l Usha Drukpa/Thimphu
Bhutan may have slipped two points in the World Bank’s Ease of Doing Business report. However, it is not a matter to worry about. This appears to be the message that Economic Affairs Minister, Lyonpo Lekey Dorji, underlines going by his post on his personal page on the social media site.
“Bhutan jumped from global ranking of 148 in 2014 to 144 in 2015 to 71 in 2016 to 73 in 2017. The report comes one year early. Yes we dropped from 73 to 75 in the latest ranking but we are still much ahead of other countries in the region,” the Minister says.
Nonetheless, the Minister says “we do not intend to bask in glory and we did make concerted efforts to improve, however, most economies are improving too and there is lot of competition to improve the ranking.”
According to Lyonpo Lekey, Bhutan’s distance to frontier metric, the most important measure of the gap to perfection, improved from 65.21 last year to 66.27 this year. “Despite dropping in the ranking by two places, we improved by more than one percent point. This is the highest in our region. The second highest ranked country in our region is India at 100.”
Meanwhile, the World Bank’s report also outlined 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.
Despite the two point drop, there are a number of areas in which Bhutan has improved, such as starting a business, getting credit, dealing with construction permits, enforcing contracts and paying taxes. However, Bhutan needs to improve in getting electricity, registering properties, and protecting minority investors.
With the central bank reducing the minimum lending rate in March, Bhutan’s getting credit ranking jumped to 77 from 82 last year. The process and number of days required to open a business also improved, resulting in Bhutan gaining six spots in this parametre. Other criteria such as dealing with construction permits and enforcing contracts saw significant jump, moving 15 and 22 places respectively. Ease in paying taxes also jumped two places to 17th in the world.
According to the latest World Bank Annual Ratings, Bhutan is ranked 73 among 190 economies in the ease of doing business. Last year, Bhutan ranked 71 out of 189 countries worldwide. Bhutan emerged the highest ranked country in South Asia.
Earlier, the Economic Affairs’ Minister, in a condensed but informative post, had said that Bhutan’s rating by “Transparency International,” the body assessing corruption perception index (CPI), has improved from 33 in 2013 to 27 among 190 countries in 2015. He has also touched on diversification of the economy highlighting that the Government has already started work on it and will give greater impetus during the 12Five Year Plan formulation and implementation.
Reflecting on the Five Jewels of the economy, he states that greater care and focus will be given to these five areas, as enshrined in the Economic Development Plan (EDP) 2017. Sectors like ICT, Construction, industries and others find prominence etc will receive importance as well.
Amongst others, Lyonpo Leki has underlined that the Government is currently building 756 acres industrial park in Jigmeling, Gelephu; 350 acres industrial park in Damdhum, Samtse; 150 acres industrial park in Motanga, SJongkhar; and Bongdema industrial park in Monggar.
“Although we often discount the contributions from our industries, it is in the excess of Nu. 10Billion annually,” he says, adding that MoEA is also working on identifying small and sustainable industrial parks in each Dzongkhag to encourage industrialization of the districts. He also posted that the Government has signed the most liberal trade, transit and commerce agreement with the most important trading partner, India.
Ease of Doing Business in Bhutan averaged 111.40 from 2008 until 2017, reaching an all time high of 146 in 2010 and a record low of 70 in 2014. Compared to 2014, Bhutan moved up 54 notches. Bhutan instituted two major reforms that helped push the ranking.
According to the report, Bhutan is the easiest country to do business in South Asia. Overall, Bhutan scored 65.37 points out of 100. This is an increase from last year when Bhutan scored 65.21, but the improvement in the score was not enough to push the ranking higher.
The World Bank states that economies, which 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.