Developing trade within SAARC
Dev ADHIKARI
Countries in the SAARC region have some of the best business and
institutional practices for strengthening the business environment.
Certain practices including rules and regulations largely create and
facilitate business activities.
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Highrise buildings in Colombo, a rapidly developing South Asian
city |
Similarly, credit facility and court efficiency are also important.
Since the last two decades, countries in this region are doing their
best to derive advantage from the globalisation movement. Within the
region there is growing concern to institutionalize free trade
agreement.
Challenges
But there are a number of challenges specially to develop a uniform
basis of doing business and creating a smooth and favourable business
environment. Are we really learning from the best practices followed by
the countries in the region in the process of reforming our institutions
to create a sound business environment ?
Although many countries in this region are claiming about
deregulation and improvements in government mechanism to facilitate
business activities over the last two decades, analysis of the factors
of “doing business indicators” and other sources of information provides
a different reality.
This article attempts to assess how far SAARC nations specially,
Nepal, Pakistan, Sri Lanka, Bangladesh, India, Afghanistan, Maldives and
Bhutan are putting their best efforts to improve their business
environment by learning from each other’s best practices.
A global comparison of SAARC best practice indicators with the
practices of the developed countries even of our own continent clearly
indicates that there is no reason to be satisfied for our entrepreneurs
in the matter of providing a satisfactory environment for them to do
business.
According to global business statistics, Singapore is ranked as 1 in
terms of ease to do business.
Business
If we compare this with any other country of the SAARC region, it
seems that our countries are the most difficult places to do business.
Even a country like India is ranked at 120th position.
According to global statistics of “doing business” to start a
business in Australia an entrepreneur has to go through two procedures
and it takes only 2 days to complete it.
In Bangladesh, it takes 74 days to start a business and in India an
entrepreneur has to spend 33 days. These figures are the highest in the
region.
Although, entrepreneurs in Nepal require fewer number of days and
will have to pass through few more processes compared to India and
Bangladesh, they have to spend many more days to deal with licensing
matters.
In the region, it takes less time for Nepalese entrepreneur to
register the property. Maldives is in a better position compared to
other countries in terms of less time required to take business license,
starting business and do business
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Indian External Affairs Minister Pranab Mukherjee with Pakistan
Foreign Affairs Minister Shan Mehmood Qureshi in Colombo on
Thursday. Economic ties feature prominently in bilateral talks.
Pic. by Rukmal Gamage |
If we look at the situation of “protecting investor index” (0-10) in
terms of corporate governance, Nepal stands in third position in the
region.
In the case of protection of borrowers and lenders (in 0-10 index)
Nepal stands in the 3rd position (4). In the global ranking Hong Kong is
most protected country (10).
Bangladesh is in the best position in this region in terms of
protecting rights of borrowers and lenders and corporate governance.
Although very poor in the global ranking, in terms of court efficiency,
Maldives is ranked in better position compared to India and Bangladesh.
In the region, Maldives is ranked the best in terms of ‘tax payable
and compliance’ indicator. It is also interesting to know than in
Maldives’ entrepreneurs have to make fewer number of tax payments (1)
and it takes zero hour to pay taxes. Regarding trading across the
boarder, Pakistani entrepreneurs need least time to import whereas
Indian entrepreneurs spend fewer days in exporting goods.
Entrepreneurs
Afghanistan needs quite a lot of time to import as well as to export.
The reason might be that entrepreneurs have to spend comparatively many
days in the region to get credit facility from the banks.
From the regional analysis of facts and figures it appears that there
is no single country said to be perfect to establish a sound business
environment in terms of the above indicators in the region.
In such differing environmental factors among the nations, we all
have to try to understand our strengths and weakness to improve the
current indicators of business environment.
Import and export
Above presented statistics provide enough evidences that we can learn
from each other’s best practices to improve and strengthen our business
environment. How India has been changing in ranking to ease the way of
doing business presents a good example for us to reform our economies.
Similarly, we can learn more from Maldives to ease the process of
doing business, dealing with license, tax payable and compliance and to
make our court more efficient.
Bangladesh presents good example of protecting rights of investors
and good governance in the region. From Pakistan we can learn to
minimize cost of import and export.
In fact, without learning from one another’s strengths and weakness
it is difficult to create a sound business environment in the region
Gorkapatra. |
