Professor Trevor Munroe has identified over-burdensome regulations and banking fees as twin blockades to business.
On Monday, he urged Jamaica's banks to limit the pass-through of fees, saying they should absorb some administrative costs to make credit more accessible.
"I revisited the Global Competitiveness Report 2012-2013, published every year by the World Economic Forum. In that report, one indicator in relation to Jamaican institutions deals specifically with the burden of government regulations. On this indicator, Jamaica ranks near the bottom, at number 127 of 144 countries ranked," said Munroe.
Similarly, Munroe pointed to low scores on the Global Competitiveness Index which deals with financial market development, which also ranked Jamaica at 127 of 144 countries in relation to the ease of access to loans.
"The very low value and rank of our country on these indicators contributes to Jamaica being at number 97, and the average score of 3.8 on a scale of one to seven is clearly hampering our country's development and requires urgent corrective action on a number of fronts," the professor said at the Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) conference in Kingston.
Munroe called for swift targeted actions, including more collaboration between the Jamaica Bankers' Association and regulator Bank of Jamaica, and speedy implementation of a banking code.
"May I use this forum to call on the BOJ to do all that is possible to ensure that this code does not add to existing bureaucratic red tape and to indicate the timeline for this enforceable Bankers Code to be legislated," said Munroe.
"The critical issue is how to combine three imperatives: enhanced banking regulation; less bureaucratic red tape and minimal cost being passed onto the consumer," he said.
Munroe is executive director of the National Integrity Action and visiting professor at the Sir Arthur Lewis Institute of Social and Economic Studies.
Pointing to billions of dollars lost through Ponzi schemes and acknowledging that inadequate regulation can be a major contributor to the worsening of economies, Munroe said it should not come at a cost where the conduct of business is impeded.
"The very difficult challenge is to ensure that new regulation is appropriately customised, that the cost of compliance with new regulation comes nowhere near the cost incurred from inadequate regulation, and that the increased regulation is not accompanied by more red tape and bureaucracy," he said.
"These increased costs are not easy to calculate," he asserted.
Further, Munroe is advocating for the adoption of a proposal where companies absorb whatever cost is associated with the regulations and offset it by lowering returns to shareholders and reducing expenses through greater internal efficiencies.
"The prudential indicators, published by the BOJ, suggest that Jamaica's commercial banks are in a relatively robust condition, suggesting an ability to cope with any additional cost incurred by compliance with additional regulation without overburdening the consumer," said Munroe.
"I therefore invite the banks to understand the need for more robust regulation, to work constructively with the authorities and with the consumer lobby in the speedy completion of the Omnibus Bill and, very importantly, in determining the content of a meaningful, enforceable code of conduct, to the benefit of both the banks and the consumer," he said.