Tsunami of woes overwhelms business sector

FOR Milton Samuda, fashioning an environment that allows the private sector to be competitive, driving growth and creating jobs, must start with a public bureaucracy that no longer perceives business people as rogues keen on robbing the Treasury.

"Successive governments, instead of targeting the minority of corrupt businesses, have treated the private sector as homogeneously corrupt," Samuda, a lawyer and president of the Jamaica Chamber of Commerce (JCC), told The Sunday Gleaner.

"As a result, the civil service and its bureaucracy have evolved documentation and processes which makes business difficult for all," Samuda said.

Samuda is not singular in his view of Jamaica - where official unemployment is now near 12 per cent, and the economy has seen 12 straight quarters of decline, and growth has been anaemic over the past three decades - as a difficult place to do business.

Indeed, the World Economic Forum, in it latest report released this month, ranked the island 95th, of 139 countries on its global competitive index, down nine places from two years ago, albeit when there were fewer countries on the index.

Jamaica behind B'dos

Jamaica is 51 places behind fellow Caribbean Community (CARICOM) member, Barbados (44th), and 11 adrift of Trinidad and Tobago (84th), both of which are listed among a handful of developing countries considered by the survey to be in transition to the ranks of developed countries.

Jamaica is considered to be still transitioning from the first to the second of the report's three phases of development.

The global index is arrived at by weighting a range of quantitative and qualitative measures, such as macroeconomic stability, the state of infrastructure, access to and quality of education and health care, the state of the labour market, the rule of law, rates of taxes, market innovation and sophistication, and the ease and efficiency of conducting business.

With regard to the basic requirements for economic competitiveness, such as institutions, infrastructure, the macroeconomy, Jamaica ranked 103, but did considerably better at 83, when it came to "efficiency enhancers" such as higher education and training, labour-market efficiency, and financial-market development.

But these were not considered by private-sector officials, surveyed for the report, to be the most debilitating factors to doing business in Jamaica.

Crime, an inefficient public bureaucracy, and corruption, in that order, were their greatest concerns.

In fact, with regard to how burdensome it is for businesses to comply with the Government's administrative requirements, such as getting permits to conduct business, adhering to regulations, paying taxes or submitting reports, Jamaica ranked 112th of the 139 countries. Barbados was 13th, and Trinidad and Tobago 51st.

'Reduce size of Gov't'

According to Samuda, the way for Prime Minister Bruce Golding to begin to drive efficiency and competitiveness is to "reduce the size and influence of Government, starting with the size of the Cabinet".

This would include fast-tracking the reform of the public sector that is now being debated so as to "drive down the cost of government, eliminate duplication, (and) deter corruption-feeding inefficiencies".

Samuda would also "remove non-performers (from the public sector) and better reward performers".

Joseph M. Matalon, president of the Private Sector Organisation of Jamaica (PSOJ), insists on the urgency of reform, but stressed that these must not be cosmetic.

"What we need now is not grand gestures, but rather, concerted action across a broad front to address the many issues identified in the PSOJ's Economic Policy Framework and elsewhere," said Matalon, who is also the chairman of the ICD Group of construction and financial-services companies.

"The reform agenda," he said, "must tackle identified impediments to growth and job creation,"

Professor Rosalea Hamilton, an international trade expert who teaches at the University of Technology and who founded a lobby for small businesses - the Micro, Small and Medium-size Enterprises Alliance - believes, too, that Jamaican governments, including the incumbent Golding administration, have failed to create an environment conducive to businesses, especially those at the end of the scale for which she lobbies.

"Not enough (is being done) to fashion a business/investment-friendly atmosphere to facilitate MSMEs to survive and grow in the current context of the global recession," she said.

According to Hamilton, the environment is overarched by "unfriendly, unsupportive, and bureaucratic government ministries and agencies".

The upshot: increased costs to business, which translates to an absence of growth and job creation.

"What we need now is not grand gestures, but rather, concerted action across a broad front to address the many issues identified in the PSOJ's Economic Policy Framework and elsewhere.

- Matalon"

"Successive governments, instead of targeting the minority of corrupt businesses, have treated the private sector as homogeneously corrupt.

- Samuda"

"Not enough (is being done) to fashion a business/investment-friendly atmosphere to allow MSMEs to survive and grow in the current context of the global recession.

- Hamilton"