The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Bahamas Financial Services Board's (BFSB) chief executive yesterday urged this nation needed to engineer "a material change" in its 'ease of doing business' standing.

Tanya McCartney, speaking after the Bahamas moved up two spots to 119th in the World Bank rankings, told Tribune Business that this nation remained in an "undesirable position" compared to many of its international financial centre (IFC) rivals.

"While we're slightly improved, we still have a ways to go," she told this newspaper. "It's a step in the right direction, and I think we can be better placed in these rankings.

"We are working to address some of the areas identified in that [World Bank] report, and that they rank us on, so we can see consistent improvement and a material difference in the short to medium term.

"We are still not in a desirable place, and want to see material change. We are really working hard to achieve that."

Improving the Bahamas' 'ease of doing business' is one of the financial services industry's key priorities, especially since key global rivals are ranked far higher than this nation. Singapore and Hong Kong, for example, two of this nation's major IFC competitors, are ranked second and fifth in the world, respectively, while Switzerland is 33rd and Panama 79th.

Ms McCartney said BFSB and the wider financial services industry are represented on the Government-appointed 'ease of doing business' committee, co-chaired by attorneys Lynn Holowesko and Bryan Glinton, which has been charged with recommending improvements to the public sector's interaction with Bahamian and foreign-owned businesses.

"The Government is fully engaged with the national 'ease of doing business' committee with a view to improving the matter," the BFSB chief executive added. "The committee is using the indicators the World Bank uses; paying taxes, the ease of starting a business.

"The Business License process, paying taxes and starting a business are priorities for any business, financial or otherwise."

Ms McCartney said the financial services sector shared similar 'ease of doing' business concerns as the domestic economy, adding that improvements in this area were vital to the competitiveness of all industries.

"There's nothing that is particularly unique to the financial services sector," she added. "It's all businesses across the board, domestic and international, who seek to do business here. Our concerns are the broader concerns shared by anyone doing business here.

"As we promote the Bahamas, we'd like to be able to say we can process requests in a timely manner, and start companies in a manner that is competitive with other jurisdictions. That's what we're working on - across the board. It is a financial services issue, but a broader economic issue we have to work on."

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. 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.

"This is bigger than financial services, but critical to financial services," Ms McCartney told Tribune Business. "It's [reform] for the international business we want to bring here, it's equally as important for local business and domestic entities."

The financial services sector's 'ease of business' priorities include company incorporation and formation and work permit approvals, and the Minnis administration has already taken steps to address the latter concern.

The Commercial Enterprises Bill, already tabled in the House of Assembly, 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.

Financial services leads the way among the 'targeted industries', with reinsurance; captive insurance; investment fund administration; arbitration; wealth management; international trade and international arbitrage included in the 'fast track' work permit sectors.

These segments are being targeted because they do not have a significant presence within the Bahamas' financial services industry, the Minnis administration hoping that the work permit 'fast track' will help convince such businesses to relocate here.