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Ease of Doing Business Index

Ease of Doing Business Index

How difficult is to do business in Pakistan?

The World Bank has released its annual report “Doing Business 2018” that contains information on business regulations in 190 countries of the world. It measures how close each economy is to global best practices in business regulations. It has ranked Pakistan at 147th position on its Ease of Doing Business Index. In its previous report i.e. ‘Doing Business 2017’, the World Bank had ranked Pakistan at 144 out of 190 countries. Hence, Pakistan has slipped three positions this year.  In South Asia, Bhutan has been ranked at 75, which is the highest-ranked economy in the region, followed by India at 100 and Nepal at 105. Pakistan with the 147th position is at number 6 in South Asia, followed only by Bangladesh 177 and Afghanistan 183.

“Ease of Doing Business Index” provides an important yardstick, which investors consult in order to decide whether a particular destination is suitable for investment or not? Needless to mention that total investment in Pakistan was Rs 5,026 billion (US$ 48 billion) in 2017 and investment to GDP ratio was 15.78%. Fixed investment was Rs 4,517 billion (US$ 43 billion) and fixed investment to GDP ratio was 14.18%. On the other hand, private investment to GDP ratio was 9.9% and public investment to GDP ratio was 4.28%.

Pakistan lost 16 positions on the indicator of paying taxes, standing at 172, according to the 2018 report. Last year, Pakistan’s ranking was 156. One of the reasons behind the dismal performance was the increase in overall tax rates that surged to 33.8% of total profits. Due to multiplicity of taxes, individual taxpayers and companies had to make 47 tax payments every year which consumed 311.5 hours, according to the report.

Furthermore, Pakistan lost 23 positions on the indicator of getting credit for doing business as its position was 105 this year, as against 82 last year. It was because amidst the government’s growing budget-financing needs, very little capital was left for the businesses to expand.

Similarly, the country remained at 167 on the index of getting electricity. There were about six kinds of procedures that an applicant had to complete for getting a connection. There are 15 types of procedures that require 252 days for an investor to get a construction permit. For registering a property, about 155 days are required, as per the report.

Last year, Pakistan was the most improved economy with 10 places higher on the Ease of Doing Business Index. It was mainly because Pakistan was the sole economy in South Asia to reform property transfers. Under the Land Records Management and Information System, a programme has been developed and deployed to strengthen the capacity of land administration institutions in Lahore. During a five-year period, the project deployed an automated land records system and improved the quality of services provided by the land agency.

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About Bilal Hassan

The writer is a graduate in Taxation Policy & Management from Keio University Japan and has certification in International Economics and Law & Economics from Faculty of Economics Keio University, JAPAN. He can be accessed at

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