The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Two-thirds of Bahamian businesses have needed to use "personal contacts" to close or speed-up government deals, showing why "red tape" and corruption are among the country's top woes.

A Bahamas Chamber of Commerce and Employers Confederation (BCCEC) survey, the findings of which were revealed yesterday, identified "government bureaucracy", "poor work ethic" in the labour force, and "corruption" as the three greatest obstacles to private sector and economic growth.

The online survey of Chamber members, conducted between March 14 and April 2, 2018, saw four-fifths of businesses single out public sector "red tape" and bureaucracy as their biggest problem.

And more than half cited "poor work ethic" among employees, together with corruption, as the next priorities to be addressed if The Bahamas' economic competitiveness and productivity are ever to improve.

The findings were disclosed by the Inter-American Development Bank (IDB), which collaborated with the Chamber and Ministry of Finance on a survey that revealed the scale of the private sector's struggle to conduct business with the Government online.

"An online survey conducted by the Bahamas Chamber of Commerce and Employers Confederation (BCCEC), in collaboration with the IDB and in coordination with the Ministry of Finance (MOF), shows that 79.1 percent of the respondents think "inefficient government bureaucracy" is the most problematic factor, "poor work ethic in national labour force" with 57.93 percent is the second, and "corruption" with 55.47 percent of the responses, is the third," an IDB document revealed.

"When asked about the last transaction conducted with the government, only 33 percent said they managed the transaction completely online. When asked about how many documents they had to submit for this transaction, 38.16 percent said five or more documents.

"Sixty-seven percent said that they had to interact three or more times with the government before completing the transaction. Finally, 30.26 percent of the respondents said they had to spend eight hours or more to complete the transaction. In addition, 65.47 percent have used personal contacts to expedite the processing of a government transaction."

The revelations came in an IDB report associated with a $30 million project designed to facilitate the Government's 'digital transformation' and, in so doing, strengthen the Bahamas' economic competitiveness - something it identified as the biggest impediment to job creation and economic growth.

"The Bahamas has gone through an extended period of flat economic growth averaging 0.5 per cent for the past 10 years," the document said. "The country's limited competitiveness has held up efforts to promote economic growth by attracting foreign investment and facilitating local entrepreneurship.

"The Bahamas occupied the position 119th out of 190 countries in the 2018 Doing Business Report (DBR) due to the difficulties to conduct business activities in the country. Key procedures to do business, such as registering a company or a property, require numerous steps and long waiting periods, which increase the costs for local entrepreneurs and potential foreign investors.

"Registering a company in the Bahamas is four times' costlier than in OECD countries. Government bureaucracy affects competitiveness by adding an extra cost to the regular cost of operating a business, and puts a financial burden on low income families that must spend time and money in transportation and waiting lines, thereby losing the income related to the time required to deal with the administrative bureaucracy," the IDB report added.

"Time-consuming government procedures are also a deterrent for entrepreneurial activity, since entrepreneurs need to operate with agility in their early stages to quickly generate revenue with their limited initial capital."

The IDB-financed $30 million 'digital transformation' is designed to reduce the Government's inefficient bureaucracy, and bolster "low levels of transparency", which affect the public sector's internal workings just as much as its dealings with the public and private sector.

Pointing to the continued reliance on a paper-based system, the report said: "Hiring a new government employee requires seven procedures with different government agencies. To open an e-mail account for a government employee, three memos need to be physically exchanged among government agencies."

And, although the Bahamas enjoys an 84 per cent Internet usage penetration rate, just 11 of 366 government procedures - some 3 per cent - can be completed online. Public sector capacity was described as being "very weak", while morale, wages, accountability, skills and budgets were all branded "low".

"Out of 18 ministries, just four have point-to-point interoperability that allows them to exchange information digitally. No centralised exchange mechanism is available," the IDB report said.

"The Ministry of Public Service, responsible for the management of the Government's human resources, has an annual budget for training of $150,000 to serve close to 20,000 employees, which allows it to provide training to about 200 employees per year (1 per cent of the number of employees).

"The Bahamas performs relatively low among countries assessed under the Open Data Index, being ranked 74th out of 94 included in the survey. The Bahamas was assigned just 17 per cent of the potential maximum score."

The IDB reiterated that the Ministry of Finance's Department of Information Technology, which is responsible for IT services across the Government, has only 68 persons - with some lacking "sufficient knowledge for the issues they need to handle".

"The department of IT in the Registrar General's Department has one professional full-time and one part-time," the report said. "This office is responsible for the Business and Property Registries, among other tasks. Out of 17,353 employees in the public service, just 73 are classified as Information Technology (IT) professionals."

It added that transparency surrounding construction permits and government procurement was "particularly low", but the IDB suggested that blockchain technology "presents a unique opportunity for a country such as the Bahamas to modernise its property registration system by adding an extra layer of security, therefore improving trust in the system".

"Availability and quality of data has been a concern for the Government, and a limitation to take policy and management decisions, the IDB study added. "Data has become the centre of policy decisions, and a growing economic activity is being built around it.

"For the Government, the possibility of counting on digital, reliable, timely, accurate, updated and integrated data opens endless possibilities to design policy and manage initiatives based on data.

"Equally important, it allows the Government to apply artificial intelligence techniques to that data and use predictive analytics to anticipate citizens' needs or to better allocate resources in security, health and inspection tasks."