Trends in Private Investment in Developing Countries And Perceived ...

Discussion Paper No. 37

Trends in Private Investment in Developing Countries And Perceived Obstacles to Doing Business

Statistics for 1970-1997

Guy P. Pfeffermann Gregory V. Kisunko Mariusz A. Sumlinski

10th Edition

Contents

Foreword ............................................................................................................................. v Abstract .............................................................................................................................vii Chapter I - Private and Public Investment Trends .............................................................. 1 Chapter II - Perceived Obstacles to Doing Business: Worldwide Survey Results ............. 5 The survey.................................................................................................................. 5 Number of obstacles................................................................................................... 6 The nature of obstacles............................................................................................. 12 Country-specific responses ...................................................................................... 13 The dog that didn’t bark............................................................................................ 15 Obstacles and levels of private investment—econometric results ........................... 20 Appendix 1 - Methods and Sources .................................................................................. 25 Appendix 2 - Statistics ...................................................................................................... 27 Sub-Saharan Africa .................................................................................................. 29 Latin America and the Caribbean............................................................................. 32 Middle East and North Africa .................................................................................. 37 Transition Countries................................................................................................. 39 East Asia................................................................................................................... 41 South Asia ................................................................................................................ 45 Table - Investment as a share of GDP............................................................................... 47

iii

Foreword This is the tenth annual edition of "Trends in Private Investment in Developing Countries". In order to mark the anniversary, the discussion paper includes figures for each of the countries for which data are available as well as the first country-specific results of a worldwide survey of obstacles to doing business perceived by executives in 74 countries (including several industrial countries for comparison). The rationale for this publication is that standard UN national accounts do not break investment down between public and private; rather, they distinguish between central government and all other investment, and the latter includes investments by state-owned enterprises. The IFC discussion papers pull together information provided by national organizations, World Bank, and IMF economists in order to estimate levels of private investment.

Guy Pfeffermann Director, Economics Department & Economic Adviser of the Corporation

v

Abstract The first part of the discussion paper documents trends in private and public fixed investment. On average for the 47 countries covered (including, for the first time in this series, China), 1997 was a record year for private investment, which rose from a low of 11.2 percent of GDP in 1985 to 14.3 percent in 1997, the last year for which data exist. Public investment declined to 7.2 percent of GDP, its lowest level since 1975. The largest 1997 increases in private investment were in two transition countries where levels remain low (Bulgaria and Romania) followed by Panama, Côte d'Ivoire, Bolivia, Argentina and China. Ratios of private investment to GDP were highest in Papua New Guinea, Malaysia, the Republic of Korea, Thailand, and Indonesia, before the full effects of the Asian crisis were felt. The second part presents country-specific results of a 1996/97 worldwide survey of business executives. The discussion focuses on obstacles to doing business in each of the 74 countries covered (including industrial economies) and their relationship to levels of private investment. A few factors emerge as being of particular importance to private investment decisions: the real exchange rate, the rule of law, predictability of judiciary systems, and the extent to which financing is available to enterprises.

vii

Chapter I Private and Public Investment Trends In 1997, the latest year for which the data exist, private investment continued to rise and public investment to decline on average in line with recent trends in the 47 countries covered this year (see Figure 1). The data do not reflect the worsened economic conditions of many developing countries in the wake of the Asian crisis. "Investment" refers to gross domestic fixed capital and encompasses national as well as foreign direct investment.

Fig. 1. Trends in Private and Public Investment (percent of GDP)

% of GDP

Private investment

Public investment

16 14 12 10 8 6 4 2 0 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997

Overall trends of the past few years mirror those in the four major regions shown in Figures 2 to 5. In all cases except most recently in East Asia trends in private and public investment clearly diverge. The drop in public investment is particularly pronounced in Africa.

1

Fig. 2. Latin America: Private and Public Investment (percent of GDP)

% of GDP

Private investment

Public Investment

16 14 12 10 8 6 4 2 0 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997

Fig. 3. Sub-Saharan Africa: Private and Public Investment (percent of GDP)

% of GDP

Private investment

Public Investment

16 14 12 10 8 6 4 2 0 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997

2

Fig. 4. South Asia: Private and Public Investment (percent of GDP) Private investment

Public Investment

% of GDP

14 12 10 8 6 4 2 0 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997

Fig. 5. East Asia: Private and Public Investment (percent of GDP) Private investment

Public Investment

30 % of GDP

25 20 15 10 5 0 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997

Individual country trends as well as the statistics are shown in Appendix 2.

3

The following table shows 1997 private investment ratios in descending order. Table 1. Private Investment in 1997 (percent of GDP) Papua New Guinea Malaysia Korea Rep. of * Thailand Indonesia Panama Peru Philippines Dominican Republic Turkey Chile Mauritius Nicaragua Argentina India Mexico China Brazil Paraguay Costa Rica Iran Ecuador Namibia * 1996

31.5 30.9 27.1 24.1 22.1 22.0 21.0 20.9 20.5 20.5 20.4 20.0 19.8 18.4 16.1 16.0 15.8 15.8 15.4 15.0 13.8 13.3 12.9

Belize South Africa Tunisia El Salvador Egypt Kenya Côte d'Ivoire Guatemala Benin Morocco Bangladesh Poland Bolivia Colombia Guinea-Bissau Pakistan Mauritania Uruguay Venezuela Romania Madagascar Malawi Bulgaria

12.8 12.7 12.4 12.1 12.1 11.3 11.2 11.1 11.0 11.0 10.8 10.3 10.3 10.0 9.2 8.9 8.6 8.6 7.4 6.2 5.5 5.1 4.8

Table 2 shows changes in ratios of private investment to GDP between 1990 and 1997. Table 2. Changes in Private Investment Ratios (percent) Bulgaria Romania Panama Côte d'Ivoire Bolivia Argentina China Benin Nicaragua Peru Bangladesh Iran Papua New Guinea Venezuela Malaysia Turkey Poland Mexico India Indonesia Dominican Republic Belize Uruguay

443 344 196 128 108 95 92 83 77 72 68 66 57 50 48 31 21 17 16 15 12 12 12

Chile Philippines Guinea-Bissau El Salvador Guatemala Ecuador Kenya Namibia Mauritius Tunisia Pakistan South Africa Colombia Mauritania Korea Rep. of Brazil Paraguay Costa Rica Madagascar Morocco Egypt Thailand Malawi

4

11 11 9 9 8 8 3 2 1 1 0 -2 -2 -7 -9 -10 -15 -15 -21 -25 -28 -30 -56

Chapter II Perceived Obstacles to Doing Business: Worldwide Survey Results The survey Why is investment, especially private investment, so low in some developing countries and so high in others? Levels of investment and how efficiently it is being used are affected by many factors, most of which can be grouped into (a) macroeconomic policies; (b) microeconomic incentives; and (c) institutional factors. An earlier IFC Discussion Paper1 as well as other publications2 draw on the views expressed by CEOs or managers of businesses in groups of developing and, for purposes of benchmarking, mature industrialized economies. The present paper uses the same data, which were collected under the aegis of the World Bank’s 1997 World Development Report3 as well as additional ones gathered by researchers at the University of Basel (for Brazil, Hong Kong, China, Korea, Singapore, and Thailand). The survey covers 3,951 firms in 74 countries, mostly in manufacturing and services (about half each) plus some agricultural firms.4 The survey covers large and small firms with and without foreign participation. Interviews were conducted in the countries where firms operate. This paper addresses the question: which obstacles to doing business are considered to be most serious by private sector managers in particular countries? The answer might help to identify policy domains (macroeconomic, institutional) most relevant in each country and levels of national authority (central, local) most appropriate to reduce obstacles to doing business. Managers were asked to judge on a six points scale how problematic various obstacles are for doing business. The six points range from "no obstacle" and "moderate obstacles," to "strong" and "very strong" obstacles.5 The areas listed are: •

Regulations for starting business/new operations

1

How Businesses See Government: Responses from Private Sector Surveys in 69 Countries. Aymo Brunetti, Gregory Kisunko, and Beatrice Weder, IFC Discussion Paper No. 33, 1998. 2 Institutions in transition: reliability of rules and economic performance in former socialist countries. Aymo Brunetti, Gregory Kisunko, Beatrice Weder, Policy Research Working Paper No. 1809, 1997; Credibility of rules and economic growth: evidence from a worldwide survey of the private sector. Aymo Brunetti, Gregory Kisunko, Beatrice Weder, Policy Research Working Paper No. 1760, 1997; Institutional obstacles to doing business: Region-by-region results from a worldwide survey of the private sector. Aymo Brunetti, Gregory Kisunko and Beatrice Weder, Policy Research Working Paper, No. 1759, 1997. 3 The State in a Changing World, Oxford University Press, 1997. 4 The average number of respondents per country is 54 (ranging from 13 in Chad to 124 in Togo), the median 49 and the standard deviation 29. 5 Each respondent was limited to checking no more than five "very strong" obstacles.

5

• • • • • • • • • • • • • • •

Price controls Foreign trade regulations (exports, imports) Financing Labor regulations Foreign currency regulations Tax regulations and/or high taxes Infrastructure Policy instability Safety or environmental regulations Inflation General uncertainty regarding costs of regulations Crime and theft Corruption Terrorism As well as an open-ended category: "Other."

The discussion also draws on responses to a separate question: "Unpredictability of the judiciary presents a major problem for my business operations" for which the six points scale ranges from "fully agree" to "strongly disagree." In order to integrate judiciary unpredictability issues with the other obstacles listed above, we equate "fully agree" to "very strong obstacles" and "agree in most cases" to "strong obstacles." Throughout this paper, "obstacles" are drawn from the list above (including unpredictability of the judiciary). Number of obstacles The bottom line on Table 3 shows the number of areas which 50 percent or more of respondents considered to be serious ("strong" and "very strong" responses). It is important to bear in mind that the table reflects judgements on the part of business people; the apparent absence of serious problems may mean that the items listed in the questionnaire do not hinder businesses, and/or that business people have learned to get around them. Furthermore, comparisons between countries are not straightforward because it is quite possible that the "propensity to complain" varies from country to country.

6

ALBANIA

ARMENIA

AUSTRIA

AZERBAIJAN

BELARUS

BENIN

BOLIVIA

BRAZIL

BULGARIA

CAMEROON

CANADA

CHAD

COLOMBIA

CONGO, Rep. of

COSTA RICA

CÔTE D'IVOIRE

Table 3. Reported obstacles to doing business—total number and ranking

2 ..

.. ..

.. 3

.. ..

4 ..

3 ..

1 ..

.. ..

10 ..

.. ..

.. ..

1 ..

4 ..

4 ..

.. ..

3 ..

.. ..

.. ..

.. ..

.. ..

.. 6

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. 5

.. ..

.. ..

.. .. .. .. 1 .. .. .. ..

.. .. .. 1 .. .. .. .. ..

.. 1 .. 2 .. .. 3 .. ..

.. .. .. 1 .. 3 .. .. ..

.. .. 2 1 .. 2 .. 6 5

.. .. .. 2 .. .. .. 4 ..

2 .. .. 4 2 .. .. .. ..

.. .. .. .. .. .. .. .. ..

8 .. 4 2 9 4 .. 1 3

5 .. .. 3 1 .. .. .. ..

.. .. .. 1 .. .. .. .. ..

.. .. .. 2 2 .. .. .. ..

7 .. .. 1 8 6 .. .. ..

5 .. .. 1 3 .. .. .. ..

2 .. .. 1 .. .. .. .. ..

4 .. .. 1 .. .. .. .. ..

4 3 ..

.. .. ..

.. .. ..

4 2 ..

.. .. ..

.. 1 ..

.. 5 ..

.. .. ..

4 7 ..

1 4 ..

.. .. ..

.. 2 ..

1 3 4

.. 2 ..

.. .. ..

4 2 ..

Other

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

Total number of serious obstacles per country

4

1

4

4

7

4

5

0

10

5

1

4

8

6

2

5

Obstacles

Unpredictability of the judiciary Regulations for starting business/new operations Price controls Regulations on foreign trade (exports, imports) Financing Labor regulations Foreign currency regulations Tax regulations and/or high taxes Inadequate supply of infrastructure Policy instability Safety or environmental regulations Inflation General uncertainty on costs of regulations Crime and theft Corruption Terrorism

(continued)

7

CZECH REP.

ECUADOR

ESTONIA

FIJI

FRANCE

GEORGIA

GERMANY

GHANA

GUINEA

GUINEA-BISSAU

HONG KONG (China)

HUNGARY

INDIA

IRELAND

ITALY

JAMAICA

Table 3 (continued)

.. ..

1 ..

.. ..

4 ..

.. ..

.. ..

.. ..

.. ..

1 ..

2 ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. .. .. 1 .. .. .. .. ..

2 4 .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. 4 2 .. .. .. 1 4

.. 1 .. 2 .. .. .. .. ..

.. .. .. 1 .. .. .. .. ..

.. .. .. 1 .. .. .. .. ..

2 .. .. .. .. .. .. 1 ..

.. .. .. 4 3 .. .. .. ..

.. .. .. .. .. .. .. 1 ..

.. .. .. .. .. .. .. .. ..

.. .. .. 1 .. .. .. 2 ..

.. .. .. 2 1 .. .. .. ..

.. .. .. 1 .. .. .. .. ..

.. 2 .. 1 3 .. .. .. ..

.. .. .. .. 3 .. .. 2 ..

.. 2 ..

.. 3 ..

.. .. ..

3 .. ..

.. .. ..

.. 2 ..

.. .. ..

.. .. ..

.. 2 ..

.. .. ..

.. .. ..

.. .. ..

.. .. ..

.. .. ..

.. .. ..

1 4 ..

Other

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..


2

4

0

6

2

2

1

2

4

2

0

2

2

1

3

4

Obstacles


8

JORDAN

KAZAKHSTAN

KENYA

KOREA, Rep. of

KYRGYZ REP.

LATVIA

LITHUANIA

MACEDONIA

MADAGASCAR

MALAWI

MALAYSIA

MALI

MAURITIUS

MEXICO

MOLDOVA

MOROCCO

.. ..

3 ..

.. ..

.. ..

2 ..

.. ..

2 ..

.. ..

1 ..

.. ..

.. ..

1 ..

.. ..

2 ..

4 ..

1 ..

.. ..

.. 7

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. .. .. 1 .. .. .. .. ..

.. .. .. 1 .. 4 .. .. 5

5 .. .. 4 1 .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. 1 .. .. .. .. ..

2 .. .. 1 .. .. .. .. 4

.. .. .. 1 .. .. .. .. ..

2 .. .. 1 .. .. .. .. ..

8 .. .. 1 5 4 .. 6 ..

.. .. .. .. 1 .. .. 3 ..

.. .. .. .. .. .. .. .. ..

.. .. .. 2 .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

4 .. .. 3 .. .. .. .. ..

5 .. .. 1 .. .. .. .. ..

.. .. .. .. 3 .. .. .. ..

.. .. ..

6 2 ..

2 2 ..

.. .. ..

4 3 ..

.. 3 ..

.. 3 ..

.. .. ..

7 3 ..

2 .. ..

.. .. ..

.. .. ..

.. .. ..

5 1 ..

3 2 ..

.. 2 ..

Other

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..


1

7

5

0

4

4

3

2

8

3

0

2

0

5

5

3

Obstacles


(continued)

9

MOZAMBIQUE

NIGERIA

PARAGUAY

PERU

POLAND

PORTUGAL

RUSSIA

SENEGAL

SINGAPORE

SLOVAKIA

SOUTH AFRICA

SPAIN

SWITZERLAND

TANZANIA

THAILAND

TOGO

Table 3 (continued)

.. ..

.. ..

1 ..

1 ..

3 ..

1 ..

3 ..

1 ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

3 ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

4 .. .. 5 .. .. .. 3 ..

.. .. .. .. 3 5 .. 1 7

3 .. .. .. .. .. .. .. ..

.. .. .. 2 .. .. .. .. ..

5 .. .. 1 .. 3 .. 5 2

.. .. .. .. .. .. .. .. ..

.. .. .. 1 .. 2 .. .. ..

.. .. .. 2 .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. 1 .. 3 .. .. ..

.. 3 5 2 .. .. .. .. ..

.. 1 .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

3 .. .. 1 2 .. .. 5 ..

.. .. .. 1 .. .. .. .. ..

.. .. .. 1 .. .. .. 2 ..

1 2 ..

3 1 5

3 2 ..

.. .. ..

.. .. ..

.. .. ..

4 .. ..

.. .. ..

.. .. ..

.. 2 ..

1 4 ..

.. .. ..

.. .. ..

.. 4 ..

.. .. ..

.. .. ..

Other

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..


5

7

4

2

6

1

4

2

0

3

5

1

0

5

1

3

Obstacles


10

TURKEY

UGANDA

UNITED KINGDOM

UKRAINE

UNITED STATES

UZBEKISTAN

VENEZUELA

WEST BANK & GAZA STRIP

ZAMBIA

ZIMBABWE

3 ..

.. ..

.. ..

.. ..

.. ..

2 ..

1 ..

.. ..

.. ..

.. ..

31 1

.. ..

.. ..

.. ..

.. 5

.. ..

.. ..

.. ..

.. 2

.. ..

.. ..

0 5

0 7

.. .. .. .. .. 1 .. 2 ..

3 .. .. 1 .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

3 .. .. 1 .. 2 .. .. ..

.. .. .. 1 .. .. 2 .. ..

.. .. 4 1 .. .. .. 3 5

.. 5 .. 6 .. 4 .. 2 ..

2 .. .. 4 1 .. .. .. ..

.. .. .. 4 5 .. .. 1 ..

.. .. .. 1 4 .. .. 2 ..

22 7 5 53 20 13 2 20 8

30 9 7 72 27 18 3 27 11

.. .. ..

.. 2 ..

.. .. ..

4 .. ..

.. .. ..

.. 6 ..

7 3 ..

.. .. ..

2 2 ..

.. 3 ..

23 35 2

31 47 3

Other

..

..

..

..

..

..

..

..

..

..

0

0


3

3

0

5

2

6

7

4

5

4

Obstacles


Number of countries where 50% cut-off was exceeded

Frequency of occurrence (%) 42 1

The number of problematic areas ranges from zero (in 9 countries, 7 developing plus Switzerland and the UK)6 to 7 and more (in seven countries). The surveys were carried out in 1996/97; conditions may have changed since then. An updated survey of business conditions is being planned for 1999, which may make it possible to identify such changes. The average number of serious obstacles to doing business is 3.7 in the developing and transition countries and 1.5 in advanced industrial countries. Table 4 shows the sensitivity of results to using a more restrictive definition of what constitutes a serious problem area, lowering the bar from 50 percent or more of respondents to, respectively, 60, 70 and 75 percent. The average number of serious obstacles changes as follows: 6

Korean, Malaysian, and Thai managers did not perceive "strong" obstacles to doing business in 1997; this may reflect the fact that the survey was undertaken prior to the worst of the East Asian crisis, but may also reflect long-term fundamental strengths.

11

Table 4. Average number of serious obstacles to doing business per country

Number of serious obstacles per country Percentage share of respondents who view problems as serious 50% or more 60% or more 70% or more 75% or more Average for developing and transition 3.7 2.2 1.2 0.7 countries (63 countries) Average for advanced developed countries (11 countries)

1.5

0.5

0.3

0.3

Ratio of averages for developing/ transition and advanced developed countries

2.7

4.4

4

2.3

The nature of obstacles The last columns of Table 3 show obstacles to doing business in order of frequency in the countries where firms were surveyed. Using the 50 percent cut-off point, the table suggests that taxes are by far the most prevalent perceived obstacle to doing business (72 percent of the countries). The finding is ambivalent, however, because the question combines tax regulations and "high taxes." More meaningful is the frequency of corruption and the unpredictability of the judiciary, which are perceived in 47 and 42 percent respectively of the 74 countries to be a serious obstacle to doing business. Next come, neck-and-neck, crime and theft (31 percent of countries), lack of financing (30 percent), inadequate infrastructure (27 percent) and inflation (27 percent). In none of the countries were "other" obstacles to doing business considered to be serious, suggesting that the list of possible problem areas was quite comprehensive. Table 5 compares the perceived seriousness of obstacles in developed and developing countries. Labor regulations and safety and environment regulations obstacles are considered to be serious obstacles to doing business in a number of developed countries, but do not loom large in developing economies. Taxes, as noted, are the most prevalent perceived obstacle for all countries (in 90 percent of transition economies and in 64 and 65 percent, respectively, of developed and other developing countries). Inflation is considered to be a serious obstacle in 35 percent of non-transition developing countries and 25 percent of transition economies. Infrastructure is considered a problem in 9 percent of developed, 10 percent of transition and 40 percent of other surveyed developing economies. Obstacles related to political instability and general uncertainty in the cost of regulations are much more prevalent in transition then in other developing economies (40 versus 12, and 30 versus 5 percent respectively). Lastly, regulations related to foreign economic activities are more of an obstacle in transition countries.

12

Table 5. Obstacles to doing business considered serious by 50% or more of respondents (percent of countries) Obstacles

Unpredictability of the judiciary Regulations for starting business/new operations Price controls Regulations on foreign trade (exports, imports) Financing Labor regulations Foreign currency regulations Tax regulations and/or high taxes Inadequate supply of infrastructure Policy instability Safety or environmental regulations Inflation General uncertainty on costs of regulations Crime and theft Corruption Terrorism Other

All Developed All Transition countries countries developing economies countries 42 9 48 50 1 9 0 0

Other developing countries 47 0

0 7

0 0

0 8

0 15

0 5

30 9 7 72 27

0 36 0 64 9

35 5 8 73 30

30 0 15 90 10

37 7 5 65 40

18 3

0 18

21 0

40 0

12 0

27 11

0 0

32 13

25 30

35 5

31 47 3

0 0 0

37 56 3

40 60 0

35 53 5

0

0

0

0

0

Country-specific responses Table 3 ranks the most serious obstacles identified by business people in each country surveyed. It shows, the relative importance attached to different obstacles (cases where 50 percent or more of respondents judged a particular obstacle to be "strong" or "very strong"). So for example a number 1 means that a particular area was mentioned by the largest proportion of respondents as being a serious obstacle to doing business, a 2 the second-most frequent mention and so forth. The ranking of country-specific obstacles to doing business might help governments and aid agencies to prioritize private sector development strategies, especially in combination with Table 6, which delineates primary policy domains on which the lessening of different obstacles depends.

13

Table 6. Policy domains

Central Government

Fiscal (local authorities) n

Institutional (central authorities) Crime and theft

n

Tax regulations and/or high taxes

n

n

Crime and theft

n

Inflation

n

Corruption

n

Corruption

n

Policy instability

n

Unpredictability of the judiciary

n

Inadequate supply of infrastructure General uncertainty on costs of regulations

Tax regulations and/or high taxes

Institutional (local authorities)

n

Financing

n

Inadequate supply of infrastructure

n

n

Foreign currency regulations

n

Financing

n

n

Labor regulations

n

n

General uncertainty on costs of regulations

n

n

Inadequate supply of infrastructure

n


n

Regulations of foreign trade (exports, imports)

n

Safety or environmental regulations

n

Price controls

General uncertainty on costs of regulations Terrorism

Terrorism

n


n

Safety or environmental regulations

Some of the obstacles pertain to several policy domains; the balance of responsibilities for lessening obstacles between central government and local authorities depends largely on the degree of decentralization existing in specific countries. The main point of Table 5 is that the removal of obstacles to doing business is a shared responsibility which requires government commitment at many different levels. Civil society can of course play an important role in helping to bring about policy changes.

14

The dog that didn’t bark It is also of interest to map out institutional and policy areas which are not considered to be obstacles to doing business. Table 7 (which is similar in layout to Table 3) flags areas which 50 percent or more of respondents in each country judged to be "no obstacle" to doing business (checking 1 or 2 on a scale of 6).

ALBANIA

ARMENIA

AUSTRIA

AZERBAIJAN

BELARUS

BENIN

BOLIVIA

BRAZIL

BULGARIA

CAMEROON

CANADA

CHAD

COLOMBIA

CONGO, Rep. of

COSTA RICA

CÔTE D'IVOIRE

Table 7. Reported problem-free areas—total number and ranking

.. ..

.. ..

4 ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

7 ..

.. ..

.. ..

.. ..

2 ..

.. ..

3 ..

.. ..

2 4

.. ..

.. ..

.. ..

1 ..

1 ..

.. ..

.. ..

2 9

.. ..

1 ..

.. ..

.. ..

.. ..

.. 1 .. .. .. 4 2 .. ..

.. .. .. .. .. .. .. .. ..

.. .. 4 .. .. 3 .. 7 ..

.. .. .. .. .. .. 1 .. ..

.. .. .. .. .. .. 1 .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. 3 ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. 5 .. 6 4 .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. 1 .. .. ..

.. .. ..

.. .. ..

7 7 1

.. .. ..

.. .. ..

.. .. ..

.. .. 1

.. .. 2

.. .. ..

.. .. ..

8 3 1

.. .. ..

.. .. ..

.. .. 1

.. .. 1

.. .. 2

Other

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

Number of unproblematic areas

4

0

9

1

1

0

2

3

0

0

9

0

1

1

2

2

Areas in consideration


(continued)

15

CZECH REP.

ECUADOR

ESTONIA

FIJI

FRANCE

GEORGIA

GERMANY

GHANA

GUINEA

GUINEA-BISSAU

HONG KONG (China)

HUNGARY

INDIA

IRELAND

ITALY

JAMAICA

Table 7 (continued)

.. ..

.. ..

.. 4

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

12 3

.. ..

.. ..

.. ..

.. ..

.. ..

2 ..

.. ..

1 ..

.. ..

3 ..

1 ..

3 ..

2 ..

1 ..

.. ..

8 5

.. ..

1 ..

4 6

2 ..

1 ..

.. 3 1 .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. 3 .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. 1 .. 1 ..

.. .. .. .. .. .. .. .. ..

.. .. 5 .. 4 1 .. 5 ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

4 13 1 5 10 9 .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. 7 .. .. 4 .. 2 ..

.. .. .. .. .. .. .. .. ..

.. .. 2 .. .. .. .. .. ..

.. .. ..

.. .. ..

.. .. 2

.. .. 1

.. .. ..

.. .. ..

5 .. 1

.. .. 1

.. .. 1

.. .. 1

11 7 2

.. .. ..

.. .. 2

7 3 1

.. .. 1

.. .. 3

Other

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..


3

0

4

1

3

1

7

2

2

1

13

0

2

8

2

3



)

16

JORDAN

KAZAKHSTAN

KENYA

KOREA, Rep. of

KYRGYZ REP.

LATVIA

LITHUANIA

MACEDONIA

MADAGASCAR

MALAWI

MALAYSIA

MALI

MAURITIUS

MEXICO

MOLDOVA

MOROCCO

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

3 ..

.. ..

.. ..

.. ..

1 ..

.. ..

.. ..

2 3

3 ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. 1 .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. 1 .. ..

.. .. 2 .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. 2 ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. 3 .. ..

4 .. 6 .. .. 2 .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. 2 .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. 2 .. .. ..

2 .. 1

.. .. ..

.. .. 2

.. .. 1

.. .. ..

.. .. 1

.. .. 2

.. .. 1

.. .. ..

.. .. 1

4 .. 1

.. .. 1

.. .. 1

.. .. ..

.. .. ..

2 .. 1

Other

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..


2

0

3

1

1

2

2

2

0

4

6

1

2

0

0

3



(continued)

17

MOZAMBIQUE

NIGERIA

PARAGUAY

PERU

POLAND

PORTUGAL

RUSSIA

SENEGAL

SINGAPORE

SLOVAKIA

SOUTH AFRICA

SPAIN

SWITZERLAND

TANZANIA

THAILAND

TOGO

Table 7 (continued)

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

6 10

.. ..

.. ..

.. ..

6 ..

.. ..

.. ..

.. ..

.. ..

.. ..

1 ..

1 ..

2 ..

.. ..

.. ..

.. ..

6 ..

.. ..

.. ..

.. ..

7 10

2 ..

.. ..

.. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. 2 .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. 2 ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. 2 .. .. ..

.. .. 9 .. 6 2 5 .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

12 .. 8 .. 4 2 .. 5 11

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. 1

.. .. ..

.. .. ..

.. .. ..

.. .. 1

.. .. 1

.. .. ..

.. .. 1

1 2 2

.. .. ..

.. .. ..

.. .. ..

9 3 1

.. .. 1

.. .. ..

.. .. ..

Other

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..


1

0

1

2

2

2

0

2

10

0

0

0

12

2

0

0



18

TURKEY

UGANDA

UNITED KINGDOM

UKRAINE

UNITED STATES

UZBEKISTAN

VENEZUELA

WEST BANK & GAZA

ZAMBIA

ZIMBABWE

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

.. ..

6 3

8 4

1 ..

.. ..

5 5

.. ..

.. ..

.. ..

.. ..

5 ..

1 ..

1 ..

33 7

45 9

.. .. .. .. .. .. .. .. ..

.. .. 1 .. .. .. .. .. ..

.. .. 2 .. 7 .. .. 1 2

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

.. .. 1 .. .. .. 4 .. ..

.. .. 1 .. .. .. .. .. ..

.. .. .. .. .. .. .. .. ..

3 3 19 1 6 13 7 9 2

4 4 26 1 8 18 9 12 3

.. .. ..

.. .. 2

.. 2 ..

.. .. 1

.. .. 1

.. .. 1

.. .. ..

2 .. 2

.. .. 3

.. .. 2

11 7 43

15 9 58

Other

..

..

..

..

..

..

..

..

..

..

0

0


1

2

7

1

1

1

0

5

3

2



Number of countries where 50% cut-off was exceeded

Frequency of occurrence, (%)

Table 8 aggregates countries by groups, as in Table 5. It suggests that in 58 percent of the surveyed countries (73 percent of developed, 65 percent of developing and 35 percent of transition countries) terrorism is not perceived to be a serious problem by business people, nor are price controls, which are not considered to be a serious problem in 45 percent of the countries (73 percent of developed, 44 percent of developing and 30 percent of transition countries, respectively).

19

Table 8. Reported problem-free areas (percent of countries)

Areas in consideration Unpredictability of the judiciary Regulations for starting business/new operations Price controls Regulations on foreign trade (exports, imports) Financing Labor regulations Foreign currency regulations Tax regulations and/or high taxes Inadequate supply of infrastructure Policy instability Safety or environmental regulations Inflation General uncertainty on costs of regulations Crime and theft Corruption Terrorism Other

All countries

Developed countries

Transition economies

27

All developing countries 5

0

Other developing countries 7

8 4

0

5

5

5

45 9

73 45

40 3

30 0

44 5

4 4 26 1

9 0 55 0

3 5 21 2

0 10 15 0

5 2 23 2

8

36

3

0

5

18 9

55 0

11 11

5 20

14 7

12 3

64 18

3 0

5 0

2 0

15 9 58

45 45 73

10 3 56

0 0 35

14 5 65

0

0

0

0

0

Looked at together with problem areas in Table 3 it seems that neither price controls, foreign trade controls or foreign exchange regulations were considered in 1996-97 to be serious obstacles to doing business except in a handful countries (Belarus, Bulgaria, Republic of Congo, Fiji, Kazakhstan, Ukraine, Uzbekistan, West Bank and Gaza, and South Africa). Regulations for starting a new business were found to be an obstacle in only one of the surveyed countries, surprisingly a developed one (Austria). These results are indicative of the depth and breadth of liberalization which has taken place over the last decades. Obstacles and levels of private investment—econometric results Econometric calculations presented in Table 97 show that, unsurprisingly, in many cases a definite link exists between 1996 private investment and problems (or lack of 7

The specifications we tested have the following form: Private Inv./GDP96 = a0 + a1 LN(GDP/Const. 87 PPP,90) + a2 LN(Sec school enrol., 1990)+ a3 OBST + u. Private Inv./GDP96 is a ratio of private investment to GDP in 1996. LN(GDP/Const. 87 PPP,90) is the logarithm of 1990 GDP per capita calculated at PPP in 1987 prices from a World Bank data base. LN(Sec school enrol., 1990) is the logarithm of growth secondary school enrollment in 1990 also taken from a World Bank data base. OBST is an additional variable drawn from the set of 16 obstacles (we ran separate tests for “problem” and “problem-free” values of the variable).

20

them) in policy areas relevant to doing business. In some cases the share of business executives reporting that a particular policy area is problematic is significant, in some cases the share of problem-free responses and in other areas both responses are related significantly to investment. These results are to be treated as preliminary, if only because of the small number of countries (23) common to both data sets. Nevertheless, out of 16 policy areas 7 are significant for private investment levels when there is a perceived serious problem in these areas. At the same time, 9 out of the 16 policy areas are significant to levels of private investment when they are problem-free. And 4 areas out of 16 (financing, labor regulations, foreign currency regulations, and crime and theft) are significant in both cases. Table 9. Summary regression output (dependent variable—private investment/GDP, 1996, number of observations – 23)

-9.852 17.537 -0.562 2.026 3.266 0.620 2.750 3.625 0.759 -0.091 0.157 -0.581

0.581 0.542 0.457 0.568

0.391 0.514 0.557 0.219

-8.974 16.706 -0.537 2.710 3.147 0.861 1.605 3.504 0.458 -0.277 0.181 -1.529

0.121 -25.294 3.483 1.838 0.118

0.597 0.400 0.652 0.143

21.662 3.462 3.591 0.103

-1.168 1.006 0.512 1.147

0.257 0.327 0.615 0.265

0.108 -19.122 1.665 3.819 0.274

15.915 2.878 3.229 0.113

-1.202 0.579 1.183 2.419

0.244 0.570 0.252 0.026

0.151 -5.776 18.162 -0.318 1.972 3.234 0.610 2.295 3.606 0.636 -0.154 0.189 -0.814

0.754 0.549 0.532 0.426

Confidence level

P-value

Coefficients

-0.878 0.665 0.598 1.273

0.063

Adjusted R Square Intercept LN(GDP/Const. 87 PPP,90) LN(Sec school enrol., 1990) Regulations on foreign trade (exports, imports)

17.483 3.161 3.524 0.138

0.410

Adjusted R Square Intercept LN(GDP/Const. 87 PPP,90) LN(Sec school enrol., 1990) Price controls

-15.346 2.102 2.108 *** 0.175

t Stat

0.794 0.619 0.435 0.003

Adjusted R Square Intercept LN(GDP/Const. 87 PPP,90) LN(Sec school enrol., 1990) Regulations for starting business/new operations

Confidence level

P-value

t Stat

3.841 14.488 0.265 1.312 2.593 0.506 2.291 2.870 0.798 -0.169 0.049 -3.425

Problem-Free

Standard Error

Intercept LN(GDP/Const. 87 PPP,90) LN(Sec school enrol., 1990) Unpredictability of the judiciary

Standard Error

Variables

Coefficients

Problem

** 0.271

-12.543 0.987 3.580 0.338

14.724 2.752 3.050 0.116

-0.852 0.359 1.174 2.918

0.405 0.724 0.255 0.009

(continued)

21

***

Table 9 (continued)

9.462 15.217 0.622 0.541 0.229 2.661 0.086 0.932 3.687 2.916 1.265 0.221 -0.250 0.075 -3.335 0.003

-22.060 16.532 -1.334 4.099 3.068 1.336 3.056 3.238 0.944 -0.223 0.098 -2.282

-4.065 16.680 -0.244 1.909 3.040 0.628 2.118 3.382 0.626 -0.185 0.102 -1.802

0.110 0.337 0.304 0.001

16.404 3.053 3.375 0.098

-0.771 0.454 0.870 1.806

0.450 0.655 0.395 0.087

-0.554 -0.789 4.767 0.389

15.148 2.906 3.141 0.136

-0.037 -0.271 1.518 2.865

22

*

0.334

**

-5.639 0.893 2.770 0.234

16.924 3.172 3.442 0.152

-0.333 0.282 0.805 1.539

0.743 0.781 0.431 0.140

0.321 0.824 0.961 0.404 0.369

*

0.971 0.789 0.146 0.010

0.186

5.447 24.151 0.226 0.183 3.729 0.049 3.078 3.607 0.853 -0.081 0.089 -0.920

***

0.186

*

12.237 16.957 0.722 0.479 -0.677 2.930 -0.231 0.820 4.901 3.189 1.537 0.141 -0.195 0.070 -2.771 0.012

Confidence level

P-value

Standard Error

t Stat -1.678 0.985 1.057 3.801

0.458 -12.652 1.386 2.938 ** 0.177

0.810 0.537 0.539 0.087

Adjusted R Square Intercept LN(GDP/Const. 87 PPP,90) LN(Sec school enrol., 1990) Inadequate supply of infrastructure

13.767 2.483 2.751 0.113

0.252

Adjusted R Square Intercept LN(GDP/Const. 87 PPP,90) LN(Sec school enrol., 1990) Tax regulations and/or high taxes

-23.107 2.446 2.908 *** 0.430

0.198 0.197 0.357 0.034

Adjusted R Square Intercept LN(GDP/Const. 87 PPP,90) LN(Sec school enrol., 1990) Foreign currency regulations

0.342

0.399

Adjusted R Square Intercept LN(GDP/Const. 87 PPP,90) LN(Sec school enrol., 1990) Labor regulations

Coefficients

0.079

Adjusted R Square Intercept LN(GDP/Const. 87 PPP,90) LN(Sec school enrol., 1990) Financing

Confidence level

Problem-Free

P-value

t Stat

Standard Error

Variables

Coefficients

Problem

0.152 -15.085 2.227 2.859 0.076

17.846 3.211 3.554 0.072

-0.845 0.694 0.804 1.054

0.408 0.496 0.431 0.305

-10.993 16.568 -0.663 2.294 3.088 0.743 3.183 3.433 0.927 -0.128 0.078 -1.638

-7.608 17.031 -0.447 3.118 3.278 0.951 0.322 3.897 0.083 -0.109 0.082 -1.319

0.887 0.687 0.367 0.206

-11.125 2.037 2.096 0.123

16.947 3.149 3.512 0.093

-0.656 0.647 0.597 1.322

0.519 0.526 0.558 0.202

0.127

0.660 0.353 0.935 0.203

-14.764 1.719 2.260 0.499

14.311 2.648 2.938 0.155

-1.032 0.649 0.769 3.215

0.315 0.524 0.451 0.005

0.126 -9.577 16.992 -0.564 2.288 3.173 0.721 2.588 3.504 0.739 -0.154 0.122 -1.265

0.580 0.480 0.469 0.221

0.928 0.441 0.836 0.031

*** 0.382

-12.319 2.403 1.043 0.211

15.190 2.826 3.184 0.081

-0.811 0.850 0.328 2.617

0.427 0.406 0.747 0.017

0.121 -1.461 16.043 -0.091 2.291 2.908 0.788 0.697 3.323 0.210 -0.128 0.055 -2.323

Confidence level

P-value

Standard Error

t Stat -0.144 0.409 0.923 -1.311

0.175

Adjusted R Square Intercept LN(GDP/Const. 87 PPP,90) LN(Sec school enrol., 1990) Crime and theft

17.874 3.185 3.529 0.191

0.126

-28.823 19.750 -1.459 0.161 1.197 3.088 0.388 0.703 6.538 4.093 1.597 0.127 0.389 0.226 1.719 0.102

Adjusted R Square Intercept LN(GDP/Const. 87 PPP,90) LN(Sec school enrol., 1990) General uncertainty on costs of regulations

-2.567 1.301 3.259 -0.250 0.164

Adjusted R Square Intercept LN(GDP/Const. 87 PPP,90) LN(Sec school enrol., 1990) Inflation

0.099

0.515 0.467 0.365 0.118

Adjusted R Square Intercept LN(GDP/Const. 87 PPP,90) LN(Sec school enrol., 1990) Safety or environmental regulations

Coefficients

0.087

Adjusted R Square Intercept LN(GDP/Const. 87 PPP,90) LN(Sec school enrol., 1990) Policy instability

Confidence level

Problem-Free

P-value

t Stat

Standard Error

Variables

Coefficients

Problem

**

0.299

**

-6.562 1.157 2.340 0.320

16.445 3.066 3.372 0.177

-0.399 0.377 0.694 1.813

0.694 0.710 0.496 0.086

(continued)

23

*

Table 9 (continued)

9.878 17.925 0.551 0.588 0.795 2.954 0.269 0.791 2.202 3.236 0.681 0.504 -0.190 0.083 -2.286 0.034

-9.088 17.106 -0.531 1.727 3.182 0.543 3.295 3.574 0.922 -0.139 0.119 -1.167

-15.458 1.457 3.777 ** 0.089

0.601 0.594 0.368 0.258

Confidence level

P-value

t Stat

Standard Error 17.453 3.172 3.610 0.069

-0.886 0.459 1.046 1.301

0.387 0.651 0.309 0.209 0.124

-6.765 1.623 2.047 0.330 0.110

Adjusted R Square * ** ***

0.187

0.252

Adjusted R Square Intercept LN(GDP/Const. 87 PPP,90) LN(Sec school enrol., 1990) Terrorism

Coefficients

0.257

Adjusted R Square Intercept LN(GDP/Const. 87 PPP,90) LN(Sec school enrol., 1990) Corruption

Confidence level

Problem-Free

P-value

t Stat

Standard Error

Variables

Coefficients

Problem

16.493 3.052 3.395 0.186

-0.410 0.532 0.603 1.770

0.686 0.601 0.554 0.093

* 0.181

Significant on the 10 percent confidence level. Significant on the 5 percent confidence level. Significant on the 1 percent confidence level.

Source for private investment data: Jack Glen and Mariusz A. Sumlinski, "Trends in Private Investment in Developing Countries—Statistics for 1970-96," IFC Discussion Paper 34, Washington, D.C., 1998.

The highest statistical significance for depressing private investment (on the 1 percent confidence level) is for unpredictability of the judiciary and lack of financing. Where financing is not a serious problem this is very positively associated to levels of private investment (significance on the 1 percent confidence level). In contrast, lack of serious problems with the judiciary are not related significantly to high levels of private investment. The same asymmetrical relationship seems to characterize tax regulations and corruption—where these are serious problems they depress private investment, but low taxes and lack of corruption do not by themselves stimulate private investment.

24

Appendix 1 Methods and Sources 1. Fixed Investment Data National accounts normally do not break down gross domestic investment into its private and public sector components. Private investment is defined in this publication as the difference between total gross domestic investment (from national accounts) and consolidated public investment. Consolidated public investment data for each country were compiled mainly from World Bank Country Economic Memoranda, Public Investment Reviews, Public Expenditure Reviews, and other World Bank country reports. They reflect efforts by World Bank missions to compile public sector data. Where World Bank data are not available, country data were used. The countries included in this edition represent all the developing countries for which the relevant data are available. Minor changes were made in the last two or three years for most countries as a result of revisions in their national accounts data. Updates are not available (at the time of this writing) through 1997 for Korea. Table 1 presents investment figures for each country, including total fixed investment (GDFI/GDP); private fixed investment (PRIVATE I/GDP); and public fixed investment (Public I/GDP). The ratios are computed using local currency units at current prices.

25

Appendix 2 Statistics

27

Sub-Saharan Africa Benin Côte d’Ivoire Guinea-Bissau Kenya Madagascar Malawi Mauritania Mauritius Namibia South Africa

29

Be n i n 35

Ke n y a

%

35 Pr i va t e

%

Pu b l i c

Pr i v a t e

30

30

25

25

20

20

15

15

10

10

5

5

0

0

1990

1991

1992

1993

1994

1995

1996

1997

1970

1973

1976

Cô t e d ' I v o i r e 35

35

Pr i va t e

30

30

25

25

20

20

15

15

10

10

5

5

0 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

0 1985

1987

Gu i n e a - Bi s s a u

1985

1988

1991

1994

1997

Publ i c

1989

1991

1993

1995

1997

Ma l a wi

% 35

% Pr i v a t e

Pub l i c

30

30

25

25

20

20

15

15

10

10

5

5

0 1987

1982

%

Pub l i c

Pr i v a t e

1979

Ma d a g a s c a r

% Pr i va t e

35

Pub l i c

Pub l i c

0

1988 1989

1990 1991

1992

1993

1994

1995 1996

1997

1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997

30

Ma l a wi

Ma d a g a s c a r 35

%

35 Pr i va t e

Pr i v a t e

Publ i c

30

30

25

25

20

20

15

15

10

10

5

5

Pub l i c

0

0 1985

%

1987

1989

1991

1993

1995

1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997

1997

31

Latin America and the Caribbean Argentina Belize Bolivia Brazil Chile Colombia Costa Rica Dominican Republic Ecuador El Salvador Guatemala Mexico Nicaragua Panama Paraguay Peru Uruguay Venezuela

32

Ar g e n t i n a 35

Br a z i l

% 35 Pr i va t e

30

%

Publ i c

Pr i va t e

Publ i c

30

25 25

20 20

15 15

10 10

5 5

0 1970

1973

1976

1979

1982

1985

1988

1991

1994

0

1997

1970

1973

1976

1979

1982

%

35 Pr i va t e

1991

1994

1997

% Pri vat e

Publ i c

30

30

25

25

20

20

Pub l i c

15

15

10

10

5

5

0

0 1972

1977

1982

1987

1992

1970

1997

Bol i v i a 35

1988

Ch i l e

Be l i z e 35

1985

% Pr i va t e

Publ i c

30 25 20 15 10 5 0 1987

1992

1997

33

1973

1976

1979

1982

1985

1988

1991

1994

1997

Co s t a Ri c a 35

El S a l v a d o r

%

35 Pr i v a t e

%

Pub l i c

Pr i v a t e

30

30

25

25

20

20

15

15

10

10

5

5

0

0

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

1970

1973

1976

Do mi n i c a n Re p u b l i c 35

Pub l i c

35

1985

1988

1991

1994

1997

1991

1994

1997

%

Pub l i c

Pr i v a t e

30

30

25

25

20

20

15

15

10

10

5

5

0

Pub l i c

0

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

1970

1973

1976

1979

1982

1985

1988

Me x i c o

Ec u a d o r 35

1982

Gu a t e ma l a

% Pr i v a t e

1979

%

35 30

Pr i v a t e

%

Pub l i c

Pr i va t e

Publ i c

30 25

25 20

20 15

15 10

10 5

5 0 1970

1973

1976

1979

1982

1985

1988

1991

1994

0

1997

1970

34

1973

1976

1979

1982

1985

1988

1991

1994

1997

Ni c a r a g u a 35

Pe r u

%

35 Pr i va t e

% Pr i v a t e

Pu bl i c

30

30

25

25

20

20

15

15

10

10

5

5

Pub l i c

0

0 1990

1991

1992

1993

1994

1995

1996

1981

1997

1983

1985

1987

%

35 Pr i v a t e

1993

1995

1997

% Pr i va t e

Pub l i c

30

30

25

25

20

20

15

15

10

10

5

5

Pu b l i c

0

0 1987

1989

1991

1993

1995

1970

1997

1973

1976

%

35 Pr i v a t e

1982

1985

1988

1991

1994

1997

% Pr i v a t e

Pub l i c

30

30

25

25

20

20

15

15

10

10

5

5

Pub l i c

0

0 1970

1979

Ve n e z u e l a

Pa r a g u a y 35

1991

Ur u g u a y

P a n a ma 35

1989

1973

1976

1979

1982

1985

1988

1991

1994

1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

1997

35

Middle East and North Africa Egypt Iran Morocco Tunisia Turkey

37

Eg y p t 35

Tu n i s i a

%

35 Pr i va t e

%

Publ i c

Pr i v a t e

30

30

25

25

20

20

15

15

10

10

5

5

0

0

1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

1970

1973

1976

Pu b l i c

1979

I ran 35

35

1988

1991

1994

1997

1988

1991

1994

1997

%

Pub l i c

Pr i v a t e

30

30

25

25

20

20

15

15

10

10

5

5

0

Pu b l i c

0

1980

1982

1984

1986

1988

1990

1992

1994

1996

1970

Mo r o c c o 35

1985

Tu r k e y

% Pr i v a t e

1982

% Pr i va t e

Pu b l i c

30 25 20 15 10 5 0 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997

38

1973

1976

1979

1982

1985

Transition Countries Bulgaria Poland Romania

39

Bulgaria 35

% Private

Public

30 25 20 15 10 5 0 1990

1991

1992

1993

1994

1995

1996

1997

Po l a n d 35

% Pr i va t e

Pub l i c

30 25 20 15 10 5 0 1989

1991

1993

1995

1997

Ro ma n i a 35

% Pr i va t e

Pub l i c

30 25 20 15 10 5 0 1991

1992

1993

1994

40

1995

1996

1997

East Asia China Indonesia Korea Malaysia Papua New Guinea Philippines Thailand

41

Republic of Ko r e a

Ch i n a % 35

% 35 Pr i vat e

Pu bl i c

30

30

25

25

20

20

15

15

10

Pr i va t e

Pub l i c

1977

1982

10

5

5

0 1980

1982

1984

1986

1988

1990

1992

1994

0 1972

1996

I ndo ne s i a 35

1997

% Pr i v a t e

Pu b l i c

30

30

25

25

20

20

15

15

10

10

5

5

0 1981

1992

Ma l a y s i a

% 35 Pr i va t e

1987

Pub l i c

0 1983

1985

1987

1989

1991

1993

1995

1997

1970

43

1973

1976

1979

1982

1985

1988

1991

1994

1997

P a p u a Ne w Gu i n e a 35

Th a i l a n d

%

35 Pr i v a t e

Pr i v a t e

30

30

25

25

20

20

15

15

10

10

5

5

0

0

1981

1983

1985

1987

1989

1991

1993

1995

1970

1997

Ph i l i p p i n e s 35

% Pr i va t e

%

Pub l i c

Pu b l i c

30 25 20 15 10 5 0 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997

44

1973

1976

Pub l i c

1979

1982

1985

1988

1991

1994

1997

South Asia Bangladesh India Pakistan

45

Ba n g l a d e s h 35

% Pr i va t e

Pub l i c

30 25 20 15 10 5 0 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997

I ndi a 35

% Pr i va t e

Pub l i c

30 25 20 15 10 5 0 1970

1973

1976

1979

1982

1985

1988

1991

1994

Pa k i s t a n 35

% Pr i va t e

Pub l i c

30 25 20 15 10 5 0 1970

1975

1980

1985

46

1990

1995

1997

Table 1. Investment as a share of GDP (in %) Country/Year Argentina

Bangladesh

Belize

Benin

Bolivia

Brazil

Bulgaria

Chile

China

Colombia

Costa Rica

Côte d'Ivoire

Dominican Republic

Ecuador

Egypt

El Salvador

Guatemala

Guinea-Bissau

GDI/GDP Private I/GDP Public I/GDP GDI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 21.2 20.9 20.7 18.2 19.3 25.9 26.8 27.2 24.4 22.7 25.3 22.7 21.8 20.9 20.0 17.6 17.5 19.6 18.6 15.5 14.0 14.6 16.7 18.2 19.9 18.3 18.5 13.1 12.8 12.5 11.6 12.5 16.1 15.1 15.0 13.4 14.1 19.2 16.9 16.6 14.8 14.9 12.5 13.2 15.7 14.4 12.2 9.4 12.7 14.9 16.6 18.1 16.6 16.8 8.1 8.1 8.2 6.6 6.8 9.8 11.7 12.2 11.0 8.6 6.1 5.8 5.2 6.1 5.0 5.1 4.3 3.9 4.3 3.3 4.6 1.9 1.8 1.7 1.8 1.7 1.7 3.0 7.1 6.3 9.9 11.1 11.8 11.3 15.3 16.2 15.5 13.4 12.4 12.9 12.5 12.9 12.4 12.9 12.8 11.5 12.1 14.3 15.4 16.6 17.0 2.9 4.2 3.4 5.4 4.9 5.6 5.7 8.2 9.6 9.1 7.2 6.7 7.4 6.3 6.2 6.4 6.5 6.4 5.8 6.6 7.8 7.8 9.4 10.7 0.1 2.9 2.9 4.6 6.2 6.2 5.6 7.1 6.7 6.4 6.2 5.7 5.6 6.3 6.7 6.0 6.4 6.4 5.7 5.5 6.4 7.6 7.2 6.3 26.2 23.5 27.1 25.3 28.7 28.0 28.5 26.6 22.7 24.8 22.5 18.9 20.3 17.4 17.4 21.5 25.7 27.4 25.6 28.5 29.3 29.8 24.1 20.6 18.8 17.8 15.2 14.8 16.6 18.5 16.1 11.7 9.8 11.1 13.5 9.8 8.5 11.8 8.7 8.4 13.8 17.1 17.4 11.4 8.1 10.0 16.3 13.0 12.7 12.2 8.4 8.3 12.3 8.7 10.2 11.9 16.8 16.8 11.5 11.3 12.7 10.4 8.6 8.7 9.0 7.7 8.6 10.0 14.2 20.4 19.3 13.5 11.1 7.9 6.6 13.4 13.5 13.3 15.0 15.5 17.3 16.6 6.0 6.1 6.7 7.9 6.2 6.9 9.1 7.4 7.4 6.6 7.1 9.3 10.4 7.5 12.1 12.7 12.0 12.6 14.5 16.3 16.3 14.8 15.5 15.8 5.9 4.0 3.6 5.0 5.8 6.6 7.4 6.4 7.6 8.4 6.2 8.7 8.4 7.6 8.7 9.7 8.9 8.4 8.0 7.5 18.8 19.7 20.2 21.4 22.8 24.4 22.5 21.3 21.8 22.8 23.6 24.3 23.0 19.9 18.9 18.0 20.0 23.2 24.3 26.9 22.9 19.6 19.6 20.4 20.7 20.5 19.1 12.8 14.2 14.4 16.2 15.8 16.9 14.2 14.7 14.1 12.5 17.0 16.6 16.0 13.8 13.7 12.9 14.4 16.8 17.9 21.1 17.6 14.4 13.9 15.5 15.8 16.8 15.3 6.0 5.5 5.8 5.2 7.0 7.5 8.3 6.6 7.7 10.3 6.6 7.7 7.0 6.1 5.2 5.1 5.6 6.4 6.4 5.8 5.3 5.2 5.7 4.9 4.9 3.7 3.9 24.4 18.2 16.2 13.0 13.8 15.3 13.6 0.9 0.5 0.3 2.9 5.4 6.8 5.3 23.5 17.7 15.9 10.0 8.4 8.5 8.4 16.4 14.5 12.2 7.9 21.2 13.9 12.8 14.5 17.8 17.8 16.6 18.6 14.2 12.0 12.4 16.8 17.1 19.4 20.3 23.0 23.1 19.9 22.4 24.9 23.3 23.9 24.8 9.5 6.5 4.5 0.5 9.2 3.2 4.8 7.6 11.4 12.6 11.2 13.4 9.5 7.4 6.4 14.1 13.6 13.1 14.4 18.2 18.4 15.0 16.7 18.9 18.0 19.9 19.6 6.9 8.0 7.7 7.4 12.0 10.7 8.0 6.9 6.4 5.2 5.4 5.2 4.7 4.7 6.0 2.8 3.5 6.4 5.9 4.8 4.8 4.9 5.8 6.0 5.3 3.9 5.2 20.2 19.8 23.2 24.1 25.6 28.4 30.6 31.7 31.8 26.1 24.4 25.9 30.3 37.7 36.4 34.2 33.8 3.7 6.0 7.3 8.1 9.0 9.6 10.2 11.2 11.6 9.5 8.3 8.7 9.7 14.9 15.9 15.6 16.1 16.5 13.7 16.0 16.0 16.5 18.7 20.4 20.5 20.2 16.6 16.1 17.2 20.6 22.9 20.6 18.6 17.7 18.0 17.5 16.1 15.8 16.4 15.3 15.9 14.5 15.4 15.4 16.8 17.7 17.5 17.2 17.0 17.5 17.7 17.4 19.5 18.1 16.6 14.6 15.6 18.8 20.5 19.7 17.2 12.4 11.6 9.8 10.1 11.5 9.9 10.3 7.9 9.9 10.0 9.8 10.3 9.4 9.7 8.5 8.4 9.2 10.2 11.5 10.2 10.2 8.3 8.6 10.8 13.3 12.0 8.2 5.6 6.0 6.3 5.7 4.9 5.4 5.6 6.6 5.5 5.4 7.0 7.3 8.1 7.5 8.5 9.2 8.5 7.3 8.0 7.8 6.4 6.3 7.0 8.0 7.1 7.7 8.9 19.4 22.1 21.9 20.5 21.3 20.7 23.5 22.4 23.0 26.2 23.9 24.1 20.3 18.0 20.0 19.3 18.7 19.8 18.9 20.5 22.4 19.7 20.8 23.2 19.8 19.3 18.4 15.0 16.4 15.1 14.7 15.8 14.4 15.1 14.2 15.6 17.3 14.7 15.2 13.1 11.6 13.7 12.3 12.8 15.4 14.8 16.0 17.7 15.5 16.6 18.3 15.0 14.8 14.0 4.4 5.7 6.8 5.8 5.5 6.3 8.4 8.2 7.4 8.9 9.2 8.9 7.2 6.4 6.4 7.0 5.8 4.4 4.1 4.5 4.7 4.2 4.1 4.9 4.9 4.4 4.4 14.8 14.1 13.8 12.2 8.5 8.6 8.5 7.8 11.1 12.9 13.9 7.9 6.7 6.8 5.9 4.9 5.1 4.7 4.1 7.0 8.7 9.6 6.9 7.4 7.0 6.3 3.6 3.4 3.8 3.7 4.1 4.2 4.3 19.1 17.9 19.8 22.2 23.3 24.5 22.3 21.7 21.0 23.9 23.9 22.8 18.7 20.3 21.0 18.3 20.6 26.0 27.1 28.2 24.9 21.6 22.2 26.4 25.9 23.9 24.2 14.0 12.4 12.2 15.1 15.9 16.5 16.0 15.6 14.8 18.8 16.3 16.1 14.3 15.6 17.6 12.9 16.0 16.2 16.8 18.1 18.2 15.3 15.1 17.9 17.3 16.8 17.1 5.1 5.5 7.6 7.1 7.4 8.0 6.3 6.1 6.2 5.1 7.6 6.7 4.4 4.7 3.4 5.4 4.6 9.7 10.3 10.2 6.7 6.3 7.1 8.5 8.6 7.1 7.1 16.7 21.8 18.0 17.6 18.2 23.2 22.2 23.6 26.2 23.7 23.6 22.3 22.7 16.6 15.4 16.1 18.8 22.7 21.3 20.7 18.4 19.7 19.5 19.9 18.8 18.6 17.8 10.0 14.7 11.4 10.8 10.2 14.5 13.0 13.4 16.8 14.5 14.1 11.7 13.0 8.6 9.0 9.5 9.6 13.4 12.7 11.6 12.4 12.6 12.4 13.2 12.8 13.1 11.7 6.7 7.1 6.6 6.8 8.0 8.7 9.2 10.2 9.4 9.2 9.5 10.6 9.7 8.0 6.4 6.6 9.2 9.3 8.6 9.2 6.1 7.0 7.1 6.7 6.0 5.5 6.1 30.1 34.2 32.1 32.1 34.4 27.4 34.5 30.6 26.9 22.2 19.1 16.2 16.6 16.2 16.0 9.1 13.9 13.1 12.7 13.2 10.1 13.3 16.0 16.7 13.1 10.5 9.2 10.5 10.7 10.5 21.0 20.3 19.0 19.4 21.3 17.3 21.2 14.6 10.2 9.2 8.5 7.1 6.1 5.5 5.5 10.7 11.2 14.1 12.4 14.2 23.0 20.1 21.2 21.4 17.6 13.6 13.6 12.6 11.6 11.5 12.0 13.1 13.6 12.6 13.3 13.7 15.2 17.2 17.8 18.5 18.7 15.8 8.4 8.3 10.1 8.8 9.5 15.0 13.9 13.9 15.6 11.5 6.4 6.2 6.5 7.0 7.6 8.7 10.6 10.7 9.5 9.8 11.2 12.3 13.2 13.7 14.7 15.1 11.6 2.3 2.9 4.0 3.6 4.7 8.0 6.2 7.3 5.8 6.1 7.1 7.3 6.1 4.6 3.9 3.3 2.5 2.9 3.1 3.5 2.5 2.8 4.0 4.0 3.7 3.6 4.1 12.6 13.3 13.0 13.9 14.8 15.6 20.6 18.9 20.0 18.7 16.4 16.8 15.0 10.5 9.6 11.0 10.1 12.4 13.4 13.7 13.0 12.2 15.6 16.1 14.2 14.5 13.3 10.2 10.4 9.8 10.5 11.9 12.1 14.0 13.0 14.4 12.4 10.5 8.9 8.9 6.6 6.7 8.8 8.1 9.7 10.5 10.6 10.3 9.8 13.2 13.3 11.8 12.2 10.9 2.4 2.9 3.2 3.4 2.9 3.5 6.6 5.9 5.6 6.3 5.9 7.8 6.1 3.9 2.9 2.1 1.9 2.7 2.9 3.2 2.7 2.4 2.4 2.7 2.4 2.3 2.4 35.2 44.7 39.0 29.9 31.0 48.3 30.9 21.8 22.3 18.9 7.3 14.1 8.7 8.4 7.8 20.0 6.3 1.4 7.1 4.2 27.9 30.6 30.3 21.5 23.2 28.3 24.6 20.4 15.2 14.8 (continued.../)

1997 20.1 18.4 1.7 17.3 10.8 6.5 23.3 12.8 10.5 18.5 11.0 7.5 17.2 10.3 6.9 19.6 15.8 3.8 11.3 4.8 6.5 25.2 20.4 4.8 33.4 15.8 17.5 16.9 10.0 6.9 19.5 15.0 4.5 16.0 11.2 4.8 24.7 20.5 4.2 19.0 13.3 5.7 17.6 12.1 5.6 15.7 12.1 3.6 13.9 11.1 2.8 24.8 9.2 15.6

Table 1. (contiued) Country/Year India

Indonesia

Iran

Kenya

Korea, Rep. of

Madagascar

Malawi

Malaysia

Mauritania

Mauritius

Mexico

Morocco

Namibia

Nicaragua

Pakistan

Panama

Papua New Guinea

Paraguay

GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 13.1 16.4 16.9 15.3 15.7 17.9 19.1 19.2 19.3 19.8 19.3 19.7 20.1 19.3 19.7 20.7 21.2 21.7 21.6 22.5 23.2 22.1 22.5 20.9 21.4 23.8 23.2 8.1 9.9 9.3 8.5 9.6 10.3 10.3 10.6 10.7 10.5 10.7 10.6 9.6 9.4 9.6 10.2 9.8 11.3 11.6 12.9 13.8 12.6 14.0 13.1 12.9 16.3 16.6 5.0 6.5 7.6 6.8 6.1 7.6 8.8 8.6 8.6 9.3 8.6 9.1 10.4 9.9 10.1 10.5 11.4 10.4 10.1 9.6 9.4 9.5 8.5 7.8 8.6 7.5 6.6 24.2 30.5 25.1 22.5 23.6 24.2 24.9 26.1 27.3 28.4 28.1 27.3 25.9 27.8 28.4 29.6 13.7 18.2 13.2 12.5 13.5 16.2 17.3 17.7 18.7 19.2 18.5 17.7 16.1 18.1 22.5 23.9 10.5 12.3 11.9 9.9 10.1 8.0 7.5 8.4 8.6 9.3 9.6 9.5 9.8 9.7 5.9 5.7 21.7 19.1 17.5 21.5 20.9 17.5 15.4 13.3 13.3 13.3 15.5 21.6 22.0 22.1 23.3 23.7 25.8 11.4 9.3 7.4 12.0 12.4 10.6 8.6 7.8 7.9 8.2 8.3 13.2 13.0 11.4 12.9 13.3 14.3 10.4 9.8 10.0 9.4 8.5 6.9 6.7 5.5 5.4 5.1 7.1 8.5 9.0 10.7 10.4 10.4 11.5 19.7 22.7 22.1 20.8 19.2 20.2 20.0 21.0 25.1 23.7 23.6 23.9 19.0 18.0 18.1 17.9 19.6 19.6 20.1 19.3 20.6 19.0 16.6 16.9 18.9 21.4 19.8 13.7 14.0 13.6 11.4 10.5 11.7 11.6 12.1 15.6 12.8 13.0 13.3 10.4 11.1 10.5 10.7 11.5 12.5 11.8 11.2 10.9 10.5 9.2 9.6 9.9 13.5 12.3 6.0 8.7 8.5 9.4 8.7 8.5 8.4 8.9 9.5 10.9 10.7 10.6 8.6 6.9 7.5 7.2 8.1 7.1 8.3 8.1 9.7 8.5 7.3 7.3 9.0 7.9 7.5 20.4 23.0 25.4 25.0 24.0 26.9 30.9 32.7 32.1 28.0 28.4 29.2 28.9 28.6 28.2 29.1 29.6 31.9 37.1 38.4 36.6 36.0 35.7 36.6 36.9 13.9 18.0 20.5 19.3 18.8 20.7 24.5 25.8 24.3 20.3 21.2 22.7 22.4 21.3 21.3 23.3 24.1 25.9 29.6 29.5 27.3 27.2 27.0 27.8 27.1 6.5 5.0 4.9 5.7 5.2 6.2 6.4 6.9 7.8 7.7 7.2 6.5 6.5 7.3 6.9 5.7 5.5 6.0 7.4 9.0 9.3 8.8 8.7 8.8 9.8 8.5 9.0 10.1 13.3 13.4 14.8 10.6 11.3 11.4 10.9 10.9 11.6 2.6 3.6 3.1 6.4 3.7 6.9 4.6 3.7 3.7 4.7 4.9 5.0 6.0 5.4 7.0 6.9 9.7 7.9 5.9 7.6 7.8 6.2 6.0 6.7 20.4 18.9 24.9 22.1 22.2 30.9 26.8 22.2 15.1 14.6 13.7 13.0 13.3 12.0 13.8 15.3 16.7 19.7 20.2 19.9 15.2 29.3 16.6 12.4 7.8 7.3 7.8 8.5 9.4 12.3 7.5 4.7 4.9 6.1 5.4 3.3 5.0 2.0 5.9 7.2 9.0 11.7 11.9 9.7 6.8 14.1 7.4 5.8 12.6 11.6 17.1 13.6 12.8 18.6 19.3 17.5 10.2 8.4 8.3 9.8 8.3 10.0 7.9 8.2 7.6 8.0 8.3 10.2 8.4 15.3 9.2 6.6 18.9 22.1 23.9 23.7 26.9 26.6 23.4 24.3 24.7 26.4 31.1 36.0 36.4 36.1 31.9 29.8 26.4 23.0 24.1 29.3 32.4 33.4 36.0 38.3 40.1 43.0 42.2 12.8 15.5 15.2 16.5 19.3 16.6 14.0 14.2 15.7 17.5 19.5 19.9 18.2 17.7 16.8 15.8 14.3 13.8 15.4 18.5 20.9 22.7 21.5 23.8 27.2 30.4 30.9 6.1 6.6 8.7 7.2 7.6 10.0 9.4 10.1 9.0 8.9 11.6 16.1 18.2 18.4 15.1 14.0 12.1 9.1 8.7 10.8 11.5 10.7 14.5 14.6 13.0 12.6 11.4 20.0 17.9 20.5 23.5 14.4 16.0 19.2 9.2 7.9 6.8 10.4 4.8 7.4 12.1 10.7 10.0 13.7 13.2 9.6 8.7 7.1 28.4 27.7 28.3 25.7 23.3 22.0 17.9 18.0 18.0 18.7 19.7 21.6 28.7 26.5 31.2 28.9 27.8 28.4 30.8 24.3 26.1 20.3 18.9 18.3 17.7 14.9 13.5 11.5 11.6 12.3 12.6 12.8 14.3 16.6 19.5 19.7 20.7 18.2 20.6 21.7 16.3 16.8 8.1 8.8 10.0 8.0 8.4 8.5 6.4 6.4 5.7 6.0 7.0 7.3 12.2 7.1 11.5 8.2 9.6 7.9 9.1 8.0 9.3 19.8 17.8 18.9 19.2 19.9 21.4 21.0 19.7 21.2 23.7 24.8 26.3 23.0 17.5 18.0 19.2 19.6 18.5 18.5 17.2 17.9 18.6 19.6 18.6 19.4 16.2 18.0 13.2 13.2 12.8 11.7 12.3 12.4 12.8 11.9 12.8 13.5 13.9 14.3 12.8 11.0 11.4 12.5 13.0 13.3 14.1 13.0 13.6 14.6 15.8 14.8 15.6 12.8 14.2 6.6 4.6 6.1 7.5 7.6 9.0 8.2 7.8 8.4 10.2 10.9 12.1 10.2 6.6 6.6 6.7 6.6 5.2 4.4 4.2 4.3 4.1 3.8 3.8 3.8 3.3 3.8 24.8 29.7 32.0 24.9 24.0 22.2 26.0 27.3 24.4 23.1 23.1 21.3 20.2 19.3 22.8 25.4 22.2 22.5 22.1 20.5 22.0 19.6 9.8 12.9 14.5 13.5 11.4 11.8 11.4 13.4 11.8 11.2 12.1 12.2 11.6 11.8 13.2 14.5 11.8 11.3 7.7 7.7 10.6 10.2 15.0 16.7 17.5 11.4 12.6 10.4 14.5 13.9 12.6 11.9 11.0 9.1 8.6 7.6 9.6 10.8 10.5 11.2 14.4 12.8 11.4 9.4 26.0 26.0 21.7 17.4 14.5 13.7 13.3 13.9 14.8 16.1 20.4 15.6 20.2 21.6 21.0 21.6 23.5 10.9 9.7 6.8 6.1 5.9 4.9 5.7 6.5 7.9 10.4 12.6 8.2 10.5 13.4 12.7 14.0 15.5 15.1 16.3 14.9 11.3 8.6 8.8 7.6 7.5 6.9 5.7 7.8 7.3 9.7 8.1 8.3 7.6 8.0 20.4 18.3 19.5 18.9 22.1 24.0 29.0 11.2 10.7 9.7 8.9 9.8 10.6 14.1 9.3 7.6 9.8 10.0 12.4 13.4 14.9 14.3 14.0 12.6 11.5 12.2 14.4 18.2 18.6 17.3 17.0 17.1 17.1 16.8 17.0 16.5 16.5 17.0 17.5 16.5 17.3 17.3 17.4 18.6 19.1 17.9 16.9 17.0 7.3 7.0 6.6 5.6 4.4 4.6 5.9 6.2 5.8 5.8 7.7 7.8 7.2 7.4 7.5 7.6 7.8 7.7 7.7 8.3 8.9 8.9 9.8 10.0 9.6 8.7 8.9 7.0 7.0 6.0 5.9 7.8 9.8 12.3 12.4 11.5 11.2 9.4 9.4 9.7 9.6 9.0 8.9 9.2 9.7 8.8 9.0 8.4 8.5 8.8 9.1 8.3 8.2 8.1 19.3 8.8 6.5 8.5 15.0 18.3 23.8 24.2 24.9 25.1 16.8 5.7 4.5 7.4 12.0 15.1 19.8 20.8 21.5 21.3 2.4 3.1 2.0 1.1 3.0 3.1 4.0 3.4 3.4 3.8 26.8 33.0 29.7 23.9 18.4 21.0 19.3 23.3 26.0 25.1 28.0 23.8 18.8 13.9 22.3 27.6 18.1 26.1 23.6 17.6 12.1 14.5 14.0 18.3 21.2 20.0 23.3 18.6 12.5 11.1 19.0 24.0 8.7 6.9 6.1 6.2 6.3 6.4 5.3 5.0 4.7 5.1 4.7 5.2 6.3 2.8 3.4 3.6 14.8 14.0 15.5 15.6 17.9 19.9 22.7 23.8 25.2 27.0 27.2 27.4 24.0 20.1 21.6 20.7 23.5 23.7 23.1 22.7 21.0 22.0 19.8 18.6 22.5 23.1 22.5 10.8 10.3 11.0 12.3 15.2 15.7 13.5 15.2 17.9 20.7 22.4 22.6 19.5 13.3 13.2 14.2 18.5 17.6 16.3 16.0 18.2 18.7 16.1 15.4 19.0 17.7 18.1 4.0 3.7 4.5 3.3 2.7 4.2 9.2 8.6 7.3 6.3 4.9 4.8 4.5 6.9 8.4 6.5 5.1 6.1 6.9 6.7 2.8 3.3 3.7 3.2 3.5 5.3 4.4 (continued.../)

1997 22.9 16.1 6.8 28.4 22.1 6.3 24.9 13.8 11.1 18.2 11.3 7.0

11.8 5.5 6.3 12.3 5.1 7.1 42.4 30.9 11.5 17.5 8.6 8.9 27.2 20.0 7.2 19.6 16.0 3.6 20.7 11.0 9.7 20.7 12.9 7.8 31.6 19.8 11.8 15.8 8.9 6.9 26.4 22.0 4.4 37.0 31.5 5.6 22.7 15.4 7.3

Table 1. (contiued) Country/Year Peru

Philippines

Poland

Romania

South Africa

Thailand

Tunisia

Turkey

Uruguay

Venezuela

East Asia

South Asia

LAC

SSAFR

Total GDFI/GDP Total Private I/GDP Total Public I/GDP

GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP GDFI/GDP Private I/GDP Public I/GDP

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 28.8 29.5 23.7 20.2 18.2 18.5 17.8 19.7 16.6 14.7 14.5 15.2 16.8 21.0 23.5 23.5 24.8 21.5 20.8 15.1 12.1 12.0 13.2 13.4 15.5 13.1 12.2 11.7 12.0 13.4 16.9 19.5 19.6 21.0 7.3 8.7 8.7 8.1 6.1 5.4 4.4 4.2 3.5 2.5 2.7 3.1 3.4 4.0 4.0 3.9 3.9 24.7 26.4 25.1 25.2 27.5 27.2 27.8 27.5 29.8 24.5 17.5 16.8 16.5 17.8 20.8 23.1 20.0 20.9 23.8 23.6 22.2 23.4 24.5 20.6 16.1 17.9 18.2 20.1 18.8 16.8 20.0 23.7 19.1 13.7 14.0 13.7 14.9 17.3 18.9 15.9 16.0 18.8 18.7 17.6 18.8 20.9 4.1 10.3 7.2 7.0 7.4 8.5 10.9 7.5 6.1 5.4 3.7 2.8 2.8 2.9 3.6 4.2 4.1 4.9 5.0 4.9 4.6 4.6 3.6 16.0 20.7 20.8 17.5 15.8 16.1 19.3 17.0 19.3 2.7 8.5 12.3 7.7 6.8 7.1 6.8 7.8 10.3 13.3 12.1 8.5 9.8 9.1 9.0 12.5 9.2 9.0 14.2 14.7 14.1 16.1 18.0 19.3 15.4 1.4 2.8 4.3 6.7 8.5 9.4 6.2 12.9 11.9 9.8 9.4 9.6 9.9 9.2 24.7 26.2 26.9 25.4 25.1 29.4 30.1 28.0 26.4 26.2 26.2 27.8 27.9 26.8 24.4 23.3 20.2 18.5 19.8 20.6 19.6 17.8 16.6 15.5 16.1 16.9 17.2 17.4 14.1 14.5 14.0 13.5 13.4 14.8 14.7 13.7 13.0 12.7 13.3 15.5 15.9 15.6 14.6 13.1 11.6 11.2 13.2 13.2 12.9 11.9 11.4 10.8 11.7 12.6 12.6 12.7 10.6 11.7 12.8 11.9 11.7 14.6 15.5 14.3 13.4 13.5 12.9 12.3 12.0 11.2 9.9 10.2 8.6 7.3 6.7 7.4 6.8 5.9 5.2 4.7 4.4 4.3 4.6 4.7 23.8 23.3 22.7 22.4 23.3 22.9 22.9 26.0 25.3 25.6 27.8 28.0 26.9 28.5 28.6 27.2 25.8 27.6 30.7 34.6 40.4 41.6 39.3 39.5 40.0 41.1 41.1 35.6 16.7 16.6 16.0 17.3 19.6 17.7 16.1 18.6 17.6 18.0 18.9 19.0 19.1 20.5 20.3 18.5 18.4 21.7 25.6 29.6 34.2 34.4 31.1 31.6 31.3 32.2 30.8 24.1 7.1 6.7 6.7 5.1 3.7 5.2 6.8 7.4 7.7 7.6 8.8 8.9 7.9 8.0 8.3 8.7 7.4 6.0 5.0 5.0 6.1 7.2 8.1 7.9 8.7 8.9 10.2 11.5 20.4 19.8 19.8 20.5 20.8 25.7 29.0 30.7 30.9 30.5 28.3 31.0 34.0 31.8 32.1 28.1 25.0 21.6 20.5 22.5 24.4 24.1 24.6 25.5 24.9 24.2 23.2 24.5 8.5 7.7 8.8 10.7 10.5 12.3 11.6 10.9 11.7 12.0 13.3 14.8 15.4 15.9 15.7 14.5 12.1 11.1 11.3 12.4 12.3 12.7 13.2 12.7 13.1 12.3 11.8 12.4 11.9 12.1 11.0 9.8 10.3 13.4 17.4 19.8 19.2 18.5 15.0 16.2 18.6 16.0 16.4 13.7 12.8 10.5 9.3 10.1 12.0 11.4 11.4 12.8 11.8 11.9 11.4 12.1 22.5 20.2 21.7 21.4 19.9 22.1 24.4 25.7 23.1 21.9 22.1 20.1 19.4 20.1 19.5 20.3 22.8 24.7 26.1 22.8 22.9 23.8 23.6 26.5 24.6 23.8 25.0 26.1 12.6 11.6 13.0 12.9 11.3 11.7 13.2 13.2 12.4 10.7 13.3 11.0 11.1 11.4 11.4 11.1 12.6 14.7 17.2 15.2 15.6 16.2 16.2 19.3 18.9 19.9 20.3 20.5 9.9 8.6 8.7 8.5 8.6 10.4 11.2 12.5 10.7 11.2 8.8 9.2 8.3 8.7 8.1 9.2 10.2 10.0 8.9 7.6 7.3 7.6 7.4 7.3 5.7 3.9 4.7 5.6 11.8 11.5 9.8 9.0 10.3 13.3 15.5 15.2 16.0 16.2 16.7 15.7 15.1 13.7 10.9 9.6 9.9 11.4 11.9 11.6 10.8 11.9 12.5 13.8 12.8 11.5 11.8 12.0 8.8 8.3 7.5 7.1 7.7 8.7 9.0 8.2 8.0 9.7 11.4 10.7 7.9 8.6 6.4 6.1 6.2 7.4 7.9 7.2 7.7 7.8 9.0 9.5 8.3 8.2 8.4 8.6 3.0 3.2 2.3 1.9 2.6 4.6 6.5 7.0 8.0 6.5 5.3 5.0 7.2 5.1 4.5 3.5 3.7 4.0 4.0 4.3 3.1 4.1 3.4 4.3 4.5 3.3 3.4 3.3 16.0 17.3 20.4 21.2 22.8 16.9 14.1 18.2 21.1 20.0 17.6 16.1 14.8 16.9 10.5 11.1 10.9 12.1 12.3 7.2 4.9 7.6 8.9 9.0 8.2 6.7 5.1 7.4 5.5 6.2 9.5 9.1 10.5 9.7 9.2 10.6 12.2 11.0 9.4 9.4 9.7 9.5

GDFI/GDP

21.3

22.7

22.3

23.0

25.2

24.8

24.2

25.6

26.5

28.0

27.7

27.2

29.4

28.9

26.5

24.8

24.7

24.6

26.2

28.0

30.1

30.8

30.6

31.4

31.1

32.6

33.5

33.5

Private I/GDP

14.8

16.1

15.0

17.3

19.8

18.6

16.3

17.9

19.0

20.4

17.0

16.3

18.6

18.5

16.8

14.9

15.6

16.4

18.2

20.1

21.6

21.9

20.3

20.7

21.3

23.6

24.5

24.2

Public I/GDP

6.6

6.7

7.3

5.8

5.4

6.2

7.9

7.7

7.5

7.7

10.7

10.9

10.8

10.4

9.7

9.8

9.1

8.1

8.0

7.9

8.5

8.9

10.3

10.8

9.8

9.0

9.0

9.3

13.7

15.2

14.8

9.9

11.7

12.9

15.7

16.3

16.1

16.0

17.2

17.7

17.5

16.5

16.2

16.7

16.9

17.3

16.9

17.6

17.8

17.0

17.7

18.1

18.2

19.1

19.1

18.7

Private I/GDP

7.7

8.5

8.0

5.7

6.1

6.1

7.2

7.2

7.4

7.3

8.9

9.3

8.6

8.0

7.9

8.4

8.0

8.4

8.6

9.2

9.7

9.1

10.1

10.3

10.1

11.5

12.1

11.9

Public I/GDP

6.0

6.8

6.8

4.3

5.6

6.8

8.6

9.1

8.8

8.7

8.4

8.4

8.8

8.6

8.3

8.3

8.9

8.9

8.3

8.3

8.0

7.9

7.6

7.8

8.1

7.6

7.0

6.7

GDFI/GDP

16.6

16.9

17.4

16.7

19.0

20.5

21.1

20.9

21.7

21.7

21.2

21.8

20.0

17.2

16.9

16.6

17.5

18.8

18.8

18.3

17.5

17.7

18.9

20.1

20.0

19.6

19.3

20.5

Private I/GDP

11.5

11.6

11.5

11.1

12.5

13.2

13.1

12.8

13.6

13.6

13.7

14.1

12.7

10.8

10.9

11.0

11.9

13.0

12.7

12.3

12.0

11.8

12.7

14.0

14.2

14.2

13.7

15.0

Public I/GDP

5.1

5.3

6.0

5.6

6.5

7.3

8.0

8.1

8.1

8.1

7.5

7.7

7.3

6.4

6.0

5.6

5.7

5.8

6.1

5.9

5.4

5.9

6.3

6.1

5.8

5.4

5.7

5.5

GDFI/GDP

22.2

24.4

24.5

22.2

21.1

24.8

25.2

24.7

27.7

25.6

24.3

23.0

20.2

18.8

17.6

15.9

15.5

18.3

21.3

20.5

19.8

18.3

20.3

18.6

19.0

18.0

17.9

18.4

Private I/GDP

13.9

14.2

13.8

10.9

10.4

11.4

13.8

13.5

14.8

12.7

11.4

11.4

10.2

10.0

9.3

8.2

7.9

8.4

10.5

10.2

10.3

9.5

10.1

9.4

9.4

9.9

10.3

10.7

Public I/GDP

8.3

10.2

10.7

11.3

10.7

13.4

11.4

11.2

12.9

12.9

12.9

11.6

10.1

8.8

8.3

7.7

7.7

9.9

10.8

10.3

9.5

8.8

10.2

9.3

9.6

8.1

7.6

7.7

17.8 11.6 6.2

18.3 11.8 6.6

18.8 11.8 7.0

17.7 11.2 6.5

19.2 12.2 7.0

21.2 12.8 8.4

22.3 12.9 9.4

22.6 13.1 9.6

23.2 13.7 9.4

23.0 13.5 9.5

22.7 13.2 9.5

23.0 13.4 9.6

22.6 13.0 9.6

21.2 12.4 8.8

20.1 11.9 8.2

19.1 11.2 7.9

19.3 11.5 7.8

19.9 12.1 7.8

20.9 12.8 8.1

20.8 12.9 7.9

20.8 12.8 8.0

20.3 12.4 8.0

21.1 12.5 8.6

21.3 13.0 8.3

21.3 13.3 8.0

21.3 14.0 7.4

21.3 14.1 7.2

21.6 14.4 7.1

GDFI/GDP

Note: Unless otherwise noted the sources are: national authorities & World Bank/IMF staff estimates. Data for 1996/97 are preliminary/estimates. China - private investment includes: investment by: collective-owned units, joint-owned units, share-holding units, foreign-funded units, Hong Kong-Macao-Taiwan-funded units and by individuals. Brazil - source 1990-1997: FIBGE, Centro de Estudos de Economia and Governo/IBRE/FGV, previous years World Bank. 1990-97 - private investment includes investment by enterprises controlled by state and local municipalities. Republic of Korea - public investment = capital expenditure of consolidated nonfinancial public sector. Mexico - 1988-97 data based on a new INEGI methodology. Morocco - up to 1990 public investment are estimated by investment of 14 biggest public companies; 1990-1997 data for the whole economy. Poland - 1995-97 GDP includes estimates of "the grey economy". South Africa - Source: Quarterly Bulletin of South African Reserve Bank.