Dear Editor,
Jamaica's historic performance on the World Bank's Ease of Doing Business Index is being praised by the pundits. However, this success is attributed largely to the reform measures of the International Monetary Fund.
Within the past year, a number of pro-market laws were passed, including legislation relating to insolvency, the Security Interest in Personal Property Act, and the establishment of credit bureaux.
This year the World Bank applied a different methodology, by ranking countries on their distance to frontier score, that benchmarks economies to the global best practices in business regulation. In previous years, the average of each country's percentile rank in various areas, such as accessing credit, resolving insolvency and registering property, were calculated in order to determine a state's position. Based on the new measurement, it should not surprise anyone that Jamaica improved on the index, because it is expected that laws like the Security Interest in Personal Property Act (SIPP) will greatly facilitate businesses.
The rationale behind SIPP is that it will make it easier for businesses to access credit by broadening the base of assets that can be used for collateral. Contrary to what is being propagated in the media, the World Bank report does not actually measure the present state of business facilitation in Jamaica, but the possibility that it will become easier to do business in the future based on the reforms of the IMF.
Furthermore, it must be noted that a number of factors will influence a country's progress from the rule of law to innovation. For example, in the early years of the World Bank's publication, Jamaica occupied more favourable positions, yet the economy was not dynamic. However, China's performance has been less spectacular, but its growth rates have been more astonishing. The Doing Business Report is just another flawed ranking that does not determine a country's future. Additionally, members of this Administration should not take credit for the perceived improvements, because without the IMF they would not exist.
Lipton Matthews
lo_matthews@yahoo.com
Thank the IMF, not this Gov't
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Jamaica's historic performance on the World Bank's Ease of Doing Business Index is being praised by the pundits. However, this success is attributed largely to the reform measures of the International Monetary Fund.
Within the past year, a number of pro-market laws were passed, including legislation relating to insolvency, the Security Interest in Personal Property Act, and the establishment of credit bureaux.
This year the World Bank applied a different methodology, by ranking countries on their distance to frontier score, that benchmarks economies to the global best practices in business regulation. In previous years, the average of each country's percentile rank in various areas, such as accessing credit, resolving insolvency and registering property, were calculated in order to determine a state's position. Based on the new measurement, it should not surprise anyone that Jamaica improved on the index, because it is expected that laws like the Security Interest in Personal Property Act (SIPP) will greatly facilitate businesses.
The rationale behind SIPP is that it will make it easier for businesses to access credit by broadening the base of assets that can be used for collateral. Contrary to what is being propagated in the media, the World Bank report does not actually measure the present state of business facilitation in Jamaica, but the possibility that it will become easier to do business in the future based on the reforms of the IMF.
Furthermore, it must be noted that a number of factors will influence a country's progress from the rule of law to innovation. For example, in the early years of the World Bank's publication, Jamaica occupied more favourable positions, yet the economy was not dynamic. However, China's performance has been less spectacular, but its growth rates have been more astonishing. The Doing Business Report is just another flawed ranking that does not determine a country's future. Additionally, members of this Administration should not take credit for the perceived improvements, because without the IMF they would not exist.
Lipton Matthews
lo_matthews@yahoo.com
Thank the IMF, not this Gov't
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