By NEIL HARTNELL
Tribune Business Editor
The private sector yesterday warned the Bahamas "can't jump through hoops" over its rise in the World Bank's 'ease of doing business' index, even though its 119th position means "the bleeding's stopped".
Edison Sumner, the Bahamas Chamber of Commerce's chief executive, expressed relief that the two-place improvement from last year's 121st ranking had ended the "downward spiral" the Bahamas has been on "for too long".
He told Tribune Business he had "feared" for the Bahamas' reputation among the international investment community had it slipped further in the World Bank's index, which measures the efficiency of a company's permitting/approval systems compared to 189 other nations.
The Bahamas has spent multiple years sliding in the 'ease of doing business' rankings, having gone from a position in the top third - the 60s and 70s spots - to almost falling out of the middle third last year.
While yesterday's modest improvement has at least 'stopped the rot', Mr Sumner and others acknowledged that the Government and private sector together face an "enormous" task to implement further reforms that will accelerate the Bahamas' rise up the World Bank index.
The Chamber's chief executive expressed hope that if the two sides could successfully implement some of the reforms now being discussed, the Bahamas' ranking would enjoy greater improvement in next year's index - possibly even breaking into the world's top 100 nations.
"The fact we've moved up two notches is a good thing, but I'd like to see that jump up 10-15 notches in the next year," Mr Sumner told Tribune Business. "Some of the plans on the drawing board, if followed through and acted upon, should see a significant improvement in our ranking on the ease of doing business."
Acknowledging that ending successive years of decline was "extremely important" for business and investor confidence, he added: "It's about stopping the bleeding, stopping the downward spiral.
"We've been on this trend for too long as a country. When we look at other countries in the region, they've improved their rankings through greater efficiency, reforms and new business processes and diversifying their economies.
"This is the first step. It's s significant move for us as a country. I feared that if we declined further in the index, it would have caused a lot of anxiety regarding the country internationally."
Mr Sumner said the albeit modest improvement in the Bahamas' standing would signal to potential investors that "something that is positive is starting to happen, but reiterated it was vital to "translate" reform ideas into reality.
He added that sustained improvement in the 'ease of doing business' ranking would "improve the level of confidence the international investment community has in the country.
"It shows them the Bahamas is turning the corner, and implementing policies that make consideration of investing in the Bahamas a reality," the Chamber chief executive said, "and I hope with this that we begin to attract a good quality of investments to the country."
The World Bank's annual 'ease of doing business' index is used as a key indicator by international investors to guide them in their decision-making, as it enables them to gauge how easy it is to conduct commerce in a particular nation.
They will be especially wary of allocating capital to projects in low-ranked nations, or those that have suffered consecutive falls such as the Bahamas, as this gives them the impression that their investments will be unsafe, and caught up in too much bureaucracy and red tape.
The Minnis administration has placed particular emphasis on improving the 'ease of doing' business, both in perception and reality, given that smooth regulatory processes are especially important to a Bahamian economy positioned as an international financial and business centre (IFC).
It has appointed a national 'ease of doing business' committee, co-chaired by Lynn Holowesko and Bryan Glinton, to develop recommendations and a strategy for alleviating bureaucratic bottlenecks and private sector frustration. The Chamber has also created its own committee, which is supplying feedback and ideas to the Government body.
The World Bank yesterday appeared to justify the Bahamas' modest move up the rankings on the basis of reforms that had made it easier to 'start a business' and 'pay taxes'.
It highlighted the merger of Business License and Value-Added Tax (VAT) registration, and a reduction in Stamp Duty on the sale of land, as processes that had improved the conduct of business in the Bahamas.
However, when it came to the different category rankings, the Bahamas appeared to have largely 'stood still'. It only ranked in the world's top third on two indicators - the ease of paying taxes (55th), and resolving insolvency (64th).
Despite the Business License/VAT registration process 'merger', the Bahamas still found itself in just 108th spot out of 190 on 'starting a business'. It also remained near-bottom on registering property (167th), due to the time taken on title searches and lodging/recording a conveyance at the Registry of Records.
The Bahamas was also ranked 142nd on the 'ease of getting credit'; 117th for the 'ease of getting electricity'; 129th on minority investor protection; and 157th for 'trading across borders'. The only other areas where the Bahamas made the 'top 100' was on obtaining construction permits, where it ranked 86th, and in enforcing contracts where it placed 74th.
With the Bahamas lagging in all areas, Mr Sumner yesterday agreed that much remains to be done before this nation gets where it needs to be.
"Although we've seen a reversal, I don't think we should be jumping through hoops," he told Tribune Business. "The trend reversal is good, but there's a lot of work to do, especially on implementing policies and measuring them.
"Right now, we're not at a place where we can celebrate this improvement because there's an awful lot of work to be done. It's a good start, but there's more to do."
Mr Sumner disclosed that the Chamber's international contacts had revealed significant foreign investor/business interest in the Bahamas, but concerns over numerous were deterring them from pursuing this further.
"A lot of companies are looking at the Bahamas as a place they want to do business," he told Tribune Business, "but challenges remain over the cost and reliability of energy; the cost of labour; the strength of the talent pool; the bureaucracy in terms of getting Business Licenses and investment approvals.
"It's a matter of having confidence in the economy, a matter of having confidence in the administration of the country. When we see there's a reversal, and we're moving in the other direction on the 'ease of business and not declining, it boosts the level of confidence in the Bahamas from the international community that we are taking steps to improve where we are.
"If we can demonstrate this in the eyes of the international community, then we will see renewed interest in the Bahamas," Mr Sumner added. "Some fresh incentives may be necessary, but there has to be a balanced approach so we don't throw the baby out with the bath water, but nor do we give away the shop."