ISLAMABAD - Pakistan’s position has improved by 28 places and rose to a rank of 108 in the global ease of Doing Business rankings after the enactment of six regulatory reforms.
“The enactment of six regulatory reforms has landed Pakistan among the world’s top 10 business climate improvers,” the World Bank Group’s Doing Business 2020 study said. Due to a concerted improvement in business regulation, Pakistan climbed 28 places and rose to a rank of 108 in the global ease of Doing Business rankings this year from 136 the previous year.
Prime Minister Imran Khan has expressed the confidence that Pakistan will become one of the top places for investment before the end of next year. He said the government has fulfilled another of its manifesto commitments by showing improvement in the ease of doing business. In a tweet on Thursday, he said Pakistan has achieved the biggest improvement in its history in the World Bank's Ease of Doing Business rankings. He said over the last decade Pakistan's ranking had slipped more than fifty places. Now, we have improved twenty eight places from 136 to 108.
According to the World Bank, the reforms that helped the country improve its ranking are significant. The country 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 Labor Department registration fee was abolished.
Pakistan made the approval process for obtaining a construction permit easier and faster in both Karachi and Lahore. 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 for the 2018 fiscal year. This reform reduced the number of payments from 47 to 34 and the total number of hours required complying 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, the country increased the transparency of electricity tariff changes. Karachi made property registration faster by making it easier to execute and register a deed at the Office of the Sub-Registrar. Lahore increased the 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 (WEBOC) electronic system and ensured coordination of joint physical inspections at the port.
Pakistan continues to perform best on the 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 World Bank Country Director for Pakistan Illango Patchamuthu.
“The accelerated reform agenda has 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.”
Going forward, Pakistan has other opportunities for improvement in the areas measured by Doing Business. 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.
Adviser to Prime Minister on Commerce, Industries and Investment Abdul Razak Dawood said that the Prime Minister of Pakistan gave priority to Ease of Doing Business reforms and held a number of meetings to make sure that the reform drive is on track. He stated that the report is only one step towards the goals and the Government has constituted a number of reform committees to bring about further improvements in the business climate in the country. He said this while addressing a launching ceremony of World Bank’s “Ease of Doing Business,” report 2020.
Underlining the importance of Doing Business report, Mr. Razak Dawood stated that the ranking is very important for foreign investment in a country. He told that six reforms of Pakistan have been accepted by the World Bank but we are particularly focusing on the remaining four areas, where there is still a lot of room for improvement.
He further underscored improvement in DB ranking is a proof of Pakistan’s commitment to improve business environment and intergradation with world economy. Moreover, Pakistan has beaten India by 18 points in DB ranking of 2019 of World Bank. The Advisor appreciated the role of Federal and Provincial agencies, as well as the team of Board of Investment and the World Bank, which worked hard during the last year to ensure an unprecedented improvement by Pakistan in the global DB Rankings. Further, Adviser to PM underlined that improved DB ranking will go a long way to attract domestic as well as FDI from the globe. It pertinent to mention that owing to improved business climate FDI witnessed growth of 112% in September 2019.
Addressing the event, Chairman BOI, Mr. Zubair Gilani, said that the government has a consensus on resolving the business-related issues through technology backed solutions. He added that the improvement in business environment and overall economy is becoming visible because of the reforms introduced by the Government and, going forward, the Government will focus on the mandate of ensuring well-being of masses and providing quality education and health to everyone.