Doing business became easier in India and Pakistan in 2005-2006, according to a new regional report released yesterday by the World Bank and its private sector arm, IFC, entitled Doing Business in South Asia 2007.

Doing Business in South Asia 2007 is the third report in a series of South Asia regional reports based on the methodology of the annual global Doing Business report.In end August 2006, the Doing Business 2007: How to Reform report was released.

The South Asia report covers 8 countries. The top ranked countries in the region are the Maldives (53) and Pakistan (74), followed by Bangladesh (88), Sri Lanka (89), Nepal (100), India (134), Bhutan (138), and Afghanistan (162). As a region, South Asia performs comparatively well in business start-up and protecting investors. It lags far behind, however, on the ease of employing workers, enforcing contracts, and trading across borders.

Doing Business tracks a set of regulatory indicators related to business start-up, operation, trade, payment of taxes, and closure by measuring the time and cost associated with various government requirements. It does not track variables such as macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions, or crime rates.

The report finds that entrepreneurs in South Asia face large regulatory obstacles to doing business. For example, it takes 18 months of salary, on average in the region, to dismiss a redundant worker. More than a year (425 days) is needed to register property in Bangladesh. Taxes are high: a standard company in India pays 81% of commercial profits in taxes, while in Pakistan, it takes 560 hours per year to comply with all tax regulations.

The full report and other downloads are available at the Doing Business Website.