“It is regrettable that we have a pattern of downward slide.”
Those were the words uttered by Chairman of the National Democratic Congress (NDC) Vincent Roberts in reference to Grenada’s drop in the “Doing Business” index of the World Bank.
The October 2016 World Bank Group’s Ease of Doing Business report indicated that the island dropped again for a second consecutive year.
Grenada’s ranking moved downward from the adjusted 2015 position of 131 out of the 189 countries, to a position of 138 in 2016.
Countries are ranked on their ease of doing business, from 1–190.
A high rate of doing business-ranking means the regulatory environment is more conducive to the starting and operation of a local firm.
The ranking also serves as a measure to show how efficient a country is in facilitating investment and business operation and covers the business cycle from start-up to winding down.
The private sector arm of the World Bank known as the International Finance Corporation undertakes the review.
The report is considered an important tool providing insight as to how a country is operating, its competitiveness and in many instances, whether the country is investor friendly or not.
According to the World Bank Group’s Ease of Doing Business Report of the 10 areas reviewed, Grenada only registered growth in the area of registering property, moving from 137 points to 136 points.
Addressing this issue at a press conference held by NDC, Roberts observed that “we declined in every other area with the most remarkable area of decline being getting electricity where we dropped (by) 12 points from 54 to 66.
“It is not surprising therefore, that the report shows that Grenada occupies the unenviable position of being the lowest ranked Organisation of Eastern Caribbean States (OECS) country,” he said.
Noting that Grenada is only 1 rank above Haiti”, Roberts recalled that “when the NDC was in power in 2008 to 2013, the island gained global recognition for its reform of the legal and regulatory framework for business.
He said, “Grenada gained recognition in 2010 of being one of the top 10 performers among the 189 countries being reviewed and jumped an impressive 19 places from position 92 to position 73.”
This year’s drop in the ranking comes on the heels of a seven-point drop between 2013 and 2014, a 33 point drop between 2014 and 2015 and a 4 point drop between 2015 and 2016.
In response to a question posed in relation to the country’s ranking in the Ease of Doing Business report at last week Tuesday’s post-Cabinet press briefing, Minister with responsibility for International Business, Nicholas Steele said that government has been taking constant action to improve the Ease of Doing Business ranking, especially with the enactment of the Bankruptcy Act, which was passed prior to June this year.
He added that the Bankruptcy Act is “supposed to have very significant effect on the doing business ranking,” which he said should be reflected in the next report and reports thereafter.
Min. Steele, who did not articulate knowledge of the latest report for 2017, which was published on October 25, 2016 said, “I noticed that there have been some rumblings recently.
“The doing business ranking comes out annually in June of every year so it came out in June of this year and there is not going to be any change in the ranking until June of next year.”
He expressed the view that the ruling New National Party (NNP) government appears to be the victim of “our own progress because the ranking does not give credit to the existence of the legislation (and would) only give credit when the legislation has been tested.”
He pointed out that “with respect to our ranking it (is) always not just your improvement but being able to improve faster than others who are within that ranking”.
“So you can improve the overall investment environment in a country and still fall in the ranking because others around the world or in the region have improved faster than you,” he said.
“I look forward to seeing the positive change that we would get from the Bankruptcy legislation,” he added.
According to Minister Steele there has not been a single case of anyone filing for bankruptcy since the enactment of the legislation in June.
“Based on the economic environment we have here (in the country) there isn’t a filing of bankruptcy”, he said.
Congress has often pointed to the closure of several businesses on the island within the past four years especially in Grenville, St. Andrew.