Friday, September 19, 2008

More on Doing Business 2009 report

I have already discussed about the Doing Business 2009 report in a previous blog post. More on the report here. Here, I will focus on Nepal and South Asia. All the South Asian economies saw their ranking slip by some positions in this year’s report. This does not mean that the countries backtracked on earlier reforms. Other economies reformed more and better than the South Asian economies and hence climbed up the ranking, thus pushing the South Asian economies’ ranking down.

Sadly, on the ten index considered on the report, Nepal did not enact reform on a single one of them. The report flatly states, “No major reforms were recorded” in Nepal. Among the 181 countries considered in the report, Nepal’s overall ranking in the ease of doing business is 121, which is ten positions down from last year’s ranking of 111.

More on Nepal and South Asia:

  • The report states that it takes 7 procedures, 31 days, and costs 60.20 percent of income per capita to start a business in Nepal.
  • In the construction business it takes 15 procedures and 424 days (highest in South Asia), and costs 248.40 percent of per capital to get a construction permit.
  • The rigidity of employment index is 42 (Maldives has the lowest rigidity of employment index), and firing cost is equal to 90 days of salary (Afghanistan has the lowest firing cost in South Asia).
  • It still takes 3 procedures and 5 days, and costs 6.30 percent of property values to register property (Bhutan has the lowest in South Asia).
  • According to the report, the strength of legal rights index, which takes into account how collateral and bankruptcy laws facilitate the rights of borrowers and lenders, is 5 in Nepal (Bangladesh and India have the highest value in South Asia). Meanwhile, the strength of investor protection index for Nepal is 5.30 (Bangladesh has the best protection system with an index score of 6.70).
  • In terms of enforcing contracts, it takes 39 procedures and 735 days, and costs 26.80 percent of claim to enforce contract in Nepal. This shows how rigid and inefficient out courts are to resolve commercial disputes. Bhutan has the lowest costs to enforce contracts. Additionally, for a typical firm, it takes 5 years and 9 percent of estate to go through the process of insolvency.
  • For a typical entrepreneur, it requires 34 payments and 408 hours per year, and costs 34.10 percent of profit to pay taxes.
  • Furthermore, it takes 9 documents and 41 days, and US $1764 per container for an entrepreneur to export a typical item from Nepal. In the import front, it takes 10 documents and 35 days, and US $1900 per container to import a typical item.

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