Pakistan has improved its position by 11 spots in the World Bank’s latest ‘Ease of Doing Business rankings’, climbing to 136th from 147th last year. The annual report, which ranks countries on business-friendliness, procedural ease, regulatory architecture and absence of bureaucratic red tape is considered valuable in internationally and A country’s position in the ranking report indicates its competitiveness as well as highlights the areas where reforms are needed to improve its business climate.
This is a welcome news in current context where Pakistan is approaching friendly countries and international financial institutions for assistance to alleviate the chronic economic burden. Business activity lies at the core of a thriving economy and often the primary determinant of its health. Easier it is to start new business and get the required permits and procedural issues resolved more likely a country is to attract foreign investment and develop own vibrant entrepreneurial ecosystem.
Notwithstanding the marked improvement in doing business index ranking, Pakistan needs to go a long way to develop a business culture at par with developed economies. Although World Bank reports that active reforms are underway in several indicators such as starting a business, registering a property and resolving insolvency. There are several other indicators where Pakistan lags far behind regional and international competitors. It lies at 166 in dealing with construction permits, 167 in getting electricity and a dismal 173 in paying taxes out of 190 countries ranked.
Most issues are procedural ones and can be resolved easily through improved governance and digitization of public works. But any increased business activity will fail to generate revenue for state if tax system is not revamped and tax not is effectively widened. This is the most demanding task and the one which must be carried out in earnest. Government has time and again vowed to introduce tax reforms, but action should follow talk soon.
