Doing business in Pakistan.

Byline: Haroon Sharif

PAKISTAN has struggled for long to attract higher volumes of foreign direct investment (FDI) to expand and modernise its rather stagnant economic base. Pakistan's investment level is almost half the volume of investment attracted by growing economies like Vietnam, India, Bangladesh and Sri-Lanka. In order to accommodate two million young Pakistanis entering the labour market every year, Pakistan needs to double its investment to GDP ratio.

Business leaders blame Pakistan for lack of policy consistency, repressive taxation, high utility costs, cumbersome procedures, weak contract enforcement and dispute resolution capacity. One is then not surprised to see Pakistan's current ranking of 136 out of 190 on the Ease of Doing Business Index.

Read: Pakistan listed among 'Top 20 Improvers in Doing Business 2020' by World Bank

The good news, however, is that Prime Minister Imran Khan made it his priority to improve ease of doing business. As a result of the coordinated efforts led by the Board of Investment, Pakistan has been acknowledged by the World Bank among the top 20 global reformers this year. Pakistan is expected to improve its ranking by 25 places in the report to be launched on Oct 24 (today). This will be the highest-ever upward shift in a year shown by the country and perhaps the only significant home-grown economic reform of which the PTI government can genuinely take credit for.

Pakistan has been acknowledged as one of the top 20 global reformers this year.

The other top reformers include China, India, Bangladesh, Qatar and Central Asian countries. It is also important to take stock of the reasons for slipping down on the Global Competitiveness Index where the responsibility mainly lies with the commerce and industry ministries.

According to the World Bank, Pakistan improved in six areas which included starting a business, dealing with construction permits, getting electricity, registering property, paying taxes and trading across borders. Pakistan made starting a business easier by expanding procedures available through the online one-stop shop. In addition to improvements in property registration, obtaining a construction permit became easier.

The launching of online portals for new commercial connections made getting electricity easier, and tariff changes are announced in advance. Moreover, tax compliance became easier through online payment modules for value-added tax and corporate income tax. Pakistan made...