The picturesque Himalayan kingdom of Bhutan, rooted in the non-consumerist ethos of Buddhism, would much rather chase Gross National Happiness over Gross Domestic product. This is an established fact. But the tiny, land-locked country, with a population of less than a million, is the best performing South Asian economy on the ease of doing business in World Bank's Doing Business 2018 report. On the face of it, there seems to be a contradiction - Bhutan has managed to promote economic growth while seeking holistic spiritual well-being.
Ranked 75 in the Ease of Doing Business Report, Bhutan is much ahead of India in the current list, ranked 100. In the last three years, Bhutan's rank in the Ease of Doing Business list has been slipping from 71 to 73 to 75. But it has still maintained the highest rank in South Asia. The country broke into the top 100, leaping 54 steps, in the Doing Business report of 2016, published in October 2015. India jumped 30 steps into the top 100 only this year. How did Bhutan achieve this?
Say Charlotte Nan Jiang, Senior Private Sector Development Specialist on the Doing Business team of the World Bank, "This accomplishment came as a result of a striving reform plan responsible for implementing nearly 10 reforms in the last 10 years. It successfully implemented reforms improving access to credit and protection of minority investors, making it easier to start a business and register property as well as enhancing contract enforcement.
Among Bhutan’s achievements is the remarkable progress it has made in the area of enforcing contracts. Fifteen years ago, it cost more than 90 percent of the value of a claim to enforce a contract in Bhutan; now, it takes 23 percent, placing the country in the top 25 globally in this area. Starting a Business is another area that greatly improved in the last 15 years. Several reforms were responsible in reducing the time from 62 days in 2003 to 12 days, as well as a reduction of the cost to start a business of nearly 15% of income per capita."
Nan Jiang further breaks down Bhutan's consistently encouraging performance in South Asia. "The Doing Business indicators show that Bhutan strongest performance is in the areas of paying taxes, trading across borders and enforcing contracts where the economy ranks within the global top 30. In paying taxes, for example, it takes 85 hours per year for a standard Bhutanese company to prepare, file and pay its taxes.
This is below the regional average of 277.3 hours in South Asia. In enforcing contracts, the time that it takes to resolve a commercial dispute between two businesses in Bhutan is 225 days which is also less than the regional average of 1,101.6 days and less than the average time in OECD high-income economies (577.8 days), " she says over email, highlighting how these practices and reforms have brought Bhutan closer to the global best practices in business regulations.
According to Nan Jiang, there is no clash between Bhutan's pursuit of Happiness at the policy level and facilitating an improved business environment,"Since areas measured by Doing Business help to improve good governance by reducing unnecessary regulatory burden, the two measures can be seen as complementary," she says.