Daily Times

KARACHI: Pakistan’s position in the global Doing Business rankings has slipped three notches to 147 from last year’s 144th position. Experts term the findings of the World Bank’s report ‘a setback’ to the government’s business friendly impression.

Professor Dr. Athar Ahmed, a senior economist, termed the report a ‘matter of shame’. “The report depicts the true picture of the economy. It will definitely dent the government of PML-N”, Ahmed said.

“How can the ranking improve in a situation where the country’s finance minister cannot even maintain his own bank account?” Dr. Ahmed questioned, adding that the credibility of the country has been questioned with the release of the report.

Shamim Ahmed Firpo, the former KCCI president, said that instead of protecting national interests the government officials were engaged in securing their own interests. “Everyone in the business community feels insecure in the current political situation,” he said. Due to current political turmoil the investors are not willing to increase their stakes. “As long as the status-quo is maintained the business and the economy will continue to suffer,” the former KCCI president warned.

However, the World Bank report has also acknowledged implementation of economic reforms.

“Pakistan has implemented four reforms, making it easier to register a new business, transfer commercial property and facilitating cross-border trade,” the Bank has held in the report.

The country has made it easier to start a business by replacing the need to obtain a digital signature for company incorporation with a less costly personal identification number.

This change applies to both Karachi and Lahore. Besides, the report acknowledges improvements in land registration process that have promoted transparency. These measures include online availability of the fee schedule and documents needed to be submitted for property registration.

Protecting minority investors: Pakistan has increased protection for minority investors by making it easier to sue directors in case of prejudicial transactions with interested parties. Trading across borders, Pakistan has made importing and exporting easier by developing a new container terminal and enhancing the customs platform for electronic document submission.

11 indicators: The World Bank’s Doing Business flagship report uses 11 indicators to measure aspects of business regulation that matter for entrepreneurship. The indicators include starting a business, dealing with construction permits, getting electricity, registering property, access to finance, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and labour market regulations.

South Asian region: According to the report, India has carried out the most reforms in the South Asian region in the past 15 years. With 37 reforms, the country is followed by Sri Lanka’s 22 and Pakistan’s 19.

South Asia is the only region not represented in the top 50 rankings for ease of doing business. However, India stands out this year as one of the 10 economies that improved the most in the areas measured in the report.

The region’s top-ranked economies are Bhutan, (75), India (100), and Nepal (105). South Asian economies carried out a record 20 business reforms in the past year, bringing to a total of 127 the number of reforms introduced in the region over the last 15 years.

The World Bank said that a major focus of reforms in the past year were in the area of protecting minority investors, with half of the region’s eight economies implementing measures to strengthen protections.

The Bank said that governments around the world had embraced and nurtured advances in information technology to reduce bureaucratic hurdles and increase transparency. “Today, in 65 of the 190 economies covered by Doing Business, entrepreneurs can complete at least one business incorporation procedure online, compared with only nine of the 145 economies measured in Doing Business 2004. Furthermore, in 31 economies it is now possible to initiate a commercial dispute online. This kind of progress can also be observed in the other areas measured by Doing Business”, the bank added.

Slight improvement in ‘Distance to Frontier’: Even though Pakistan dropped to 147th from its previous position 144th ranking, it has shown improvement in the Distance to Frontier (DTF) category.

The World Bank states that the DTF score “helps assess the absolute level of regulatory performance over time. It measures the distance of each economy to the ‘frontier’, which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005.”

On DTF, Pakistan stands at 51.65 out of 100 compared to last year’s 50.94. This progress is still slower than the South Asian average.

With additional input from the web desk

With an overall score 147, here’s how the breakdown looks on the Index:

n 142 for “Starting a Business”

n 141 for “Dealing with construction permits”

n 167 for “Getting electricity”

n 170 for “Registering property”

n 105 for “Getting credit”

n 20 for “Protecting Minority Investors”

n 172 for “Paying taxes”

n 171 for “trading across borders”

n 156 for “enforcing contracts” and

n 82 for “Resolving insolvency”

Published in Daily Times, November 2^nd 2017.