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Some headlines are misleading. But not this one. The ones in question refer to Pakistan's "progress" in the annual "Doing Business" rankings recently released by the World Bank.

Indeed, Pakistan's overall ranking moved up by four places to 144 in the 2017 rankings, making it among the top 10 countries that saw an improvement this year.

Entirely missing from the discourse, however, was the fact that Pakistan's 2016 rankings were revised downwards by 10 places, from 138 to 148, which means that the country's Doing Business performance last year was far worse than what everybody imagined.

In other words, Pakistan took 12 steps backward in 2016 - from a rank of 136 in 2015 to 148 in 2016 - before it took 4 steps forward in 2017. If that is progress, then a camel is also a horse.

At this point, a good hard look at the rankings table would help grasp what follows.

graph 1(2)2

The biggest reason why Pakistan managed to take a few steps forward this year was improvements in 'getting credit'. Specifically, this refers to "improved access to credit information guaranteeing by law borrowers' rights to inspect their own data," and the fact that the credit bureau also expanded its borrower coverage. Hence, the huge increase in distance to frontier (DTF) scores in 'getting credit.'

For the uninitiated, the DTF score shows how far on average an economy is from the best performance achieved by any economy on each Doing Business indicator.

In the World Bank's own words, "an economy's distance to frontier is reflected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. For example, a score of 75 in DB 2016 means an economy was 25 percentage points away from the frontier constructed from the best performances across all economies and across time."

There were other increases in Pakistan's 2017 DTF scores. Of these, one of the most notable ones was improved quality of land administration by digitizing ownership and land records that helped improve the DTF scores of 'registering property'.

But this improvement comes not without controversy, since the World Bank only included Punjab's improvement in land management system - famously known as LRMIS - and failed to incorporate similar reforms in Sindh, where it is known as LARMIS. Surely both have been in operation before May-June of this year - the cut-off period used by the bank to incorporate any reforms in their Doing Business Survey via respondents.

graph 2(2)0

It is unclear whether this is because of Sindh's failure to raise enough awareness and marketing of its LARMIS or whether it was World Bank's eagerness to include Punjab's LRMIS, because after all it had funded that project. Hopefully, Sindh's LARMIS will eventually be incorporated next year, and considering that Karachi has a bigger weight (65%) in Pakistan's overall ranking, the inclusion of LARMIS will help boost the 'quality of land administration index', and thereby the overall score of 'registering property'.

Before we get to the nerdish part of this story, two pieces of informative nuggets are worth sharing. First, 'getting electricity' has worsened in the country. Not only has the index measuring the reliability of supply and transparency of tariff remained at zero in Pakistan, but the cost of getting an electricity connection has also gone up rather sharply. This nugget ought to be flagged every time someone says the government has been 'reforming' the power sector.

Second, until last year, economic observers (including this column) loved to cite how long it took to file taxes in this country - 594 hours to be precise, according to the original 2016 Doing Business data. Lo and behold, that number has now been slashed to 307 hours in revised 2016 numbers, which albeit increased to 311 hours in 2017.

The story goes that until last year, World Bank's respondents for taxation in Pakistan reported the number of hours for both federal and provincial taxes (which inflated the 'number of hours'), although, as per methodology, they were only supposed to report the number of hours it takes to file federal taxes.

This fact alone raises question marks over the credibility of the World Bank Doing Business rankings (Recall that in a not-so-recent past, a World Bank analysis had also claimed that Pakistanis were sending $4.7 billion to India as remittances - a claim that was rubbished by both this column and the central bank).

Lastly, thanks to a latest change in methodology, the World Bank also now inquires 'whether a woman's testimony carries the same evidentiary weight in court as a man's?' The answer to that is a 'no' in Pakistan, for reasons well known, and therefore Pakistan got a negative point in 2017 rankings, leading to a decline in the 'quality of judicial processes index' - a key component of 'enforcing contract'.

Strangely, however, despite the fall in 'quality of judicial processes index' in 2017 (from 7.0 to 5.7), the DTF scores for that index as well as the scores & rank for 'enforcing contract' on the whole remains exactly the same as that in the revised 2016 numbers.

This is odd because when the increase of 1.8 index points in 'quality of land administration index' could improve the score for 'registering property', then a fall of 1.3 index points in 'quality of judicial processes index' should result in lower scores for 'enforcing contract' - especially considering that 'quality of judicial processes index' has one-third weight in determining the scores for 'enforcing contract' whereas 'quality of land administration index' has a lesser weight (one-fourth) in determining the scores for 'registering property'.

Whether this is an error of omission or commission on the World Bank's part, one hopes to find out soon. But mistakes like this and the one pointed out earlier demand some clarity from the bank, whose policy peddlers often act as pied pipers in Pakistan. Didn't we say the devil lies in the details!

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