Doing Business 2019: Training for Reform is the 16th 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 involves analysis of data for 190 nations, from June 2017 to May 2018.
For the last 5 years, I
have reviewed these reports and, like previous articles, I will commence by
examining the global ranking of Caribbean states in Doing Business 2019. With the exception of Puerto Rico, all the
states examined are members of the Association of Caribbean States (ACS).
Data is presented in two
tables below. Last year’s data is included for your convenience. Differences between
the years may simply result from changes in the methodology used to prepare the
current report, not necessarily a tangible change of performance. Data on
scores and number of regulatory reforms implemented have been added.
Table 1: Global Ratings
of Caribbean Islands
RANKING
|
SCORE
|
#REFORMS
|
||||
Report Year:
|
2018
|
2019
|
2018
|
2019
|
2018
|
2019
|
ACS Caribbean
Island States:
|
113
|
115
|
58.10
|
58.47
|
0.92
|
0.61
|
Caribbean SIDS:
|
109
|
111
|
65.61
|
60.04
|
0.82
|
0.55
|
Puerto Rico (US)
|
64
|
64
|
69.26
|
69.46
|
1
|
1
|
Independent
Caribbean SIDS:
|
112
|
115
|
58.73
|
59.10
|
1.25
|
0.75
|
Jamaica
|
70
|
75
|
66.92
|
67.47
|
2
|
1
|
Trinidad
|
102
|
105
|
60.93
|
60.81
|
0
|
0
|
Bahamas, The
|
119
|
118
|
58.13
|
58.90
|
3
|
2
|
Barbados
|
132
|
129
|
56.78
|
56.78
|
0
|
0
|
OECS:
|
117
|
121
|
57.78
|
57.83
|
0.50
|
0.33
|
St. Lucia
|
91
|
93
|
62.96
|
63.02
|
0
|
0
|
Dominica
|
98
|
103
|
61.03
|
61.07
|
0
|
0
|
Antigua & Barbuda
|
107
|
112
|
59.42
|
59.48
|
1
|
1
|
St. Vincent & the Grenadines
|
129
|
130
|
56.34
|
56.35
|
0
|
0
|
St. Kitts & Nevis
|
134
|
140
|
54.35
|
54.36
|
1
|
0
|
Grenada
|
142
|
147
|
52.64
|
52.71
|
1
|
1
|
Large Caribbean
Island States:
|
140
|
142
|
49.59
|
49.82
|
1.50
|
1
|
Dominican Republic
|
99
|
102
|
60.57
|
61.12
|
3
|
1
|
Haiti
|
181
|
182
|
38.48
|
38.52
|
0
|
1
|
Table 1 shows
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 (ie. Santo Domingo).
The SIDS group is
sub-divided into three.
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 islands comprise the Independent SIDS group.
Table 2 shows
information on 12 ACS Latin American (LatAm) states. Like the previous grouping
of ACS Caribbean Islands, these LatAm states are divided into two groups –
Central American and South American States: the former comprising 8 states and
the latter 4.
It should also be noted
that Table 2 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 ACS Caribbean islands in table 1 are members
of CARIFORUM.
Doing Business 2019 Fact
Sheet: Latin America and the Caribbean lists 32 LAC states: 33 inclusive of Chile, which is an OECD
state. The regional average score is 58.25 which has a rank of 121. With the
exception of Puerto Rico, 24 of these are ACS member states: the remaining 8 being
in non-ACS South American states.
11 of the top 15 LAC economies
are ACS member states: the lowest rank being 105. This is equivalent to Doing Business 2018 but the lowest rank was then 102. This is
mostly due to the superior rankings of the 5 ACS Central American economies, but
also 5 ACS Caribbean Islands and Colombia, as the sole ACS South American
economy.
Table 2: Global Ratings
of ACS Latin American States
RANKING
|
SCORE
|
#REFORMS
|
||||
Report Year:
|
2018
|
2019
|
2018
|
2019
|
2018
|
2019
|
ACS Latin American States:
|
105
|
109
|
60.39
|
60.34
|
1.08
|
0.42
|
ACS Central American States:
|
86
|
91
|
64.02
|
64.08
|
1.25
|
0.62
|
Mexico
|
49
|
54
|
72.27
|
72.09
|
1
|
0
|
Costa Rica
|
61
|
67
|
69.36
|
68.89
|
2
|
0
|
El Salvador
|
73
|
85
|
65.20
|
65.41
|
4
|
2
|
Panama
|
79
|
79
|
65.71
|
66.12
|
2
|
1
|
Guatemala
|
97
|
98
|
61.16
|
62.17
|
0
|
1
|
Honduras
|
115
|
121
|
58.13
|
58.22
|
0
|
0
|
Belize
|
121
|
125
|
57.11
|
57.13
|
0
|
0
|
Nicaragua
|
131
|
132
|
55.27
|
55.64
|
1
|
1
|
ACS South American States
|
132
|
135
|
55.31
|
55.11
|
0.75
|
0
|
Colombia
|
59
|
65
|
69.04
|
69.24
|
0
|
0
|
Guyana
|
126
|
134
|
56.78
|
55.57
|
2
|
0
|
Suriname
|
165
|
165
|
48.10
|
48.05
|
1
|
0
|
Venezuela
|
188
|
188
|
30.85
|
30.61
|
0
|
0
|
These top 15 performers,
from highest to lowest, are: Mexico [54], Chile [56], Puerto Rico [64], Colombia
[65], Costa Rica [67], Peru [68], Jamaica [75], Panama [79], El Salvador [85],
St. Lucia [93], Uruguay [95], Guatemala [98], Dominican Republic [102], Dominica
[103], Trinidad and Tobago [105]. Only Chile, Puerto Rico, Peru, and Uruguay
are not ACS members.
As before, Colombia is
the sole ACS South American economy, in its group of 4; Mexico, Costa Rica,
Panama, El Salvador, and Guatemala the 5 ACS Central American economies, in its
group of 8.
The Dominican Republic
is the only large ACS Caribbean-Island economy, in its group of 2. Jamaica,
Trinidad and Tobago are the 2 larger ACS SIDS, in their group of 4. Puerto Rico
is the remaining larger SIDS economy. St. Lucia and Dominica are the 2 ACS OECS
economies, in their group of 6.
The superior ranking of
the ACS LatAm economies is specifically due to performance of Mexico, Colombia
and Costa Rica. Mexico is the best Central American performer and Colombia the
best ACS South American economy: the former being more highly ranked than the
latter.
Belize and Nicaragua are
the only ACS Central American economies below the LAC average: Belize being a
CARIFORUM member. Conversely, Colombia is the only ACS South-American economy above
average; and beside islands mentioned in top 15 LAC economies, only Antigua and
Barbuda, and Barbados are above-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, St. Kitts
and Nevis, Guyana, Nicaragua, St. Vincent and the Grenadines, and Barbados: 7
are CARIFORUM members, and Bolivia is the sole non-ACS member.
Also, the ACS LatAm
group has the greatest discrepancy between ranks: Colombia being highest at 65
and Venezuela the lowest at 188. The remaining 2 – Guyana and Suriname – being
CARIFORUM members – are also in the bottom 10 along with Venezuela.
ACS not only has the
most capable economies to effect reform, but it also has the most deserving economies.
Therefore, it seems the body most suitable to facilitate this reform in the
shortest order. But, indifference to reform continues to further deteriorate
performance. Political will is simply lacking in this regard.
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 as stated in my previous article, states of the Organization of
Economic Co-operation and Development (OECD) are already highly ranked.
This behavior has not
changed. According to Doing Business
2019: LAC has the “lowest share
of reformers with 56% of economies” (58% including Chile). Only 19 of the 33
LAC economies implemented at least one regulatory reform to make it easier to
do business, which amounted to 27 reforms in total.
Consequently, LAC had
the “lowest average increase” in score: which amounted to +0.22 points; and is
one of only “two regions absent from the top 50 ranking”. It may be recalled
that Mexico, which is an ACS member, was the sole economy in the top 50 ranking
in Doing Business 2018. However, it had
made no reforms subsequently.
It may be argued that
Mexico could have been negatively impacted by natural disasters during the
period. But, Puerto Rico was impacted even worst yet managed to make a single
reform. Its score increased more than the LAC average, and its ranking remained
intact.
LAC has no reason to persist
with such behaviour and this is no less true for ACS economies, even though
they are typically ranked higher. El Salvador, which was a stand-out in Doing Business 2018 and an example of
what could be achieved where the political will exists, reduced its reforms
from 4 to 2 this period and fell 12 places in rank.
Beside El Salvador,
Bahamas is the only other ACS economy to have implemented 2 reforms. Only 10 of
the 25 ACS economies made at least one reform. In all such cases, their scores
marginally increased but, excluding Puerto Rico, all ACS economies fell in
rank.
In the LAC, Brazil made
4 reforms – the only LAC economy to make more than 2 changes – and its rank improved
16 places, from 125 (in Doing Business
2018) to 109. In Doing Business 2018,
El Salvador, Dominican Republic and The Bahamas made at least 3 reforms and
all increased in rank (see Doing Business
in the Caribbean 2018).
At that time El Salvador
had implemented 4 reforms and was considered among “the 10 economies showing
the most notable improvement in performance…”, while ranks of practically all other
ACS economies fell. It is time all ACS governments get serious about regulatory
reform and consistently implement them every year.
Paul Hay is a Jamaican national, founder of PHC Projects: a managed service provider and consultancy, based in Kingston Jamaica, with a vision of providing strategic planning and implementation services to organizations for the construction/renovation of non-residential facilities in the English-speaking Caribbean.
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