Bhutan has slipped eight places from its previous ranking and dropped to 89th in the World Bank’s latest Doing Business 2020 report. This is the fourth year in the row where Bhutan’s Doing Business rankings have slipped.
However, last year’s comparative numbers show doing business in Bhutan has not really become more difficult but other countries in the ranking have made more advances to ease business growth.
The report looks at 10 different topics in doing business, each ranked separately, and how easy it is to carry out topics in a country. The report compares business regulations in 190 economies. The former government in July 2017 had pledged to take Bhutan into the top 50 of the rankings.
Ranked at 103, starting a business is one of the biggest hurdles in Bhutan. It takes 12 days and eight procedures to register a business entity in Bhutan. Dealing with construction permits and getting electricity is not an easy task for businesses in Bhutan either. Ranked at 91 and 78 respectively, it takes 150 days to get construction permits and over two months to get an electricity connection for business in Bhutan according to the report.
Registering a property also takes a whopping 77 days, thus it is also ranked poorly at 53. Getting credit for potential businesses is another big hurdle. Bhutan is ranked 94th among 190 countries in ease of getting a loan to start a business. Protection of minority investors, people who have non-controlling share in a company, is also among the lowest-performing indicators ranked at 111th.
However, ranked at 15th paying taxes for businesses in Bhutan is as easy as it gets. This indicator is the best performing indicator for Bhutan in the ease of doing business. Ease in trading across the border and enforcing contracts also ranked high at 30th and 29th respectively.
And finally, when it comes to resolving insolvency of a business entity, Bhutan is ranked a lowly 168th. The report indicates Bhutan has no practice of resolving insolvency. Except for protecting minority investors and resolving insolvency, Bhutan remained above the South Asian region average in all the other eight indicators.
The Doing Business 2020 study shows that developing economies are catching up with developed economies in the ease of doing business. Still, the gap remains wide. An entrepreneur in a low-income economy typically spends around 50 per cent of the country’s per-capita income to launch a company, compared with just 4.2 per cent for an entrepreneur in a high-income economy. It takes nearly six times as long on average to start a business in the economies ranked in the bottom 50 as in the top 20.
Sherub Dorji
