KARACHI: World Bank, in its report Pakistan Development Update – 2017, has identified corruption and tax rates as constraints to business growth.
The World Bank said that in comparison with other countries in the region – and with other fast-growing developing economies such as Indonesia and Vietnam – firm managers and/or owners in Pakistan are significantly more likely to identify corruption, electricity supply, or tax rates as constraints to the growth of their business.
Survey-based measures of enterprise constraints in the formal sector indicate that the ability of firms in Pakistan to grow is inhibited by several factors.
The World Bank’s Investment Climate Surveys conduct detailed interviews with a representative sample of firm managers and/or owners across a large number of developing countries to identify factors that discourage investment and restrict firm-level productivity.
Pakistan’s low ranking on the DB index suggests that the lack of entry and dynamism among SMEs is driven by deficiencies in the investment climate.
Moreover, its ranking against DB indicators has fallen substantially in recent years. As of 2006, Pakistan’s business climate was considered generally more favourable than those of India, Indonesia, Turkey, or Vietnam, but the most recent rankings suggest that deficiencies in Pakistan’s investment climate now inhibit firm growth – not just more than in any of these four countries, but (with a ranking of 147 out of 190 economies) also in most of the world.
