Recent assessments by international agencies of Pakistan's relative position in South Asia generally place it at the bottom of the table, especially with regard to the rate of economic growth. The basic question is whether this is also the case in diverse rankings ranging from the Human Development Index to the Governance Index?
The article focuses on five key international rankings which are more frequently referred to highlight strengths or weaknesses of a particular country. These are the Human Development Index, Governance Index, Corruption Perceptions Index, Ease of Doing Business Index and the Global competitiveness Index. A comparison is made of the rankings in each index of five major South Asian countries, namely, Bangladesh, India, Nepal, Pakistan and Sri Lanka.
Human Development Index The Human Development Index [HDI] is prepared by the United Nations Development Program (UNDP) and covers 189 countries. The latest ranking is for 2018. Among the five countries, Sri Lanka has the highest ranking, followed by India, Bangladesh, Nepal and Pakistan. Therefore, in the HDI, Pakistan has the lowest ranking among the five major South Asian countries. Globally, Pakistan is placed in the 150th position, equivalent to the 79th percentile. There is a risk that Pakistan will slip from the medium to the low level of human development.
A matter of concern is that excluding Pakistan the other four South Asian countries have improved their global ranking. The biggest improvement is in the case of Sri Lanka which has improved its position from 92nd in 2013 to 76th in 2018. Pakistan meanwhile has slipped four places.
Disaggregation of HDI reveals that Pakistan has made the least progress in education. The increase in the last six years in expected years of schooling is 1.3 as compared to 3.5 in Bangladesh and 1.7 in India.Following the big expansion in transfers to the Provincial Governments in the 7th NFC Award, the expenditure on education has increased from 2.1 percent to 2.8 percent of the GDP in 2017-18. However, this has apparently not led to a corresponding increase in the enrollments.
Governance Indicators The World Bank has constructed a set of five Governance Indicators (GI) related to voice and accountability, political stability and violence, government effectiveness, regulatory quality and rule of law for virtually all countries.
The five South Asian countries generally do not perform well in the area of governance and fall in the bottom 60 percentiles. The highest rating is of Sri Lanka in political stability and violence, rule of law and regulatory quality. India has the best rating in Government effectiveness and in voice and accountability.
Pakistan falls in the lowest percentile among the five countries in voice and accountability, political stability and violence and rule of law. However, it performs better than Bangladesh and Nepal in Government effectiveness and regulatory quality. The low rating in political stability and violence is probably due to the acts of terrorism while the rule of law has been limited by inequitable access and the extremely large number of pending cases, especially in the lower courts. Clearly, there is a need for big improvement in the quality of governance in Pakistan.
Corruption Perception Index The Corruption Perception Index (CPI) is prepared by the Transparency International for 180 countries. It is based on perceptions of domestic and foreign investors and of different segments of the population.
The CPI ranking for 2018 of South Asian Countries comes as a surprise. Pakistan has strongly improved its ranking from 127th in 2013 to 117th in 2018. Consequently, while it was placed at the bottom among the five South Asian countries, it is now ranked third, above Nepal and Bangladesh. The real surprise is Bangladesh. It has slipped 13 places to the ranking of 149th in 2018. Generally, Bangladesh is quoted as a country which is performing well with a GDP growth rate of near 6 percent and exports which are almost twice that of Pakistan. Clearly, high level of corruption does not appear to have impeded economic progress in the country.
Pakistan's big improvement in its CPI ranking is in contradiction to the frequent statement by the present Government that corruption had reached all time peak levels during the last ten years. There is need to publicize more the significant improvement in Pakistan's CPI ranking as a way of attracting more foreign direct investment.
East of Doing Business Index This index is prepared by the World Bank Group for 180 countries. Pakistan was ranked 107th globally in 2013 in the Ease of Doing Business Index (EDBI). Perhaps once again as surprise, this ranking placed Pakistan in the second position, after Sri Lanka, among the five South Asian countries. Interestingly India was the worst performer with a ranking of 132nd.
There have been big changes in rankings among South Asian countries since 2013. India has dramatically improved its position from 132nd to 77th. This is the consequence particularly of major reforms in the taxation system and in e-governance. Meanwhile, Pakistan has fallen sharply in the rankings to 136th. Fortunately, there was some improvement in 2018 from 144th to 136th.
There is, in particular, a need for reducing the number of taxes levied and the process of payment of taxes, through simplification of the taxation system. It is indeed embarrassing that Pakistan is currently ranked 172nd out of 178 countries in the payment of taxes.
Global Competitiveness Index The Global Competitiveness Index [GCI] is prepared annually by the World Economic Forum for 140 countries. This includes four countries of South Asia, namely, Bangladesh, India, Pakistan and Sri Lanka.
Pakistan ranks poorly in this index, below Sri Lanka, India and Bangladesh. This in clearly substantiated by the extraordinarily weak performance of Pakistan's exports since 2013. India has the best ranking globally of 58th in 2018, followed by Sri Lanka at 85th. It is indeed surprising that the rankings of Bangladesh and Pakistan are so close to each other. The latter is placed at 103rd and the latter at 107th. This clearly does not reflect the substantially better performance of Bangladesh in export growth.
Also, it is somewhat reassuring that Pakistan has substantially improved its relative position from 133rd to 107th in the last six years. This is a recent phenomenon and augers well for the future growth in Pakistan's exports.
The areas where Pakistan needs to do better are in the areas of human capital which is linked to labor productivity and in the enabling environment, especially in order to promote private investment. The reassuring finding is Pakistan's relatively high ranking in the innovation ecosystem. This is clearly attributable to the sophisticated exports by the country's SMEs.
Overall, the results of international rankings of the five major South Asian countries indicate that Pakistanis not always in the lowest position. This is the case in the Human Development Index. Governance Index and Global Competitiveness Index. However, Pakistan ranks third and above Bangladesh and Nepal in the Corruption Perceptions Index and in the fourth position above Bangladesh in the Ease of Doing Business Index. An objective and transparent measure of the performance of the incumbent Government will be if it is able to achieve improvement in the major international indices during its tenure.
(The writer is Professor Emeritus and former Federal Minister)
Comments
Comments are closed.