The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas faces “the harsh reality” that it has done nothing to improve ‘the ease of doing business’, the Chamber’s chairman warning yesterday that far-reaching reform was necessary to improve economic competitiveness.

Gowon Bowe told Tribune Business there should be little surprise that the Bahamas is now ranked 121st out of 190 nations for ‘business ease’, given that reforms to-date had largely consisted of “tweaks at the edges”.

“We really need to ask the critical question: What have we done as a nation to improve our standing?” Mr Bowe said.

“It’s a very blunt question. If we have not initiated private-public sector working groups and discussions of these issues, do we really expect to be improving?”

The Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chairman added that the blame for this nation’s consistent declines in the World Bank rankings, year after year, needed to be shared equally between the public and private sectors.

He emphasised that devising, and implementing, the necessary reforms required a public-private partnership (PPP) approach, as neither side would be able to successfully transform how business is conducted in the Bahamas without the other.

“It cannot be left to the development of the Government and civil service, as they are least likely to know how to improve the ease of doing business,” Mr Bowe added.

Emphasising that businesses were best-placed to know the main impediments to the smooth conduct of commerce, Mr Bowe said participation and ‘buy-in’ by the key civil servants was more important than that of the policymakers.

“They have to be willing to sit down with businesses, take a deep breath, listen to criticism as long as its constructive and justified, and cut through the bureaucracy and fiefdoms that have been formed,” he told Tribune Business.

“The reality is clear: What has the Bahamas done; what has the country done; to change its ranking. The sad reality is: Nothing.

“If we sit with our eyes closed, hoping that minor tweaks at the edges change our ranking, we are mistaken.”

The Bahamas’ slippage in the 2015 rankings was even more pronounced than first thought, the World Bank ultimately moving this country back from the 106th spot initially announced to 120th, based on upgraded data and methodology changes.

While this cushioned the Bahamas’ fall in this year’s rankings, as it lost just one spot, this nation - which prides itself on being an international services provider and magnet for foreign direct investment - has to come to grips that it is now perilously close to falling into the bottom third of the ‘business ease’ rankings.

The Bahamas is now ranked below ‘economic powerhouses’ such as Papua New Guinea (119th); Swaziland (111th); the Solomon Islands (104th); and Lesotho (100th).

And it has also slipped behind many of its Caribbean competitors, including Jamaica (67th); St Lucia (86th); Antigua & Barbuda (113th); and Barbados (117th). Until the past two-three years, the Bahamas was placed ahead of the latter two.

The Bahamas’ ‘ease of doing business’ decline has not resulted from anything it has necessarily done but, rather, the fact it has effectively ‘stood still’ while its competitors have enacted reforms enabling them to overtake this nation.

Mr Bowe said the Bahamas needed to ensure that it at least kept pace with the evolving world around it, but without a serious commitment to change, the latest World Bank report would only become “fodder for chatter in the press”.

“The Government and the private sector equally share the burden of saying we’ve not done anything. That’s the harsh reality when we look at the findings,” the BCCEC chairman told Tribune Business.

The Bahamas’ one-spot fall in the latest rankings was largely due to its 73-place drop on the ‘ease of paying taxes’, from 22nd in the world to 95th. This stemmed from its implementation of Value-Added Tax (VAT), and the extra burden it has imposed on the private sector.

Elsewhere, the Bahamas fell six spots - from 112th to 118th - when it came to protecting minority investors, and from 134th position to 139th on the ease of obtaining credit.

While the Bahamas maintained its 118th spot on the ease of ‘starting a business’, it fell from 108th to 110th on construction permits, and from 115th to 116th on getting electricity.

The only ‘bright spot’ was the 18-place improvement on the ‘ease of registering property’, but even here the Bahamas only moved from 184th in the world - near rock bottom - to 106th.

The country now faces the possibility of soon being bracketed with many nations regarded as ‘Third World’, unless a concerted reform effort is undertaken.