The World Bank got it all wrong and now Barbados will have to pay dearly for the errors of the international financial institution.
Outspoken Minister of Commerce Donville Inniss levelled this charge as he blasted the bank’s 2015 report on Doing Business in Barbados.
He was at time addressing the official launch of the online services by Corporate Registry, a department of the Corporate Affairs and Intellectual Property Office at the Baobab Tower, Warrens, St Michael this week.
Overall, Barbados is ranked 106 out of 189 countries assessed in the report falling three places from its 2014 ranking of 103. It stands behind its Caribbean neighbours Jamaica ( 58), Trinidad and Tobago (79), and St Lucia (100).
Doing Business ranks the easy with which a local entrepreneur can open and run a small to medium-size business when complying with relevant regulations.
It measures and tracks changes in regulations affecting 11 areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and labour market regulation.
Between June 2013 and June 2014, the report, which measured 189 economies worldwide, documented 230 business reforms, with 145 reforms aimed at reducing the complexity and cost of complying with business regulation, and 85 reforms aimed at strengthening legal institutions.
The data covers 47 economies in Sub Saharan Africa, 32 in Latin America and the Caribbean, 25 in East Asia and the Pacific, 26 in Eastern Europe and Central Asia, 20 in the Middle East and North Africa and eight in South Asia, as well as 31 Organization for Economic Co-operation and Development (OECD) high-income economies.
Inniss was particularly peeved that the report perpetuated “blatant lies” after it stated that it took more than two weeks and a number of procedures to form a company in Barbados.
“What does it take to start a business in Barbados? According to data collected by Doing Business, starting a business there requires 8.0 procedures, takes 18.0 days, costs 7.6% of income per capita and requires paid-in minimum capital of 0.0% of income per capita,” the 84-page report stated.
The Minister heaped scorn on the accuracy of the information, adamant that it was not a true reflection of the process of setting up operations in the country.
“Now whether it is based on information provided by state agencies, by professionals or by their own thinking, they certainly have been strangers to the truth when it comes to company formation in Barbados. They have indicated that it takes eight steps and 18 days to form a company in Barbados…”
The report also said Barbados had some way to go to improve the ease of doing business.
In this regard, it ranked Barbados at 94 globally, again behind Jamaica ranked at (20), Trinidad and Tobago and St. Lucia (72) Grenada (80) and St. Kitts and Nevis (87)
While insisting that he respected and would continue to work with the World Bank, he maintained that the financial institution and others like it “ do not always get it right.”
Noting that the report would negatively affected the country, Inniss lamented that considerable resources would now have to be spent to correct the misleading information.
He expressed the hope that the next report would provide an “accurate” picture of Barbados’ business environment.
Last week, Minister of Finance Chris Sinckler took issue with the report, describing it as “disingenuous”.
“We do have some challenges in the way in which that particular measure is designed and executed – the weightings and the comparisons and so forth and so on – because it is really a little disingenuous to try to have 180 somebody different jurisdictions and to try to apply some standard measure across them, when laws, norms, cultures and otherwise are different, without the appropriate weightings for the rating system you achieve,” argued Sinckler in an address at the opening of a two-day Public Sector Leadership conference at the Hilton Barbados Resort on the topic, Overcoming the Implementation Deficit: From Planning to Performance.
Sinckler took specific issue with the measure of dealing with construction permits, which looks at the “procedures, time and cost to complete all formalities to build a warehouse”.
The minister said he was “quite intrigued because when we had a conference call for the people who were responsible for it” they did not specify the type of warehouse.
“So how can you say that it takes this amount of time in Barbados to do a warehouse but do not say what type of warehouse? And then match it against another country and say ‘this country gets in done in three weeks but Barbados takes three months’, when you have not said what type of warehouse it is [and] where this warehouse is located?” he asked.