Doing business index:

SL's position improving in relative and absolute terms - CB

Despite slipping in the World Bank's Ease of Doing Business index by nine points, the Central Bank (CB) in a statement last week said that Sri Lanka's ranking in the Doing Business Index has improved in relative and absolute terms.

According to 2015 Doing Business ranking Sri Lanka has slipped to 99 from 85 as several other nations raced ahead.

"According to the latest Doing Business Ranking published by the World Bank Group, Sri Lanka is ranked in the 99th position out of 189 countries for 2015. The country's Doing Business rank in absolute terms enjoys an increase from 60.01 to 61.36 in 2015, narrowing the country's distance to frontier measure.

"Therefore, Sri Lanka has improved its ranking in relative and absolute terms compared with the 2014 rankings. Also, for the third consecutive year, Sri Lanka has secured its position as the highest ranking country in South Asia,” the statement said.

The CB statement said that the Doing Business 2015 methodology has incorporated several changes to the computation of the Doing Business ranking. According to the new method, the country rankings are calculated using a measure termed ‘Distance to Frontier'.

This approach is said to indicate as to how close each economy is to the global best performer. Due to this change, Sri Lanka's 2014 ranking has been revised downwards to 105 from 85.

In addition, the Doing Business 2015 Index has expanded the scope of three sub indicators of the Doing Business Index - Protecting Investors, Getting Credit and Resolving Insolvency. As a result of these structural changes, the 2015 Doing Business country rankings can no longer be compared with the previously published country rankings.

According to the Doing Business 2015 Report, the World Bank Group has recognised that Sri Lanka has improved in the areas of - getting electricity, paying taxes, trading across borders and protecting minority investors, during 2013-2014.

These improvements included implementing concessionary terms of capital payment for small and medium scale industrial sector to obtain electricity, introducing an electronic filing and payment system for Employees’ Provident Fund contributions, issuing regulations for all shipping lines from levying terminal and other charges in addition to freight and specified international charges for container cargo and improving efficiency in export and import procedures.

In this connection, it has been acknowledged that the improvements have reduced document preparation time and strengthened the interests of minority shareholders.