Doing Business in the Caribbean 2018: El Salvador Stands Out

Doing Business 2018: Reforming to Create Jobs is the 15^th 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 series now includes data for 190 nations, from June 2016 to June 2017.

For the last 4 years, I have reviewed these reports and, like previous articles, I will commence by examining the global ranking of Caribbean states in “Doing Business 2018”. With the exception of Puerto Rico, the states examined are members of the Association of Caribbean States (ACS).

Data for these states is presented in the two tables below. Last year’s data is included for your convenience, but it should be noted that differences may simply indicate the change in the methodology used to prepare the current report, not necessarily indicating a tangible improvement or deterioration of performance.

Table 1: Ratings of Caribbean Islands

ACS Caribbean Island States	2017	2018
Caribbean Islands	111	113
Caribbean SIDS	110	109
Puerto Rico (US)	55	64
Independent Caribbean SIDS	115	112
Jamaica	67	70
Trinidad	96	102
Bahamas, The	121	119
Barbados	117	132
OECS	116	117
St. Lucia	87	91
Dominica	101	98
Antigua & Barbuda	113	107
St. Vincent & the Grenadines	125	129
St. Kitts & Nevis	134	134
Grenada	138	142
Large Caribbean Island States	142	140
Dominican Republic	103	99
Haiti	181	181

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 group is further sub-divided into three groups.

Puerto Rico, being the only SIDS that is not politically independent, is a group unto itself. The 6 smallest islands are members of the Organization of Eastern Caribbean States (OECS); and, the remaining 4 states comprise the last group.

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.

Doing Business Regional Profile 2018: Latin America and the Caribbean (LAC) lists 32 states. The regional average rank is 110. With the exception of Puerto Rico, 24 of these are ACS members. The remaining 17 states are all located in South America.

But, 12 of the top 15 LAC performers are ACS member states: better than “Doing Business 2017”, “Doing Business 2016”, and “Doing Business 2015”. Again, this is mostly due to the superior rankings of the Central American sub-group, though this number does include 6 Caribbean Island ACS members. 

Table 2: Ratings of ACS Latin American States

ACS Latin American States	2017	2018
Latin American States	102	105
Central American States	85	86
Mexico	47	49
Costa Rica	62	61
El Salvador	95	73
Panama	70	79
Guatemala	88	97
Honduras	105	115
Belize	112	121
Nicaragua	127	131
South American States	127	132
Colombia	53	59
Guyana	124	126
Suriname	158	165
Venezuela	187	188

The top 15 performers, from highest to lowest, are: Mexico, Peru, Colombia, Costa Rica, Puerto Rico, Jamaica, El Salvador, Panama, St. Lucia, Uruguay, Guatemala, Dominica, Dominican Republic, Trinidad and Tobago, Antigua and Barbuda. Only Peru, Puerto Rico, and Uruguay are not ACS members.

6 LatAm ACS member-states are in the top 15: 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.

The Dominican Republic is the only large Caribbean-Island state present. Jamaica, Trinidad and Tobago are 2 of the 4 larger ACS SIDS that are top performers. Puerto Rico is the other larger SIDS. St. Lucia, Dominica, Antigua and Barbuda are 3 of the 6 OECS members that are top performers.

The superior ranking of the LatAm sub-group is specifically due to performance of Mexico, Colombia and Costa Rica: Mexico with rank of 49 being best performer in the Central America group and Colombia, ranked 59, best of the South America group. The former being ranked higher than the latter.

Honduras, Belize, and Nicaragua were the only 3 states of the Central American group below the LAC regional average: Belize being a CARIFORUM member. Conversely, Puerto Rico, Jamaica, and Trinidad were the only 3 islands with ranks above the LAC average.

Regrettably, ACS also comprises 9 of the 10 lowest ranked economies in LAC. In ascending order from the lowest, these are: Venezuela, Haiti, Suriname, Bolivia, Grenada, Saint Kitts and Nevis, Barbados, Nicaragua, Saint Vincent and the Grenadines, and Guyana: Bolivia being the sole non-ACS member.

Also, the LatAm group is the group with the greatest discrepancy of ranks within ACS states: Colombia being highest at 59 and Venezuela the lowest at 188. The remaining 2 – Guyana and Suriname – being CARIFORUM members – are also in the bottom 10 along with Venezuela.

Therefore, ACS not only has the most capable states to effect reform, but it also has the most deserving of states. Therefore, it seems to be the body most suitable to facilitate this reform in the shortest order. But, indifference to reform continues to further deteriorate performance.

According to Doing Business 2018, “Latin America and the Caribbean and the OECD high-income group had the smallest shares of economies implementing business regulation reforms”. But, states of the Organization of Economic Co-operation and Development (OECD) are already highly ranked.

LAC does not have reason to emulate such behaviour and this is no less true for Caribbean states, even though they are typically higher ranked. In this regard, El Salvador stands as a glaring example of what can be achieved where the political will exists to implement business regulation reform.

According to Doing Business 2018, El Salvador is among “the 10 economies showing the most notable improvement in performance on the Doing Business indicators…”.  Where global ranks of practically all Caribbean States fell, El Salvador’s rose from 95 to 73.

In the Caribbean context, last year El Salvador had the 11^th highest rank among its peers in Doing Business 2017. But this year, it has advanced 3 places to 7^th overall: overtaking Guatemala, Saint Lucia, and Panama in the process.

El Salvador shines brilliantly. Can the other ACS members, including CARIFORUM members, follow suit? Can the region collaborate to bring about well-needed reform and a better future? We can, and we must, but we need to be proactive and stop procrastinating.


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.

Related articles:

Doing Business in the Caribbean 2017: Central America Leads by Example

Doing Business in the Caribbean 2016: Central America shows the way

Greater Caribbean Business in 2015

Doing Business in the Caribbean 2015: Who Cares?

Business in the Caribbean 2014: CARIFORUM needs Reform, part 2

Business in the Caribbean 2014: CARIFORUM needs Reform

Singapore: Example to the Caribbean in Doing Business