Ease of doing business
The World Bank’s Ease of Doing Business report is its annual flagship publication for good reason. Serious investors are in constant need of ‘sure information’ about various markets they might want to direct their investments to. And though they have ample sources for real time information – like keeping managers and traders hooked to Bloomberg screens – there is little reliable information about governmental and bureaucratic processes and procedures that are part and parcel of investing. The more needless hurdles in establishing a business, in simpler words, the less chances of attracting serious investors.
And this is another area where the ruling party has been unable to honour core campaign promises. Going by the World Bank’s latest report, out of 189 countries Pakistan has slid from an already unenviable 136 last year to 138 now in terms of ease of doing business. This means, whatever its rhetoric, the N-league has been unable to bring business registration and initiation processes up to 21st century requirements. If this trend remains unchecked, it is likely to cost the government more than just economically as the China Pakistan Economic Corridor rolls on. The Chinese have been ahead of schedule in all their projects so far. They have also made impressive strides forward on the matter of easing business.
Significantly, other promises that were not kept related to taxes, electricity and exports; all of which play a crucial role in generating economic activity and/or revenue. It is little surprise, considering these failings, that the economy remains gripped in a low growth cycle. Whatever positives have come – like low inflation from international Brent collapse – have been exogenous, not the sum of the finance ministry’s wizardry. The government, meantime, is happy to borrow its way through to the next election, even at the cost of a bloating deficit. Its economic model remains restricted to mega projects like motorways and power plants which, considering the present situation, amounts to little more than spit-polishing the economy; putting on an artificial shine and ceremony, even at the cost of operational efficiency.