Pakistan needs reforms to ensure ease of doing business

According to the Doing Business report 2020 report, Pakistan stands at 108^th rank in ease of doing business. It has improved from 28 positions since the previous year but there are still many barriers to ease of doing business. Pakistan has the potential to improve its reforms in trade, agriculture and manufacturing sectors but it lacks a proper regulatory framework to encourage competition. Despite having a competition commission, our country does not have competitive markets. It is due to the government’s intervention in the market that has put pressure on businesses, making it difficult to reach their maximum potential. The regulatory barriers put a constraint on domestic competition, leading to only a few firms dominating the market and a lack of effective competition policies.

 The lengthy regulatory framework by the government has made it difficult and time-consuming for industries to operate. It results in excessive paperwork, high transaction costs, trade barriers and rent-seeking. The development of competitive marketing is lagging behind as the government is using excessive protectionist policies to control the situation but in reality, they are causing significant inefficiencies. Due to these reasons, there is a lack of productivity and innovation in the domestic market, leading to high costs and constrained ease of doing business. In the long-term, it is impacting the trade, agriculture and industrial sector, eventually directing to slow economic growth and lesser ranking in the global market.

The government can play a huge role to improve the ranking of ease of doing business. To reduce the cost, the government can remove policy distortions regarding investment, competition and trade. The Competition Commission of Pakistan (CCP) must promote healthy competition and policy must be implemented effectively so it ultimately benefits the consumers and society. The aim should be directed towards a sustainable economy. The CCP must take enforcement actions such as protecting consumers from anti-competitive practices and exploitation by the business community. The government should focus on maintaining and boosting the process of competition in order to encourage efficient use of scarce resources.