THE ISSUE: Removing burdens ‘crucial’ at this time
Just two months ago, the World Bank’s Doing Business Rankings indicated that Barbados was still falling short when it comes to making it easy and efficient for individuals and companies to do business.
According to the October 29, 2012 BARBADOS BUSINESS AUTHORITY, while the island was doing better than several other Caribbean countries, it was lagging behind others, including international business centre Bahamas – one of Barbados’ competitors in the sector.
Doing Business 2013: Smarter Regulations For Small And Medium-Sized Enterprises ranked Barbados No. 88 of 185 countries.
Barbados’ lowest ranking in the ten categories came in the area of investor protection where the island ranks 169th out of the 185 countries.
That indicator distinguishes three dimensions of investor protections: transparency of related-party transactions, liability for self-dealing, and shareholders’ ability to sue officers and directors for misconduct.
Another low ranking (154) was given to Barbados in the area of registering property.
According to the report, the process involves six procedures and takes about 153 days.
Enforcing contracts, for which the country got a rating of 105, requires 38 procedures and 1 340 days, it added.
To start a business, it said it takes 18 days in Barbados, 416 days to issue construction permits, 65 days to get electricity services, and 1.8 years to resolve insolvency.
In the January 9, 2012 BARBADOS BUSINESS AUTHORITY, then president of the Barbados Small Business Association Celeste Foster noted that with the economic slowdown, it was crucial that Government removed “all unnecessary burdens and disincentives which restrict entrepreneurial activity and stymie economic, and implement solutions to reduce administrative barriers and improve efficiency”.
“E-governance initiatives introduced – online filing: VAT, NIS, income tax returns – have alleviated waiting times and afforded small business persons the opportunity to complete these tasks in their down-time, thus saving time and money.
“The process needs to be expanded to facilitate business registration, licences, remittances and payments to vendors,” she said.
Foster also noted that the traditional business hours of 8 p.m. – 5 p.m. restricts productivity and impacts the cost of business.
“In a competitive global environment, we must adopt the seven-day/24-hour work cycle, introduce flexible work schedules which encourage telecommuting and promote continuous productivity. These practices enable the maximization of resources, while controlling costs.
“The advent of e-banking has improved business facilitation, and it is anticipated that the increasing use of these facilities will see a reduction of finance charges,” she said.
Furthermore, in the April 21, 2012 BARBADOS BUSINESS AUTHORITY, attorney at law and former Minister of Commerce Lynette Eastmond said speed and efficiency were two issues that were often under consideration when the matter of business facilitation was raised for discussion.
“Many Barbadians are aware that this country is becoming less attractive, as countries that had not in the past invested in education and health care are now doing so and with a strong work ethic, are becoming more attractive as destinations for investment, leisure and business.
“There is a great temptation to immerse oneself in a discussion about the great efficiencies that information technology can bring and the value of those hand-held devices each Barbadian adult now possesses.
“However, ICTs superimposed on a business culture that sees no benefit in such efficiencies will be of limited benefit,” she said.
Eastmond queried whether it was clear that within the context of Barbadian business, speed and efficiency were rewarded or whether employees who exhibit these skills stood a better chance of promotion.
“Individuals naturally do what is most beneficial to their survival,” she said.
The attorney noted that there was a perception in Barbados, whether justified or not, that success was based “on who you know”.
“Thus, it may very well be that the energies that should be directed at improving efficiencies are diverted into ensuring that the principals of businesses and employees, whether in the public or private sector, secure the connections that will ensure success,” she said.
Eastmond noted that it was not easy to change a culture and while family connections and Government concessions do play a role in most countries, the Government and the private sector do not, in those countries, systematically hinder the emergence of those who do not have those advantages.
“If individuals and businesses continue to believe that there is no advantage in speed and efficiency, they will never pursue it and Barbados will see a reversal in its fortunes,” she said.
In the July 26, 2012 DAILY NATION, the Barbados Chamber of Commerce and Industry urged Government to take urgent action to speed up the Barbados Competitiveness Programme.
President Lalu Vaswani noted that the $20 million project, which was launched in May 2011 by the Ministry of Finance and Economic Affairs in association with the Inter-American Development Bank (IDB), was vital to improving national competitiveness through improved business facilitation.
The four-year initiative is expected to address several issues relating to taxes and incentives, business transactions and developments across various sectors, trade and logistics and public and private sector relations, among others.
However, Vaswani said although the Chamber had noted Minister of Finance Chris Sinckler’s public support for the programme, it had urged for urgent attention to resolve delays experienced thus far.
“In one case cited, a report on one component of the competitiveness programme has been outstanding since May 2011.
“This is a cause for serious concern since changes that are targeted to enhance investment, employment and foreign exchange inflows are delayed and as a result undermine our national economic interest,” he said.
Vaswani stressed that Barbados should avoid losing its key competitive advantage internationally relative to its small size and its ability to be nimble in making changes.