By: Dr Syed Akhter

The World Bank’s latest rankings of 190 countries on the Ease of Doing Business (EDB) is out.  Pakistan did well, considering it moved up 28 rungs on the rankings ladder, from 136^th place to 108^th.  In this latest round, Pakistan is one of 10 countries (Saudi Arabia, Jordan, Togo, Bahrain, Tajikistan, Kuwait, China, India, and Nigeria) that have improved the most across at least three of the 10 factors that go into constructing the EDB rankings. The annual report received wide publicity on its arrival because the rankings matter. They reflect how conducive the regulatory environment is for opening a business, getting a location, accessing finance, dealing with day-to-day operations, and operating in a secure business environment. They also enable both intra-country and inter-country comparisons. They show not only how a country has fared over the years but also where it stacks up in relation to others. The rankings, therefore, are useful not only for domestic policy makers who find out how successful they were in improving the regulatory environment, but also for business executives who need to make decisions about which countries to enter for investment and business expansion.

Businesses look at rankings to make sense of the regulatory environment. Thus, if a country’s ranking is high, the likelihood of being included as a candidate for further review is greater. On the other hand, if the rank is low, decision makers may not even look its way. In this regard, the rankings may serve the purpose of a travel advisory. If a travel advisory is in effect for a country, one would refrain from going there; but if one does need to go there, extra precautions would be warranted.