Business: The government’s effort to improve the business climate in the country has paid off, and its target to be in top 100 in the ease of doing business ranking has been achieved.
The World Bank Group has ranked Bhutan 71 among 189 economies around the world in its annual Doing Business 2016 report released yesterday. Last year, Bhutan was ranked 125, and with the 54 notches up the ladder, Bhutan is now the easiest country to do business in South Asia.
The government last year had established a task force chaired by the economic affairs minister with cross-sectoral membership including the private sector to review and recommend reforms in ease of doing business. Doing Business report focuses on regulations and regulatory processes involved in setting up and operating a business.
The report observes that Bhutan instituted two significant reforms during the past year. In getting electricity, Bhutan made it easier for entrepreneurs to connect to the grid by speeding up the process for obtaining a new connection.
A press release from the World Bank states that five years ago, it took an entrepreneur 93 days to get electricity, now it only takes 61, less time than in France.
Bhutan also implemented a reform in the registering property indicator through which transferring property has been streamlined by introducing a computerized land information system. This initiative has decreased the time to complete a transfer by 15 days.
“Bhutan has been advancing steadily in recent years in improving its regulatory environment and making it more business friendly,” the press release quoted the World Bank’s Country Representative for Bhutan, Genevieve Boyreau as saying. In doing so, the country representative said Bhutan could stimulate both entrepreneurship and job creation for its population.
Through thoughtful and well-executed policies and reforms that support improvements in the business environment, he said Bhutan has the potential to foster a dynamic and expanding private sector that will help realize its development aspirations. “The World Bank supports in Bhutan a better investment climate for private sector through a series of Development Policy Credits and technical assistance.”
This year’s Doing Business report completes a two-year effort to expand benchmarks that measure the quality of regulation, as well as efficiency of the business regulatory framework, in order to better capture realities on the ground.
Five indicators saw changes – Dealing with Construction Permits, Getting Electricity, Enforcing Contracts, Registering Property and Trading Across Borders.
For example, indicators on Dealing with Construction Permits, which previously measured the procedures, time and cost to comply with the formalities to build a warehouse now also measures the Building Quality Control index, good practices in construction regulation. Bhutan performs well on the Building Quality Control index scoring 13 out of 15, the same score as Ireland.
The economy also scores well on the index for registering property, quality of land administration. The score of 24 out of 30 indicates Bhutan has a high quality of infrastructure for ensuring the reliability of information on property titles and boundaries as well as a high level of geographic coverage in land ownership registration and cadastral mapping.
On starting a business, Bhutan is ranked 91. According to the report, it takes 15 days to start a business and the entrepreneurs have to complete eight procedures.
According to the World Bank, the economies that rank high on Doing Business indicators tend to perform well in other international data sets, such as the Global Competitiveness Index and Transparency International’s Corruption Index.
Overall, Bhutan scored 65.21 out of 100 points, compared to the 87.34 points scored by Singapore, the best performer in terms of having the most business-friendly regulation in the world.
In the neighbourhood, Bangladesh ranked 174, Pakistan 138, India 130, Sri Lanka 107, The Maldives 128, Afghanistan 177 and Nepal 99.
New Zealand, Denmark, Republic of Korea, Hong Kong, the United Kingdom, the United States, Sweden, Norway and Finland are the other top 10 countries.