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December 14, 2016

Pakistan ranks below most regional countries in property rights index

Business

December 14, 2016

LAHORE: Pakistan ranks 121 out of 128 countries in the International Property Rights Index (IPRI) 2016 Report. Among the regional countries it ranks below China, India, Iran, Sri Lanka, and Nepal. Only Myanmar and Bangladesh are ranked below.

The report states that a strong property rights regime commands the confidence of people in its effectiveness to protect private property rights. It also provides for unified transactions related to registering property and allows access to credit necessary to convert property into capital.

As innovation and creativity abound in markets around the world, the current globalised economy requires strong property rights. The index measures the three main components of a sound property rights system: the legal and political environment (LP), physical property rights (PPR), and intellectual property rights (IPR). 

Each of these three components that make up the International Property Rights Index are further broken down into subcomponents. The LP has four subcomponents: judicial independence, rule of law, political stability, and control of corruption. The PPR has three subcomponents: the protection of physical property rights, registration of property and the ease of access to loans. The final component, IPR, also has three subcomponents: the protection of intellectual property rights, patent protection, and copyright protection.

This index was introduced a decade back. Pakistan’s overall score on a scale of 10 in IPRI 2007 was 3.9 points that declined to 3.6 in 2016. Its highest score in this segment was 4.3 points achieved in 2014.

On the basis of this score, Pakistan ranked 121 out of 128 global economies and 18 out of 20 regional countries. In the political sub index, its score was only 2.8; in physical property sub index, the score was 5.0, ranking it 102 out of 128 countries in this parameter.

The intellectual property rights score was 3.2 out of 10, and the country ranked 118 out of 128 economies. On the other hand, the sub index of legal and political on independence of judiciary was 4.3, elevating its rank to 74 out of 128 in this segment. On rule of law, the score was 3.4, placing it at 109 among 128 countries.

The country scored barely 0.1 out of 10 in political stability, ranking it lowest among 128 countries. In control on corruption, Pakistan scored 3.4, placing it at 107 out of 128 countries.

In the sub index of physical property rights, Pakistan’s scoring deteriorated from 5.7 points out of 10 in 2007 to 5.0 points in 2016. The scored in the protection of physical property rights was 4.1 points, placing Pakistan at 102 out of 128 economies.

According to the IPRI 2016 Report, Pakistan’s scored on registering property, was healthy at 8.4 points. It was ranked 97 among the 127 countries for which the data was available.

But on access to loans, its performance was very poor, scoring only 2.6 points; despite that, Pakistan placed 84 among 128 economies surveyed by the report.

Hernando De Soto, the greatest proponent of physical property rights, stated in the report that property rights are crucial in establishing a climate conducive to economic prosperity and freedom within a country.

As such, the developed nations around the world have found the importance of property rights and ensured their protection. Therefore, western countries top the list of scores for strong property rights protection.

Conversely, countries that have weak property rights also struggle to develop strong, innovative economic markets. Pakistan’s record on intellectual property rights has never been satisfactory. This is the reason that its score of 3.2 out of 10 is very low.

The United States and Pakistan have been negotiating preferential trade agreement for the last many years. Each time, the US government asks Pakistan to improve its record on the protection of intellectual property rights.

In this sub index, Pakistan’s score was 3.7 and the ranking 103 out of 128 countries. On patent protection, the score was 4.5 and the rank 100 out of 128 economies. Copy rights protection scored the lower in this sub index, at only 1.5 in all parameters. Pakistan ranks 96 in this parameter.

The total IPRI scores of the country increased by only 0.1, changing it to 3.7 out of 10. This placed Pakistan 18th in Asia and Oceania, and 121st in the world. Pakistan is classified by the IMF as part of the Middle East, North Africa and Pakistan (MENAP) group and by the World Bank as a lower-middle income country.It is a member of the South Asian Association for Regional Cooperation.

 

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