WASHINTON DC, November 29, 2006 – The Eastern Caribbean island of St Lucia is the best place to do business with compared to other members countries of the Organization of Eastern Caribbean States.
The island was given the vote of confidence from the World Bank Group yesterday in its ‘Doing Business 2007: Organization of Eastern Caribbean States, First Multi-country Report for Latin America and the Caribbean.’
The decision, researchers said, was made based on the overall ease of doing business in the OECS grouping. Overall, St. Lucia was ranked 27th globally.
The island was followed in the Eastern Caribbean Antigua and Barbuda, St. Vincent and the Grenadines, Dominica, Grenada and St. Kitts and Nevis, which came in at sixth.
Globally, Antigua and Barbuda was ranked at 33rd; St. Vincent at 44; Dominica and Grenada at 72 and 73, respectively; and St Kitts at 85.
Prepared by the World Bank and the International Finance Corporation with support from the United States Agency for International Development, the report tracks the time, cost, and problems a business faces to comply with legal and administrative requirements in startup, operation, trade, taxation, and closure.
Researchers found that the OECS countries perform well on the ease of starting a business, dealing with licenses, and the strength of investor protections. But they fall behind on the ease of getting credit, enforcing contracts, and closing a business. Results vary for trading across borders, registering property, and paying taxes.
The report also found that OECS countries are moving towards greater integration among themselves and in the context of the Caribbean single market economy. OECS countries have already harmonized several areas of business regulations, including business startup, legal rights of borrowers and lenders, bankruptcy procedures, and contract enforcement. Yet differences arise in how this harmonized legislation is implemented in each jurisdiction.
Starting a business in St Vincent and the Grenadines takes 12 days, compared to 57 days in St. Kitts and Nevis for example. St Vincent and the Grenadines was also found to be the world’s top performer on the construction license indicator – it takes 74 days to obtain a warehouse construction license and costs 10.6 percent of income per capita. But its 195 days in Dominica or 34.9 percent of income per capita in St Lucia.
World Bank officials added that the greatest remaining obstacles for OECS countries are lack of credit information and inefficient courts. For example, no OECS country has a functioning and comprehensive credit bureau, and this limits entrepreneurs’ access to credit, researchers said. It also takes 681 days to enforce a simple contract through the courts in Dominica, compared to 109 days in New Zealand the global leader.
“Some reforms are underway, but more are needed if the OECS countries want to keep up with the rest of the world,” said Simeon Djankov, head of the Doing Business project, a joint unit of the World Bank and IFC. “Whatever reformers do, they should always ask, ‘Who will benefit the most?’ If reforms are seen to benefit only foreign investors, large investors, or bureaucrats-turned-investors, they reduce the legitimacy of the government. Reforms should ease the burden on all businesses: small and large, domestic and foreign, rural and urban. This way there is no need to guess where the next boom in jobs will come from. Any business will have the opportunity to thrive.” (Hardbeatnews.com)