The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE “xenophobic” attitude of many Bahamians towards foreign investors is hurting this nation’s Ease of Doing Business ranking, a well-known businessman arguing that the Government needed to tackle “the bureaucracy that sits below them” as a national priority.

Dionisio D’Aguilar said it was “no surprise” that the Bahamas continued to slip annually in the World Bank’s report, given the country’s often-paradoxical attitude towards foreign direct investment, combined with what he described as a “crazy” Know Your Customer (KYC) regime and “antiquated banking system”.

Pointing out that a “multifaceted” response was required to improve how business was conducted in the Bahamas, the Superwash laundromat chain’s president said he had personally encountered several bureaucratic hold-ups recently in seeking to have a document authenticated as ‘true and correct’.

Explaining what happened, Mr D`Aguilar said he went to the Ministry of Foreign Affairs to have a marriage certificate apostillised - certified as true and correct - on behalf of a Dutch national.

The Ministry had said the document did not bear the correct signature, sending Mr D`Aguilar to the Registrar General's Department to sort the matter out. “I had to leave it (the marriage certificate) there overnight. I go back the next day and went to the Ministry of Foreign Affairs,” Mr D'Aguilar recalled.

While he arrived at the latter Ministry at 1pm, Mr D'Aguilar was told that it only apostillised documents between 9am-12pm. “I had to go back the next day to drop off the document. It takes three days to apostillise,” Mr D`Aguilar added.

“I went back on day three but did not have the receipt. The woman there said that without it she couldn`t give it to me, because it would cause too much paperwork. What if I had lost the receipt permanently Does it mean I would never see it again.

“She reluctanly looked, and it took an extra five minutes to find it, but she was not prepared to do it unless I pushed and got upset. This is what the ease of doing business in this country is. The bureaucracy does not want to help. It took me five days. This is why we will continue to slip. There are so may other facets to doing business in this country.”

The Bahamas slipped another six spots to 77th place in the World Bank’s 2013 Ease of Doing Business rankings, and Mr D’Aguilar said: “Two things concern me about that.

“Number one, I’m, not surprised by that at all. I think the political directorate really want to improve the ease of doing business in the country, but they don’t get the fact the problem is not them; it’s the bureaucracy that sits below them.

“What’s interesting to note is that we’re slipping every year. While the Government’s saying it wants to change this, we slip every year and the problem is we don’t get why this is happening.”

Mr D’Aguilar then told Tribune Business: “One of the reasons why this is happening is we are a xenophobic people. While we want foreigners to come to purchase land to invest, we don’t treat them correctly when they arrive. When they run into that bureaucarcy, it’s most off-putting.”

Identifying obtaining residence and work permits from the Immigration Department as a major headache for foreign investors and their executives, the former Chamber of Commerce president said: “People wait for months and months to hear from Immigration.

“That causes us to slip in the rankings. We must address the Immigration problems to give people a definite time period in which they’re going to respond. This vagueness is upsetting. You go to Dubai, Singapore and in three-five days you know the answer. In the Bahamas, it’s anywhere from six weeks to three months.”

Mr D’Aguilar then turned his icy gaze to the Bahamian banking system. “The KYC rules we have in this country are absolutely crazy,” he told Tribune Business. “We have swung the pendulum too far to the other side.”

Regardless of whether Bahamians had different, pre-existing facilities at the same bank, Mr D`Aguilar said they had to supply “tonnes of identity documents “ each time a new one was established - regardless of whether it was a savings or chequing account, fixed deposit or a loan. Companies also had to provide KYC information on all their directors.

“It's completely over the top. It's so crazy,” Mr D`Aguilar told Tribune Business. “We have Immigration, antiquated KYC rules and an antiquated banking system that is burdened down with paperwork.

“If you go to the Cayman Islands, Dubai or Singapore, you can have a foreign currency account with ease, while our foreign exchange laws are onerous and burdensome. When you can put together Immigration, KYC rules at the local banks and an antiquated banking system with the general xenophobic nature of Bahamians, you get the impression why people think there`s a problem in the ease of doing business.

“When coming here to do business, you need an account in US dollars, but you need exchange control and all those permits. With Immigration you don`t know when to follow up and the system is often down.”

Mr D'Aguilar contrasted the Bahamas` cumbersome KYC regime to that in the US, where he said it took him half-a-day to open a bank account via two forms of personal identification.

“I live here, everyone knows who I am, and I can't open a bank account like that. It's ridiculous,” Mr D'Aguilar told Tribune Business. “We will continue to slip (in the Ease of Doing Business rankings), and I anticipate we will slip again next year.

“And no one knows how to correct this problem. It's a multifaceted response to reduce the onerous KYC rules, Immigration hold-ups inclusive of the civil service. They have to be helping, not hinder.”