ISLAMABAD: In what appears to be the highest-ever upward shift in a year shown by a country, Pakistan climbed 28 places and rose to the rank of 108 in the World Bank Ease of Doing Business index and landed in the club of world’s top 10 business climate improvers.
In its report for the year 2020 released on Thursday, the World Bank said the enactment of six regulatory reforms, including a concerted improvement in business regulation, had improved Pakistan’s overall ranking that would improve the country’s image for attracting investments.
Global investors use the World Bank’s index as a guide to learn about the business environment of a country before making any business plan. Taking to Twitter, Prime Minister Imran Khan said Pakistan had achieved the biggest improvement in its history in World Bank’s ease of doing business rankings. “Over last decade Pakistan’s ranking had slipped more than 50 places. Now we have improved 28 places from 136 to 108,” he added.
He said this was another commitment of his manifesto that was achieved. “I want to congratulate all the people in our government who worked hard to make this happen. We still have a long way to go. InshaAllah, before the end of 2020 Pakistan will become one of the top places for investment,” he added.
Climbs 28 places to slot of 108 in World Bank Ease of Doing Business ranking
Adviser to the Prime Minister on Investment Razak Dawood termed the significant improvement in ranking a move by the present government to provide an environment conducive to foreign investment. He said the government had set ambitious reform targets to achieve 70th and 80th position in the WB ranking over the next couple of years.
The adviser said Pakistan had achieved the first position in the South Asian region in bringing fast reforms, besides having 6th position in top reformers of the world.
Other countries included in the club of top 10 reformers are: Saudi Arabia, Kuwait, Jordan, Nigeria, India, China, Bahrain, Tajikistan and Togo. India remained top among South Asian nations at 63, followed by Bhutan at 89, Nepal at 94 and Sri Lanka at 99. The countries which are far behind in the ease of doing business index in South Asia are Bangladesh at 168, Afghanistan at 173 and Maldives at 147.
Mr Dawood said the World Bank report 2020 covered two main cities — Karachi and Lahore, adding that improvement in the ranking was achieved due to coordinated efforts of two provinces — Sindh and Punjab. He said the government would provide similar opportunities for investment in Balochistan and Khyber Pakhtunkhwa as well.
According to the World Bank report, the reforms that helped Pakistan improve its ranking are significant. Pakistan has made starting a business easier by expanding the functionalities of the online one-stop-shop. This reduced the number of procedures required to set up a business from 10 to five and improved the economy’s score for starting a business.
Additionally, in Lahore, the Labour Department registration fee was abolished. Authorities made the approval process for obtaining a construction permit easier and faster in both Karachi and Lahore, respectively.
In Karachi, the process was also made safer by ensuring that building quality inspections take place regularly. Pakistan also eased the process for paying taxes by introducing online payment modules for value-added taxes and corporate income taxes. The government also lowered the corporate income tax rate. This reform reduced the number of payments from 47 to 34 and the total number of hours required to comply with tax requirements per year from 294 to 283.
Pakistan also made it easier to get electricity and register property. Karachi and Lahore enforced service delivery time frames and launched an online portal for new applications. In addition, Pakistan increased the transparency of electricity tariff changes.
Karachi made property registration faster by making it easier to execute and register a deed at the sub-registrar office. Lahore increased transparency of the land administration system by publishing its fee schedule online. Lastly, in the area of trading across borders, Pakistan enhanced the integration of various agencies in the Web-Based One Customs electronic system and ensured coordination of joint physical inspections at the port.
Pakistan continues to perform best on protecting minority investors’ indicator, earning the maximum possible points on the extent of ownership and control index, which measures governance safeguards protecting shareholders from undue board control. Globally, Pakistan is in the top 30 economies on this measure.
“This rise is significant and made possible by collective and coordinated actions of federal government and provincial governments of Sindh and Punjab over the past year,” said Illango Patchamuthu, the World Bank Country Director for Pakistan.
He said the accelerated reform agenda had many noteworthy features to improve quality of regulations, reduce time and streamline processes. “This momentum needs to be sustained in the coming years for Pakistan to continue to make progress,” he added.
Going forward, Pakistan has other opportunities for improvement in the areas measured by the Word Bank index. For example, on enforcing contracts, the country ranks 156th. It takes 1,071 days to resolve a commercial dispute in Pakistan, almost twice the average among OCED high-income economies, said the WB report.
The report is based on surveys carried out in Lahore and Karachi, and the results are based on work done from November 2018 to June 2019.