ISLAMABAD: Pakistan has made some important progress towards the ease of doing business for small and medium-sized enterprises, finds the latest edition of the World Bank Group’s Doing Business report.

As a result, the country has emerged as one of the global top 10 improvers this year, says the report titled ‘Doing Business 2017: Equal Opportunity for All’.

Pakistan’s position in the doing business global rankings improved to 144 out of 190 economies this year under the latest methodology as a result of the reforms programme announced by the government. The country was ranked 148th last year.

The country’s ‘distance to frontier’ score, a measure of distance each economy has moved towards best practice expressed as frontier at 100, also improved from 49.48 to 51.77 this year.

Pakistan had announced a three-year road map to improve its global ranking on doing business earlier this year. Consistent with that, the country completed three reforms in the past year in registering property, getting credit and trading across borders.


Country among top 10 reformers in World Bank’s Doing Business 2017 report


In Lahore, transferring property was made easier by improving the quality of land administration through digitising ownership and land records. This has made land administration more reliable than before.

Cross-border trade was eased by updating electronic customs platforms in Lahore and Karachi. It now takes less time for an exporter to comply with border regulations.

Pakistan improved access to credit information by legally guaranteeing borrowers’ rights to inspect their own data. The credit bureau also more than doubled its borrower coverage, thereby increasing the amount of creditor information and providing more financial information to prospective lenders. Pakistan now ranks second in the South Asia region in the area of getting credit.

“These improvements provide important building blocks for a more efficient business environment that would encourage local entrepreneurs in the country,” says Illango Patchamuthu, World Bank’s Country Director for Pakistan.

“At the same time, Pakistan needs to accelerate reforms towards better regulatory practices for a more conducive business environment for higher growth and job creation,” he said.

While Pakistan’s recent improvements are encouraging, the report finds that local entrepreneurs still face difficulties in many areas such as enforcing contracts and getting electricity. For instance, it takes almost three years to settle a commercial dispute in Pakistan compared to the global average of 637 days. And firms in both Karachi and Lahore experience power outages on a daily basis, it points out.

This year’s report includes, for the first time, a gender dimension in three indicators: starting a business, registering property and enforcing contracts. The country needs to pay significant attention to gender aspects, it says.

The ‘paying taxes’ indicator has been expanded as well to include measures of post-filing processes relating to tax audits and value added tax refund. Tax audit compliance in Pakistan takes 29 hours, which is considerably less than the regional average of 48 hours, but higher than the global average of 17 hours.

The finance ministry in a statement said reforms have been spearheaded by the finance minister and the Committee on the Ease of Doing Business through development and implementation of a National Doing Business Reform Strategy.

Commenting on the report, Mr Ishaq Dar said, “Implementation of the time-bound reforms under this strategy over the next two years is expected to significantly improve the country’s business environment and act as a catalyst for increasing both domestic and foreign investment.”

The strategy, according to the statement, was the result of consultative process led by the Ministry of Finance with involvement from federal and provincial government agencies concerned including key institutions, Board of Investment, Federal Board of Revenue and Securities and Exchange Commission of Pakistan.

The World Bank’s report says that a record 137 economies around the world have adopted key reforms that make it easier to start and operate small and medium-sized businesses.

In its global country rankings of business efficiency, the report awarded its coveted top spot to New Zealand, followed by Singapore, Denmark, Hong Kong, South Korea, Norway, United Kingdom, United States, Sweden and Macedonia.

Published in Dawn October 27th, 2016

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