Bhutan Policy Notes : Doing Business Reform
Bhutan has been reforming its doing business environment in recent years as part of a policy shift to improving its investment climate and economic performance.Overall, it is ranked 75 out of 190 countries and is the highest ranked country in the S...
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| Format: | Policy Note |
| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/163511564662900331/Bhutan-Doing-Business-Reform-Policy-Notes http://hdl.handle.net/10986/32291 |
| Summary: | Bhutan has been reforming its doing
business environment in recent years as part of a policy
shift to improving its investment climate and economic
performance.Overall, it is ranked 75 out of 190 countries
and is the highest ranked country in the South Asia region,
significantly outperforming Bangladesh and Pakistan. In the
last decade, as part of a Government policy agenda to
improve competitiveness, Bhutan has launched across the
board reforms in many areas.During the DB 2018 period, there
was not a reform momentum in Bhutan. The very slight
downgrading of the ranking can be attributed to reform
inertia after a decade of success. Another factor for the
lack of improvements in DC in 2018 has been Government focus
on other reforms, especially involving hydropower, cottage
and small industries and SOE’s.Reforms clearly need
acceleration after a decade of strong reform momentum,
spurred by desire to see improvements in Bhutan’s overall
ranking has not moved significantly in either direction.
There has been significant improvement in dealing with
construction permits and in enforcing contracts but
deterioration in protecting minority investors and
registering property. The lack of forward momentum reflects
slippages in reform momentum due to policy environment and
shifting government priorities.First, access to credit in
Bhutan is improving due to the expansion of the scope of
collateralizable assets and the deepening of the credit
bureaus. Second, the National Land Commission, a competent
and responsible public agency managing land administration,
has made progress in terms of land registration and online
portals. According to the National Land Commission (NLC),
the average days to register property declined from 54 days
in 2016 to 42 days in 2018. Finally, recent Government
attempts to streamline regulations and dismantle
administrative complexities should help reduce transactions
costs for private operators.top of these areas, Bhutan’s
business climate remains constrained by imperfections in
factor markets, limited access to product markets, and state
dominance.The focus has been on ways to set up businesses,
improve construction permits, improve credit bureaus, ensure
better land registration, and protect minority investors.
The Bank/IFC team is working in close collaboration with
this new team and providing relevant international
experience and support. |
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