Page 13 - Jan-Mar 2016 The Pakistan Accountant

Cover Story Chart 1: How economies in the South Asia rank on the ease of doing business We have still Afghanistan (Rank 183) 41.16 to unleash the Bangladesh (Rank 173) 46.84 full potential India (Rank 142) 53.97 of the region Regional Average (Rank 134) 54.56 Pakistan (Rank 128) 56.64 with its 1.7 billion people, Bhutan (Rank 125) 57.47 Maldives (Rank 116) 58.73 which includes Nepal (Rank 108) 60.33 26% of the Sri Lanka (Rank 99) 61.36 world’s youth 0 100 Distance to frontier score and 40% of the Source: Doing business database 2015, published by the World Bank world's poor. The ranking of economies is determined by sorting the aggregate distance to frontier (DTF) scores. The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier. The 10 topics considered to analyse the ranking and score are: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. While this ranking tells much about the business environment in an economy, it does not tell the whole story. The ranking on the ease of doing business, and the underlying indicators, do not measure all aspects of the business environment that matter to firms and investors or that affect the competitiveness of the economy. Still, a high ranking does mean that the government has created a regulatory environment conducive to operating a business. For policy makers, knowing where their economy stands in the aggregate ranking on the ease of doing business is useful. Also useful is to know how it ranks compared with other economies in the region and compared with the regional average. Policy Challenges faced by the South Asian Region Growth in South Asia was driven by India, the region’s largest economy, which emerged from two years of modest growth. Regional growth is projected to rise to 7.6 percent by 2017, as reforms ease supply constraints in India, political tensions subside in Pakistan, remittances remain robust in Bangladesh and Nepal, and demand for the region’s exports firms. Past adjustments have reduced vulnerability to financial market volatility. Risks are mainly domestic and of a political nature. Sustaining the pace of reform and maintaining political stability are key to maintaining the recent growth momentum. The region has significant policy challenges; some broad level have been discussed here: • Electricity supply remains unreliable. Although reforms to increase private sector participation and to auction some 200 coal mines to the private sector are important January - March 2016 The Pakistan Accountant 11