liquidity [50%]

Money Market Index (EBRD assessment, 2014)

Government Bond Index (EBRD assessment, 2014)

Corporate Bond Index (EBRD assessment, 2014)

Turnover ratio (World Bank, FEAS and FESE, 2014)

Market-supporting institutions and policies [40%]

Development of adequate legal and regulatory framework [100%]

Quality of securities market legislation (EBRD Legal Transition Survey, 2007; EBRD assessment, 2014)

Effectiveness of securities market legislation (EBRD Legal Transition Survey, 2007; EBRD assessment, 2014)

Table N.1.5.4

Table N.1.5.4 – Rating transition challenges in the private equity (PE) sector

Components Criteria Indicators

Market structure [50%]

Competition [35%]

Effective number of fund managers per thousand companies (Preqin, EMPEA and company websites, latest available)

Market penetration [65%]

Scope of fund type/strategy (EMPEA, Preqin, Zawya, S&P Capital IQ, Thomson Reuters, Mergermarket, EVCA and EBRD estimates, latest available)

Active PE capital as % of GDP (EMPEA, Preqin, Zawya, S&P Capital IQ, Thomson Reuters, World Bank, Mergermarket, EVCA, EBRD estimates, latest available)

PE capital available for investment as % of GDP (EMPEA, Preqin, Zawya, S&P Capital IQ, Thomson Reuters, World Bank, Mergermarket, EVCA and EBRD estimates, latest available)

Market-supporting institutions and policies [50%]

Development of adequate legal and regulatory framework [70%]

Barriers to institutional investor participation (EBRD, latest estimates)

Quality of securities market legislation (EBRD Legal Transition Survey, 2007)

Effectiveness of securities market legislation (EBRD Legal Transition Survey, 2007)

Corporate governance [30%]

Effective framework (EBRD Corporate Governance Legislation Assessment, 2007)

Rights and roles of shareholders (EBRD Corporate Governance Legislation Assessment, 2007)

Equitable treatment of shareholders (EBRD Corporate Governance Legislation Assessment, 2007)

Responsibilities of board (EBRD Corporate Governance Legislation Assessment, 2007)

Disclosure and transparency (EBRD Corporate Governance Legislation Assessment, 2007)

Table N.1.5.5

Table N.1.5.5 – Rating transition challenges in the MSME finance sector

Components Criteria Indicators

Market structure [50%]

Non-banking financing [10%]

Leasing (respective ATC score)

Private equity (respective ATC score)

Capital markets (respective ATC score)

Banking financing [90%]

Competition

Competition in banking (respective ATC score)

Interest margin between bank lending to SMEs and large corporates (short-term and long-term) (EBRD assessment, 2014)

Access to finance

Share of SME lending to total lending weighted by distance of domestic credit to GDP to that in EU area (EBRD assessment, 2014)

Outreach of commercial banks (branches per 100,000 adults) (IMF, 2012)

Skills

Existence of specialised SME department in banks (EBRD assessment, 2014)

Extent of use of SME lending methodologies (EBRD assessment, 2014)

Presence of trained loan officers in SME lending (EBRD assessment, 2014)

Market-supporting institutions and policies [50%]

Development of adequate legal framework [100%]

Ability to offer and take security over immovable property (cadastre) (EBRD assessment, 2014)

Credit information services (EBRD assessment, 2014)

Registration system for movable assets: ability to offer and take non-possessory security over movable property (EBRD assessment, 2014)

Collateral and provisioning regulatory requirements (EBRD assessment, 2014)

Enforcing secured creditor rights (EBRD assessment, 2014)

Inclusion

Table N.1.6.1

Table N.1.6.1 – Inclusion gaps for gender

Components Indicators Sources

Legal and social regulations

Addressing violence against women

The Economist Intelligence Unit – Women’s Economic Opportunity (EIU-WEO), 2012

 

Property ownership rights

 
 

Inheritance laws in favour of male heirs

OECD Social Institutions and Gender Index, 2009

Access to health services

Sex at birth: f/m ratio

World Bank WDI, 2013

 

Maternal mortality ratio (maternal deaths per 100,000 live births)

 
 

Contraceptive prevalence (percentage of women aged 15-49)

 

Education and training

Literacy rate: f/m ratio

UN Social Indicators, latest available

 

Primary school completion rate: f/m ratio

World Bank Education Statistics, latest available

 

Gender parity index (GPI) for net enrolment rate in secondary education

 
 

Percentage of female graduates in tertiary education

 
 

GPI for gross enrolment in tertiary education

 

Labour policy

Equal pay policy

EIU-WEO, 2012

 

Non-discrimination policy

 
 

Policy on maternity and paternity leave and its provision

 
 

Policy on legal restrictions on job types for women

 
 

Differential retirement age policy

 
 

CEDAW ratification

 

Assessment of labour practices

Equal pay practice

EIU-WEO, 2012

 

Non-discrimination practice

 
 

Access to child care

 
 

Female top manager

BEEPS V, 2012

 

Gender pay gap

UNECE, latest available

Employment and firm ownership

Female ownership (equal or more than 50 per cent)

BEEPS V, 2012

 

Share of women in non-agricultural employment

World Bank WDI, latest available

 

Labour force participation rate: f/m ratio (age 15+)

World Bank Gender Indicators, latest available

 

Unemployment with tertiary education: f/m ratio

 
 

Unemployment rate: f/m ratio

 

Access to finance

Account at a formal financial institution: f/m ratio (age 15+)

Global Financial Inclusion (Global Findex) Database, 2011 (updated 2014 version)

 

Account used for business purposes: f/m ratio (age 15+)

 
 

Credit card: f/m ratio (age 15+)

 
 

Debit card: f/m ratio (age 15+)

 
 

Mobile phone used to receive money: f/m ratio (age 15+)

 
 

Mobile phone used to send money: f/m ratio (age 15+)

 
 

Saved at a financial institution in the past year: f/m ratio (age 15+)

 
 

Loans rejected for firms with female versus male top management

BEEPS V, 2012

 

Women’s access to finance/seen as an obstacle or not/for firms with female versus male top management

 
 

Women’s access to finance programmes

EIU-WEO, 2012

Table N.1.6.2

Table N.1.6.2 – Inclusion gaps for youth

Components Indicators Sources

Labour market structure

Hiring and firing flexibility

Global Competitiveness Index, WEF, 2013-14

Redundancy costs

 

Wage-setting flexibility

 

Opportunities for youth

Difference in unemployment rate from youth (age 15-24) to adult (age 25-65)

World Bank and ILO, 2013 or latest available

Difference between youth not in education, employment or training (NEET)

Eurostat, 2013; Silatech, 2009

Quantity of education

Average years of education for people aged 25-29

Barro-Lee, 2010 (updated 2014 version); Human Development Index, 2012

Percentage of youth (age 15-24) with no schooling

 

Quality of education

Test performance relative to highest possible score

PISA, 2012; supplemented by TIMSS, 2011

Schools’ accountability (achievement data tracked over time )

 

Teacher/instruction material shortage

 

Employers’ perception of the quality of the education system

WEF, 2013-14

Households’ perception of the quality of the education system

LITS, 2010

 

Universities in top 500 (cumulatively)

ARWU, 2003-14

Financial inclusion

Difference between youth (age 15-24) with bank account compared with adults (age 25+)

Global Findex Database, 2011 (updated 2014 version)

Difference between youth (age 15-24) with debit card compared with adults (age 25+)

 

Difference between youth (age 15-24) with bank account used for business purposes compared with adults (age 25+)

 

Table N.1.6.3

Table N.1.6.3 – Inclusion gaps for regions

Components Indicators Sources

Institutions

Corruption in administrative, health and education systems

LITS, 2010

Quality of administrative, health and education systems

 

Trust in local government

 
 

Satisfaction with the local government

 

Access to services

Access to water

LITS, 2010

Access to heating

 
 

Perception of the quality of the health care system

 

Labour markets

Unemployment

LITS, 2010

Formal or informal job?

 

Education

Years of education

Gennaioli et al. data set, Quarterly Journal of Economics, 2013

 

Households’ perception of the quality of the education system

LITS, 2010