Unlike most other indicators of the ease of doing business in Pakistan, ‘trading across border’ underwent a major improvement over the last one year, according to the World Bank Group’s Doing Business 2015 report.
Pakistan has made trading across borders easier by introducing a fully automated, computerised system for the submission and processing of export and import documents, said the World Bank Group’s flagship publication.
The web-based One-Customs system has pushed Pakistan’s rank up by four notches to 108 in the category of ‘trading across border’.
Overall, Pakistan ranked 128th out of 189 economies of the world in terms of the ease of doing business it offers to entrepreneurs. It ranked 127th last year, which means an overall deterioration in the regulatory environment when it comes to starting and operation of a local firm.
The 2015 rankings are benchmarked to last year’s and are determined on the basis of 10 topics, each consisting of several indicators.
Out of the 10 topics, Pakistan’s position improved in trading across borders and resolving insolvency by four and three notches respectively, in 2015. Pakistan maintained its 161st position in the enforcing contract category, according to the 2015 report.
Its rank deteriorated in starting a business (-7), dealing with construction permits (-4), getting electricity (-1), registering a property (-3), getting credit (-6), protecting minority investors (-2), and paying taxes (-4).
Starting a business
The total number of procedures required to register a firm in Karachi is 10 as opposed to the average of 7.9 in all South Asian countries.
The number of procedures involved in registering a firm in any member country of the Organisation for Economic Co-operation and Development (OECD) is only 4.8.
Similarly, the total number of days required to register a firm in Karachi is 19 as opposed to the South Asian average of 16 and 9.2.
Construction permits
Although the number of procedures involved in building a warehouse is lower than the comparable average in South Asian and OECD member countries, the procedures take as many as 249 days in Karachi as opposed to the average of 196.6 days in South Asian countries.
Getting electricity
Getting electricity is particularly difficult in Pakistan compared to the rest of South Asian and OECD economies. It takes 173 days to obtain a permanent electricity connection.
The measure captures the median duration that the electricity utility and experts indicate is necessary in practice, rather than required by law, to complete a procedure.
The comparable average for South Asian and OECD countries is 145.7 and 76.8 days, respectively.
Registering property
The total number of days required to register a property in Karachi is 50, which is better than the South Asian average of 99.5 days. However, it takes fewer days in OECD economies to register a property, as their average is only 24 days.
Besides a sale purchase agreement that costs around Rs5,000, property registration involves 1% town tax, 2.5% of the property price (capital value tax), 3% of property price (stamp duty) and 1% of property price (registration fee).
Published in The Express Tribune, October 31st, 2014.
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Total failure of the N-League led government with no one else to blame.