By NEIL HARTNELL
Tribune Business Editor
The Bahamas' chief WTO negotiator yesterday backed calls for "ease of business" reforms to move "a lot quicker", but reiterated this was no reason to delay the planned 2019 accession.
Raymond Winder told Tribune Business that obtaining full World Trade Organisation (WTO) membership needed to work in "parallel" with improving The Bahamas' business processes and systems, as the Government is doing.
He acknowledged that The Bahamas' "historical reluctance" to change, and eliminate bureaucracy and "red tape" through the use of technology, had sparked this week's International Monetary Fund (IMF) call for "decisive action" to tackle structural obstacles holding back economic growth.
But he rejected interpretations of the IMF's advice as suggesting that the Bahamas should delay WTO accession until it had improved its 'ease of doing business' and economic competitiveness, thereby better enabling domestic companies to match foreign rivals in a liberalised trading environment.
"We've got to get both these things done, not one before the other," Mr Winder, Deloitte & Touche (Bahamas) managing partner, said of the WTO and 'ease of business'.
"The Government recognises that this stuff needs to be done. That's why the Government, in parallel, is working on the 'ease of doing business'. It's not going as fast as we'd like to see it go, but it's on the agenda. That's happening; it's being worked on."
The Minnis administration has appointed an 'Ease of Doing Business' Committee, headed by Lynn Holowesko, to examine all the Bahamas' business processes and recommend reforms. Cabinet is reviewing their suggestions, and some changes are likely to be incorporated in the upcoming 2018-2019 Budget.
The IMF, in its recent Article IV report, warned that the Bahamas will not "reap the full benefits" of WTO membership unless it takes "bold action" to eliminate structural obstacles to growth.
It added that economic growth will remain "subdued" unless the Government moves decisively to address this nation's 'ease of doing business', energy, labour and credit market inefficiencies.
"Decisive structural reforms are needed to unlock growth, particularly as a gradual liberalisation of the economy advances," the IMF said, acknowledging the Minnis administration's efforts to deregulate through initiatives such as exchange control liberalisation, the Commercial Enterprises Act and the WTO accession process.
Yet it warned that the Bahamas will fail to maximise the benefits from such reforms, and be unable to achieve higher GDP growth rates, without addressing long-standing structural weaknesses and bottlenecks within its economic make-up.
"Staff stressed that these efforts should be complemented with bold action to put the public debt-to-GDP ratio on a downward trajectory, and to alleviate structural impediments to reap the full benefits from greater integration with the global economy," the IMF said.
"A more competitive economy would also facilitate a further strengthening of foreign reserve buffers...... Without bold action to tackle long-standing structural bottlenecks, medium-term growth would remain subdued."
Mr Winder, in response, told Tribune Business: "I do agree with the IMF that regardless of whether we're a member of the WTO or not, our economy is not going to reap the kind of investment it can.
"But nowhere does it say you must do this stuff before you join the WTO. The 'ease of business' is not a one-time thing. It's a continual process of being innovative and creative to improve the efficiency of doing business. There's not a point in time where you can say: 'I've got it; I can now rest on my laurels'."
Mr Winder said the Bahamas' satisfaction with the 'status quo' had allowed other nations to leapfrog it when it came to competitiveness and attracting investment, which was why this nation now had to enact far-reaching, swift reform that will prove uncomfortable for some.
"The IMF's point is that historically we've been so reluctant to move on these things, and do the structural reforms, that our economy has not grown because we've not done the ongoing work that helps the ease of business," he told Tribune Business.
"Because we've not been doing that, we need to take this bold action to catch up. The IMF does not say until you have completed this process, then join the WTO. That is incorrect. Structural reforms are an ongoing process.
"Every country, every day of the week, should be looking at structural reforms to encourage innovation and creativity, so we can improve the overall quality of doing business."
Mr Winder thus rejected the position taken by Robert Myers, the Organisation for Responsible Governance's (ORG) principal, who earlier this week argued that the IMF's report supported his calls to delay WTO until the 'ease of business' was improved.
The WTO chief negotiator, though, said he shared Mr Myers' frustrations that reform was not taking place "fast enough". "I agree with Robbie that it's not been done fast enough, and we need to get on with things a lot quicker," he told Tribune Business.
"We have no disagreement on that. The Government recognises that, and has put together a first-class committee to identify those areas and make it happen."