The Tribune

PRIME Minister Dr Hubert A Minnis minced no words when he spoke at Bahamas Business Outlook last week. Before a packed house at the Baha Mar Convention Centre, the prime minister won over an audience disgusted and fed up with the obstacles in the way of accomplishing the smallest required task. He spoke frankly, citing the 2017 World Bank Annual Report listing The Bahamas as 119th overall out of 190 countries in Ease of Doing Business. He rattled off figures that reinforced what attendees already knew. In every aspect from getting a building permit to renewing a business license, the words ease and doing business in The Bahamas do not even belong in the same sentence. The Bahamas’ ranking on the World Bank Ease of Doing Business scale was appalling, but what the prime minister did not address was the incestuous link of a culture of corruption that created a world of paper, giving those who handled all that paper the power to speed things up or slow them down commensurate with opportunities for pay-offs.

“Having been a businessman for many years, I know the frustration that business owners feel in complying with certain government processes,” the prime minister said. Using a basic warehouse as the model for new construction, The Bahamas ranked 106th out of 190 countries in obtaining a building permit, 117th in obtaining a connection for permanent electricity at the site. For registering property, the country ranked 167th and 142nd in obtaining credit. The only categories in which we ranked at a relatively acceptable level were obeying orders -- 55th for paying taxes and 74th for enforcing contracts.

We could cite horror stories that would make you wonder why anyone bothers going into business. We know of one man who has formed a Bahamian company with a Bahamian partner offering products and service that will aid the country. He is the ideal investor, experienced and financially capable. Both personally and professionally, has a stellar international reputation. In addition to the company, he and his wife are building a multi-million dollar house in an exclusive community. They have poured more than $2m into its construction. Yet their lawyers are still trying to complete the conveyance for the property and the company is still trying to open a bank account.

That’s one case with multiple challenges.

Multiply that by hundreds and you get a sense of the size of the problem.

Dozens of businesses are stalled, unable to renew business licenses or import goods because they cannot renew their Customs bond because they cannot get letters of good standing from NIB, not because they are not paid up but because NIB has a “backlog”. If the rumours are true that NIB is not releasing letters of good standing until January 31, the same day as business licenses have to be renewed, then every business will have to pay a penalty for being late or government will have to extend the deadline and try to find a reasonable explanation for something that is inexcusable. Anyone who has ever been to a National Insurance Board office to get a letter of good standing will have seen the inefficiency with which the antiquated process is handled. These letters should be automatic, available online just like a VAT receipt. Once payment is made and clears, the account should show satisfactory status and someone at the business should be able to print out the document in his or her office. In an era when you can order everything from a pizza to a Japanese style kit home online, pay in a flash, print a receipt or use your phone as a wallet, how do we expect The Bahamas to compete when we are still running pieces of paper between offices?

Some of those same businesses that are sending to NIB daily are almost at their wit’s end. It is hardest on those covered under the Light Industries Encouragement Act who cannot use their duty free Customs bond and are running out of supplies. The same hardship applies to a restaurant that needs to import ingredients under its reduced duty provisions. Business slows, customers get angry, turn elsewhere, perhaps to a non-Bahamian supplier and storage charges mount.

There is only one real reason why we still do business like it was done 100 years ago – corruption. In the old days, people used to count their chances for stealing or taking money as part of their informal pay package. Asked how a job’s pay was, a worker would answer openly, “Wages bad, but chances real good.” Chances were the opportunities to steal clothing from the warehouse in the back or get someone to slip a few dollars under the table for a favour. Families clothed and fed themselves on chances and good chances became an undercurrent of the gray economy.

Today, desperation for paper documents makes for ‘chances’ among the public service, many of whom work in deplorable buildings and circumstances and feel justified. But every pay-off to get something expedited fuels the culture of corruption, makes the honest person’s wait longer and disrupts the already slow system.

Corruption and ease of doing business are inexorably linked and until we break the back of the former and find new ways to circumvent the “need to see your face” construct, we will continue to suffer the anti-business malaise.

Dr Minnis, you have two battles on your hands when you tackle ease of doing business and we wish you well on both.