Aid harmonization in education sector in Nepal

So, the good news is that the aid agencies are harmonizing their effort to better education sector in Nepal. Despite my skepticism about the effectiveness of certain kind of donor funded projects, the intervention in the education sector has produced impressive results.

The program focuses on three pillars of access, inclusion and quality. The program is supported by eight other development partners who will also pool their resources, together with the World Bank and government resources. In addition, five non-pooling partners will support the program directly, adds the statement.

The total cost of the five-year program ending 2013/14 is estimated to be about $2.6 billion, of which pooled development partners have committed approximately $500 million.

As a sector wide approach, the program will finance salaries and benefits for nearly 120,000 government school teachers. It will also finance salaries of around 100,000 community recruited teachers through salary grants. Financing for all additional teachers to be recruited during the program period will be made through a per capita child financing formula that takes into account the number of students enrolled in a particular school, the release added.

I hope aid harmonization will be followed up in other sectors as well. The British government has unveiled $5 billion health care plan for six countries (Nepal being the only one from Asia). I hope other aid agencies harmonize their efforts with that of the British government. DFID has done quite a good job in education and health care sector in Nepal.

Strauss-Kahn on financial crisis and low-income countries

Managing Director of the IMF, Dominique Strauss-Kahn, gave a speech at a CGD event on Sept 17. He talked about how the IMF is becoming flexible in helping developing countries cope with severe shortage of funds after the global financial crisis.

He argued that low-income countries have been hit harder than what was expected in March 2009 and now they remain highly vulnerable and face severe financing problems. These countries have been battered by multiple shocks--food and fuel price shock, global financial crisis, and drought and famine. The IMF estimates that low-income countries’ exports of goods and services could drop this year by 16 percent. A decline in remittances, by up to 10 percent, would further aggravate the plight of poor countries. Additionally, FDI flows to low-income countries might fall by 25 percent in 2009. Almost 17 million people are facing severe food shortages and may need emergency food aid, he said. Moreover, due to the global financial crisis an additional 90 million people will be pushed into extreme poverty.

Strauss-Kahn expects a recovery in 2010 and the developing countries would be able to “ride the wave of rising world demand”. [But, at a time when almost all the countries are aiming to increase exports, it is unclear how much the developing countries would benefit even if the world economy rebounds in 2010.]

He argues that there is something new about domestic policy responses in the developing countries this time-- most of them are “home grown”.

Some of this good news is home grown—always the best kind. Since many of these countries ran good policies, they built foundations to ward off the storm. This is something new. In the past, many low-income countries facing such a financial squeeze would have been forced to slash government spending, put administrative constraints on imports, or simply not pay their bills—making the crisis worse.

But this time is different. Debt positions had improved substantially, creating the breathing space for countercyclical policy. In fact, we estimate that almost two-thirds of low-income countries are at low or moderate risk of debt distress—this flows from better policies, and also from more aid and debt relief.

More than three quarters of low-income countries let budget deficits get bigger as revenue fell. One third also introduced a discretionary fiscal stimulus.Of 27 low-income countries with available data, 26 have preserved or increased social spending—no mean feat in the current environment.

The IMF is increasing funding and making the process much more flexible. He also spoke something about conditionality (apparently, admitting that some conditionalities were in fact counter productive):

It’s no secret that our lending programs attracted some criticism over the years. People said our conditions were too harsh, too intrusive, or even misguided. I accept some of that criticism. We made mistakes, but we always try to learn from our mistakes. Overall, I think the PRGF was a success. Countries with sustained program engagement over the past two decades saw bigger boosts to growth than those without such involvement.

Still, we need to make sure that the medicine does not harm the patient. Over the past few years, we have been streamlining our conditionality, focusing on core policy measures that are critical for macroeconomic stability, poverty reduction, and growth. Too many conditions in too many different areas can reduce effectiveness and lead to a loss of legitimacy. Across low-income country programs, the number of conditions has fallen by one third compared with the beginning of the decade. About 40 percent of these conditions are now focused on improving public resource management and accountability—such as expenditure control and tax administration.

Recent reforms have gone even further. From now on, our loans no longer include binding conditions on specific measures. Instead, programs will focus on meeting the overall objectives of the reforms, giving governments more leeway in reaching their goals.

Need to harmonize WTO with RTAs

Carnegie Endowment organized an event about WTO and how we can move forward with existing agreements so that the institution is relevant in the days ahead.It was argued that trade negotiations should be flexible to accommodate emerging thorny issues in the developing countries. Stalled trade negotiations could be passed if negotiations focus on liberalizing the sectors that are already moving forward in that direction due to independent initiative from individual countries. If the Doha Round has a slim chance passing in its entirety, then it can be passed by diluting the deal to accommodate new concerns of emerging and developing nations.

Uri Dadush presented a policy brief (WTO Reform: The Time to Start is Now), where he argues that the next round of WTO negotiations should be more flexible and tailored to the needs of individual countries and trading groups. He raised a very interesting perspective that most of the achievements under the WTO were in fact already moving forward in that direction due to bilateral and regional agreements among nations. The WTO just formalized and incorporated those already existing agreements under its framework. The most thorny issues related to subsidies are yet to be sorted out and this is what plagues the protracted Doha Round. Reductions of applied tariffs on trade in goods since 1995 is attributable to autonomous liberalization (65 percent), implementation of the Uruguay Round (25 percent), and regional arrangements (10 percent).

The WTO is increasingly bypassed in trade reform by unilateral, bilateral, and regional processes, and no new liberalization of trade in goods has come from multilateral negotiations since the institution was founded in 1995.

The WTO is nowhere to be found in several areas of crucial concern, including food security, international financial regulation in the wake of the global financial crisis, and climate change.

The WTO must break away from its splendid isolation and move from a single-minded focus on reciprocal multilateral concessions based on consensus and find ways to participate actively in arenas where actual liberalization is taking place.

The Doha Round is more complex and is hard to pass in its entirety because not all countries would agree to its provisions without diluting some of them to fit their national interest. The Doha Round has been complicated by the increased sensitivity of agricultural issues, the complexity of trade-offs in behind-the-border regulations in services sector, the growing number of diversity of trading partners, and the increased influence and assertiveness of large players and of groupings (LDCs). It is hard to reach a consensus incorporating all the members’ concern. This does not mean that consensus cannot be reached. Consensus can be reached in a diluted form, i.e. dealing with easier issues now and leaving thorny issues for later [we already did this one with the previous five rounds of negotiations and the most thorny issues were left to deal with for the Doha Round!]. How many issues can we leave now and then how much can achieve from the Doha Round? Hard to answer. However, Dadush feels that concluding the Doha Round is essential to preserving the credibility of the WTO as an institution and to avoid writing off the gains made in the last eight years of costly negotiations.

At at time when regional agreements are flourishing, the WTO should find a way to honor and incorporate provisions under such agreements within its global system. This will keep on the relevancy of the WTO. Generally, regional agreements are fast to come up with because of it is easy to form a consensus with few players. They are also designed to address country-specific needs and lessen discrimination: a low external tariff, simplified rules of origin, and coverage of all forms of trade. Dadush argues:

Establishing effective rules to govern regional agreements should be the WTO’s long-term objective, but its constructive engagement with regional processes is a prerequisite to achieving that goal.

In fact, the WTO seems to have realized this aspect and is arguing for giving more policy space to individual countries to help them weather unexpected demand and supply shocks. A recent WTO World Trade Report emphasized for inclusion of “trade contingency measures”. The contingency measures discussed in the report include safeguards measures, anti-dumping and countervailing measures, the re-negotiation of tariff commitments, the raising of tariffs up to their legal maximum levels, and the use of export taxes. These are needed because too little flexibility in trade agreements may render trade rules unsustainable. At the same time, too much flexibility may weaken the value of commitments and trade rules. An appropriate balance between flexibility and commitment is required for the success of trade agreements. There are some who argue that RTAs undermine full gains from global trade but evidence is not that strong in the light of increasing South-South trade. There are more gains to be made by encouraging WTO to engage in “opportunistic multilateralism” by strategically expanding existing RTAs into other relevant areas.

Steve Charnovitz, one of the panelist, argued that though judicial and executive branches of the WTO are working fine, it is not the same with the legislative process. He maintains that the existing WTO is out of sync with developments in the real world. Its limits on national regulation are not consistent with the changed market structure in place right now, especially in the new regulatory structure after the global financial crisis. Also, this is an era of huge government subsidies to almost all the crucial sector in an economy. This is not in line with the WTO regulations. Since the situation is bad everywhere and almost all of them are engaging in propping up flagging sectors, no one is complaining. He opines that the WTO should hold public hearing on each new PTA. He wants WTO to have a mix of states, NGOs, and private actors--like IUCN does.

Arvind Subramanian argued that new forms of protectionism is emerging out despite other restrictions from the WTO: exchange rate policies to prop up domestic exports and resource nationalism (export restriction or rice and gas last year).

Economics at work, Festival edition

One of the biggest festivals in the Hindu calendar is approaching and people are excited for family reunion and celebration. This comes up with the tendency by each household to build up stock of goods and services, thus drastically driving up demand for essential goods while supply being more or less constant for some period (until the adjustment occurs). However, before the adjustment occurs, the drastic rise in demand jacks up prices so high that it seems that the goods market is punched hard by sudden inflation hurricane. This is where we need a government food stocking and distribution agencies to smooth out supply of such goods and services.

Anyway, here is a story about increase in price of goats (not uncommon though):

With just days to go before Nepal's biggest religious festival of the year, the capital Kathmandu is suffering a severe shortage of goats for ritual sacrifice, the government said Tuesday.

As a result, the government food agency has ordered officials to travel to the countryside and buy up goats to be brought into the capital, where they will be sold for slaughter to mark the main Hindu festival of Dashain.

... the price of the animals had risen by around 25 percent in the capital as the festival approached, and the government was hoping to bring in around 6,000 of them

Is Nepal gaining from becoming a member of the WTO?

In my latest op-ed, I look at how Nepal has fared since it joined the WTO in 2004. Quite surprisingly, overall trade has declined and employment situation in the manufacturing sector became worse. May be Nepal should focus more on the nearby markets where trade takes places the most (say, South Asian Free Trade Agreement-SAFTA) rather than eying markets in developed countries.

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Is Nepal gaining from WTO?

A recent Ministerial Meeting in New Delhi decided to resume trade negotiations to pass the Doha Round, which came to a grinding halt in July last year over differences concerning special safeguard measures and agricultural subsidies offered by rich nations. The WTO Director General Pascal Lamy hopes that a Doha deal is doable by 2010. The Doha deal is expected to not only help countries expand trade but also help developing countries achieve development goals.

An increase in trade of goods and services in the international market has helped many countries achieve rapid economic growth. In the context of Nepal, we need to inquire what benefits we would have from the Doha Round in particular and the WTO in general. Nepal joined the WTO on April 23, 2004, becoming the first LDC to join the trading bloc through full working party negotiation process. So far, there have not been discernible benefits – in terms of growth, employment, poverty reduction and industrial production – from joining the WTO. In fact, exports have declined, imports increased and the manufacturing sectors, especially the ones that weighted high in the exports basket, have been going downward.

It is time to evaluate the progress made since joining the WTO and the possible impact on growth and employment due to planned reduction in tariffs in the coming years. No study has been done so far to figure out how much would Nepal gain by joining various trading blocs and under what trading scenario (tariff and subsidy rates) would Nepal lose and gain in what kind of sectors? What would be its impact on employment, which should be one of the main barometers for evaluating long-term success of trade?

It is surprising to note that trade (as a percentage of GDP) has declined since 2004, quite contrary to what is expected after joining trading blocs. It was 46.14 percent in 2004 but 45.28 percent in 2007. In the six years before joining WTO, on average, trade was 52 percent of GDP. In post-WTO period, on average, trade was 46 percent of GDP. Imports have been consistently rising since 2004 but exports have been decreasing. In FY 2003/04, exports (as a percentage of GDP) were approximately 16.7 percent whereas it was 12.1 percent in FY 2007/08. However, imports in FY 2003/04 were 29.5 percent of GDP but it was 32.7 percent in FY 2007/08. This means trade deficit is ballooning (increased by 23.3 percent last fiscal year). Had it not been for increasing remittances, balance of payments would have been negative. The investment situation also is not that encouraging. In FY 2007/08, gross investment (percentage of GDP) was 29.7 percent, down from 24.5 in FY 2003/04. Similarly, there has not been much change in foreign direct investment.

This means that even after joining the WTO, the country has failed to reap potential benefits; instead, it is at a disadvantage in terms of export promotion, public investment to prop up key industries and employment generation.

There has been no change in production structure and a shift to new productive activities is not happening. The top five export items – carpets and rugs, garments, jute goods, pulses and raw jute and jute cuttings – have not changed. Almost 80 percent of the exported items are manufactures and 60 percent of total export items go to India. The other top export destinations are the US, the EU, China and Bangladesh. Meanwhile, major import destinations are India (53 percent), China, the EU, Singapore and Malaysia. Of the total imports, 65 percent is manufactures, 15 percent agricultural products and the remaining fuels and mining products.

The rate of increase in volume of trade is not matched by the disappointing progress in economic growth rate and employment generation. The average growth rate in the post-WTO period is 3.5 percent while the average growth rate in trade in the same period is 46 percent. Worse, the employment level has been miserable in the manufacturing sector. Generally, low-skilled manufacturing activities are expected to increase along with a surge in employment in these sectors after joining the WTO. This is true for developing countries where wage rate is low and there is abundance supply of labor. However, in Nepal, the main export industry (garment and carpet) is close to being grounded now, which has already shed almost 90 percent employment and less than 20 firms are in operation.

Two main problems bedevil the exports sector: A lack of price and quality competitiveness. The former is a linked to exogenous factors such as road obstructions, high transportation costs, industrial strikes by politically-motivated trade unions and high cost of procurement of intermediate goods. All of these increase the cost of production. The second one is linked to endogenous factors like unwillingness of the export-based firms to explore innovative means of production and shift production to more productive activities with potential for comparative advantage. It is partly associated to their habit of excessively relying on trade under preferential agreements. A guaranteed low tariff and quota free access to markets abroad led to depression of incentives to innovate by the existing exporters. As per WTO agreement, when the quota system was phased out in 2005, the export-oriented firms went bust because other international competitors started eating up previously guaranteed market share.

The government has not been able to facilitate linkages between productive activities by reducing coordination failures. There are virtually no production and capital linkages between the existing goods that Nepal exports with comparative advantage and those that it could potentially do in the future. The capital and human resources of one industry are not readily available or useful to other industries, leading to a lack of synchronization in innovation of new goods and services.

The process of innovation and synchronization of similar industrial activities have not been made any easier by the government. The talks of establishing special economic zones (SEZ), which comprise of export processing zones, special trading zones, tourism/recreation and simplified banking facilities, have still not materialized due to political bickering and a lack of effective lobby from the industrial sector. The government has been planning for years to establish SEZs in Bhairahawa, Birgunj, Panchkhal and Ramate. Typically, the firms based in SEZs are responsible for producing quality goods and for exporting over 70 percent of their total production. The government has failed to give enough incentives in the form of tax credit, human resource training and technical expertise to the industrial sector.

The stalemate in production structure in the country even after six years of joining WTO is disappointing. No one knows how much will Nepal gain or lose if the Doha Round is completed by 2010. The government and think tanks need to analyze gains and losses under different WTO trading scenarios, especially tariffs reduction and subsidies elimination. Since more than half of the trading activities take place with India, it makes sense to focus on opening up markets for more goods and services between India and Nepal, than with the rest of the world. Also, given the increasing volume of trade among the SAARC members, it might be prudent to seek trading opportunities under much more liberal terms with SAFTA members than hoping to reap far-fetched benefits under the WTO regime.

Source: Republica, September 9, 2009

Global Competitiveness Report 2009-2010

The World Economic Forum (WEF) has published its annual global competitiveness report, which ranks countries based on how competitive their economies are (Global Competitiveness Index). This time the US fell to second place, overtaken by Singapore as the most competitive nation.

The GCI is based on 12 “pillars of competitiveness”, providing a comprehensive picture of the competitiveness landscape in countries around the world at all stages of development. The pillars include Institutions, Infrastructure, Macroeconomic Stability, Health and Primary Education, Higher Education and Training, Goods Market Efficiency, Labour Market Efficiency, Financial Market Sophistication, Technological Readiness, Market Size, Business Sophistication,and Innovation.

Here is a list of the top ten competitive nations:

Regarding Nepal’s standing, here are few details:

Overall, it ranks 125 out of 131 nations considered in the report. Specifically, institutions (123), infrastructure (131), macroeconomic stability (86), health and primary education (106), higher education and training (124), goods market efficiency (117), labor market efficiency (122), financial sophistication (99), technological readiness (132), market size (96), business sophistication (126), and innovation (130). Overall, Nepal had four “advantages” and 116 “disadvantages”. Gloomy report for Nepal!

Doing Business Report 2010--Nepal edition

The IFC has published its annual ease of doing business ranking-- Doing Business Report-- yesterday. This recent report is seventh in a series of annual reports published by the IFC and the World Bank. The report, Doing Business 2010: Reforming through Difficult Times, lists Singapore as a consistent and top reformer this year as well. The other top reformers on the list are New Zealand, Hong Kong, the US, the UK, Denmark, Ireland, Canada, Australia, Norway, and Georgia. Here is the full ranking. Here is an overview.

The report notes that despite global economic crisis, over 70 percent of the 183 economies covered by the report made progress. Reformers around the world focused on making it easier to start and operate businesses, strengthening property rights, and improving commercial dispute resolution and bankruptcy procedures.Two-thirds of the reforms recorded in the report were in low- and lower-middle-income economies. For the first time a Sub-Saharan African economy, Rwanda, is the world’s top reformer of business regulation, making it easier to start businesses, register property, protect investors, trade across borders, and access credit. The top ten reformers for this year are Rwanda, Kyrgyz Republic, Macedonia, FYR, Belarus, UAE, Moldova, Colombia, Tajikistan, Egypt, and Liberia. Rwanda has made fascinating progress in almost all the indicators.

The major indicators used are: starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, and closing business. Note that these indicators do not assess market regulation or the strength of the financial infrastructure; macroeconomic conditions, infrastructure, workforce skills and security.

However, the regulatory environment for business influences how well firms cope with the crisis and are able to seize opportunity when recovery begins. Where business regulation is transparent and efficient, it is easier for firms to reorient themselves and for new firms to start up. Efficient court and bankruptcy procedures help ensure that assets can be reallocated quickly. And strong property rights and investor protections can help establish the basis for trust when investors start investing again.

So, how come the countries that are always in the top ten list consistently and persistently sticking around the top. It is because:

They follow a longer-term agenda aimed at increasing the competitiveness of their firms and economy. Such reformers continually push forward and stay proactive. They do not hesitate to respond to new economic realities. Consistent reformers are inclusive. They involve all relevant public agencies and private sector representatives and institutionalize reforms at the highest level. Successful reformers stay focused, thanks to a long-term vision supported by specific goals. 

In South Asia, Pakistan was the top reformer, followed by Maldives, Sri Lanka, Bangladesh, Nepal, Bhutan, India, and Afghanistan. It is surprising that India is in the second last position in South Asia.

How is Nepal doing this year?

Nepal’s rank is unchanged at 123 position in terms of ease of doing business. Specifically, starting a business was harder in Nepal (rank 87 in 2010 but 75 in 2009); dealing with construction permits was slightly harder (rank 131 in 2010 and 130 in 2009); employing workers also became difficult (rank 148 in 2010 but 147 in 2009); registering property became easier (rank 26 in 2010 and 29 in 2009); getting credit became difficult (rank 113 in 2010 but 109 in 2009); protecting investors became harder (rank 73 in 2010 but 70 in 2009); paying taxes also became harder (rank 124 in 2010 but 111 in 2009); trading across borders became cumbersome (rank 161 in 2010 but 159 in 2009); no change in enforcing contracts (ranking maintained at 122); and no change in closing business (ranking maintained at 105).

Overall, there was improvement in just one indicator-- registering property. Nepal’s Finance Act 2008 reduced the fee for transferring a property from 6 percent to 4.5 percent of the property’s value. Nepal did not make doing business any easier in the economy this year as well and it languished at the bottom. It is kind of expected because of transportation obstructions, forced closure of industries, labor union strikers, depleting industrial security, no improvement in infrastructure, severe power shortage, and labor market rigidities.

In order to start a business in Nepal, it still takes 7 procedures, 31 days and cost equivalent to 53.6 percent of income per capita. This cumbersome process and high cost exist despite no minimum capital requirement for starting a business. Compare this with doing business in South Asia: it takes 7.3 procedures, 28.1 days, cost equivalent to 27 percent of income per capita, and minimum capital requirement equivalent to 26.9 percent of income per capita.

In dealing with construction permits (the procedures, time, and costs to build a warehouse, including obtaining necessary licenses and permits, completing required notifications and inspections, and obtaining utility connections), it takes 15 procedures, 424 days, and cost equivalent to 221.3 percent of income per capita. Compare this with South Asia,it takes 18.4 procedures, 241 days, and cost equivalent to 2310.6 percent of income per capita. Compare this with OECD average: it takes 15.1 procedures, 157 days, and cost equivalent to 56.1 percent of income per capita.

In employing workers, the difficulty of hiring index is 67, rigidity of hours index is zero, difficulty of redundancy index is 70, rigidity of employment index is 46, and redundancy costs is equal to 90 weeks of salary. Compare this with South Asia:  the difficulty of hiring index is 27.8, rigidity of hours index is 10, difficulty of redundancy index is 41.3, rigidity of employment index is 26.3, and redundancy costs is equal to 75.8 weeks of salary. And, to OEDC average: the difficulty of hiring index is 26.5, rigidity of hours index is 30.1, difficulty of redundancy index is 22.6, rigidity of employment index is 26.4, and redundancy costs is equal to 26.6 weeks of salary. Note that each index assigns values between 0 and 100, with higher values representing more rigid regulations. The Rigidity of Employment Index is an average of the three indices.

In registering property, it takes 3 procedures, 5 days and cost 4.8 percent of property values. Compare this with South Asia: it takes 6.3 procedures, 105.9 days and cost 5.6 percent of property values. And to OECD average: it takes 4.7 procedures, 25 days and cost 4.6 percent of property values.

In getting credit, strength of legal rights index is 5, depth of credit information index is 2, public registry coverage (% of adults) is zero, and private bureau coverage (% of adults) is 0.3. Compare this with South Asia: strength of legal rights index is 5.3, depth of credit information index is 2.1, public registry coverage (% of adults) is 0.8, and private bureau coverage (% of adults) is 3.3. And with OECD average, strength of legal rights index is 6.8, depth of credit information index is 4.9, public registry coverage (% of adults) is 8.8, and private bureau coverage (% of adults) is 59.6. Note that the Legal Rights Index ranges from 0-10, with higher scores indicating that those laws are better designed to expand access to credit. The Credit Information Index measures the scope, access and quality of credit information available through public registries or private bureaus. It ranges from 0-6, with higher values indicating that more credit information is available from a public registry or private bureau.

In protecting investors, extent of disclosure index is 6, extent of director liability index is 1, ease of shareholder suits index is 9, and strength of investor protection index is 5.3. Compare this with South Asia: extent of disclosure index is 4.3, extent of director liability index is 4.3, ease of shareholder suits index is 6.4, and strength of investor protection index is 5. And with OECD average, extent of disclosure index is 5.9, extent of director liability index is 5, ease of shareholder suits index is 6.6, and strength of investor protection index is 5.8. Note that the indicators above describe three dimensions of investor protection: transparency of transactions (Extent of Disclosure Index), liability for self-dealing (Extent of Director Liability Index), shareholders’ ability to sue officers and directors for misconduct (Ease of Shareholder Suits Index) and Strength of Investor Protection Index. The indexes vary between 0 and 10, with higher values indicating greater disclosure, greater liability of directors, greater powers of shareholders to challenge the transaction, and better investor protection.

In paying taxes, an entrepreneur have to make 34 payments per year, spend 338 hours per year preparing tax stuff, pays 16.8 percent tax on profits, labor tax and contributions equal to 11.3 percent, other taxes equal to 10.7 percent and total tax rate is 38.8 percent of profit. Compare with South Asia: an entrepreneur have to make 31.3 payments per year, spend 284.5 hours per year preparing tax stuff, pays 17.9 percent tax on profits, labor tax and contributions equal to 7.8 percent, other taxes equal to 14.2 percent and total tax rate is 40 percent of profit. Compare with OECD average: an entrepreneur have to make 12.8 payments per year, spend 194.1 hours per year preparing tax stuff, pays 16.1 percent tax on profits, labor tax and contributions equal to 24.3 percent, other taxes equal to 4.1 percent and total tax rate is 44.5 percent of profit.

In trading across borders, it takes 9 documents, 41 days, and costs US$ 1764 per container to export a standardized shipment of goods. Meanwhile, it takes 10 documents, 35 days, and US$ 1825 to import a standardized shipment of goods. Compare this with South Asia: it takes 8.5 documents, 32.4 days, and costs US$ 1364.1 per container to export a standardized shipment of goods, while it takes 9 documents, 32.2 days, and US$ 1509.1 to import a standardized shipment of goods. And with OECD average: it takes 4.3 documents, 10.5 days, and costs US$ 1089.7 per container to export a standardized shipment of goods, while it takes 4.9 documents, 11 days, and US$ 1145.9 to import a standardized shipment of goods.

In enforcing contracts (commercial), it takes 39 procedures, 735 days, and costs 26.8 percent of claim. Compare this with South Asia: it takes 43.5 procedures, 1052.9 days, and costs 27.2 percent of claim. And with OECD average: it takes 30.6 procedures, 462.4 days, and costs 19.2 percent of claim.

In closing a business (resolve bankruptcies), it takes 5 years, costs 9 percent of estate and recovery rate is 24.5 cents on the dollar (claimants recover from the insolvent firm). Compare with South Asia: it takes 4.5 years, costs 6.5 percent of estate and recovery rate is 20.4 cents on the dollar. And with OECD average: it takes 1.7 years, costs 8.4 percent of estate and recovery rate is 68.6 cents on the dollar.