World Bank ‘Doing Business Index’:

‘Lanka to be among top 30 by 2015’

Shirajiv SIRIMANE

Sri Lanka rose to the 89th position in the Global Ranking from 183 countries, as one of the best places to do business with, on the ‘Doing Business Index’ compiled by the World Bank and the International Finance Corporation yesterday.

Sri Lanka rose in the global ladder partly by strengthening investor protection and reducing taxes on business. Sri Lanka made paying taxes less costly for businesses by abolishing the turnover tax and social security contribution and by reducing corporate income tax, value added tax and nation building tax rates, the report said.

Sri Lanka also strengthened investor protection by requiring greater corporate disclosure on transactions between interested parties.

China is placed at the 91st while Vietnam is ranked 98th. The Maldives is ahead of Sri Lanka in the ranking and India finished at 132nd position while Pakistan (105), Nepal (107), Bangladesh (122), Bhutan (142), Afghanistan (160) were also behind Sri Lanka.

Central Bank Governor Ajith Nivard Cabraal speaking to Daily News Business said this achievement once again clearly underlines the investor confidence the international community has for Sri Lanka.

He said Sri Lanka will be able to see a gradual increase of this factor in the future as well. “We are confident that in keeping with the Mahinda Chintanaya Sri Lanka would be able to be placed in the 30th position by 2015 or 2016. Meanwhile one of the leading entrepreneurs who has business ventures in many countries, Chairman Multichemi, Samantha Kumarasinghe also endorsed this World Bank report and said that it is very difficult to start businesses overseas.

“The red tape and beaucracy we face is enormous,” he said.

An official of the Board of Investment said the one day approval concept and simplications of regulations too had contributed to this factor.

The Ceylon Chamber of Commerce (CCC) said that they were pleased that Sri Lanka has seen a quantum leap in its overall ranking in the Doing Business Index of the World Bank. Sri Lanka has risen nine points from 98/183 in 2011 to become 89/183 in 2012 sending out positive signals for investors and the business community.

“There has been a remarkable increase in some key areas such as dealing with construction permits, protecting investors and trading across borders. The country has risen from 169th position to 111th position with regard to dealing with construction permits in 2012 while in protecting investors Sri Lanka is ranked in the 46th position as opposed to the 74th position in 2011. The country also stands at the 53rd position in trading across borders in 2012. These achievements on the part of the country indicate that the peace dividend has indeed paid off and the efforts made by the authorities to improve our ranking have borne positive results,” the CCC said.

Whist congratulating the government on this achievement, the Ceylon Chamber noted that there are areas that can be further improved such as registering property, getting credit and even starting a business. Even though Sri Lanka has declined in the ranks in relation to paying taxes, it has to be noted that recently introduced tax reforms have not been taken into consideration in the current rating.

The Ceylon Chamber of Commerce is optimistic that the government will take necessary action to improve the areas that are lagging so that Sri Lanka can further improve its overall ranking in the future.

However, despite the significant improvements seen in Sri Lanka’s business landscape, the report has also identified further areas requiring intervention in the future, as the country has seen less progress in paying taxes, registering property and enforcing contracts. Sri Lanka continues to rank poorly on paying taxes (rank 173) as well as registering property (rank 161) and enforcing contracts (rank 136).

‘Doing Business in a More Transparent World’ assesses regulations affecting domestic firms in 183 economies and ranks the economies in ten 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, World Bank Group Global Indicators an Analysis Director Augusto Lopez-Claros said. 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.