Jamaica's poor economic performance - Blame it on corruption

Reginald Budhan agrees with the widely held assertion that government bureaucracy helps to hold back business, but the top civil servant in the island's industry and investment ministry does not believe it is the only, or biggest, constraint to entrepreneurship and competitiveness in Jamaica.

"The system is bad, but I don't think it is so bad that it is the source of your uncompetitiveness," Budhan, the ministry's permanent secretary, told Wednesday Business in an interview.

In fact, Budhan suggested that corruption in Jamaica contributes substantially to the country's uncompetitiveness and its poor economic performance.

Hence, as the country's tackles public-sector bureaucracy, he feels it has to "reform the values and attitudes of the nation."

So, while Budhan supports civil servants being encouraged to take greater risk on the job, he warns of the potential backlash if things go wrong - an attitude that is likely to instil caution.

"The level of bureaucracy in a country and the control systems are reflections of the honesty and integrity of the people," he said.

Budhan's analysis - coming against the backdrop of Jamaica's rank of 95, among the 139 countries rated on the World Economic Forum's Global Competitiveness Index (GCI) - is unlikely to be embraced favourably by private-sector leaders, who complain, often, and bitterly, about how difficult it is to conduct business here.

It is true that Jamaica is 99th, out of 180 countries on the Transparency International's Corruption Index and 107th on the GCI for the same issue.

But these indexes, private sector people point out, measure corruption in the country broadly, and adding more public sector red tape only compounds the problem and adds to corruption. In that regard, Jamaica, on the CGI index, is 79th for irregular payments and bribes and 116th for the perception that public officials apply favouritism in decision-making.

Homogeneously corrupt

"Successive governments, instead of targeting the minority of corrupt businesses, have treated the private sector as homogeneously corrupt," complains Milton Samuda, president of the Jamaica Chamber of Commerce (JCC).

"As a result, the civil service and its bureaucracy have evolved documentation and processes which make businesses difficult for all," Samuda added.

It is a complaint that government ministers have, for years, claimed to understand and which the current prime minister, Bruce Golding, has promised to fundamentally address.

Golding, like Budhan, said the problem is not as bad as sometimes made out, in his April budget remarks, agreed that the public sector's role in facilitating business "is not anywhere as good as it needs to be."

"A major bugbear in doing business and investing - the things needed to facilitate growth and job creation - is the frustration posed by bureaucracy," Golding told his parliamentary colleagues.

It took too much time, far "too many unnecessary producers ... too many to be completed and too much time to get responses or decisions on simple matters," he said at the time.

A body that Golding established to review the structure of government has delivered a plan on the restructuring of the government. It is now being reviewed by the administration and a parliamentary committee.

That report, however, does not address the immediate concerns of businesses faced with bureaucratic logjams, although Budhan said these are things being worked on by a competitive committee, chaired by his boss, the industry, commerce and investment minister, Karl Samuda.

Several impediments to doing business have been identified, he said.

"The key ministries with responsibility for implementing the reforms also identified the policies and strategies that they would be implementing in an effort to resolve the challenges to doing business," Budhan said.

'Government can do more'

The JCC's Samuda, however, believes Government can do more ... and quickly.

For instance, Samuda would immediately implement a recommendation by the contractor general for a single anti-corruption agency with investigative and prosecutorial powers.

He would also legislate that project approvals be deemed to have been granted three months after application. "If an application is properly submitted and meets all legal and technical requirements, but the bureaucracy has not fully processed and/or formally approved them."

This is as close to a suggestion made early in office by Prime Minister Golding for some project development, but which he has not instituted.

Budhan said the Government was listening to the private sector, but the solutions will take time.

"It is a continuous work," he said. We have to take a little more risk, but it means that when people exploit that latitude you need strong penalties."