Doing business in Pakistan
(Tribune) — “The difference between Pakistan and India is that you can get things done faster in Pakistan,” said an Australian businessman at a gathering of Australian and Pakistani entrepreneurs in Karachi.
Given the fact that it was the launch of the Pakistan-Australian Business Forum, one might expect such kind of words about the country from a visitor, but the World Bank has empirical evidence to suggest that his statement is true. For the last seven years, the World Bank has issued a report called Doing Business, which measures the ease with which private enterprises can conduct business around the world. It measures such metrics as the amount of time it takes to register a business, how many procedures does it take, how many official signatures and how much would it cost. It does so for dozens of other relatively simple interactions between government and businesses in any given country.
It then ranks each country by how easy it is to do business there. While the subjects covered by the report seem like inane minutiae about government paperwork, they reflect a practical application of the globally dominant ideology about the role of government in an economy: the Washington Consensus. This broad term refers to the idea that the primary role of the state is to ensure the functioning of a free and fair private market place. While the idea has come under attack since the beginning of the current global recession, it remains the driving force behind most of the global institutions.
According to the Doing Business report, for the last seven years, Pakistan has been an easier place to do business than Brazil, Russia, India and China – collectively referred to as the BRICs and commonly thought of as the most important emerging markets in the world. For the 2010 report, released in September 2009, Pakistan was ranked higher than any other South Asian nation, the first time that has happened since rankings were published in 2005.
This relative ease of doing business is being used by the government of Pakistan in marketing Pakistan as an investment destination. That is probably a smart call, considering the fact that the World Bank’s report is one of the key references used by foreign investors when making a decision as to where to invest. But perhaps the government would do well to focus on how the rankings are compiled, and how surprisingly easy it is to climb up the ladder.