According to the latest Global Competitiveness Report (2017-18) of the World Economic Forum, Pakistan’s competitiveness has reached 115th, showing an increase in position by seven places. This shows that in the last year, macroeconomics indicators of the country have improved by a major factor. For the past two consecutive years, the country’s position has been improving at the index. An jump of four places was recorded in the year 2016-17.
The top three countries on the list of competitiveness are Switzerland, US, and Singapore respectively. Out of these three, Switzerland has been on the top consecutively for the last nine years.
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The competitiveness, as the data has shown, has increased on a global scale. South Asian countries have shown an increase in competitiveness with Bhutan going up 15 places with a position of 82 while Nepal going up by 10 places with a position of 88. Similarly, Bangladesh has climbed to the 99th position with an jump of seven positions. On the other hand, India has seen a downfall while moving to the 40th position. Similarly, Sri Lanka has fallen down to the 85th position going down by 14 ranks. The major factor for the downfall of both these countries is inefficient bureaucracy and corruption.
The report showed a number of 114 global competitiveness indicators. Out of these 114 indicators, Pakistan improved on 84, lost its position on 20 indices, and secured its previous position on the remaining 12 indices.
Sound improvement in Pakistan’s ranking
In institutional rankings, Pakistan moved up by 21 ranks. Position of the country last year was 111 while the current position is 90. Infrastructure ranking increased from 116 to 110. Furthermore, Pakistan climbed 10 ranks on the Macroeconomic Stability Pillar with a position of 106. Pakistan lost one rank in the Health and Primary Education rankings. Previously, the ranking was 128 while the country now stands at a position of 129. Higher Education and Training increased to 120 from 123. Labor Market Efficiency reached 128, Goods Market Efficiency reached 107, Technological Readiness increased to 111, and Labor Market Efficiency increased to 128.
On Market Size rankings, Pakistan ranks at 28th position. In Business Sophistication, the rank increased to 81 from 95 in one year. Pakistan also showed an amazing improvement of 15 ranks in Innovation rankings.
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Amir Jahangir, Chief Executive Officer of Mishal Pakistan, the Country Partner Institute of the Global Competitiveness and Benchmarking Network of the World Economic Forum said:
“Pakistan is classified as a factor driven economy. It primarily depends on improving its institutions, infrastructure, macroeconomic stability, health and primary education indicators”
He further added:
“Pakistan has managed to resist the global crisis and has shown resilience for economic recovery. Globally countries that are competitive have shown resilience to crisis. However, the reforms agenda still remains an unfinished business”
Difficult issues for operating business in Pakistan
The Global Competitiveness Report also showed that business in Pakistan is difficult due to corruption. Corruption has been highlighted as the most negative factor impacting business in the country. The reports of last year also showed the same data which means that no development has been made on the issue.
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Another problematic factor for businesses in Pakistan is higher tax rates. Those who are operating business in the country have to pay a lot of amount in tax including sales tax, income tax and withholding tax on their incomes. For emerging businesses, the profit margin is too low.
At present, there is plenty of political instability in Pakistan. Moreover, the relations with India are also bitter at the moment. As a result, it generally becomes difficult to bring foreign investment in the country.