Thursday, September 7 2006 11:47 Hrs (IST) - World Time -

Washington: India is the top reformer in South Asia making it easier to do business there, according to a new report by the World Bank and the International Finance Corporation (IFC).

'Doing Business 2007: How to Reform' finds that India implemented five reforms in fiscal 2005-06 to simplify business registration, cross-border trade, and payment of taxes, as well as easing access to credit and strengthening investor protection.

Although the reforms improved India's ranking over last year's, it still ranks relatively low at 134 and lies 41 places after China which is reforming at a faster pace than India.

The top 10 reformers are, in order: Georgia, Romania, Mexico, China, Peru, France, Croatia, Guatemala, Ghana and Tanzania.

Five reforms in India and two in Pakistan reduced the time, cost, and hassle for businesses to comply with legal and administrative requirements.

No other South Asian economy improved its business regulations in 2005-2006, ranking the region last in the pace of reforms.

"Bangladesh is the third easiest country in which to do business in South Asia, although as a whole it is lagging behind other parts of the world when it comes to reforms that could enhance business activity," the report said.

Bangladesh has undertaken steps to improve its business climate and one notable reform made recently was introduction of a new land registration act to improve security and reduce corruption in land transactions.

The report finds that the South Asia region ranks behind all others on the pace of reforms, with only a quarter of countries making at least one reform that improved the Doing Business indicators.

Commenting on South Asia situation, Michael Klein, World Bank-IFC vice president for financial and private sector development, and IFC chief economist said, "South Asian countries need to do more to reap the benefit from new enterprises and jobs, which can come with more business-friendly regulations."

Doing Business 2007 also ranks 175 economies on the ease of doing business-covering 20 more economies than last year's report. These rankings highlight significant obstacles to business in South Asia, compared to countries around the world.

The top ranked countries in the region are the Maldives (53) and Pakistan (74), followed by Bangladesh (88), Sri Lanka (89) and Nepal (100). India, despite its good recent reform performance referred to above, still comes in at 134. Bhutan (138) and Afghanistan (162) are ranked lowest in the region.

The top 30 economies in the world are, in order: Singapore, New Zealand, the United States, Canada, Hong Kong (China), the United Kingdom, Denmark, Australia, Norway, Ireland, Japan, Iceland, Sweden, Finland, Switzerland, Lithuania, Estonia, Thailand, Puerto Rico, Belgium, Germany, the Netherlands, South Korea, Latvia, Malaysia, Israel, St. Lucia, Chile, South Africa, and Austria.

The rankings track indicators of the time and cost to meet government requirements in business start-up, operation, trade, taxation, and closure. They do not track variables such as market size, macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions, or crime rates.