Pakistan, second best to do business in South Asia: WB
* Report points out South Asia as the second-fastest reforming region in the world
* Singapore remains best place for businesses
ISLAMABAD: South Asia has picked up the pace of regulatory reform over the past year to become the second-fastest reforming region in the world, on par with the speed of reform in the countries of the OECD, finds World Banks report Doing Business 2008.
The pickup in reform was led by India, which rose 12 places on the ease of doing business and made the reform of business regulation a policy objective. India was the top reformer worldwide in trading across borders. Bhutan and Sri Lanka are the other top reformers in South Asia this year. Bhutan introduced the countrys first fundamental labor protections. Sri Lanka made it easier to start a business and to trade across borders.
Singapore, for the second year running, tops the aggregate rankings on the ease of doing business. The top-ranking countries in South Asia are Maldives (60) and Pakistan (76). India improved its ranking to 120th this yearachieving a bigger gain than China, which rose by nine places to 83rd.
Worldwide, the top 10 reformers are, in order, Egypt, Croatia, Ghana, FYR Macedonia, Georgia, Colombia, Saudi Arabia, Kenya, China, and Bulgaria. Reformers made it simpler to start a business, strengthened property rights, enhanced investor protections, increased access to credit, eased tax burdens, and expedited trade while reducing costs. In all, 200 reformsin 98 economieswere introduced between April 2006 and June 2007.
The report finds that equity returns are highest in countries that are reforming the most, said Michael Klein, World Bank/IFC Vice President for Financial and Private Sector Development.
Details on Pakistan suggest that it extended overtime limits for retail workers from 150 hours a year to 624 and made working hours more flexible. The private credit bureau has expanded the scope of information distributed to include positive as well as negative credit information. In addition to late payments and defaults information, the original and outstanding loan amounts are now distributed to lenders as well. Pakistan s public credit registry eliminated its loan threshold of Rs 500,000 ($8,350), boosting coverage by 20 times. In July 2006, the Sindh (province) Finance Act was issued that caused the stamp duty to decrease from three percent to two percent of property value. However, the positive impact of the reform was overcome by the reinstatement of the capital value tax of two percent at the national level by the Finance Act 2006, causing a net increase of one percent property value in the total cost to transfer this year.
Afghanistan, through a change in format of the required circular form, now entrepreneurs are required to obtain fewer approvals from various government agencies and procedural steps to transfer property have decreased from 11 to 9. In addition, some district courts title deeds storages are being digitalised.
Bhutan made it easier for entrepreneurs to start limited liability trading companies by eliminating two proceduresname approval and location clearanceand increasing efficiency at the Registrar of Companies. The time to start operating a business in Thimphu dropped from 62 to 48 days. The time needed to transfer property, which takes place largely in the courts, has decreased by 30 days.
India introduced an electronic registry that covers the rights granted by companies. The registry can be searched by name of debtor, and is linked geographically to cover the whole country. The private credit bureau has incorporated firms to its database and now provides credit information on corporate entities. Through introduction of an Electronic Data Interchange (EDI) system, customs declarations are now carried out through the internet. This system has also allowed the operation of a Risk Management System (RMS), an e-manifest system, and an e-payment system which facilitated the decrease in import time by seven days.
Sri Lanka made the most progress in South Asia for starting a business. A new companies act eliminated burdensome approvals and introduced a flat registration fee. Company seals and notaries were made optional. Procedures were reduced from 8 to 5, and the time for start-up decreased from 50 days to 39. Sri Lanka introduced electronic submission of customs declarations, cutting time for trading by 7 days. Sri Lanka s credit bureau restricted the availability of information on repaid defaults to only 1 year, while defaults settled through the courts are kept for 3 years. Elsewhere, Eastern Europe and Central Asia led world regions in reform, with Estonia, Georgia, and Latvia all among the top 25 on the ease of doing business. In Africa the pacesetters are Ghana and Kenya, but was uneven, with almost half the countries not reforming at all. Reform in the Middle East and North Africa is picking up speed, led by Egypt, Saudi Arabia, and Tunisia. Latin America and East Asia are at the bottom of the list of reformers this year.
Daily Times - Leading News Resource of Pakistan
