One of the positive outcomes of the passage of Hurricane Sandy is the speed at which businesses have tried to return to normal. One way to gauge whether a country is serious about commerce is to assess how its business leaders respond in times of crisis.
In the aftermath of the hurricane, it was commendable that businesses delivered on reliability. The big side benefit of this is that for a country in the economic doldrums the return to productivity provides a morale booster. People are more confident that Jamaica will surmount this hurdle and return to normality.
Hopefully, global players would have taken notice, especially at a time when Jamaica's already low ranking on the Ease of Doing Business index has slipped slightly.
Every year, the World Bank conducts a comprehensive study into the ease of doing business across the globe, canvassing the opinions of law and accounting firms. Economies are ranked from one to 185 on the Ease of Doing Business index, which averages a country's percentile ranking on 10 key indicators, each of which is given equal weight.
The indicators are: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency.
In the latest figures released on Tuesday, Jamaica dipped two spots to 90, even though there were noted improvements in tax and customs procedures. No doubt the work of the Private Sector Working Group on tax reform was considered. The group recommended a raft of changes, including cutting corporate income tax.
Yet this was not enough to advance Jamaica's performance, for the report concluded that it is harder to do business in Jamaica than before, as only three of the 10 criteria showed improvement. What is it that countries like Singapore, (which topped the list for the seventh consecutive year), Poland (top improver in the last year), New Zealand, and Colombia are doing that we are not? More important, are we even interested in finding out?
One of the factors common to all these countries that are considered good for business is that they have undertaken the necessary regulatory reforms to ease the regulatory burden, thereby facilitating the growth of the small and medium-sized business sector. These countries understand that if necessary regulations are not in place, businesses will forever be trapped in that area of uncertainty known as the 'informal sector'.
Jamaica is competing for investment dollar along with countries that are rated among the best in the world for doing business based on their infrastructure, financial, legal and professional services, as well as their low and simple tax systems.
Interestingly, the study does not take into account the impact of macroeconomic policy, levels of crime and violence, quality and reliability of infrastructure, corruption and currency stability. But these factors also weigh heavily on the mind of the investor, and Jamaica scores poorly in all these areas.
Just wishing that investors will come flocking to our shores will not make it a reality since there are so many other locations competing for their attention and money. Jamaica has to outperform its competitors to be successful at attracting investment.
What is the Government's action plan, and who in the current administration is responsible for helping to realise such a plan? Building an entrepreneurial and business-friendly environment is the only way to chart a course to substantial growth and allow Jamaica to escape its current debt trap.
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