Jamaica falls in Doing Business rankings
Notwithstanding government efforts at regulatory reform, Jamaica continues to slide in the World Bank's annual Doing Business rankings, falling three more places to 94 in the new report released Monday.
The fall represents the ninth year of straight decline for Jamaica, which ranked 43 in the 2006 report, and comes amid calls from corporate Jamaica for the Government to do more to create a business-friendly climate.
However, in one of the most watched sub-rankings, the ease of paying taxes, Jamaica did no worse than the previous year, although it continued to rank among the worst performers at 168 of 189 countries.
"I am disappointed," said Christopher Zacca, president of the Private Sector Association of Jamaica (PSOJ).
"At a time when our only way out is through economic growth and the creation of a facilitative environment for business - especially with no room to manoeuvre with the fiscal budget - I would have hoped for some improvement," he told Wednesday Business.
The PSOJ has been trumpeting the importance of a friendly business climate, and its knock-on effects of jobs, investment, and the economic growth that has eluded Jamaica for decades.
"Some things have been done, but we have to do more - more than our competitors. Our competitors are the rest of the world and we are competing for investment and job creation," Zacca said.
Doing Business 2014 ranks 189 countries for ease of doing business around a range of ten indicators. The report, published annually, is dated a year ahead of the period in which it is released. The 2014 report tracks performance from June 2, 2012 to June 1, 2013.
In the Caribbean area, Jamaica's fallen ranking placed it behind seven of its CARICOM peers, namely: St Lucia, 64; Trinidad and Tobago, 66; Antigua, 71; Dominica, 77; St Vincent and the Grenadines, 82; The Bahamas, 84; and Barbados, 91. But it also puts it ahead of seven others: St Kitts-Nevis, 101; Belize, 106; Grenada, 107; Guyana, 115; the Dominican Republic, 117; Suriname, 161; and Haiti, 177.
This year's report, subtitled 'Understanding Regulations for Small and Medium-Size Enterprises', again ranks Singapore at No. 1 for the ease of doing business, and the African republic of Chad ranking last.
Jamaica at midpoint the global rankings falls just below Russia and Serbia and just above the Maldives and China.
There were some successes, however, as despite the slide, Jamaica led the Caribbean area in its reforms and made at least three positive changes to improve its business regulatory environment over the past year.
The report said Jamaica reduced the corporate income tax rate, streamlined procedures for starting a new business, and adopted new legislation for credit information reporting and private credit bureaus - two licences were issued by the Bank of Jamaica and the bureaus went live earlier this year.
Jamaica made starting a business easier by enabling the Companies Office of Jamaica to stamp a new company's articles of incorporation at registration, and made paying taxes less costly for companies, although it increased vehicle and asset taxes.
On the downside, Jamaica made transferring property more difficult by increasing the transfer tax and stamp duty. In this sub-ranking, Jamaica dropped from 102 in the 2013 report to 114.
Its positions held steady in five categories: resolving solvency, which remains at 31; dealing with construction permits, 52; protecting investors, 80; trading across borders, 118; and paying taxes at 168.
The Doing Business report comes just ahead of the introduction of a bill to Parliament on Tuesday dealing with tax reform, which aims to curtail tax subisidies but stimulate the real economy.
Only two other Caribbean countries were listed in the current report as making regulatory changes - Bahamas and Trinidad and Tobago.
The Bahamas reduced the cost of transferring property and improved its insolvency process; while Trinidad lowered the cost of connecting to the power supply and was also recognised for simplifying procedures for registering a new business.
"It is encouraging to see countries in the Caribbean engaged in reforms aimed at reducing burdensome regulations and building stronger legal institutions," said Augusto Lopez-Claros, director, global indicators and analysis, World Bank Group, in a statement.
"Even after these achievements, however, more can be done to improve the quality of the rules underpinning the activities of the private sector, to ensure continued convergence towards the better practices seen elsewhere in the world."
Jamaica may have led on reforms in the Caribbean, but it still did not place in the top 50 economies which had done the most to narrow the 'distance to frontier', or DTF, gap since 2005.
That group is led by Rwanda and includes Russia, China, India and Mexico.
The World Bank report notes, however, that Jamaica recorded a 0.14 point improvement in its DTF assessment.
The 'distance to frontier' measure analyses the gains an economy has made at a given point in time relative to the best performance achieved on each Doing Business indicator since 2003.
It essentially measures "an economy's own progress in reforming business regulations and practices over time," the World Bank said in a feature on the current report.
The DTF scoring ranges from 0 to 100 points, with 100 representing the best performance. Jamaica's DTF score increased from 64.89 in the 2013 report to 65.03 in the current review period.
Eleven Caribbean countries have implemented reforms since 2005. Jamaica led the region with a total of 13 reforms during the period. Dominican Republic followed with 12 reforms, which allowed it to narrow the gap with global good practices in business regulation, the most since 2005.
The top 10 economies ranked for ease of doing business are: Singapore, which continues to have the most business-friendly regulations, followed by Hong Kong; New Zealand; United States; Denmark; Malaysia; Republic of Korea; Georgia; Norway; and United Kingdom.
Doing Business 2014
Ease of doing business9491Starting a business
Source: World Bank
I am disappointed - Zacca