RED TAPE COSTING JA BILLIONS
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.