It is not very often that you find Pakistan ranked in the top 100 countries in the world unless of course it is about corruption indices and such other criteria.
Admittedly, being at 85th place is not that big an achievement for a country of as much potential as Pakistan, but the Doing Business 2010 report issued by the World Bank and the International Finance Corporation does give some heart in such troubled times.
The report aims at evaluating different criteria vital for business development and the ease with which a particular business can be run in the major cities of Pakistan.
Pakistan has long recognized the value of smart regulations which have been under way since 2005, as a recognition of which the country became one of the top 10 reformers in Doing Business 2006. The progress on reforms ever since has been on track but at a painfully slow pace. The slowness of structural business reforms has a lot to do with the constant chopping and changing in political regimes.
There is no better place than Faisalabad to do your business with ease in Pakistan, so states the report. The financial capital of Pakistan, Karachi, stands a lowly ninth place among the 13 cities included in the report. The mega city is one of the two cities that have dropped places in comparison to the previous survey conducted in 2007.
Pakistan has improved 17 places and is ranked 63rd in the world when it comes to the ease of starting a business. This owes a large thanks to major improvements in Karachi which successfully managed to plug the loopholes earlier identified by the World Bank Group.
The fact that five out of six top ranked cities in the grid are located in Punjab, with the federal capital being the other one - tells a tale of its own. The report reaffirms the relative good governance in Punjab in the last five years, ably aided by large number of native investors involved in business activity in the province unlike Karachi.
Not for nothing did the findings by the Transparency International Pakistan a few weeks ago rank Punjab as the province with least corruption and most efficient and investor friendly government machinery. Punjab has been the most efficient in adopting massive reforms, most of which were recommended by the World Bank.
Lahore, Faisalabad and Sialkot were the only cities that benefited from reforms on a provincial level, while Karachi showed complacency by being entirely dependent on reforms carried by the federation, which also reflects in its overall ranking.
Karachi on the other hand ranks first in only one indicator, that of trading across the border, which is more due to its geographical proximity than any major structural reform. There is a lot which all cities lacking in one indicator or other can learn from other cities by seriously following the reforms adopted in higher ranked cities.
Mind you, Pakistan has immense business potential for traders as it is ranked 7th in the world when it comes to cost of exports. Moreover, Pakistan also has high ranking on tax benefits and tax rates, something which needs to be fully exploited to reap maximum gains, if the required reforms are undertaken in other indicators.
Hopefully, the relevant authorities will take note of the reform recommendations in the report to help Pakistan achieve an even higher rank come next year.
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Where is it easier to do business in Pakistan?
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Ease of Dealing with
doing Starting construction Property Paying
business business permits registration taxes Trading
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Faisalabad 1 2 6 1 3 4
Multan 2 6 1 7 3 5
Lahore 3 3 3 4 3 13
Islamabad 4 1 8 3 1 11
Sheikhupura 5 9 8 5 3 7
Gujranwala 6 13 2 6 3 10
Sukkur 7 10 4 10 11 3
Peshawar 8 3 6 9 10 8
Karachi 9 3 10 11 11 1
Rawalpindi 10 8 5 7 3 12
Sialkot 11 12 11 1 3 5
Quetta 12 6 12 13 2 9
Hyderabad 13 11 13 11 11 2
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Source: IFC