While the business climate in South Asian countries is improving, excessive regulations mean it is far from easy for local entrepreneurs to run their businesses here, according to a new report by the World Bank.
Although India is one of the world’s fastest-growing major economies, the report reminds us that it’s not that business-friendly. The South Asian giant ranked 132 out of 183 countries in terms of how easy it is to do business. This was worse than most other countries in the region and all other “BRIC” countries: China stood at No. 91, Russia at No. 120 and Brazil at No. 126. Still, India improved from last year, when it stood seven notches lower. It helped that it made it easier for firms to pay taxes through the introduction of electronic filing and payment for value added tax, the report said.
Sri Lanka fared far better: it climbed nine places in the rankings to 89. Sri Lanka was rewarded for having lowered the corporate income tax, among others, and for strengthening protections for investors.
Pakistan and Bangladesh fared worse than before. They both got a negative mention: Pakistan for raising the profit tax rate for small businesses and Bangladesh for making it harder to get electricity by suspending new connections for a long period of time over supply shortages.
As a result, Pakistan plunged nine positions to No. 105 and Bangladesh four to No. 122. Speedier court processes helped Nepal climb the rankings three spots from No. 110 to No. 107 and the tiny Himalayan kingdom of Bhutan climbed four places to 142.
Overall, the World Bank said that all South Asian countries benefited from improving the access entrepreneurs have to business regulations and suggested they do more in this direction.
“One route is new technology, which is increasingly used by governments to provide electronic services for filing taxes or registering businesses. This not only enhances efficiency but opens opportunities to increase transparency,” Sylvia Solf, the report’s lead author, said in a note to the press.
Link: http://blogs.wsj.com/
Source: Wall Street Journal
