RED TAPE COST­ING JA BIL­LIONS

Jamaica Gleaner - - GROWTH & JOBS - McPherse Thomp­son As­sis­tant Ed­i­tor – Busi­ness

JA­MAICA HAS lost bil­lions of dol­lars in po­ten­tial in­vest­ments, which have ei­ther been di­verted else­where or have not been set in mo­tion be­cause of in­ef­fi­cient gov­ern­ment bu­reau­cracy, the sec­ond most prob­lem­atic fac­tor for start­ing a busi­ness lo­cally, ac­cord­ing to the Global Com­pet­i­tive­ness Re­port 2016-17. “It would be hard to mea­sure bu­reau­cracy” – ex­ces­sively com­pli­cated ad­min­is­tra­tive pro­ce­dure, also called red tape – “but if you look at it from the point of view of do­ing busi­ness, then it’s sig­nif­i­cant,” said Chief Ex­ec­u­tive Of­fi­cer of the Pri­vate Sec­tor Or­gan­i­sa­tion of Ja­maica (PSOJ) Den­nis Chung.

Re­searchers us­ing data from the World Bank’s Do­ing Busi­ness Re­port on the cost of bu­reau­cratic red tape have found that bil­lions of dol­lars could be saved if gov­ern­ments ap­ply best prac­tices in reg­u­lat­ing busi­nesses.

The study is not dis­ag­gre­gated by coun­try or re­gion, and thus, it is dif­fi­cult to de­ci­pher from the re­port the rel­a­tive cost of bu­reau­cracy to Ja­maica. The Sta­tis­ti­cal In­sti­tute of Ja­maica said it has no such data for the is­land.

How­ever, in an in­ter­view with The Gleaner last week, Chung said that in look­ing at the costs, one could “think about the fact that peo­ple come here to do busi­ness, and be­cause of the bu­reau­cracy, they leave and go some­where else”.

He cited, for ex­am­ple, the pro­posed di­vest­ment of the River­ton land­fill in St An­drew, which the Gov­ern­ment has been con­tem­plat­ing for the last four years, but which has not ma­te­ri­alised de­spite huge in­ter­est in op­er­at­ing the busi­ness.

“I know of one in­vestor who wanted to put US$900 mil­lion into it,” said Chung, adding that “that just shows the amount of money we lose be­cause of bu­reau­cracy.”

So you [are] talk­ing about four to five years wait­ing [for] an in­vest­ment that, be­cause of bu­reau­cratic is­sues, we could have had, when you look at im­pact and ev­ery­thing over the time, maybe US$1 bil­lion worth of in­vest­ment in the econ­omy and bet­ter garbage col­lec­tion hap­pen­ing al­ready, and that it­self has a cost.

Den­nis Chung

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