Doing Business measures regulations affecting 11 areas of the life of a business. Ten of these areas are included in this year's ranking on the ease of doing business; starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures labor market regulation, which is not included in this year's ranking.
According to the report, Pakistan implemented four reforms in the past year; made it easier to register a new business, transfer of commercial property, increased minority investor protections, and facilitated cross-border trade.
Pakistan made starting a business easier by replacing the need to obtain a digital signature for company incorporation with a less costly personal identification number. This change applies to both Karachi and Lahore. Pakistan (Karachi) improved the transparency of the land registration process by making the fee schedule and list of documents to submit for property registration available online.
Pakistan increased minority investor protections by making it easier to sue directors in case of prejudicial transactions with interested parties. Pakistan made importing and exporting easier by developing a new container terminal and enhancing its customs platform for electronic document submission.
Pakistan's ranking for "Ease of Doing Business" in various areas remained as following: overall ranking: 147, starting a business - 142, dealing with construction permits - 141, getting electricity - 167, registering property - 170, getting credit - 105, protecting minority investors - 20, paying taxes - 172, trading across borders - 171, enforcing contracts - 156 and resolving insolvency - 82.
Paying taxes, getting electricity, trading across borders and enforcing contracts are the worst issues in doing business in Pakistan. Pakistan received the lowest rank, 172 on paying taxes, 171 on trading across borders, 167 on getting electricity as it takes 180 days to get an electricity connection, 170 on registering property and 156 on enforcing contracts.
South Asian economies carried out a record 20 business reforms in the past year, bringing to a total of 127 the number of reforms enacted in the region over the past 15 years, said the report, which monitors the ease of doing business for small and medium enterprises around the world.
India implemented eight of the past year's reforms, a record for the country in a single year. This earned India a spot among this year's global top improvers.
A major focus of reforms in the past year were in the area of protecting minority investors, with half of the region's eight economies implementing measures to strengthen protections for minority shareholders. The reforms included enhanced remedies to address cases of prejudicial transactions between interested parties in India; rules to clarify ownership and control structures in Bhutan; greater corporate transparency in Nepal; and facilitating legal action against directors in case of prejudicial transactions with interested parties in Pakistan.
The region lags behind in areas such as registering property and resolving insolvency. It takes on average 112 days to register property in South Asia, compared with the global average of 49.5 days. And, creditors for resolving insolvency recover about one-third of the property value, which is less than half of the recovery rate of 71.2 percent in OECD high- income economies.
Copyright Business Recorder, 2017