World Bank report ranks Antigua and Barbuda in top tier for ease of doing business
Back in 1957, Europe found strength in numbers and pulled together to create the European Union. The function of the European Union (EU) is to enable closer relations between the member states in order to make the most of the collective abilities. In 1973, the Caribbean joined hands in its own community and thus increased its influence on the global scene. The 15-member Caribbean Community (CARICOM) was created to promote free movement of goods, services, capital, business enterprise, and skilled labor through harmonization of policies, laws and regulations. Like the EU, there has been talk of all members being part of a common CARICOM currency and the governments are working towards even closer economic relations between the countries and citizens of the CARICOM region.
Besides linking the islands via CARICOM, a smaller cluster has been created through the Organization of Eastern Caribbean States (OECS). The OECS was created in 1981, when seven Eastern Caribbean countries signed a treaty agreeing to cooperate with each other and promote unity and solidarity among the members. Although, the islands of the OECS enjoy a close relationship, and coordination, they vary significantly in the ease of doing business, according to Doing Business 2007: Organization of Eastern Caribbean States, a new report produced by the World Bank Group.
The report finds that Antigua and Barbuda is at the forefront in the overall ease of doing business, ranking second and only surpassed by one OECS peer; St. Lucia. The report found that, in general, the Eastern Caribbean offers strong business opportunities. In fact, all OECS countries placed in the top half of the 175 economies included in the Global Doing Business 2007: How to Reform report. However, there are significant differences in the islands’ various economic standings. In all areas, Antigua and Barbuda scored well. The country stood out from the rest of OECS, and from much of the world, as a top tier to do business. For example, Antigua and Barbuda placed 22 for ease in starting a business, 15 for obtaining a license, and 17 for protecting investors out of 175 countries.
To come to these findings, the World Bank worked with the International Finance Corporation and illicited support from the United States Agency for International Development. The thorough study explored 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, however, track such variables as macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions, or crime rates.
The report found that starting a business in the OECS is relatively trouble-free compared to other regions of the world and 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 Antigua takes 21days while in St. Kitts and Nevis for example, it takes 47 days.
One of the greatest remaining obstacles for OECS countries is the reluctance to undertake critical structural reforms. However, the Sunshine Government of Antigua and Barbuda has become known for judicious, honest, and well thought out reforms, earning them a prominent role amongst their OECS colleagues. Such reforms are typically created to lead 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. "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. In the smaller states explored in the study, there were 18 regulatory reforms introduced between the period of January 2005 and April 2006. 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.
In short, the Report created by the World Bank demonstrated that Antigua and Barbuda is standing out in terms of overall ease of doing business and is ahead of the curve for the future of the economy. With the reforms being implemented by the government, the ease of doing business and the booming growth of the economy, there is no place an investor would rather be.
