KATHMANDU,30 OCT 2014Â Â – It became a little easier for entrepreneurs to do business in Nepal due to regulatory reforms made in 2013-14, said the World Bank in its report Doing Business 2015: Going Beyond Efficiency published on Wednesday.
Nepal has been ranked 108th out of 189 countries on the ease of doing business index. Last year, it was placed in the 109th position. Nepal comes before the Maldives (at number 116), Bhutan (125), Pakistan (128), India (142), Bangladesh (173) and Afghanistan (183) in the South Asian region. Sri Lanka is ahead in the 99th spot. The regional average for South Asia is 134.
The report said that Nepal had eased the areas of business regulatory reform particularly dealing with construction permits that has helped the country to climb one spot in the rankings.
Doing Business sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations.
It measures and tracks changes in regulations affecting 10 areas in the lifecycle of a business: Starting a business, dealing with construction permits,getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
The report showed that Nepal made dealing with construction permits easier by implementing a new electronic building permit system. â€œDoing business is easier in economies with administrative efficiency and strong regulatory protections,â€ said Rita Ramalho, lead author of the Doing Business report, World Bank Group. â€œWe are encouraged by the modernization of regulatory processes in South Asia because it is benefiting local entrepreneurs.â€
In Nepal, for example, a businesswoman trying to build a new warehouse nine years ago would have spent 143 days on the construction permitting process. Thanks to the adoption of
some of the best global practices, such as a new electronic building permit system in 2013-14, this process can now be completed in 86 days.
The report showed that except for dealing with construction permits, Nepal has not done well in the other 10 areas or indicators of the lifecycle of business. Nepal rose to the 91st position from the 126th position in terms of dealing with construction permits and is behind only Sri Lanka (60th position) in South Asia. It takes 86 days in Nepal to deal with construction permits while it takes 323 days in Afghanistan, 249.4 days in Pakistan and 185.9 days in India.
â€œNepal made dealing with construction permits easier by implementing a new electronic building permit system,â€ the report said.
Tulasi Prasad Sitaula, secretary at the Ministry of Physical Infrastructure and Transport, said that the government had reduced the timeframe for awarding contracts through reforms in the internal system. â€œWe are substantially cutting down the timeframe in the proposed amendment to the Public Procurement Act,â€ he said. The government has been working to amend the act as per the changed context.
In terms of starting a business, Nepal has slipped to 104 from 97 and comes behind Afghanistan (24) and Bhutan (92). For example, it takes 17 days to start a business in Nepal while it takes seven days in Afghanistan.
It has become more difficult to get electricity in Nepal, and it has slipped to the 85th position from the 78th position in the 2014 list. It takes 70 days to get electricity in Nepal by fulfilling five different procedures. It takes 74 days in Bhutan, 178.3 days in Pakistan, 114 days in Afghanistan and 105.7 days in India.
Nepal is in the 27th position in terms of ease of registering property. It takes only five days to register property n Nepal while it takes 250 days in Afghanistan, 92 days in Bhutan and 47 days in India. â€œNepal made transferring property easier by reducing the registration fee,â€ the report said.
Meanwhile, Nepal is ranked way down in terms of trading across borders. The World Bank report has placed Nepal in the 171st position among 189 countries, only overtaking Afghanistan (184) in the South Asian region.
The global report showed that it takes 40 days to export by fulfilling 11 documentations. However, importing goods takes 39 days. The cost of export per container is $2,545 while the cost of import is $2,650 per container.
According to the report, Singapore tops the global rankings with regard to ease of doing business. The others on the list of the top 10 economies with the most business-friendly regulatory environments are New Zealand, Hong Kong, Denmark, South Korea, Norway, US, UK, Finland and Australia, in that order.