Ease of doing Business

The PTI government on taking over the reins of the government recognised the importance of ease of doing business and its importance on exports, local & foreign investment, employment opportunities, revenue generation and growth of national economy.
Pakistan's global ranking improved from 147 in 2017 to 136 in 2018 with all time high of 148 in 2015 and record low of 85 in 2008 - in the last decade. During the period 2009 to 2018 the manufacturing and industrial production followed a declining trend, whereas corruption recorded a rising trend which somehow explains Pakistan's gradual decline in ease of doing business.
The ease of doing business index ranks countries against each other based on how the regulatory environment is conducive to business operations, stronger protections of property rights. Economies with a high rank (1 to 20) have simpler and more friendly regulations for businesses. In 2018, Singapore ranked at number 2 position, offering the investor the most conductive environment to do business while India is at mid level with a rank of 77. Pakistan at 136 is in the lower bracket and has much to do to restore its 2008 rating of 85.
The government has expressed hope that the measures taken in last eight months in collaboration with 30 federal and provincial organisations would help improve Pakistan's ranking on Ease of Doing Business Index.
The Board of Investment (BoI) claimed that the government payments, including taxes, came down from 47 to 16 and by next year these would be further reduced to a single digit. However, any company after starting business in Pakistan would have to make multiple payments to federal and provincial governments which were reduced through introduction of online payments system.
The BoI states that the Securities and Exchange Commission of Pakistan (SECP) has shown that 8,000 companies have been registered in last six months after introduction of online portal. All the federal government agencies and provincial governments of Punjab and Sindh are linked through online portal which reduces significantly the time of registration period of 'starting a business' from 10 days to 4 hours. The improvement in the starting business was recognised by foreign companies and they sent certificates of appreciation to BoI as claimed by it.
On 'issuance of construction permit' side, the duration was reduced from 260 days to 90 days in the country and from 260 days to 50 days in Lahore, BOI stated.
Similarly, the days of properties' registration reduced from 208 days to 15 days in Karachi and 26 days to 15 days in Lahore. The next target of the board is to reduce the days of contract enforcement and electricity bills. "We have set a direction which has been acknowledged and appreciated by investors belonging to Malaysia, the UK, the US, and the UAE," the Chairman BoI said. He said, "the federal government is giving a clear message to investors that we are bringing "200 percent" changes to facilitate them.
The measures for improvements as claimed by BoI constitute a good start in the right direction, but, unless these measure are translated into implementation on ground the improvements cited by BoI are mere meaningless. This, so far, has not happened which is reflected in the fact that the Foreign Direct Investment (FDI) sharply fell 22.6 percent to $1.6 billion in the first eight months (July-February 2019) as against $2.01 billion in the corresponding period of 2018 while the exports are flat.
Implementation comes from the implementors - which is a government machinery. The core issue is that in the last one decade the management structure in the government enterprises has deteriorated to such a great level in terms of competence, governance and efficiency that nothing moves on its own merits and as per systems. It's either the speed money or personal contacts that make things happen costing money and time to investors. BOI is no longer a 'One Window' operation.
Early this month, Prime Minister Imran Khan rightly blamed the bureaucracy for making the life of his eight-month-old administration difficult by being lethargic, by not signing the files and by being indecisive. This is the core issue throttling the national development which needs to be first addressed before moving to the next steps.
Pakistan's bureaucracy has well served the nation for a long time and by and large comprises extremely talented and well meaning persons who moved up the ranks through a well structured and transparent system of state governance. The gaps in the system however need to be identified, bridged and corrected to restore it to the level of people's confidence it once commanded.
(The writer is the former President of Overseas Investors Chamber of Commerce and Industry)