Seamless transition to the formal economy vital
FINANCE AND Public Service Minister Audley Shaw says the ease of doing business in Jamaica must facilitate a seamless transition of businesses operating informally to the formal economy.
Speaking at the annual LatinFinance Caribbean Investment and Finance forum at the Montego Bay Conference Centre last week, Shaw noted that potential entrepreneurs were often discouraged from utilizing the formal procedures to establish businesses.
This, he said, was because of bureaucracy, while noting “clear and overwhelming evidence” of informal practices, particularly among micro, small and mediumsize enterprises (MSMEs).
“What we find is that these entrepreneurs often resort to operating within the informal sector, which has less protection for labour conditions,” Shaw pointed out.
He said that placed them at a great disadvantage as it renders them more vulnerable to labour shocks.
Hence the need to ensure that the process for establishing businesses is more accommodating, Shaw added.
Meanwhile, Bank of Jamaica Governor Brian Wynter underscored the importance of getting more informal businesses regularised.
He said that was in order to ensure that the country is not, among other things, deprived of potential tax revenue.
Speaking with JIS News, Wynter emphasised that “it is imperative that we find ways to bring people into the formal sector, where we will definitely know who is doing what”.
In this regard, he agreed that “we have to create the environment that will make it easier for persons wanting to make the transition from the informal into the formal sector”.
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It has covered developments related to the banking and capital markets in the region for more than 25 years.