Jamaica less protective of investors, falls in Doing Business rankings

Jamaica dipped seven spots to rank 88 in the Doing Business Report 2012 representing its seventh straight year of decline due to difficulty obtaining electricity supply and a burdensome tax structure.

Essentially, it is harder to do business in Jamaica than before, according to the report published Wednesday by the World Bank and its affiliate, International Finance Corporation (IFC).

The report also found that Jamaica is doing an increasingly poor job of protecting investors.

Comparatively, it lauded Singapore - which in the 1960s used Jamaica as a developmental model - for topping the 'ease of doing business' list for the sixth straight year.

The publishers note that when adjusted for errors and its new electricity subranking, Jamaica actually dipped by three spots in real terms in the adjusted 2011 rankings, but seven in absolute terms. Adjustments have become an annual feature of the global report.

The decline in Jamaica's ease of doing business ranking resulted in a wider decline in its regional competitiveness. The ranking of Colombia - which also suffers from drug and criminality - has improved almost as dramatically as Jamaica declined.

In 2006, the first year in which Jamaica was featured in the report, Jamaica and Colombia ranked 43 and 66, respectively, among 155 countries.

Since then, Jamaica has dipped 45 spots to 88 of 183 economies assessed by the World Bank/IFC team, while Colombia rose 24 spots to 42.

Jamaica's worst subranking included registering property at 103, getting electricity at 112, enforcing contracts at 126 and paying taxes at 172. The latter is an improvement on last year's 175 ranking, but is still the 12th worst in the world. The Doing Business report estimates that Jamaican companies pay taxes amounting to 45.6 per cent of profit.

Electricity ranking

The getting electricity ranking is based on the lengthy time - about 49 calendar days - it takes to complete the required procedures to secure service, and the associated cost which the Doing Business report estimates at J$1.46 million on average.

It was, however, an improvement on the 2011 subranking of 114.

Jamaica's best rankings were resolving insolvency at 26 and starting a business at 23. Jamaica is categorised as a middle-income country of 2.7 million people with per capita income of US$4,750.

Last year, the report lauded Jamaica as a top-10 real-estate reformer but still ranked the country as the tenth-worst place to pay taxes worldwide. Belarus was the worst.

steven.jackson@gleanerjm.com