Nepal climbs two notches in World Bank’s doing business index
November 2, 2017 08:38 AM NPT
KATHMANDU, Nov 2: Nepal has inched up two notches in the latest ease of doing business index of the World Bank, indicating a modest improvement in the business climate of the country in one year.
Nepal is ranked 105th in ‘Doing Business Report 2018’. The country was at the 107th position last year.
The report has placed Nepal as the third easiest country in doing business in South Asia region behind Bhutan and India. While Bhutan is ranked 75th, India’s stunning performance took the country 30 places up to 100th position compared to last year.
The annual report of the World Bank -- 15th in the series -- compares business regulations and their enforcement for domestic firms and SMEs in 190 economies of the world.
The indicators gathered for the measurement, however, cover only the largest business city of each economy, except for a couple of countries where data has been collected from two cities. For Nepal, the study was on the capital city of Kathmandu. Nepal scored 59.95 in the latest report compared to the score of 57.60 in last year’s report. The distance to frontier measure shows the distance of each economy to the ‘frontier’ which represents the best performing economies, according to the World Bank Group. Measured in a scale between 0 and 100, the scale toward 100 represents an economy’s performance moving toward the frontier’s performance.
Out of the 10 indicators that the World Bank Group studies regulatory environment, Nepal observed a marked improvement in the areas of ‘getting credit’ and ‘protecting minority investors’. The reform efforts in these areas have made it easier for doing business in the country.
According to the report, Nepal strengthened access to credit by operationalizing the existing law on secured transactions that implements a functional secured transactions system and establishes a centralized, notice-based, modern collateral registry. Similarly, the country also strengthened minority investor protections by requiring greater corporate transparency.
In terms of change in the distance of frontiers, there was improvement in all areas except underperformance in ‘paying taxes’ which went down by 0.01 point to 58.01 compared to 58.02 in the last report. There were no changes in the distance of frontiers in areas like ‘Trading across Borders’ and ‘Enforcing Contracts’ as their score ended flat at 45.26 points.
However, leaders of the private sector say that the performance of the country falls short of their expectation. “As the country is gradually heading toward political stability and there seems to be some reform in recent months, there is a semblance of good environment of doing business in Nepal as reflected in the report,” Hari Bhakta Sharma, president of the Confederation of Nepalese Industries (CNI), said. “However, there is a long way to go to make Nepal a preferred destination of investment because the country is facing many business obstacles.
The government, the parliament and the private sector should work hand in hand to address those challenges,” he added.