The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A CABINET Minister yesterday admitted the Bahamas faces an "enormous" task to improve its 'ease of doing business', adding: "Our economic survival hinges on it."

Dionisio D'Aguilar, minister of tourism and aviation, told Tribune Business that the Bahamas' ranking in the World Bank's index "will only get better" under the Minnis administration due to its "laser-like focus" on the problems encountered by the private sector in interacting with Government. Speaking after the Bahamas moved up a modest two spots in the World Bank's rankings, from 121st to 119th out of 190 nations, Mr D'Aguilar said it was imperative for the Bahamas to "get it right" on the 'ease of doing business' otherwise its economy will stagnate.

He also accused the Christie administration and its predecessors of "paying lip service" to improving the Bahamas' ease of doing business, and pledged that himself and his Cabinet colleagues would be working "diligently" on the issue throughout their five-year term.

"The improvement in the ease of doing business is only going to get better," Mr D'Aguilar told Tribune Business, after the Bahamas - albeit barely - reversed consecutive years of decline in the World Bank rankings.

"This government has applied a laser-like focus to address these poor rankings of the past. For too long the Government has only paid lip service to improving the ease of doing business, but this government, this Cabinet, is focused on addressing the issue.

"We've had a number of discussions on how to improve this area, and all the Ministers are looking at how we can improve the process by which the public interacts with the Government."

The World Bank's annual 'ease of doing business' index measures the amount of bureaucracy and 'red tape' that businesses/investors encounter in their dealings with the Government and regulatory agencies, pitting nations against each other by assessing how smooth it is to conduct commerce.

Excessive bureaucracy, plus lengthy and poorly defined approvals processes with multiple steps, all cost the private sector time and money, not to mention frustration. Mr D'Aguilar yesterday acknowledged that rapid, significant improvement in the Government's interaction with the private sector was key to reviving domestic and foreign business confidence in the Bahamas.

"We've got an enormous way to go," he admitted, "but we think that once we break down how that [World Bank index] is determined and the ranking, and look at the components of it, we'll see we can make some enormous strides in improving our ranking.

"Our economic survival, our ability to grow our economy, hinges on getting this right. It doesn't take a brain surgeon to figure out that this is an area where the Government needs to apply a laser-like focus, and this government is doing just that.

"In future months you will see a slew of legislation, a slew of changes in policy and regulations, that when you see them you'll say: Those make sense. If we don't get this right we can't get our economy to grow. Everyone in the Cabinet is very mindful of this, and working hard to ensure this is addressed diligently in a timely manner."

The Government's efforts to improve the 'ease of doing business' have seemingly already started with the Commercial Enterprises Bill's tabling in the House of Assembly. This introduces a 'fast-track' process for targeted industries, viewed as potential growth drivers and foreign exchange earners, where key executives can enter the Bahamas and establish operations before applying for work permits.

Brent Symonette, minister of financial services, trade and industry, and Immigration, previously told Tribune Business that the Bill was part of a 'bigger plan', something alluded to by Mr D'Aguilar yesterday.

"This [the ease of doing business] will be an ongoing thing through our five-year term," the Minister of Tourism told Tribune Business, "but there are some quick fixes we can apply, some low hanging fruit we can go after, right out of the starting block."

Mr D'Aguilar said one example of this 'low hanging fruit' was the need for businesses to obtain compliance letters, or 'Certificates of Good Standing', from agencies such as the National Insurance Board (NIB) when they were seeking Business License renewals and Tax Compliance Certificates (TCCs).

This frequently resulted in Bahamian businesses having to make physical visits to NIB to apply for, then pick up, such documentation - creating inconvenience, plus lost time and, potentially, money.

Mr D'Aguilar said this extra bureaucracy resulted from the failure of government agencies to "talk to each other", pointing out that a business's compliance with taxes and regulations should be verified by a simple computer check.

"This makes it very, very difficult to comply," he told Tribune Business. "That's [NIB letters] just one of many, many stupid things that frustrate people every day in their interaction with the Government.

"As a businessman, I'm very encouraged in our approach to this problem, and how we're studying it, tackling it and, over time, improve the ease of doing business. In my opinion, there's already been a major change that's instilled some confidence into the economy."

The Bahamas' individual category ranking in yesterday's World Bank index was for the 'ease of paying taxes', where it rated 55th. The only other area where it ranked in the world's top third was on resolving insolvency (64th), and it made the 'top 100' on just two other indicators - obtaining construction permits, where it ranked 86th, and in enforcing contracts where it placed 74th.

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'.

With its open, services exporting economy, and positioning as an international financial and business centre (IFC), improving the 'ease of doing business' is essential for the Bahamas to boost its competitiveness.