The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas’ “disturbing and dangerous trend” of falling in the World Bank’s Ease of Doing Business rankings accelerated yesterday, with this nation slumping another 13 places to 97th spot - dropping into the world’s bottom half.

Gowon Bowe, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) new chairman, told Tribune Business that the drop confirmed the Bahamas was “not moving in the right direction”.

The 2015 rankings showed the Bahamas fell from 84th spot last year, dropping in six out of the 10 categories that are used to assess 189 nations.

This nation maintained its 125th spot when it came to ‘enforcing contracts’, and managed to improve its rankings in just three categories. One of these was a nine spot jump in ‘trading across borders’, where the Bahamas rose from 72nd to 63rd spot.

But, before anyone in the private sector and the Government gets too carried away, one of the improvements was in the ‘registering property’ category - where the Bahamas managed to jump just three spots - from 182nd spot to 179th.

This leaves this nation just 10 spots from the ‘bottom of the pile’.

Then, in a development likely to be greeted with ironic cheers by some in the business community, the Bahamas achieved its biggest improvement - and highest rating - in the ease of ‘paying taxes’ category. This nation jumped from 45th to 31st in the world in this category.

This will likely bring a rueful smile in some quarters, given the impending introduction of Value-Added Tax (VAT), but the Bahamas’ continued - and accelerated - slump in the ‘Ease of Doing Business’ rankings (it was 76th two years ago) have worrying implications for this country and its policymakers.

For it clearly indicates that the Bahamas is being bypassed by other nations that are more proactive in improving the climate in which businesses and investors can flourish.

Both the Christie administration and its predecessor have repeatedly promised to enact reforms that will improve the ‘Ease of Doing Business’ in the Bahamas, such as upgrades to the Registrar General’s Department.

Yet yesterday’s rankings plummet indicates this nation is either failing to deliver on its promises, or that reforms are being ignored and the Bahamas is not getting the credit it deserves.

Either way, the World Bank findings have the potential to harm this nation’s ability to attract foreign direct investment (FDI), as they give the impression that life for investors is becoming more, not less, difficult. The report also indicates that the Bahamas is having difficulty fostering an environment conducive to economic growth.

Khaalis Rolle, minister of state for investments, could not be reached for comment yesterday but the Bahamian private sector indicated that the latest slump came as no surprise.

Rick Lowe, an executive with the Nassau Institute think-tank, told Tribune Business: “It’s certainly a very disturbing trend. There’s not too much to be happy about these days.

“There doesn’t seem to be the will to continue to figure out how to improve things. That’s what is so discouraging...... If all these indicators start to get worse, it’s a very dangerous trend.”

Breaking it down by category, the Bahamas dropped some 11 places when it came to the ease of ‘starting a business’, falling from 84th to 97th.

The same pattern, albeit a larger fall, was repeated for the ease of obtaining a construction permit, where this nation’s ranking fell 17 spots - from 75th last year to 92nd this time around.

While the Bahamas only dropped five spots when it came to the ease of obtaining electricity, falling from 45th to 50th, the biggest slump came on access to credit - a slump from 86th place last year to 131st for 2015.

The Bahamas also suffered on minority investor protection, where its ranking slipped by 26 places from 115th spot to 141st. And it dropped from 32nd to 60th on resolving insolvency.

Mr Bowe, speaking to Tribune Business last night, agreed that the Bahamas’ rankings in the World Bank report were not “going in the right direction”.

“It goes back to competitiveness, transparency and a national plan for the country,” he said, adding that the absence of a National Development Plan with specific objectives often slowed government decision-making.

Acknowledging that perception was everything, Mr Bowe said the speed at which Business Licences, work permits and Bahamas Investment Authority approvals were obtained, plus the ease of opening a bank account in the Bahamas, all factored into the mix.

He suggested business and investor perceptions were that the Bahamas was more reactive than proactive, and called for this nation to determine its “identity” as a country, then put the enabling pieces to achieve this vision in place.

“There’s enough intangible evidence in the community to know businesses are frustrated, both local and foreign businesses,” Mr Bowe told Tribune Business.

“It’s their ability to pay taxes, get efficient responses in a timely manner, and operate a business with least interference by the long arm of bureaucracy.”

“Particularly in financial services, we are seeing a major loss of clients, business and industry participants because of the change in laws and regulations. They are not getting quick responses to how government is going to deal with it, and how the financial services industry will respond.”

Mr Bowe urged a more integrated response to the private sector’s needs, adding: “We have put in place laws and regulations, but instead of using a holistic approach, we have done them piecemeal, and sometimes this has unforeseen effects.

“A law put in place that nobody thought of can stifle business.”