An annual report from IFC and World Bank finds that Nepal has improved its ranking on Doing Business indicators, which is a good signal to investors that Nepal is helping to create a better environment for entrepreneurs.
Released today, Doing Business 2012: Doing Business in a More Transparent World assesses regulations affecting domestic firms in 183 economies and ranks the economies in 10 areas of business regulation, such as starting a business, resolving insolvency and trading across borders. This year, the ease of doing business ranking has expanded to include indicators on getting electricity.
Over the past six years, all eight economies in South Asia have made their regulatory environment more business-friendly. "Entrepreneurs in developing economies have a vital role in creating economic opportunities," said Augusto Lopez-Claros, Director, Global Indicators and Analysis, World Bank Group. "South Asia's governments have empowered entrepreneurs by implementing regulations that are efficient, accessible, and sustainable, and they should continue to seek avenues for improvement."
Reversing the trend from previous years, Nepal's rank rose by three places to 107.
This 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. The rankings in indicators such as registering property, getting credit, paying taxes, and trading across borders also improved. However, rankings fell in starting a business, dealing with construction permits, protecting investors, and resolving insolvency. On getting electricity - the newest indicator - the country is ranked 99.
There is significant scope for further significant improvements in selected Doing Business indicators like starting a business, dealing with construction permits, paying taxes, and trading across borders. Significant improvements in the Doing Business Rankings can bolster Nepal's Investment Year Campaign 2012-2013.
Among the region's economies, Bangladesh's rank fell from 118 to 122, and Maldives's rank fell from 78 to 79. However, the ranks of Bhutan (146 to 142), India (139 to 132) and Sri Lanka (98 to 89) improved. New data show that improving access to information on business regulations can aid entrepreneurs. In five of South Asia's economies, traders have access to relevant documentation requirements online or through public notices. Meanwhile, fee schedules for electricity connections are easily accessible in three economies.
"South Asian economies have an opportunity to increase access to information for entrepreneurs," said Sylvia Solf, lead author of the report. "One route is new technology, which is increasingly used by governments to provide electronic services for filing taxes or registering businesses. This not only enhances efficiency but opens opportunities to increase transparency."