Nada Yaseen - Pakistan had announced a three year road map to improve its global ranking on doing business earlier this year; which is already paying dividends as can be seen from the latest edition of the World Bank Group’s Doing Business report which has said that Pakistan has made some important progress towards the ease of doing business for small and medium-sized enterprises. As a result, the country has emerged as one of the global top 10 improvers this year.

Pakistan’s position in the doing business global rankings improved to 144 out of 190 economies this year under the latest methodology as a result of the reforms programme announced by the government. The country was ranked 148th last year.The country’s ‘distance to frontier’ score, a measure of distance each economy has moved towards best practice expressed as frontier at 100, also improved from 49.48 to 51.77 this year.

Pakistan completed three reforms in the past year in registering property, getting credit and trading across borders. In Lahore, transferring property was made easier by improving the quality of land administration through digitising ownership and land records. This has made land administration more reliable than before. 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 has also improved access to credit information by legally guaranteeing borrowers’ rights to inspect their own data. The credit bureau also 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.

“These improvements provide important building blocks for a more efficient business environment that would encourage local entrepreneurs in the country,” says Illango Patchamuthu, World Bank’s Country Director for Pakistan. “At the same time, Pakistan needs to accelerate reforms towards better regulatory practices for a more conducive business environment for higher growth and job creation,” he said.

While Pakistan’s recent improvements are encouraging, the World Bank Group’s Doing Business report finds that local entrepreneurs still face difficulties in many areas such as enforcing contracts and getting electricity. The reforms focus on regulatory changes and improving technology and building capacity of implementing agencies for simplification of procedures involved in making businesses operational. They have been designed to effectively address critical bottlenecks faced by a small and medium sized enterprise.

This year’s report includes a gender dimension in three indicators: starting a business, registering property and enforcing contracts. Pakistan needs to pay significant attention to gender aspects, as the gender gap is significant. Closing gender gaps in economic participation could boost GDP by up to a third.

The ‘paying taxes’ indicator 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.

The finance ministry has said that reforms have been spearheaded by the finance minister and the Committee on the Ease of Doing Business through development and implementation of a National Doing Business Reform Strategy. Commenting on the report, Finance Minister Ishaq Dar said, “Implementation of the time-bound reforms under this strategy over the next two years is expected to significantly improve the country’s business environment and act as a catalyst for increasing both domestic and foreign investment.” The strategy is the result of consultative process led by the Ministry of Finance with involvement from federal and provincial government agencies concerned including key institutions, Board of Investment, Federal Board of Revenue and Securities and Exchange Commission of Pakistan.

Recently, International Monetary Fund (IMF) Managing Director (MD) Christine Lagarde visited Pakistan and lauded Prime Minister Nawaz Sharif on successfully completing the IMF programme and achieving macroeconomic stability during a short period of time. Her visit comes around two months after the international lender cleared payment to Pakistan of a final $102 million tranche in a $6.4 billion three-year programme. Completion of the IMF programme reflects very positively on Pakistan. IMF has pointed out four key areas for Pakistan, including greater economic resilience, higher growth, quality of growth and belief in the global system. The IMF officially endorsed Pakistan’s economic recovery but has urged the country to continue key structural reforms if it wants to consolidate these gains.

The Asian Development Bank has also endorsed that Pakistan has improved its economy during the past three years and continuation of reforms programme would make the country an appropriate destination for investments in future. ADB President Takehiko Nakao appreciated efforts of Pakistan, while addressing a joint press conference with Finance Minister Senator Muhammad Ishaq Dar, after signing $250 million Border Service Management Project agreement. The ADB president said that many economic indicators have shown progress, enumerating that the growth rate has climbed up while inflation reduced, with fiscal deficit coming down and foreign exchange reserves built up.He said that there were many encouraging signs supported by the structural reforms introduced by the government.

All these endorsements by world economic bodies prove that the economy of Pakistan is on the right track. If we continue with our reforms and ensure best practices as per global standards there will be even further gains in global business rankings and we will be able to ensure investor friendly environment which will lead to economic growth which of course is the eventual aim of all these endeavours.