Nepal Gains in Global Prosperity Ranking

Despite ongoing political uncertainty, Nepal has achieved higher prosperity. According to the Legatum Prosperity Index 2013, Nepal climbed 6 places up this year to reach 102nd position among 142 countries across the world. Nepal was ranked 108th position last year.

 

 The index published by the Legatum Institute, a UAE based investment organisation and think-tank shows Nepal’s progress mainly in the area of personal freedom. Nepal scored 77 points in the personal freedom sub-index which includes sections such as civil liberties and tolerance among ethnic groups. The sub-index highlights more freedom of choice for ordinary Nepalis and ethnic harmony in the country.

 

The Legatum Prosperity Index has been benchmarking 142 countries since 2007 in 8 distinct sub-indices: economy, education, entrepreneurship and opportunity, governance, health, personal freedom, safety and security and social capital.

 

Nepal’s economic performance was not seen satisfactory as the country declined 5 places to 92nd position in economy sub-index, mainly because of decline in its gross domestic savings. Nepal also moved down in the safety and security sub index, by 17 places to 101st due to increase in state violence and the number of refugees.

 

Similarly, Nepal also did not fare well in entrepreneurship and opportunity as the country was placed at 111th position in the sub-index. Nepal ranked 100th in governance, 104th in education, 97th in health and 95th in social capital sub-indices. However, Nepal ranked above India, Bangladesh and Pakistan in the overall index. Bangladesh ranked below Nepal at 103rd position whereas India was placed at 106th in the index. Bangladesh ranks above India in the index for the first time in 2013. Although Bangladesh’s rank has remained constant since last year, India has declined five places in the same period. India has fallen down the Prosperity Index rankings consistently over the last five years. Pakistan was the lowest ranking country in the entire Asia-Pacific region with 132nd position whereas China stood at 51st in the index.

 

Norway ranks first in overall Prosperity, as it has since 2009, confirming its place as the most prosperous country in the world for the fifth consecutive year. The country also ranks first in the economy and social capital sub-index in 2013. Switzerland, Canada, Sweden and New Zealand secured 2nd, 3rd, 4th and 5th position respectively. Meanwhile, US ranked 11th in the index. US moved down four places to 24th in the Economy sub-index. Countries that have overtaken the US in the economy subindex include New Zealand (17th) and South Korea (19th), among others. The UK has moved down three places to 16th in overall Prosperity, as a result of decreases in the rankings for six out of eight sub-indices since last year. The UK has been leapfrogged by Austria (15th), Germany (14th), and Iceland (13th).

 

Starting a Business in Nepal Becoming Faster and Easier: IFC

Over the past year, Nepal made rules and provisions that has made it much easier to start a new business, says a World Bank Group report. According to the report published by the International Finance Corporation (IFC) on 29th October, the administrative and processing time hassles at the Office of the Company Registrar (OCR) have been reduced significantly. “This was achieved by reducing administrative processing times at the company registrar and establishing data links between agencies involved in the incorporation process,” states the report.

 

The report entitled ‘Doing Business 2014: Understanding Regulations for Small and Medium-Size Enterprises’ ranks Nepal 105th out of 189 global economies. Nepal ranked 108th last year. In terms of helping create a better environment for local entrepreneurs, Nepal ranks third in the eight South Asian economies surveyed, surpassed only by Sri Lanka and Maldives. The country’s rank in Starting a Business topic is 97, compared to 103 in 2013. “A congenial business environment is important for Nepal’s economic growth”, said Val S. Bagatsing, IFC Resident Representative in Nepal.

 

“We are encouraged by the rapid pace of reform in Nepal which will attract more investment and create jobs in the country.” The report benchmarks performance of economies in ten indicators: starting a business, availability of electricity, availability of credit, dealing with construction permits, property registration, protection of investors, tax provisions, trans-border trading, contract enforcements and resolving insolvency.

 

The IFC report finds that South Asia leads the world in implementing business regulatory reforms in 2012/13. Six of eight economies in the region completed 11 reforms simplifying the process of starting a business, strengthening access to credit, or easing the process for paying taxes. Sri Lanka was the best performing economy in the South Asia region securing 85th position whereas India ranked 134th in the index followed by Bhutan (141) and Afghanistan (164). Similarly, Maldives, Pakistan and Bangladesh secured 95th, 110th and 130th positions respectively. 

 

Singapore tops the global ranking on the ease of doing business. Similarly, Hong Kong, China, New Zealand, United States, Denmark, Malaysia, Republic of Korea, Georgia, Norway, and the United Kingdom secured the top 10 spot of economies with the most business-friendly regulations. Meanwhile, Libya (187), Central African Republic (188) and Chad (189) were lowest ranking economies in the index.