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November 2, 2018

Business report

Editorial

 
November 2, 2018

Pakistan has a long road ahead to become a more business-friendly country. The World Bank’s Ease of Doing Business report for 2019 placed Pakistan at the 136th place on its rankings, a fairly low figure given that the country is amongst the top seven in terms of its population. There is a long and difficult path ahead before we are on the road to development. The Ease of Doing Business report measures the hurdles that new businesses face in a country, which allows a concrete understanding of the problems that any new entrepreneurs face. Pakistan has done better than last year after the country rose 11 places on the ranking after introducing business reforms, such as making it easier to register properties, introducing a one-stop registration process, and making it easier to continue business during insolvency. However, the actual numbers on the first two counts are fairly poor. It takes an average of 144 days to register a property in Pakistan, which is 13 days better than it took last year, but much higher than the South Asia average of 114 days. Similarly, it takes 17 days to register a business, which is three days less than last year. 

The improvement is laudable but it is clear that a more concerted effort will be required. The time periods and cost involved in setting up a new business make Pakistan a poor choice for investment. While moving towards one-window processes in recent years has improved some things, it still takes too much time for new economic activity to take place. The World Bank is positive that Pakistan is taking the right steps, but it has urged the country to do better. This is one of the key steps that would allow investment to speed up in the country. As it stands, anyone wanting to start a new business must wait for around six months for clearing paperwork. This is not an environment that encourages new investment. China and India do much better than Pakistan on the index. Pakistan scored 56.71 while India and China scored 67.23 and 73.6 respectively. Pakistan does well on insolvency and protecting minority investors, ranking 26 in the world. This should us that there is no reason Pakistan cannot be so high in other metrics. But the 161 days it takes to get an electricity connection and similar time to get construction permits are major inhibitors in the economy taking off.

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Karachi minus plus

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