The co-author of a World Bank report measuring the ease of business said The Bahamas is "falling behind" other countries in implementing meaningful reforms, with its recent drop in the rankings indicative of inaction.
Jean Michel-Lobet, a key figure behind "Doing Business 2013", told Guardian Business that the country is not falling because the government is taking negative actions. Instead, The Bahamas is simply being passed by other nations taking proactive steps to attract business.
The report, measuring 108 countries, placed the country in 77th place in the ease of doing business, declining more than six notches. The country suffered a particularly low grade in the categories "starting a business" and "dealing with construction permits".
"This low grade is a consequence of inaction," he told Guardian Business from Washington D.C.
"We see globally a clear trend to simplifiction, in terms of sophistication to start a business and make it easier and transparent, and the reduction in the cost to start a business. In The
Bahamas, you have to interact seven times with different administrations and spend 31 days to get a business licence. In Canada, for example, it takes one interaction and you receive a license in five days."
The grim assessment from the report's author paints a more vivid picture of the challenges facing the government and private sector. In fact, The Bahamas has fallen 25 places since 2009, plummeting from 55th place to 77.
While The Bahamas might be behind nations like Canada, what is particularly concerning to Michel-Lobet is the country's place among more equivalent nations. In other words, developing countries around the world are stepping up their game and improving the ease of doing business.
"The world is moving very fast. We have recorded 2,200 reforms. At least two-thirds were dealing with simplifiction and reducing the cost of business," he explained.
Michel-Lobet said The Bahamas is falling behind. He cited another example regarding the transfer of property. It now takes four interactions and 122 days, especially taking someone nearly half the year to receive a property title.
"That is too long," he said.
Economies that reform tend to enjoy economic properity, he added. Mexico and Columbia have made strides in recent years, he told Guardian Business. The result is a 5 percent increase in new companies, which means more jobs and wealth for the county's citizens.
"I would say, right now, The Bahamas' regulations are quite cumbersome and not aligned with international best practices," Michel-Lobet revealed.
Dionisio D'Aguilar, a former head of the Bahamas Chamber of Commerce, went so far as to say The Bahamas is "unfriendly" to business and in some respects "stuck in the 20th century".
Inflexible immigration laws, an onerous banking system and an out-dated judicial system are preventing the country from achieving its potential.
"We want foreign investors, but we don't trust them. We don't welcome people with open arms," D'Aguilar claimed. "It's a long and hard process to invest in this country. You could almost term it as unfriendly."
D'Aguilar, the president of Superwash and chairman of AML Foods, felt there are many factors that make The Bahamas an attractive place for business, such as proximity, its time zone and political stability.
But he told Guardian Business that the country must be careful and not display "arrogance".
He blasted the immigration laws, pointing out it takes far too long for foreign investors to get the assistance they need. D'Aguilar called the banking structure "onerous" and flooded with the need for too many documents and hoops to jump through.
And in terms of technology, The Bahamas "has a mindset that is too 20th century" in terms of government and business processes.
"The bureaucracy is too low and cumbersome. You have these bureaucrats that run it, but as much has politicians try, they slow it down too. The throw up barriers you don't see coming," he noted. "We will continue to slip until we get a grip. We are very arrogant and we're letting it slip away because we are not adjusting."
Steven Wrinkle, former president of the Bahamas Contractors Association (BCA), said the marked fall in the construction permits category stems from poor efficiency between departments and out-dated zoning techniques.
He identified a "tremendous grey area" in most communities on whether it is classified as commercial or residential, which leads to disputes and delays. In fact, Wrinkle told Guardian Business there is "no clearly defined database" for zoning, and what exists "has a lot of variation and inconsistencies".
The former BCA president noted how offices for construction permits do not enjoy synergy and close proximity to efficiently process requests.
Environmental services, required for plumbing permits, for example, is located somewhere else entirely from the Ministry of Works. This disconnect creates not only delays, but discrepancies and even lost paperwork as contractors seek approvals.
The Bahamas also fell three notches in both the "getting credit" and "protecting investors" categories. It actually improved by one notch in "paying taxes" and "enforcing contracts".

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