Do we need to send our leaders to the dictionary?
CARIBBEAN economies, unfortunately, have shown little capacity to create the level of growth necessary to lift them out of the prevailing economic malaise.
The continuing global economic crisis cannot explain why Caribbean economies are not achieving economic growth when Asia, Latin America and Africa are all experiencing robust growth.
Until there is evidence to the contrary, we are wont to believe that the economic policies being pursued by the governments of Caribbean countries are inappropriate and unworkable.
Given that these economies are private sector-led and market-driven, economic growth requires that business be encouraged to increase investment, production and employment. We pay lip service to the idea all the time.
However, very little is done to stimulate an expansion in business activity by making it as easy as possible for enterprising people, local and foreign, to establish and operate businesses.
The 2011 Doing Business Report produced by the World Bank indicates that rather than making it easier for business to establish and operate in the Caribbean it is actually getting more difficult.
This poses two problems, namely the stifling of local economic activity and the uncompetitiveness of Caribbean economies in the bid to attract investment in the global marketplace. The Caribbean has to compete with other economies to retain even its local business, while seeking to attract new ones.
Capital and entrepreneurs are like water; they flow where it is easiest to go. That we also know.
The Doing Business Report provides quantitative data on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations. It measures and tracks changes in 10 affected areas: starting a business; dealing with construction permits; getting electricity; registering property; access to credit; protecting investors; paying taxes; trading across borders; enforcement of contracts and resolving insolvency.
Of the 183 countries from which data was collected, the easiest Caribbean country in which to do business is St Lucia at 52, and the most difficult is Haiti at 174. Jamaica is at 88, which means that there are 87 countries that an investor will most likely go to in preference to Jamaica.
Some of the most difficult aspects of the business environment compared with the rest of the world are; registering property at 135, enforcing contract at 122, and access to credit at 9. On average, it takes 246 days to get a construction permit and 94 days to register a property.
In starting a business in Jamaica it takes seven days, giving us a ranking of 23; in Trinidad and Tobago it needs 43 days and Antigua & Barbuda is at 80. Jamaica is ranked 172 out of 183 in ease of paying taxes: no wonder Jamaica has a budget deficit.
When it comes to the ease of doing business compared with the rest of the world, the Caribbean is not doing well enough to encourage the local and foreign investment which it urgently needs and it is not doing enough to making operating businesses as internationally competitive as possible. That is why the region is falling behind in the global economy and one of the reasons why economic growth is so sluggish.
The definition of the word crisis is a situation that cannot continue to exist. Do we need to send our leaders to the dictionary?