Pakistan Drops to 147th in World Bank’s Ease of Doing Business Index

Pakistan has dropped to 147^th on the “Ease of Doing business Index” list recently published by the World Bank. Last year Pakistan stood at 144^th but things didn’t go well this year either despite the efforts made by the government. World Bank assessed economies of 190 countries and Pakistan stood among the bottom few.

South Asia

Bhutan was placed at 75^th place and it was recognized as the best country for doing business in South Asia. Notable mentions amongst the South Asian countries are listed below:

• Bhutan at 75^th
• India at 100^th
• Nepal at 105^th
• Pakistan at 147^th
• Bangladesh at 177^th
• Afghanistan at 183^rd

India has carried out the most reforms in the region in the past 15 years, with 37 reforms, followed by Sri Lanka (22) and Pakistan (19).

Areas Surveyed

Doing Business index measures regulations affecting 11 areas related to businesses. Ten of these areas are included in this year’s ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures labor market regulation, which is not included in this year’s ranking.

World Bank concluded the results based on the surveys held in Karachi and Lahore. However, there were some positive changes that took place over the year.

Improvements Over 2016

Pakistan made progress in the following categories, as revealed by the World Bank report.

• ‘ease of registering property’,
• ‘strengthened minority shareholders protection’,
• ‘start a business’
• ‘Do trade across the border’.

• Overall ranking: 147,
• Starting a business – 142,
• Dealing with construction permits – 141,
• Getting electricity – 167,
• Registering property – 170,
• Getting credit – 105,
• Protecting minority investors – 20,
• Paying taxes – 172,
• Trading across borders – 171,
• Enforcing contracts – 156
• Resolving insolvency – 82.

Factors Behind Deterioration

On the other hand, Pakistan’s standings took a serious hit in the following categories:

Getting Credit for Doing Business

Pakistan was ranked 82^nd last year in the list of getting “credit for doing business”. Things didn’t go Pakistan’s way as Pakistan dropped down to a 105^th spot in the latest rankings.

Tax Indicator

Pakistan slipped to 172^nd place, down from 156^th last year. This fall in rankings is mainly due to the increased tax rates this year. The tax rates have been increased to 33.8 percent of total profits. However, the overall corporate tax was decreased to 30 percent.

This increased tax resulted in consumption of 311.5 hours as companies and individuals made 47% tax payments.

Getting Electricity

Pakistan stands at 170^th on the index of “Getting Electricity”. Last year Pakistan was at 167^th in this list. There are six steps that need to be followed to get an electricity connection in Pakistan. As per reports, there was no progress made in the “reliability of supply and transparency in electricity tariffs.

Progress in the Region

The region lags in areas such as Registering Property and Resolving Insolvency. It takes on average 112 days to register property in South Asia, compared with the global average of 49.5 days. And, creditors for Resolving Insolvency recover about one-third of the property value, which is less than half of the recovery rate of 71.2 percent in OECD high- income economies.

Via PakistanToday

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