Update Country Report Curaçao 13 Nov 2018

The latest Ease of Doing Business report, published annually by the World Bank, shows Caribbean countries continuing to perform relatively poorly. The highest-ranked country in the region, Puerto Rico, placed at 64th with Jamaica, the second-highest, placing 75th. At the other end, Haiti placed among the ten worst countries in the world. Most Caribbean countries registered only middling gains in their scores from last year, and some countries-such as Suriname or Guyana-actually saw their scores decline.

Within the Caribbean, Puerto Rico is the highest-ranked economy, although it is a significant number of places behind the US (which is in eighth place globally), of which is it a territory. Although Puerto Rico benefits from its association with the US through the US's legal system (giving it high scores for Getting Credit and Resolving Insolvency), it scored more poorly for Paying Taxes (where it ranks 162nd out of 190 countries in the world), and Registering Property (159th).

Jamaica is the largest independent country in the Caribbean to score reasonably well, ranked 75th in the world. However, this represents a five-place drop from last year's 2018 report, when it was ranked 70th. This year Jamaica scored particularly poorly in the Paying Taxes category (123rd), hindered by an onerous and bureaucratic process for registering and making tax payments. Jamaica also scored badly for Getting Electricity, ranked 115th in the world. Electricity supply is patchy across Jamaica, with many rural areas having limited access and frequent blackouts common even in main urban areas. Reliability of electricity supply is a key prerequisite for most businesses, and Jamaica's supply problems act as a deterrent to potential investors.

St Lucia, the Dominican Republic, and Trinidad and Tobago also ranked relatively well overall, at 93rd, 102nd and 105th respectively. Despite being one of the largest economies in the region and attracting rising foreign direct investment, the Dominican Republic's score dropped three places this year, from 99th in the 2018 report. Its score for Enforcing Contracts is particularly low, at 149th, indicating that investors may face an uncertain investment environment, especially when it comes to judicial recourse.

Trinidad and Tobago has also dropped three places in the rankings with low scores in several categories, such as Enforcing Contracts (174th), Paying Taxes (166th) and Registering Property (158th). As the economy is heavily dependent on its energy sector, maintaining foreign investment into the sector will be key to retaining high tax revenues from hydrocarbons production.

Challenges from the Bahamas

The Bahamas' ranking proved controversial: it was placed 118th in the 2019 report, up only one position from the previous year. Immediately after the World Bank's 2019 report was released, the chairman of the country's chamber of commerce, Michael Maura, released a statement claiming that World Bank officials had misrepresented the extent of changes to the rankings that should have been incorporated into the 2019 report. He claimed that World Bank officials had said that they would reduce the importing time metric used as a measurement in the Trading Across Borders category by nearly half, which could have had a positive impact on the country's overall ranking.

However, in the event, the Bahamas' Trading Across Borders score came in at 161st, down from 157th in 2018, a ranking that Mr Maura claimed did not reflect improvements made to import procedures at the Nassau Container Port. Such complaints reflect the importance of the Ease of Doing Business index as a globally comparative tool for potential investors; Mr Maura warned that investors might not recognise improvements that have been made in recent years.

Low scorers dominate in the ranking

Haiti remained the lowest scorer in the Caribbean, ranked 182nd out of 190 countries, one place down from 2018. This reflects the economy's major structural weaknesses, including poor infrastructure, particularly in terms of utility provision and transport networks. In addition, bureaucratic processes are lengthy and often costly, particularly for foreign investors looking to set up a business. Reflecting these weaknesses, Haiti's worst score is for Starting a Business, scoring 189th.

Ongoing political instability and the after-effects of several major natural disasters, most recently Hurricane Matthew in 2016, have hindered the efforts of successive governments to improve business processes and streamline procedures. The current president of Haiti, Jovenel Moïse, looks unlikely to shift this dynamic, with public protests having already derailed several of his efforts to introduce reforms that proved unpopular with the electorate.

Barbados' score improved three places in the 2019 index, rising to 129th. This is surprising given the island's current economic turmoil, with a rising fiscal deficit and falling revenues leading the new government of Mia Mottley to trigger debt restructuring negotiations with creditors in mid-2018. As a result, Barbados is now in selective default.

Barbados' rising score in spite of these challenges reflects the efforts made by Ms Mottley and her predecessor, Freundel Stuart, to increase the country's investment attractiveness as a means of stemming outflow of funds and attracting more investment. Although this strategy has as yet had a limited impact on levels of real GDP growth, it has achieved some progress in terms of streamlining bureaucracy and reducing red tape. One of the economy's best scores is for Resolving Insolvency (34th), reflecting a number of reforms. Nonetheless, the country's ranking remains well below the 116th place it achieved in 2016, indicating that the Mottley administration has some ground to make up.

Other poor performers in the region include Guyana and Suriname, which both saw their overall scores decline. The decline in Guyana was due to the length of time required to register a business and register construction permits (which can take up to 208 days). This led Guyana's ranking to fall from 126th in 2018 to 134th in the 2019 report. Suriname's score suffered from the difficulty of Starting a Business (182nd in the world), Getting Credit (178th) and Enforcing Contracts (187th). However, its overall ranking remain unchanged at 165th.

Outlook for the region poor without major reform

The Caribbean economies generally remain clustered in the bottom half of the global rankings, despite positive performances by outliers such as Jamaica. This reflects their general ranking as middle-income countries, but the relatively static scores in 2019 indicate that reform of business processes is not currently a priority for most of the economies, which could undermine their attractiveness as investment destinations over the medium term. This will need to change in future if the countries are to remain dynamic and competitive in the global economy.