Nepal climbs three places up in Doing Business rankings

KATHMANDU, OCT 21 -

Nepal has improved its position in the Doing Business 2012 Report by moving three notches up from the previous report to the 107th place.

Last year, the annual survey of the World Bank (WB) and International Finance Corporation (IFC) had ranked Nepal 112.

“The improvement is mainly due to improved oversight and monitoring in the legal system, thus speeding up the process for filing claims by investors, which has strengthened enforcement of contracts,” read a WB statement.

Nepal’s improvement in the ranking indicators, according to World Bank, sends a good message to investors that the country doing its bit to create better environment for entrepreneurs. “Significant improvements in the Doing Business rankings can bolster Nepal’s Investment Year Campaign 2012-2013,” says WB.

Starting a business in Nepal, according to the report, has become much difficult. Nepal’s ranking in this indicator slipped five positions to 100 from last year’s 95. 

If starting a business is difficult then closing it is much more difficult. The Nepali private sector often complains about not being able to close their businesses even if they are facing losses. The report illustrates this fact by ranking Nepal 112 in closing a business.

Nepal has been ranked No 1 in South Asia in terms of property registration, while it ranks second after India in getting credit and electricity. Getting electricity is a new indicator in the report. The country has been ranked 99 in terms of electricity connectivity.

In terms of tax payment, Nepal is in the third position in the South Asian region. However, country’s performance in cross-border trading is worse.

Trade Expert Posh Raj Pandey termed Nepal’s improvement in the ratings a ‘false impression’ of the country’s business environment. 

“Although Nepal’s ranking has improved in the global map, there have not been improvements in indicators related specifically to the country’s business sector,” said Pandey. “Improvement in indicators should have resulted in improvement in investments too, but that has not happened.”

Among South Asian economies, Maldives ranks the highest (79) followed by Sri Lanka (89) and Pakistan (105). Nepal is ranked ahead of India, Bangladesh, Bhutan and Afghanistan.

Nepal’s rankings

Indicator     DB2012    DB2011    Change

Starting a Business    100    95    -5

Dealing with Construction Permits    140    161    21

Getting Electricity    99    102    3

Registering Property    24    23    -1

Getting Credit    67    64    -3

Protecting Investors    79    74    -5

Paying Taxes    86    90    4

Trading Across Borders    162    161    -1

Enforcing Contracts    137    137    No change

Resolving Insolvency    112    113    1

Source: Kantipur