Ease of doing business

Optimism at a high as Pakistan jumps 28 places on the World Bank’s Ease of Doing Business Index

There is some cause for optimism on the foreign investment front, as Pakistan jumped 28 places on the World Bank’s Ease of Doing Business Index. The index is a guide for foreign investors to learn more about a country so as to decide where to invest money and what the attached risks would be. Pakistan, according to the index report, has developed an ambitious reform strategy, setting up a national secretariat as well as a prime minister’s reform steering committee to ensure progress. The World Bank’s country director credited the federal, Sindh, and Punjab governments for the improvement. Pakistan carried out six reforms in the last year that helped improve its ranking from 136 to 108, according to the World Bank, which also ranked us among the top 10 countries with the most improved business climate. India moved up 14 spots to 63 and remains at the top of the regional list.

Experts are crediting the Board of Investment’s two most recent chairmen — Naeem Zamindar and Haroon Sharif — for the improvement. Sharif had predicted such an improvement when he resigned in May over the government “losing focus” on investment amid its negotiations with the International Monetary fund. Some of the areas where the focus was apparently lost were contract enforcement and access to credit, despite parliament having passed laws to encourage both a few years back. Some of the notable reforms mentioned included Punjab’s abolition of the Labour Department registration fee and streamlining the approval process for construction permits in Sindh and Punjab. Better electricity supply, enhanced integration of inspections at ports, and improvements in land registration were also credited. The index report also credits Pakistan for reducing the corporate income tax rate and making it easier to pay taxes by introducing online payment systems for value-added tax and corporate income tax.

Prime Minister Imran Khan optimistically tweeted about the ranking improvement and praised those whose work had helped Pakistan move up. But caution is also necessary. Ease of business does not always translate to higher investment. Much more still needs to be done to get the economy on the right track.

Published in The Express Tribune, October 26^th, 2019.

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