The Tribune

By NEIL HARTNELL

and YOURI KEMP

Tribune Business Reporters

nhartnell@tribunemedia.net

The Bahamas must match increased business costs with "productivity and efficiency" improvements to reverse its 'ease of doing business' stagnation, the private sector urged yesterday.

Christel Sands-Feaste, chair of the Chamber of Commerce's (BCCEC) 'ease of doing business' committee, said the country's latest one-notch drop in the World Bank rankings further highlighted "the need for an ongoing focus on increasing the efficiency of the infrastructure for doing business in The Bahamas".

Responding after The Bahamas fell to 119th out of 190 countries, Mrs Sands-Feaste warned that the "benchmark" against which this nation's competitiveness is judged also continues to rise due to the improvements made by rival countries to their systems.

And, renewing calls for a holistic approach involving all stakeholders to address The Bahamas' long-standing ease of doing business woes, she called for particular emphasis to be placed on developing a system of registered land to make it easier to transfer property; bringing the long-awaited credit bureau to fruition; and "streamlining" the approvals process for starting a business.

"Whilst the World Bank's report acknowledges the progress that has been made in certain of the 11 categories by which countries are assessed, including the protection of minority investors (where there was a significant positive improvement of 44 places) and starting a business (where there was a positive movement of 11 places), the overall downgrade reflects the sentiments expressed by certain chamber members that the increasing cost of doing business in The Bahamas must be matched by corresponding increases in productivity and efficiency," Mrs Sands-Feaste said.

Noting that standards continue to change, she added: "Making it easier to do business is not a discrete issue that can be assigned to a single committee or stakeholder group; it is a national issue that affects (and requires the assistance of) government, businesses, civil society and individuals, and must be an integral part of the short, medium and long-term development plan for the country.

"The process of improving The Bahamas' service delivery model is ongoing and must continue to evolve to meet the expectations of the global marketplace of which we are a part. Put another way, our competitor jurisdictions are continuing to improve which means that the benchmark by which we are judged both domestically and internationally also continues to rise."

For The Bahamas to address its weaknesses, and begin to climb the World Bank rankings, Mrs Sands-Feaste said: "Looking forward, the BCCEC recommends that as a part of the preparation for the national budget, every government agency be mandated to identify strategic and measurable goals for improving efficiency in their agency during each Budget year.

"And the government work with all relevant stakeholders to continue the formulation and execution of legislative, policy and structural changes to positively transform the processes for doing business in The Bahamas, including streamlining the approval process for starting all businesses in The Bahamas; moving toward a system of registered land to make it easier and quicker to transfer property in The Bahamas; and complete the implementation of the credit bureau."

Mrs Sands-Feaste's comments came as the government, through the Ministry of Finance, sought to emphasise the positive by arguing that The Bahamas had achieved a "marked improvement" in five categories assessed by the World Bank.

It identified these as starting a business; dealing with construction permits; getting electricity; enforcing contracts and protecting minority investor/shareholder rights. The latter registered the greatest improvement of 44 spots, with The Bahamas moving from 132nd in the world to 88th.

This nation also improved by 11 and 14 places on "starting a business" and "dealing with construction permits", moving to 94th and 77th. However, it fell down in three key areas - registering property, getting credit and resolving insolvency - falling by 12, eight and two places, respectively, in these categories.

The World Bank dropped this nation to 169th in the world on the "ease of registering property", finding: "The Bahamas made property registration more costly by increasing the stamp duty on property transfers."

But K Peter Turnquest, deputy prime minister, argued that this was a "misunderstanding" by the World Bank as it seemed to have misinterpreted the 10 percent Stamp Duty's replacement of the previous 7.5 percent stamp duty/2.5 percent VAT split on property transfers as a tax increase.

"Overall, The Bahamas fell in the World Bank's doing business rating by one point in 2019 compared to 2018, revealing new areas for improvement," the Ministry of Finance said. "Despite improvements in the five key areas of focus, the slippage was caused by a decline in three categories and neutral results in two areas.

"The categories that saw a decrease in ratings related to registering property, getting credit and resolving insolvency. In the upcoming year, the [Government's] ease of doing business committee anticipates addressing the former two issues substantially with the land reform initiatives announced by the government, coupled with digitising the registry.

"The credit bureau, once fully up and running this year, should also greatly assist with the ease of granting and receiving credit. The matter of resolving insolvency requires additional public consultation. The government plans to take those steps over the reminder of the year working with partners at the Bar Association, BICA and insolvency practitioners."

The Ministry of Finance described itself as "satisfied overall with the improvements made over the course of the last two years to address the ease of doing business, and anticipates even greater improvements in the upcoming year for those on the ground, particular local business persons".

It added: "Efforts to provide a one-stop-shop to starting a business are being finalised; business start-up grants, credit and equity capital have ramped up with over $2m being granted this year, as well as other incentives and concessions to help ensure the success of MSMEs."