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| Sunday, 18 September 2005 |
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Business |  |
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South Asian countries pick up reform pace - World Bank Group South Asian economies are increasing the pace of reform to help small and medium businesses generate more jobs, but heavy regulatory burdens on business remain in most countries in the region, according to a new report co-sponsored by the World Bank and the International Finance Corporation (IFC), the private sector arm of the World Bank Group. The annual report, which for the first time provides a global ranking of 155 economies on key business regulations and reforms, finds that South Asian countries have had the third-most reforms per country over the past year, behind Eastern Europe and the OECD countries. The report tracks a set of regulatory indicators related to business startup, operation, trade, payment of taxes, and closure by measuring the time and cost associated with various government requirements; it does not track variables such as macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions, or crime rates. Sri Lanka ranks at number 75 ahead of competitors such as India 116th - and China 91st ranking - but behind several South Asian countries, in the overall ease of doing business. The South Asian countries are ranked as follows: Maldives 31, Nepal 55, Pakistan 60, Bangladesh 65, Sri Lanka 75, Bhutan 104, India 116 and Afghanistan 122. Sri Lanka's rigid labour regulations and mandated high severance payments continue to represent a significant barrier to job creation. The country is ranked 150th on "difficulty of firing." Only in Sierra Leone are companies required to offer more severance pay to dismiss redundant workers. The report notes that, "In Sri Lanka the rationale for increasing severance payments was to insure workers against the risk of becoming unemployed. But by imposing such high costs on businesses, Sri Lanka creates as even bigger risk for workers; never getting a job in the first place." India made noteworthy reforms to credit registries and enforcement of collateral law, making it easier for businesses to get new finance. Pakistan was the top reformer in the region and the number 10 reformer globally - making it easier to start a business, reducing the cost to register property, increasing penalties for violating corporate government rules, and replacing a requirement to license every shipment with two-year duration licences for traders. |
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