St. Lucia., November 28, 2006
– The Organization of Eastern Caribbean States (OECS) vary significantly
in the ease of doing business, according to Doing Business 2007: Organization
of Eastern Caribbean States, a new report launched today in St. Lucia
by the World Bank Group. The report finds that St. Lucia ranks first
among OECS member countries on the overall ease of doing business, followed
by, in order, Antigua and Barbuda, St. Vincent and the Grenadines, Dominica,
Grenada, and St. Kitts and Nevis.
|Where is it easy to do business in
the OECS - and where not?
|Antigua & Barbuda
|St. Vincent & the Grenadines
|St. Kitts and Nevis
|Note: Rankings on the ease of
doing business are the average of the country rankings on the 10 topics
covered by Doing Business. The rankings for all economies are benchmarked
to April 2006.
Source: Doing Business database.
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. (It does not track such variables as macroeconomic policy,
quality of infrastructure, currency volatility, investor perceptions, or
crime rates.) 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 finds 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. All OECS countries rank in the
top half of the 175 economies covered in the global Doing
Business 2007: How to Reform
report that the World Bank Group released in September. But where
they rank varies significantly: St. Lucia ranks 27th while St. Kitts and
Nevis is 85th.
The variation in performance is even greater where regulation has not been
harmonized. For example, St. Vincent and the Grenadines is 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. Compare that to 195 days in Dominica or 34.9 percent of income
per capita in St. Lucia. OECS countries can learn from each other as well
as from other Caribbean countries and small states.
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. Also, it takes 681 days to enforce a simple contract
through the courts in Dominica, compared to 109 days in New Zealand the
“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.”
Globally, 213 regulatory reforms were
introduced in 112 economies in the period January 2005 and April 2006.
Of these, 18 took place in small states. The reforms led to simpler business
regulations, stronger property rights, lighter tax burdens and easier tax
administration, improved access to credit, and lower costs of cross-border
trade for entrepreneurs worldwide. Only two of these reforms were in OECS
countries, both in Antigua and Barbuda: these improved regulations for
registering a new business and reduced tax rates. Other reforms are ongoing
in OECS countries, including the introduction of electronic systems at
Doing Business allows policy makers to compare regulatory performance
with other countries, learn from best practices globally, and prioritize
reforms. The annual Doing Business global reports have already
had an impact. The analysis has inspired and informed at least 48 reforms
around the world. A key lesson is that what gets measured gets done.
And as the news about reforms spreads, there will be increasing interest
in replicating success stories across the OECS.
The full report Doing Business 2007: OECS and press kit can be
found at: www.doingbusiness.org/OECS
For more information about the global
Doing Business report series please visit: www.doingbusiness.org
For press interviews or more information,
Nadine Ghannam, Media & Marketing
Advisor, World Bank/IFC: Tel: (202) 458-0482 - Cell: (202) 361-7798 - Email: