The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas’ latest slump in the World Bank’s Ease of Doing Business rankings was yesterday branded “untenable”, as the country slipped out of the world’s top 100 nations.

Edison Sumner, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chief executive, called for “a concerted effort” by both the Government and private sector to reverse a damaging trend that has resulted in this nation falling another nine spots in the global rankings to 106th.

The World Bank’s 2016 rankings, published yesterday, indicate that the Bahamas continues to ‘stand still’ while rivals make improvements and leapfrog ahead of it on regulatory efficiencies and systems.

And they again suggest that repeated promises by Prime Minister Perry Christie, and several of his Cabinet Ministers, to improve the ‘ease of doing business’ in the Bahamas, continue to ring hollow.

While the Bahamas saw its rankings for the ‘ease of paying taxes’ and ‘enforcing contracts’ improve, it remained flat or regressed in most other categories - such as ‘Starting a Business’, where it fell to 118th in the world.

The Wold Bank rated the Bahamas 133rd on the ‘ease of getting credit’ and 94th for construction permits, while also giving this nation low marks for ‘getting electricity’, ‘registering property’ and ‘protecting minority investors’.

No members of the Christie administration were available for comment last night, but they are likely to suggest that the World Bank has failed to account for various improvements that have either been implemented or are in the works.

For example, the Government can point to the creation of the Central Revenue Agency (CRA) and consolidation of revenue-collecting departments; the ability to incorporate and register companies on-line; and the impending BEC management takeover by PowerSecure.

Yet, notwithstanding these arguments, the latest slippage again suggests the Bahamas’ economic competitiveness is being eroded - which in turn sends the wrong signals to potential foreign direct investors.

Mr Sumner told Tribune Business that the Bahamas first needed to “understand clearly” the methodology being used by the World Bank, and how it was being evaluated.

“We do have challenges, and have acknowledged that,” he said. “The Chamber has expressed, for quite a while, that we need to put mechanisms in place to stop the slippage.

“We are currently sitting in 106th, nine points down, and we should make a concerted effort, Government and the private sector, when this report is next produced, to move ourselves up the list.

“It’s not a tenable place to be, and I’d like to see ourselves in a better position.”

Calling for a private-public partnership (PPP) to improve the delivery of business services and the way commerce is conducted, Mr Sumner added: “In speaking to any investor or business person, whether Bahamian or foreign, I’ve heard complaints across the board that it’s very frustrating and difficult to do business in the Bahamas.

“The level of bureaucracy that one has to go through is something that is more of a deterrent to doing business than anything else..... The systems can be streamlined to ensure the flow of business improves.”

Other private sector executives said the ‘ease of doing business’ drop would merely exacerbate an already “depressed” economic environment, which was already grappling with low growth and high unemployment prior to last week’s 2,000-plus Baha Mar lay-offs.

Rick Lowe, an executive with the Nassau Institute think-tank, said: “It seems like everything is snowballing. How do we get back on the road?

“It’s unfortunate. We don’t know where to begin, and so few of us have any confidence now. It’s quite distressing really.”

He added: “It’s the bureaucracy. It doesn’t encourage entrepreneurship and investment. You see it in a depressed economy because people are even more hesitant.

“It’s a bureaucratic maze, and it seems to get worse.”

The World Bank’s 2016 report acknowledged that had the Bahamas been evaluated last year on this year’s methodology, it would actually have improved its position in the rankings.

Yet this improvement would only have amounted to two places - from 108th to 106th - and suggests that the Bahamas would have fallen even further in 2014 than the 13 places it actually lost.

Mr Sumner described that part of the report as “no consolation”. And he called for improved monitoring, measurement and evaluation of the business services delivered by the public sector, and its interaction with the private sector.

Giving the Government credit for consolidating its revenue collection agencies via the CRA, Mr Sumner said: “We need to take away the red tape, all the onerous processes, and make approvals quicker.

“It’s taking too long to get Business Licences and other important documents completed. We can reduce the time taken to get businesses registered. We need to move the entire system of getting Business Licences, and renewals, to where it becomes even more streamlined.”

When it came to starting a business, the World Bank rankings placed the Bahamas behind the likes of Jamaica, St Lucia, Barbados and Antigua & Barbuda, not to mention the likes of the UK and US.

The accompanying report said: “The Bahamas made starting a business more difficult by adding a requirement for Value-Added Tax (VAT) registration.

“According to data collected by Doing Business, starting a business there requires eight procedures, takes 28.5 days, and costs 10.9 per cent of per capita income.”

“It comes down to the human element that often-times slows things down,” Mr Sumner said, calling for “improved attitudes” from those in the public sector responsible for processing business applications.

While agreeing that the private sector should not be given “a free pass”, Mr Sumner said that approval processes were sometimes not clear, with entrepreneurs unsure of the required documents and frequently ‘turned around’ and sent to multiple government agencies.

“I had to go through this myself for business registration and VAT registration,” the Chamber chief executive said. “The come back and ask for something else that’s not on the original list of requirements.

“It adds to the frustration that business people are feeling, as they waste a lot of time going round these places, which equates to money and bottom line losses. Businesses are going round these places to do something that should be done in days, but takes weeks.”

Mr Sumner reiterated that the Chamber wanted to work with the Government to identify and eliminate “areas of weakness in the system”, given that its members were “on the front line” and “most impacted” by the situation.

And he repeated the Chamber’s offer to take over management of the Business Licence registry, arguing that this would bring “more ease and efficiency to the conduct of business in the Bahamas.

“We believe that by doing this we can reduce significantly the cost of doing business in the country, and show business in the local environment and internationally we have been improving our situation,” he added.