EDITORIAL - More optimistic about Jamaica

LIKE MOST persons concerned with the long stagnation of the Jamaican economy and its loss of competitiveness against its global peers, this newspaper would have been expected to be distraught at the country's latest slippage in the World Bank's rankings of the ease of doing business.

According to the new report, released this week, we are now ranked 94th of 184 countries, three places lower than in 2012. Not only is it the ninth straight year Jamaica has moved down the index, we have slipped 51 places in that period.

This time, though, we are far more optimistic about the prospect for Jamaica's competitiveness and improvement in its business environment than at any other time in the past decade.

In 2006, when Jamaica was furthest up the table, there were 155 countries in the rankings, 29, or 19 per cent, fewer than at present. Further, it is not only that Jamaica may have regressed, but that other countries have enhanced their business environment at a faster clip than Jamaica.

All that, of course, is cold comfort to any domestic entrepreneur who has to negotiate this country's formidable regulatory environment, which, when stripped of nomenclatural niceties, is merely bureaucratic humbug that increases the cost of doing business. It also represent impediments to attracting foreign direct investment.

We, however, have a sense that, under the tutelage of the International Monetary Fund - whose imprimatur is craved in our current pecuniary - the Government is serious about business and economic reform.

The current Doing Business report, for instance, notes that during the year it covers, Jamaica has lowered corporate income tax, licensed credit bureaus, and made it a bit easier to establish companies by allowing the Companies Office of Jamaica to stamp the articles of incorporation at the time of registration. Such actions lower transactions costs in an economy.

This week, almost simultaneous with the release of the World Bank's Doing Business survey, Finance Minister Dr Peter Phillips unveiled his corporate tax and incentives regime, which should lead to lower, effective tax rates.

Critically, the new arrangement will remove ministerial discretion - thus, opportunities for corruption - from the incentive process and lessen, if not eliminate, their possibility for market distortion.

The upshot: a more competitive economy in which it should be easier to do business. Next year's Doing Business report and Global Competitive Index should reflect these developments.

But Jamaica still has much more work to do to catch up with its global competitors for capital, and to create an economy capable of sustained growth.

It is against this backdrop that we offer a suggestion to Prime Minister Portia Simpson Miller, who has already led her Government through potentially treacherous waters. She should insist on a shift of focus by her Commerce and Industry Minister Anthony Hylton.

Mr Hylton's concentration has been on delivering on big, sexy projects that would transform Jamaica into a global logistics hub. In that regard, he is in competition with Omar Davies, the transport and works minister, who is already negotiating with the Chinese for a new port/logistics centre.

What Mr Hylton has paid insufficient attention to is the myriad red tape that snarls Jamaican commerce. Last October, he set up a hotline via which people should report snags. That was trivia.

Maybe the whole logistics thing should be passed to Dr Davies, while Mr Hylton is given a serious mandate to reduce red tape.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.