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Pakistan continues to improve business environment: World Bank report

Latest Update: October 26, 2016 | 167 Views
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ISLAMABAD: Pakistan has made significant progress in increasing ease of doing business for small and medium-sized enterprises, the latest edition of the World Bank Group’s ‘Doing Business’ report finds.

Pakistan is among this year’s global top 10 improvers, states ‘Doing Business 2017 Equal Opportunity for All’ report, released on Tuesday.

The World Bank report notes that Pakistan 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 the highest number in a single year over the past decade.

The report further says that in Lahore, transferring property was made easier with improvement in the quality of land administration through digitization of ownership and land records.

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 also improved access to credit information by legally guaranteeing borrowers rights to inspect their own data. The credit bureau 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, according to the report.

As a result of these reforms Pakistan’s position in the Doing Business global rankings improved to 144 out of 190 economies this year, from 148 the prior year, under the latest methodology.

Pakistan’s Distance to Frontier score – a measure of distance each economy has moved towards best practice expressed as frontier at 100 in Doing Business report — also improved from 49.48 in 2015 to 51.77 this year, the World Bank said.

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

At the same time Pakistan needs to accelerate reforms toward better regulatory practices for a more conducive business environment for higher growth and job creation.

While Pakistan’s recent improvements are encouraging, the report found 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, the World Bank report claims.

This year’s report includes for the first time a gender dimension in three indicators: Starting a Business, Registering Property and Enforcing Contracts.

The Paying Taxes indicator set 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.