Recently, there has been a lot of talk about Pakistan’s deteriorating performance on Doing Business Indicators. According to World Bank’s flagship Doing Business Report 2018, Pakistan slipped by three points and now ranks at 147 out of 190 economies with a Distance to Frontier (DTF) of 51.65 on the Doing Business Index. Experts from various fields have shared different views on the performance of Pakistan on this front. Let us examine the subject and different facts associated with it in detail.
Doing business defines the business regulatory environment of an economy; the higher the ranking, the easier it is to establish, conduct and operate a business. The report measures aspects of business regulation and their implications for firm’s establishment and operations for 190 economies. Doing Business report measures regulations affecting 10 areas of the life of a business. Ten of these areas are included in this year’s ranking on the ease of doing business report: 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. Doing Business report has included labor market regulation as additional topic but the report has not presented ranking of economies for this indicator.
Out of these 10 areas, three areas including registering property, getting construction permits, contract enforcement fall under provincial domain whereas; two more areas including starting a business and paying taxes partially fall under provincial jurisdiction. It is also pertinent to mention that the Doing Business data of these areas are collected from Lahore and Karachi only wherein; Lahore contributes 35% and Karachi’s share is 65%. Meaning thereby, that Punjab can only contribute maximum to the 35% of the given weightage even if it performs at its full capacity. Therefore, a national Doing Business action plan was prepared at the Federal level in consultation with the World Bank Group and private sector and was disseminated to the Provincial and Federal authorities for its implementation so that national aggregate doing business ranking may be improved. The most interesting part which has never been highlighted before is that Pakistan has actually improved its Distance to Frontier (DTF) by 0.71 Points i.e. from 50.94 to 51.65 in this year but since other countries performed better than Pakistan therefore the overall ranking dropped.
In Punjab, Planning & Development Department is leading a comprehensive doing business reform agenda to improve business environment of the Province through simplifying doing business procedures in collaboration with multiple provincial departments and agencies. Government of Punjab is vigorously working on implementation of 100 days reform action plan on Doing Business in an attempt to improve our performance at least on provincial doing business indicators. At the province level, this reform agenda is being regularly monitored by Minister for Finance, Chief Secretary and Chairman Planning & Development Board through the forum of Provincial Working Group which also has representation from private sector i.e. the Lahore Chamber of Commerce and Industry.
Under this umbrella of reforms, the Government has developed a business registration portal to register selective business entities online. Up till now around 1500 entities have been established through this online facility. In coming months businessmen shall also be able to pay the business registration fee online and they would not be required to physically visit government offices or banks for that matter. On property registration reforms, it now takes only 18 days to register property in Lahore and the procedures have also been reduced. In addition, Land Record Management and Information System has automated approximately 55 million land properties thus making it possible for the land owners to access their property details online. The quality of land administration index in Lahore is expected to improve from 10 to 23.5 points. Further, the transparency of information has been increased by providing list of documents, procedures, digitized property maps of rural and peri-urban land, and fee/tax calculator on their website.
In its’ efforts to facilitate the issuance of building permits, the by-laws of Lahore Development Authority and Metropolitan Corporation Lahore have been standardized, moving a step closer towards one city one system. Furthermore, Metropolitan Corporation Lahore in collaboration with Punjab Information Technology Board has recently started the facility of issuance of building permits for warehouses from e-khidmat centre in Town hall. Through this facility, a building permit can be obtained in just 21 days. On the other hand, Lahore Development Authority has established one window counters at its’ office with counters of Traffic Engineering & Transport Planning Agency and Water and Sanitation Agency for issuance of building permits within 20 days for same categories which is considered as sample case study under Doing Business. Moreover, in an attempt to facilitate the process of obtaining building permits, Environment Department has waived off the requirement of obtaining No Objection Certificate for selective projects that do not have any significant environmental impact such as; warehouses for storage of non-hazardous materials etc.
Doing Business report under the contract enforcement indicator also measures Alternative Dispute Resolution Index. On this front, under the dynamic leadership of Honorable Chief Justice Lahore High Court, concerted efforts were made to promote a culture of alternate dispute resolution mechanism for speedy dispensation of justice and reducing excessive burden on the courts. Under this initiative, three mediation centers were established in District Court Lahore. These mediation centers deal with a variety of cases including criminal, civil, family, guardian, rent, and appeals etc. The idea was such a huge success that now the mediation centers are functional in all districts of Punjab. Till now around 10,637 cases have been processed through these mediation centers out of which 6,812 cases have been resolved. In coming months, a state of the art Alternate Dispute Resolution Centre in Lahore which is nearing completion will also be made functional.
Apart from the above mentioned reforms, there are many reform initiatives which are under process and are targeted towards improving our doing business ranking next year. Once these reforms are implemented successfully in Lahore district, the scale may be increased to replicate these success stories to other parts of the districts. The Government of Punjab is also working in tandem with Sindh Government and helping them with implementation of different DB reforms so that the national ranking may be improved. More importantly, private sector has been engaged throughout the conception and implementation phase of these reform initiatives.
The Government of Punjab is committed and cognizant of its responsibility to perform better on Doing Business Index. Nevertheless, the pace of reform implementation needs to be accelerated as the performance along doing business indicators is relative and if we do not move at rapid pace other countries will surpass us. The Government also strongly believes that a robust communication strategy is required to engage proactively with the private sector and businesses because they not only play a significant role in shaping the business environment of the economy but their feedback is also instrumental during World Bank’s doing business survey. Although, doing business report talks about specific interventions with limitations however; it encourages government to simplify doing business processes by reducing cost, time and procedures and help improve the overall business regulatory environment in order to attract domestic and foreign investments thus creating more jobs. Although we have a long journey to cover, the Government is moving in the right direction with utmost ownership at the top level and with the commitment and capacity to move fast and perform better in coming years through collaborative approach by engaging all stakeholders.