DoingBusiness 2016: Measuring Regulatory Quality and Efficiency is the 13th in the long-standing
series of co-publications by the World Bank and International Financial
Corporation (IFC). This annual report on the ease in doing business in 189 nations
covers the period from June 2014 to June 2015.
I have been
reviewing such reports for the past two years, and have published two articles
from each review: first to examine the global ranking of Caribbean states, then
to breakdown their performance into the 10 indicators used in the ranking process.
This article reviews “Doing Business 2016”.
Last year
in “Doing Business in the Caribbean: Who Cares?” and “Greater Caribbean Business in 2015”, I suggested collaboration within
the Association of Caribbean States (ACS) in order to effect well needed reform,
especially considering commonalities that existed within its membership.
The Latin
America and Caribbean (LAC) region has a number of groupings that could
undertake such reform in “Doing Business”. However, the ACS stands out, because
it is focused on the Caribbean. The two tables below present data primarily for
member-states.
Caribbean Island
|
Population (Millions)
|
Income (US $)
|
2015
|
2016
|
Caribbean Islands
|
29.9
|
6,455
|
102
|
104
|
Caribbean SIDS
|
8.9
|
13,687
|
96
|
98
|
Puerto Rico (US)
|
3.5
|
19,210
|
56
|
57
|
Independent Caribbean SIDS
|
5.4
|
10,107
|
100
|
102
|
Jamaica
|
2.7
|
5,042
|
71
|
64
|
Trinidad
|
1.3
|
16,562
|
85
|
88
|
Bahamas, The
|
0.4
|
21,010
|
108
|
106
|
Barbados
|
0.3
|
15,579
|
116
|
119
|
OECS
|
0.7
|
9,080
|
104
|
107
|
St. Lucia
|
0.2
|
7,090
|
77
|
77
|
Dominica
|
0.1
|
7,070
|
89
|
91
|
Antigua &
Barbuda
|
0.1
|
13,360
|
99
|
104
|
St. Vincent &
the Grenadines
|
0.1
|
6,560
|
106
|
111
|
St. Kitts &
Nevis
|
0.1
|
14,540
|
122
|
124
|
Grenada
|
0.1
|
7,850
|
130
|
135
|
Large Caribbean Island States
|
21.0
|
3,390
|
137
|
137
|
Dominican Republic
|
10.5
|
5,950
|
93
|
93
|
Haiti
|
10.5
|
830
|
182
|
182
|
Table 1: Ratings
of Caribbean Islands
Previously,
I had advocated reform through the Caribbean Forum (CARIFORUM). However, ACP’s
25 member states comprise 15 CARIFORUM member-states. Cuba is another member,
and 8 Caribbean Overseas Territories are associate members, though neither are
part of “Doing Business 2016”.
ACS
therefore has a wider membership of Caribbean islands than CARIFORUM. Also, “ACS provides a framework for the dialogue
and activity necessary to further advance economic integration and
intra-regional trade and investment, thereby improving competitiveness of the
Greater Caribbean region”.
DoingBusiness Regional Profile 2016: Latin America and the Caribbean lists 32 LAC states. With the
exception of Puerto Rico, 24 of these are ACS members. Nevertheless, data for
Puerto Rico was reviewed and is presented for reference. All the other LAC
states are located in South America.
Both tables
present general information on the relevant economies, as well as their
rankings for 2015 and 2016. Table 1 conveys information on 13 Caribbean Islands,
divided into two groups: 11 Small Island Developing States (SIDS) and 2 large island-states:
namely the Dominican Republic and Haiti.
The SIDS
are sub-divided into three groups. Puerto Rico, being the only island that is
not politically independent, is a group unto itself. The 6 smallest islands
belong to the Organization of Eastern Caribbean States (OECS) – the next group;
and, the last comprises the 4 remaining SIDS.
Table 2
conveys information on 12 ACS Latin American (LatAm) states. Like the Caribbean
Islands, these LatAm states are divided into two groups – Central, and South
American States. The former comprises 8 states and the latter 4 states.
It should also
be noted that this table includes three CARIFORUM member-states: Belize, in the
Central American group, as well as Guyana and Suriname in the South American
group. With the exception of Puerto Rico, all Caribbean islands in table 1 are
CARIFORUM states.
ACS Latin American States
|
Population (Millions)
|
Income (US $)
|
2015
|
2016
|
Latin American States
|
250.8
|
8,850
|
104
|
102
|
Central American States
|
169.7
|
8,480
|
90
|
86
|
Mexico
|
123.8
|
9,980
|
42
|
38
|
Costa Rica
|
4.9
|
9,750
|
79
|
58
|
Panama
|
3.9
|
10,970
|
66
|
69
|
Guatemala
|
15.9
|
3,440
|
81
|
81
|
El Salvador
|
6.4
|
3,780
|
115
|
86
|
Honduras
|
8.3
|
2,190
|
97
|
110
|
Belize
|
0.3
|
4,760
|
118
|
120
|
Nicaragua
|
6.2
|
1,830
|
123
|
125
|
South American States
|
81.1
|
9,640
|
131
|
133
|
Colombia
|
48.9
|
7,780
|
52
|
54
|
Guyana
|
0.8
|
3,970
|
132
|
137
|
Suriname
|
0.5
|
9,640
|
154
|
156
|
Venezuela
|
30.9
|
12,820
|
184
|
186
|
Table 2: Ratings
of ACS Latin American States
In both
tables, 2015 rankings are generally lower than those published in “Doing Business in the Caribbean: Who Cares?”. These rankings were actually revised
using a new evaluation process developed for the 2016 rankings: thereby
facilitating comparison between the current and past year.
Of all ACS members,
only the OECS improved its average 2015 rankings in the revision. This was due
to significant improvement in the rankings of Saint Lucia and Dominica, which
superseded Antigua and Barbuda as the top performers within OECS: other member
states having marginally worse rankings.
OECS
average 2015 ranking was revised to 104: equal to that of the LatAm states.
But, the average 2015 ratings for independent SIDS as a whole remained
superior. The average 2016 rating for ACS LatAm states marginally improved,
while that of independent SIDS worsened to become equal, at 102.
For the
LatAm ACS, the Central America group benefited from the revised 2015 ranking. Only
Honduras improved in rank, but Belize held firm. In the process, Honduras
superseded El Salvador in the revised standings. Similarly, Mexico and Panama fared
better than their counterparts in this revision.
Mexico was ranked
higher than Colombia, previously the top performer within ACS: thus making it
top 2015 performer within ACS. Similarly, Panama superseded Costa Rica in the
revised ranking. Of the three changes in standing, only Mexico and Colombia maintained
their relative positions in the 2016 ranking.
In “Doing Business 2015”, 9 out of the top 12 LAC performers were ACS member-states. In
“Doing Business 2016”, this has improved to 10 of the top 12 performers. This
improvement is solely due to significant improvement in the rankings of the
Central American sub-group.
Currently,
the top 12 LAC performers, from highest to lowest rank, are: Mexico, Peru,
Colombia, Puerto Rico, Costa Rica, Jamaica, Panama, Saint Lucia, Guatemala, El
Salvador, Trinidad and Tobago, and Dominica. Of these, Peru and Puerto Rico are
the only states that are not ACS members.
Six Latin
American ACS member-states are in the top 12: Colombia being the sole South
American member, of its group of 4. Mexico, Costa Rica, Panama, Guatemala and
El Salvador comprise the remaining 5, of the 8 member Central American group.
With the
exception of Puerto Rico, four Caribbean islands are in the top 12. No large
Caribbean-Island state is present. Jamaica, Trinidad and Tobago are 2 of the 4
larger Caribbean SIDS that are top performers: Saint Lucia and Dominica being 2
of the 6 OECS members that are also top performers.
The
improvement of the 2016 average rank for the Central America sub-group is specifically
attributed to advancements by Mexico, Costa Rica, and El Salvador. The latter
two, having been superseded in the revised ranking, managed to retake their
previous positions. Guatemala held firm.
For the Caribbean
Islands, only Jamaica and The Bahamas improved in the 2016 rankings, with Saint
Lucia, Dominican Republic, and Haiti holding firm. Though improved, The Bahamas
rating was still below-average. But, that of the Dominican Republic remained
above-average.
In the
Jamaica Gleaner publication dated October 28, 2015, the article “Jamaica Citedfor Doing Reforms in Doing Business Report” stated that:
“Jamaica... has been
cited by the World Bank, alongside Costa Rica and Mexico, as executing the most
reforms in the region in the last five years”, and “also found that Jamaica is
among the global top 10 improvers ‘as it implemented a regional high of four
reforms’ ”.
Regrettably,
ACS also comprises 7 of the 8 lowest ranked economies in LAC. In ascending
order from the lowest ranked, these are: Venezuela, Haiti, Bolivia, Suriname,
Guyana, Grenada, Nicaragua, Saint Kitts and Nevis. Of these, Bolivia is the
sole non-ACP member.
Only the
larger SIDS are not a part of this group. Haiti is one of the two large
Caribbean island states in the group; Grenada, Saint Kitts and Nevis: 2 of the 6
OECS. Venezuela, Suriname, and Guyana are 3 of the 4 South American states; and
Nicaragua: the sole Central American state.
The South
American sub-group therefore has the largest discrepancy in ranks: Colombia is
in the top 12, but the others are in the bottom 8. Two of these are CARIFORUM
states; or put differently, 5 of the 7 lowest ranked ACS members are also CARIFORUM
members.
The Greater
Caribbean not only has the most capable states to effect reform, but it also
has the most deserving of states. Again, in “Doing Business in the Caribbean:Who Cares?”, I had proposed using the Asia-Pacific Economic
Cooperation (APEC) as a model for ACS to address reform within the
sub-region.
On the
whole though, the relative standings of most states within the sub-region were
unchanged: even in the case of Mexico and Jamaica, whose global ranks improved.
However, Costa Rica and El Salvador improved their standings: Panama and
Honduras falling below Jamaica and The Bahamas respectively.
Otherwise,
five (5) islands fell in the regional standings. Listed from the highest to lowest ranked,
they are: Saint Lucia, Trinidad and Tobago, Dominica, Dominican Republic, and
Saint Vincent and the Grenadines. The global rank for Saint Lucia actually held
firm, but all the others fell.
It should now
be apparent that states have to improve their global ranks just to maintain
their relative regional standing. The global ranks of Mexico and Jamaica
improved by 4 and 7 places respectively, just to maintain their respective standings
of 1st and 6th.
Though
Mexico was the top performer, it is instructive to note that Costa Rica moved up
21 places globally, from 79 to 58, to take the 5th spot: thus preventing
Jamaica from advancing in the regional standing, even though it had moved up 7
places globally. It was simply not good enough.
To actually
improve in standing, substantial improvements have to be made. Costa Rica’s
global ranking moved up 21 places to take it from 8th to 5th
in region. El Salvador moved up 29 places, from 115 to 86, to take it from 17th
to 10th place regionally.
With the
widening of the Panama Canal now complete, a significant increase in trade and
investment can be expected in the Greater Caribbean. So, improving competitiveness
of local firms is imperative and this through the improved competitiveness of
Greater Caribbean states.
The
indifference to reform should not be allowed to further deteriorate performance
in “Doing Business”. ACS seems to be the regional body most able to facilitate
this reform in the shortest order, and time is of the essence to capitalize on expected
increase in investment and trade within the Basin.
Central America
seems to be championing reform in their individual nations. Can the other LatAm
ACS members and the Caribbean islands follow suit? More importantly, can we all
collaborate to be able to capitalise on gains expected in the near future? Only
time will tell.
Paul Hay is a Jamaican national, founder of PAUL HAY Capital Projects: a consultancy, based in Kingston Jamaica, with a vision of providing strategic planning and implementation services to organizations for non-residential facilities in the Caribbean.
Business in the Caribbean 2014: CARIFORUM needs Reform
Singapore: Example to the Caribbean in Doing Business
Paul Hay is a Jamaican national, founder of PAUL HAY Capital Projects: a consultancy, based in Kingston Jamaica, with a vision of providing strategic planning and implementation services to organizations for non-residential facilities in the Caribbean.
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Doing Business in the Caribbean 2017: Central America Leads By Example
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Singapore: Example to the Caribbean in Doing Business
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