An unabated murder toll and a high level of employee theft are being cited for Jamaica’s increasingly uncompetitive position in the global business arena.
Jamaica’s competitiveness was downgraded for the second year in a row by the World Economic Forum, dropping eight places to 86th on the Global Competitiveness Index in the 2008/2009 index published last week.
According to the World Economic Forum, crime and theft are the major problems facing businesses in Jamaica with 22.4 per cent of the respondents acknowledging that it is the major challenge.
Bureaucratic red tape followed crime as the second major threat to doing business in Jamaica.
Crime may come as no surprise, as Jamaica recorded its second-highest murder figures last year, with 1,611 people killed.
“Don’t ask me to grow an economy. Don’t ask me to grow investment and expand employment in an atmosphere where crime is posing such a deterrent to that process,” Karl Samuda, minister of industry, investment and commerce, told The Gleaner.
“If we do not address this fundamental as a matter of urgency, then the kind of reports and the ratings that we are seeing will not improve,” he added.
Samuda said many inner-city communities are robbing themselves of investment opportunities that can create employment for them and others as there is a capacity for business expansion, but violence keeps investors at bay.
“We are condemning perfectly decent communities to a life of poverty because you are intimidating investors from going in to invest,” Samuda continued.
While unable to provide figures to corroborate his position, Jamaica Employers’ Federation President Wayne Chen said employee theft was in fact high, and Jamaica lacked the systems and controls to properly arrest the issue.
Fraud was a major problem for the police last year as several businesses were swindled out of millions of dollars. Fraudsters scammed as much as US$2.5 million (J$212.5 million) last year.
“It is exacerbated by a higher level of tolerance of dishonesty and fraud and that makes it a little more difficult here,” Chen said. “Even at a higher level, I believe people commit crime with a level of impunity.”
Chief executive officer of Manpower Maintenance Services Limited, Audrey Hinchcliffe, also acknowledged the severity of the problem.
“People feel a sense of entitlement to enhance themselves by robbing the companies for which they work. If we should spend time to call in the police for every incident that we have, we wouldn’t have time to run our business!” she told The Gleaner yesterday.
She contended, however, that bureaucratic red tape was the biggest issue with which businesses have to contend.
In the Global Competitiveness Report, 12.5 per cent of businesses claimed that bureaucracy was the most problematic factor.
According to Hinchcliffe, private companies are often at the mercy of government agencies which are responsible for providing the certification and licences businesses need to conduct their operations legitimately.
The slow pace of many agencies is a hindrance to business in Jamaica, she argued.
“This business of private sector running things is not true, it is the public sector that runs things. We are at the behest of the public sector,” she said.
The former JEF head said the government agencies were not seized with the importance of facilitating anything, whether to create jobs or expand business.
Samuda shared Hinchcliffe’s views and noted that Government had engaged a team of experts from the World Bank to review business practices in Jamaica and overhaul some of the archaic procedures businesses contend with to pay taxes and ship and import goods.
“Time is not on the side of Jamaica, fundamental change is not something with which we can tarry. It has to be considered as a matter of urgency,” he said.
Faced with increasing public pressure last year, Government, proposed a slate of legislative measures to arrest the country’s crime epidemic, including a move to allow murder suspects detained for a maximum 60 days without charge.
Many of the proposals, which are still being considered by a joint select committee of parliament, have been met with harsh criticism from the Jamaican Bar Association and human-rights groups.
It is expected that the bills will be tabled next week, following a compromise on some of the measures.