Those who were happy that the democracy has made Pakistan an investment heaven should be ready for another rude shock. The latest blow has been dealt by no less than World Economic Forum which says that Pakistan has now reached 123rd position amongst 133 countries as compared to 101st position in the last year in the competitive index. The Global Competitiveness Report 2010-11 released by the World Economic Forum has disclosed that 15 problematic factors for doing business in Pakistan. These factors in the order of severity are corruption, government’s instability, inflation, access to financing, tax rates, tax regulations and foreign currency regulations. The report has kept in view each and every step and Pakistan’s ranking in each area.
In the ranking of institutions the country has been ranked at 112. 2nd pillar: in the area of infrastructure Pakistan has been placed at 110. 3rd pillar: Due to the vulnerable macroeconomic environment the country has been ranked at 133, 4th pillar: health and primary education 123, Efficiency enhancers 95th, 5th pillar: higher education and training 123rd, 6th pillar: goods market efficiency 91st, 7th pillar: labor market efficiency 131, 8th pillar: financial market development 73, 9th pillar: technological readiness 109, 10th pillar: market size 31.Innovation and sophistication factors 76th, 11th pillar: business sophistication 79, 12th pillar: innovation 75. From a list of 15 factors, respondents were asked to select the five most problematic for doing business in their country.
1st pillar: in the area institutions, property rights 107, intellectual property protection 86, diversion of public funds 92, public trust of politicians 91, irregular payments and bribes117, judicial independence 74, favoritism in decisions of government officials 87, wastefulness of government spending 58, burden of government regulation 72, efficiency of legal framework in settling disputes 103, efficiency of legal framework in challenging regulations 96, transparency of government policymaking 115, business costs of terrorism 138, business costs of crime and violence126, organised crime127, reliability of police services 119, ethical behavior of firms 100, strength of auditing and reporting standards 97, efficacy of corporate boards 115, protection of minority shareholders’ interests 94, strength of investor protection 27.
2nd pillar infrastructure: Quality of overall infrastructure 100, quality of roads 72, quality of railroad infrastructure 55, quality of port infrastructure 73, quality of air transport infrastructure 81, available airline seat kilometers 48, quality of electricity supply 128, fixed telephone lines115, mobile telephone subscriptions107. 3rd pillar macroeconomic environment: Government budget balance 90, national savings rate 89, inflation 137, interest rate spread 94, government debt 82, country credit rating 125.
4th pillar health and primary education: Business impact of malaria 111, malaria incidence 109, business impact of tuberculosis 114, tuberculosis incidence 113, business impact of HIV/AIDS 102, HIV prevalence 22, infant mortality 123, life expectancy 105, quality of primary education 103, primary education enrollment rate132.
5th pillar higher education and training: secondary education enrollment rate 125, tertiary education enrollment rate 121, quality of the educational system 87, quality of math and science education 90, quality of management schools 80, internet access in schools 84, local availability of research and training services 97, extent of staff training115,
6th pillar goods market efficiency: Intensity of local competition 87, extent of market dominance 65, effectiveness of anti-monopoly policy 73, extent and effect of taxation 46, total tax rate 37, number of procedures required to start a business 99, time required to start a business 71, agricultural policy costs 106, prevalence of trade barriers 106, trade tariffs 133, prevalence of foreign ownership 109, business impact of rules on FDI 73, burden of customs procedures 98, degree of customer orientation 97, buyer sophistication 62.
7th pillar Labor market efficiency: Cooperation in labor-employer relations104, flexibility of wage determination 104, rigidity of employment 110, hiring and firing practices 51, redundancy costs 111, pay and productivity 93, reliance on professional management 87, brain drain 68, female participation in labor force 137.
8th pillar financial market development: Availability of financial services 101, affordability of financial services 85, financing through local equity market 43, ease of access to loans 40, venture capital availability 51, restriction on capital flows 83, soundness of banks 88, regulation of securities exchanges 76, legal rights index 60. 9th pillar technological readiness: Availability of latest technologies 88, firm-level technology absorption 88, FDI and technology transfer 100, internet users 100, broadband Internet subscriptions 103, internet bandwidth 111. 10th pillar market size: Domestic market size index 26, foreign market size index 61.
11th pillar business sophistication: Local supplier quantity 87, local supplier quality 95, state of cluster development 46, nature of competitive advantage 84, value chain breadth 69, control of international distribution 89, production process sophistication 76, extent of marketing 90, willingness to delegate authority 85. 12th pillar innovation: Capacity for innovation 58, quality of scientific research institutions 79, company spending on R&D 67, university-industry collaboration in R&D 81, Gov’t procurement of advanced tech products 84, availability of scientists and engineers 80, utility patents per million population 88.