T&T has jumped 12 places in the 2015 Ease of Doing Business, which was issued on Tuesday night, but still lags six countries in the Latin America and the Caribbean region.
T&T moved from a ranking of 91 in the 2014 version of the closely watched global ranking to 79 in the 2015 edition, but is surpassed by Colombia ranked in 34th place, Mexico at 39, Chile at 41, Panama at 52, Jamaica at 58 and Guatemala at 73.
In a news release on Tuesday night, the World Bank Group said the report found that 50 per cent of economies in the Caribbean implemented at least one reform making it easier for local entrepreneurs to do business–12 reforms in total, a historical high for the region.
Washington, D.C., October 29, 2014–A new World Bank Group report finds that over the past year, 50 per cent of economies in the Caribbean implemented at least one reform making it easier for local entrepreneurs to do business–12 reforms in total, a historical high for the region.
The Caribbean region analysed by the study comprises the following economies: Antigua and Barbuda, The Bahamas, Barbados, Dominica, the Dominican Republic, Grenada, Haiti, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, and Trinidad and Tobago.
Doing Business 2015: Going Beyond Efficiency found that Jamaica had the region's biggest improvement in the ease of doing business in the past year, thanks to three reforms in areas measured by the report.
Jamaica streamlined the requirements for starting a business, reduced the cost of getting an electricity connection, and established new credit bureaus while also adopting a new secured transactions law that broadens the range of assets that can be used as collateral.
Joining Jamaica in implementing multiple regulatory reforms were the Dominican Republic and T&T.
The Dominican Republic made cross-border trade easier by reducing the number of documents required to import and export, improved the regulatory framework for credit reporting, and strengthened minority shareholder protections.
T&T jumped 12 places because it improved access to credit by adopting the Bankruptcy and Insolvency Act, which establishes clear grounds for relief from a stay of enforcement actions by secured creditors during reorganization procedures as well as a time limit for the stay.
In addition, T&T made resolving insolvency easier by introducing a formal mechanism for rehabilitation, establishing a public office responsible for the general administration of insolvency proceedings, and clarifying the rules on appointment of trustees.
And it made starting a business easier by introducing online systems for employer registration and tax registration. Such reforms are leading to tangible benefits for entrepreneurs. For example, starting a business now takes 11.5 days for an entrepreneur in T&T–on par with international best practice–down from 35.5 days in 2013.
"Entrepreneurs in the Caribbean continue to see gains in the business environment. With half the region's economies making regulatory reforms in the past year, the Caribbean continues to move in the right direction," said Rita Ramalho, Doing Business report lead author, World Bank Group. "Yet while the region continues to reform, there is still room for further improvement in the business environment."
T&T got special mention in the report as being among the ten top improvers worldwide in implementing reforms that make it easier to do business.
Among the ten countries that improved the most in performance on the Doing Business indicators: Tajikistan, Benin, Togo, C�te d'Ivoire, Senegal, Trinidad and Tobago, the Democratic Republic of Congo, Azerbaijan, Ireland and the United Arab Emirates.
As a whole, according to the report, Latin America and the Caribbean and South Asia remain the two regions with the smallest share of economies implementing regulatory reforms as captured by Doing Business.
As in previous years, however, Europe and Central Asia had the largest share of economies implementing at least one regulatory reform, with some 85 per cent doing so.
Sub-Saharan Africa had the second largest share of economies implementing at least one reform and the second largest average improvement in distance to frontier scores.
According to the report: "Many of the 10 top improvers still face many challenges on their way to international best practices in business regulation, including high bureaucratic obstacles, political instability and weak financial institutions."
The report this year expands the data for three of the 10 topics covered, and there are plans to do so for five more topics next year. In addition, the ease of doing business ranking is now based on the distance to frontier score. This measure shows how close each economy is to global best practices in business regulation.
The report finds that Singapore tops the global ranking on the ease of doing business. Joining it on the list of the top 10 economies with the most business-friendly regulatory environments are New Zealand; Hong Kong SAR, China; Denmark; the Republic of Korea; Norway; the United States; the United Kingdom; Finland; and Australia.
The ease of doing business ranking ranges from 1 to 189. The ranking of economies is determined by sorting their aggregate distance to frontier scores. These are calculated as the simple average of the distance to frontier scores for each of the 10 topics included in the aggregate distance to frontier score in Doing Business 2015. This aggregate score does not include the labour market regulation indicators.
The distance to frontier score, introduced in Doing Business 2012, shows the distance of each economy to the "frontier"–which represents the best performance observed on each of the Doing Business indicators across all economies since 2005 or the third year in which data for the indicator were collected. The measure is normalized to range between 0 and 100, with 100 representing the frontier. The measure does not include the labour market regulation indicators.
To make the data comparable across economies, the indicators are based on standardized case scenarios with specific assumptions about the enterprise–generally a domestic limited liability company operating in the largest business city.
According to the World Bank Group: "While Doing Business captures several important dimensions of the regulatory environment as they apply to local firms, it does not measure all aspects of the business environment that matter to firms and investors or that affect the competitiveness of an economy.
"For example, it does not measure security, macroeconomic stability, corruption, the skills of the labour force, the underlying strength of institutions, or the quality of infrastructure services (other than services related to trading across borders and getting electricity). Nor does it focus on regulations specific to foreign investment."
About the Doing Business report series
The annual World Bank Group flagship Doing Business report analyzes regulations that apply to an economy's businesses during their life cycle, including start-up and operations, trading across borders, paying taxes, and resolving insolvency.
The aggregate ease of doing business rankings are based on the distance to frontier scores for 10 topics and cover 189 economies. Doing Business does not measure all aspects of the business environment that matter to firms and investors.
For example, it does not measure the quality of fiscal management, other aspects of macroeconomic stability, the level of skills in the labor force, or the resilience of financial systems. Its findings have stimulated policy debates worldwide and enabled a growing body of research on how firm-level regulation relates to economic outcomes across economies.
Each year the report team works to improve the methodology and to enhance their data collection, analysis and output. The project has benefited from feedback from many stakeholders over the years. With a key goal to provide an objective basis for understanding and improving the local regulatory environment for business around the world, the project goes through rigorous reviews to ensure its quality and effectiveness.
This year's report marks the 12th edition of the global Doing Business report series.