Pakistan has been facing serious economic challenges for the last few years. However, in the World Bank's report on global ease of doing business rankings published on Thursday, Pakistan climbed up 28 spots, which greatly encourages the business activities in the country.
Presently, Pakistan is undergoing a macroeconomic crisis, with economic woes ranging from fiscal deficit, trade deficit, high debt and servicing to rising circular debt, and currency devaluation. The country's trade deficit with other countries is huge, owing to its low exports and high imports, putting pressure on its foreign exchange reserves.
Though the government has succeeded in bringing down the current account deficit by more than 60 percent during the current fiscal year by cutting the number of imports, low export rate is still a big challenge for wealth creation in the country.
Since coming to power last year, the government has been focusing on the steps to increase business opportunities in Pakistan. Besides inviting foreign entrepreneurs and governments to invest in Pakistan, the government has also encouraged local businessmen to produce export-quality products.
The financial team of Prime Minister Imran Khan was tasked to remove the bottlenecks in business registration and initiation in the country.
According to the report of the World Bank, Pakistan has enhanced six regulatory reforms including expansion of functionalities of the online one-stop-shop, making approval process for obtaining a construction permit easier and faster, and easing the process of paying taxes by introducing online payment modules for value-added taxes and corporate income taxes.
The country also became one of the top 10 improvers of ease of doing business globally. Though its rank is still 108, but it is the first time in its history that it made improvement by 28 spots.
Dr. Ashfaque Hasan Khan, professor of economics at the National University of Sciences and Technology Islamabad, believes that the country's improvement in business index will have a positive impact on foreign investors who were hesitant to do business in the country.
"Ease of doing business index indicates that how easy it is to set up a business and get infrastructure in place in a country for local and foreign investor," he said.
The Pakistani government is recently focusing on inviting foreign governments and companies to invest in Pakistan, and is going to initiate industrialization progress in the second phase of the China-Pakistan Economic Corridor (CPEC), during which industrialization is going to take place in special economic zones. A large number of Chinese companies are expected to invest and relocate their businesses in the country.
Other countries including Saudi Arabia, Turkey, the United Arab Emirates and Malaysia have also shown interest in investing in Pakistan, and the improved business climate will further facilitate them in setting up their businesses here.
In a tweet last weekend, Imran Khan said that with the efforts of his economic team, foreign direct investment in the country has surged by 111.5 percent over the last one year, and foreign private investment rose by 194 percent during the same period.
Khan also lauded his economic team, in another social-media interaction with his followers, for their hard work to make Pakistan a better place for investment. He also vowed that his government will further improve the business climate during the forthcoming year.
Analysts believe that positive news about the Pakistani economy has started to come, but there is still a long way to go for the government to improve the overall economic condition.
"It is just a beginning, we need to go a long way as it is not just ranking, but the scope of investment which attracts foreign investors. The indicators are great, but they should be supplemented by complimentary policies. If there is ease of doing business, but policies are not helping the investment, and increasing the exports, mere ranking will not work," Ashfaque said.
"Particularly at the time when there is high interest rate, high utility prices, devaluation of currency. It is difficult for businessmen to come forward and invest as these things also have critical importance besides ease of doing business itself," Ashfaque added.
The government has a lot of economic challenges, and improving economy seems to be a very hard task for the financial team, but it is making efforts to recover the staggering economy, and the recent World Bank report is an indicator that the efforts have started to bear fruit.
In a media briefing on Friday, advisor to prime minister on commerce, textile, industry and production, and investment Abdul Razak Dawood said that the World Bank's ease of doing business report is an unprecedented positive jump in the country's business environment, which would enhance the overall image of the country at world level and help promote investment to the country, but they still have a lot of work to do.
"We need to improve more for providing conducive business environment to foreign investors," he said, adding that their next target for the forthcoming years is to achieve ranking up to the 70th and 80th position range.
