By Abdul H. Azeez
In the annual Doing Business Report of the World Bank, Sri Lanka showed no improvement and once again checked in at a lowly 102 behind countries like Guatamala, Fiji, Rwanda and Khazakhstan.
The report measures the ease for firms to do business in a given country. For the fifth year running, Singapore led the list, followed by Hong Kong, New Zealand, United Kingdom, and the United States. Among the top 25 economies, 18 made things even easier over the past year.
Sri Lanka was recognised for having at least one of the minimally improved credit recognition systems in South Asia. Sri Lanka passed a new secured transactions law in 2009 but has not yet implemented it.
The use of active case management and having a separate court for commercial affairs also gained points for Sri Lanka but this did not prevent it from showing up badly in the area of contract enforcement. It came in at the 8th slowest in enforcing contracts with 1,318 days taken to enforce a contract. Compare this with Singapore’s 150 days.
Sri Lanka also recorded the highest number of annual tax payments; a shocking 62 as opposed to Sweden’s 2. The IMF has been pressing Sri Lanka about tax reform and many leading economists say that Sri Lanka has a very regressive, complicated and inefficient tax system. On an overall basis Sri Lanka ranked low in areas of enforcing contracts (137), paying taxes (166), registering property (155) and dealing with construction permits (169).
On the other hand the country was punching above its weight in areas like starting a business (34), protecting investors (74), getting credit (72), closing a business (43) and trading across borders (72). The World Bank site stated that ‘this year’s list of the 10 most-improved economies also includes three in Sub-Saharan Africa — Rwanda (a consistent reformer of business regulation), Cape Verde, and Zambia, as well as Peru, Vietnam, Grenada, and Brunei Darussalam.’