World Bank discontinues its business climate report

Islamabad: The World Bank Group has discontinued the publication of Doing Business Report.

The World Bank Group issued the following statement on the Doing Business report: “Trust in the research of the World Bank Group is vital. World Bank Group research informs the actions of policymakers, helps countries make better-informed decisions, and allows stakeholders to measure economic and social improvements more accurately. Such research has also been available tool for the private sector, civil society, academia, journalists, and others, broadening understanding of global issues.

After data irregularities on Doing Business 2018 and 2020 were reported internally in June 2020, World Bank management paused the next Doing Business report and initiated a series of reviews and audits of the report and its methodology. In addition, because the internal reports raised ethical matters, including the conduct of former Board officials as well as current and/or former Bank staff, management reported the allegations to the Bank’s appropriate internal accountability mechanisms.

After reviewing all the information available to date on Doing Business, including the findings of past reviews, audits, and the report the Bank released today on behalf of the Board of Executive Directors, World Bank Group management has taken the decision to discontinue the Doing Business report. The World Bank Group remains firmly committed to advancing the role of the private sector in development and providing support to governments to design the regulatory environment that supports this. Going forward, we will be working on a new approach to assessing the business and investment climate. We are deeply grateful to the efforts of the many staff members who have worked diligently to advance the business climate agenda, and we look forward to harnessing their energies and abilities in new ways.”

The World Bank Group had suspended publication of the Doing Business report 2021 after irregularities were reported regarding changes to the data used in the previous reports of 2018 and 2020.

Pakistan was ranked 147th among 190 countries after slipping by three places in Doing Business 2018 report; however, the country jumped by 11 places in Doing Business 2019 and 28 places in Doing Business 2020 reaching 108th and was listed among the economies with notable improvement.

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A statement issued by the World Bank Group in August 2020 read, “A number of irregularities have been reported regarding changes to the data in the Doing Business 2018 and Doing Business 2020 reports, published in October 2017 and 2019. The changes in the data were inconsistent with the Doing Business methodology.”

Over the 17 years of its existence, the Doing Business report has been a valued tool for countries seeking to measure costs of doing business. Doing Business indicators and methodology are designed with no single country in mind, but rather to help to improve the overall business climate, it had added.

The Group had stated, “a number of irregularities have been reported regarding changes to the data in the Doing Business 2018 and Doing Business 2020 reports, published in October 2017 and 2019. The changes in the data were inconsistent with the Doing Business methodology. The integrity and impartiality of our data and analysis is paramount and so we are immediately taking the following actions; we are conducting a systematic review and assessment of data changes that occurred subsequent to the institutional data review process for the last five Doing Business reports; we have asked the World Bank Group’s independent Internal Audit function to perform an audit of the processes for data collection and review for Doing Business and the controls to safeguard data integrity. We will act based on the findings and will retrospectively correct the data of countries that were most affected by the irregularities. The Board of Executive Directors of the World Bank has been briefed on the situation as have the authorities of the countries that were most affected by the data irregularities. The publication of the Doing Business report will be paused as we conduct our assessment.”

According to Doing Business 2020, Pakistan jumped 28 places to a global ranking of 108 in 2019 on ease of doing business index against 136 in 2018 when large scale manufacturing declined by 3.37 percent productivity in 2018-19.

When asked by this newspaper as to how the WB could reconcile Pakistan’s considerable improvements in ranking on ease of doing business while business productivity had declined significantly, the World Bank Country Director for Pakistan at that time Illango Patchamuthu said ranking countries on ease of doing business would take account of the prevailing economic situation from next year. Patchamuthu further stated that ease of doing businesses is composed of components that capture incremental improvements annually and it is based on de-regulation carried out by the government and private sector perceptions. Ease of doing business indicators are more reflective and representative of Small and Medium Enterprise (SMEs) sector “and we have to wait for next year’s ranking to take account of the economic slowdown.”

Copyright Business Recorder, 2021