Regional Risks for Doing Business - The Case of Pakistan

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Introduction
Regional Risks for Doing Business (in Pakistan) WEF Report

• Water Crises
• Unmanageable Inflation
• Terrorist Attacks
• Failure of Urban Planning

WEF based on EOS
Ten (10) Risks doing Business in South Asia

• The Failure of National Governance
• Unmanageable Inflation
• Unemployment and Underemployment
• Failure of Regional and Global Governance
• Cyber attacks
• Failure of Critical Infrastructure
• Energy Price Shock
• Failure of Financial Mechanism
• Water Crises
• Large Scale Involuntary Migration

Top #3 Most Important Regional Risks for Doing Business

• Failure of National Governance
• Cyber Attacks
• Unemployment and Underemployment

Pakistan’s ease-of-doing-business is likely to be affected in the coming decade as the $300 billion economy struggles to mitigate imminent risks, according to a report released by the World Economic Forum (WEF).

The report titled ‘Regional Risks for Doing Business’ has listed water crisis, unmanageable inflation, terrorist attacks, failure of urban planning and critical infrastructure as immediate risks faced by the country with 220 million inhabitants.

The survey highlighted that looming water crises is one of the biggest risks for Pakistan's economy.

The risks were identified after the WEF carried out an ‘Executive Opinion Survey’ between January and June. The findings were tabulated after receiving responses to the survey’s risk-related questions for the South Asian region – Bangladesh, India, Nepal, Pakistan and Sri Lanka.

The report highlights 10 major risks to doing business in South Asia including the failure of national governance, unmanageable inflation, unemployment and under-employment, failure of regional and global governance, cyber attacks, failure of critical infrastructure, energy price shock, failure of financial mechanism or institution, water crises and large-scale involuntary migration.

Interested in reading the complete Regional Risks for Doing Business in 2018 World Economic Forum Report? Click here to download it.

Failure of national governance was listed as one of the foremost challenges faced by the countries in the South Asian region which has remained politically active during the last two years as Pakistan, Nepal, Bangladesh, Bhutan and Maldives went through highly charged election seasons.

South Asian elections are usually observed with anxiety, as they are prone to violence, blockades and tensions. Even after completion, the period following elections is usually mired with uncertainty.

The report also points out that Pakistan, Nepal and Bangladesh are susceptible to cyber-attacks as they continue to run on computers using Microsoft products that report malware encounters almost regularly.

The region’s vulnerabilities came under the spotlight after Bangladesh Bank was hit by hackers who got away with one of the biggest heists in the history, robbing the country’s central bank of more than $80 million.

‘Unmanageable inflation’ was ranked as the second-highest risk in the region. South Asia benefited from low global oil prices during 2014-16, but a combination of rising energy prices and expansionary monetary and fiscal stances point to rising inflationary risks.

In July this year, Pakistan’s inflation rate reached four-year highs as rupee’s value continues to deteriorate.

The report highlights unemployment or under-employment as the third leading risk for the region.

Of the 19 countries facing imminent cyber-attack risks, 14 were from Europe and North America, by contrast, 22 of the 34 countries that facing ‘unemployment or under-employment’ as top-most risks hail from the sub-Saharan African region.

Geopolitical concerns were relatively muted, with ‘failure of regional and global governance’ and ‘terrorist’ attacks in ninth and tenth place globally, respectively.

The starkest of geopolitical risks, ‘interstate conflict’ was ranked in the top three risks in 17 countries. Most of these countries were in Eastern Europe and Eurasia, a pattern that reflects the increasing importance of that part of the world as global geopolitical balances undergo recalibration.

By Amin Ahmed