Thursday, July 16, 2015
By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Nearly one in five Bahamian companies feels they have to pay bribes to obtain crucial licences and permits, a report by development agencies finding this nation ranked worse than the Western Hemisphere average for corruption perceptions.
The recently-released Private Sector Assessment Report on the Bahamas said that “a large proportion of enterprises have experienced bribe requests” when it comes to obtaining approvals and permits from government agencies.
The report, a joint effort between the World Bank, Inter-American Development Bank and Caribbean development agencies, gave no specific examples to support this assertion, instead drawing on findings from a World Bank Enterprise survey of Bahamian businesses.
“Almost 20 per cent of the firms surveyed in the Bahamas felt that they were expected to give gifts to public officials ‘to get things done’ - a phrase that could cover a wide range of actions,” the Private Sector Assessment Report, published by Compete Caribbean, said.
“There are concerns about the lack of transparency and the prevalence of discretionary procedures for obtaining licences and permits.
“Perceptions regarding gifts given to obtain permits and licences in the Bahamas are roughly on a par with the global average. The Bahamas’ score is worse than the Latin American regional average or Trinidad and Tobago regarding the expectation of bribe payments to obtain construction permits and electricity and water connections.”
Perception often matters more than reality, and the fact the Bahamas is rated worse than many Latin American and Caribbean counterparts when it comes to corruption could turn-off foreign investment and harm this nation’s competitiveness.
The Private Sector Assessment Report, drawing on the World Bank’s survey of Bahamian businesses, found that at least 20 per cent of local companies claimed to have “experienced at least one bribe request” - the highest proportion among Caribbean nations, and slightly more than the global average.
However, conversely, the Bahamas had the smallest percentage of businesses who saw corruption “as a major threat”. The same result was also achieved when companies were asked if they viewed the Bahamian judicial system “as a major constraint”.
Breaking ‘bribery expectations’ down by permit, close to 25 per cent of Bahamian companies surveyed said they believed they would have to “gifts” to obtain a construction permit.
Near 20 per cent also expected to have to ‘pay’ for a Business Licence, with 15 per cent fearing they would have to do similar for electricity and water connections.
While the Bahamas’ rated worse than Antigua and Barbuda and Barbados, and was below the Latin American and Caribbean average for ‘corruption expectations’, it was ‘on a par’ with the World Bank’s global average.
And it fared much better than Jamaica, while Trinidad & Tobago also rated more poorly on Business and Import Licences.
Elsewhere, the Private Sector Assessment Report warned that the level of collateral demanded by lenders to Bahamian businesses was “substantial and prohibitive”.
“This may be a symptom of institutional limitations, such as a credit system that does not check the past creditworthiness of borrowers or effectively measure repayment risk,” the report said, pointing to the need for the Central Bank of the Bahamas’ proposed Credit Bureau.
“As a result, lending institutions lack specific information on the risks of financing ventures and are obliged to limit their exposure through high security requirements.
“The collateral required for business credit can reach 230 per cent of the value of the loan for small firms, while for mid-size companies it can reach 253 per cent, and for the largest it can be as high as 319 per cent.
“According to the [World Bank] Enterprise Surveys, the Bahamas has the highest collateral requirements as a percentage of loan value in the Latin American and Caribbean region.”
This, the Private Sector Assessment Report said, impacted small and medium-sized firms more than large Bahamian companies.
Just 1.9 per cent of large companies said access to finance was “a major obstacle”, but 12 per cent and 18 per cent of small and medium-sized firms, respectively, cited this as an issue.
“Financial issues impact firms differently at different points in their business cycles, and also depending on their size,” the Private Sector Assessment Report said.
“ There is a greater need for working capital for ongoing operations than for initial investments (large companies may not source the funds for initial investment locally).
“According to the World Bank’s surveys, only 30 per cent of all firms in the Bahamas use bank loans for working capital - one of the lowest ratios in any of the comparator countries.”
Apart from energy costs and reliability, and inadequate infrastructure, the Private Sector Assessment Report said workforce shortcomings were also cited as an issue by Bahamian businesses.
“Although labour market regulation and flexibility are not viewed as major constraints on the private sector..., firms cite the lack of skills, high wages and low productivity as concerns,” it added.
“According to surveyed stakeholders, the main skills that employers look for in potential employees are numeracy and literacy; personal traits such as responsibility, teamwork and good communication; and information technology (IT) skills.
“The lack of IT skills was highlighted by employers in financial services and insurance, while the tourism industry emphasised problems with numeracy and literacy. Due to the increasing importance of technology in numerous sectors, IT skills were mentioned across the board,” the Private Sector Assessment Report said.
“In the construction industry, companies pointed to the need for more trained air conditioning and refrigeration mechanics, electricians, carpenters, plumbers and pipe fitters, operators of heavy equipment, supervisors and construction managers, again commenting on the poor basic skills of potential workers.”
Comments
Economist says...
Emmm....don't see bribes as corruption?
Well, they do say that we Bahamians don't read....so that would explain why we don't know the meaning of the word corruption.....emmmm.
Posted 16 July 2015, 2:10 p.m. Suggest removal
TheMadHatter says...
Well, thank God it's only a "perception" - LOL.
Seriously, though, the article's suggestion that it could "harm this nation's foreign investment..." is just wrong. We still get lots of foreign investment - it's just that everyone has to realize that there are many out there who thrive in this kind of environment and are willing to engage like that. So, in a lot of cases - not all, we end up with "that kind" of investor.
So when you see so many "strange" things happening - they are not really strange at all, but should have been expected.
**TheMadHatter**
Posted 16 July 2015, 2:32 p.m. Suggest removal
GrassRoot says...
"Perception is reality".
Posted 17 July 2015, 12:26 p.m. Suggest removal
newcitizen says...
This type of activity does so much harm to the Bahamian society as a whole. It seems to be commonly accepted to 'buy lunch' for a quick turn around in many government offices. This action only benefits the person paying, and the person receiving, and negatively affects everyone else. Everyone else who is in the queue, be it for licences, passports, permits, now gets pushed back in the line as the lunch buyer is dealt with. This continues as until things get so backed up that you have no choice but to engage in it yourself. It makes things so inefficient as a whole, it slows down everything in this country when we need to be speeding up and becoming more efficient to survive in the global market today. And in the end it hurts most the people who can least afford it, the people who cannot buy lunch because they do not have the means. They are left out in the cold as they continue to be bypassed by those willing to play the game. It produces a distrust between the government service providers and the rest of the population and leave a feeling of being taken advantage of and feeling helpless but to join in.
In every way, even at the smallest level, this type of corruption is a poison to society and only harms us all as a whole.
Posted 16 July 2015, 3:08 p.m. Suggest removal
GrassRoot says...
how about buying tickets for cook-outs? When I applied for my first drivers license, I was asked into the supervisors' office. The supervisor said, that he is going on vacation now - reading the newspaper - and she would issue the drivers license only after her vacation. I basically told her to stick it somewhere, paid 10 dollars to someone else and got my license. next: I applied for a police certificate (back at the Lyford Cay police station), when picking up, the Officer in Charge said, that he would appreciate a contribution to his "gas fund" as he had to drive to pick up the certificate. I asked him, whether this was mandatory, he said, NO, but "considerate people give something". This is whats wrong in our country. People in these jobs get paid. If they decide to become coin operated, they need to be retired. I decided not to pursue those cases, as I bet the amount of bribe to get something done increases with the ranking of the person within the administration. Where are the unions when it comes down to corruption? Our country is corrupt to the bone.
Posted 17 July 2015, 12:31 p.m. Suggest removal
Franklyn says...
...emmm
Posted 16 July 2015, 3:40 p.m. Suggest removal
asiseeit says...
This report only scratches the surface, just like that report from the fools at Transparency International. Corruption in this country is DEEP. We all know how it works but those that play the game also know if they raise a stink their goose is cooked. So at dinner party's and at social functions the truth is whispered so as to not knock over the apple cart. !0% kickbacks are fact, stolen business idea's are a fact, BEC grease to get connected happens all the time, building inspectors get greased daily, and the list goes on. If the true amount of corruption in this country was to come to light even the corrupt would be ashamed.
Posted 16 July 2015, 4:05 p.m. Suggest removal
sansoucireader says...
Not good, not good at all.
Posted 16 July 2015, 4:34 p.m. Suggest removal
Well_mudda_take_sic says...
Small wonder the Chinese have washed up on our shores in a big way in recent years.....they know just who they can buy having done it over and over again in many cash strapped countries in Africa! The Christie-led PLP government undoubtedly proved to be an easy mark for the ruthless Chinese who know just what they need to do to get their way. That sports stadium has cost the Bahamian people more than they can ever imagine!
Posted 16 July 2015, 4:40 p.m. Suggest removal
Reality_Check says...
Not to mention what it has cost a foreign investor like Sarkis Izmirlian trying to do good by most Bahamians as well as his family name. Poor guy just naively or foolishly believed the Bahamian government would have his back as the principal developer behind the largest single phase FDI project ever undertaken in the Bahamas. But low and behold, the Christie-led PLP government ends up being rightfully forced to show that it is wrongfully beholden to the Chinese general contractor (CCA) and Chinese lender (CEXIMB) involved with the Baha Mar project. And most of us Bahamians with an inkling of knowledge about the inner workings of the Christie-led PLP government sadly understand why the likes of Christie, Maynard-Gibson, Gomez, Davies and Wilchcombe have sided with CCA and CEXIMB against Baha Mar and the Bahamian people.
Posted 16 July 2015, 8:38 p.m. Suggest removal
Well_mudda_take_sic says...
It's the same reason these corrupt politicians sided with the numbers bosses against the wishes of the Bahamian people, wishes which were clearly expressed by the outcome of a duly held national referendum paid for from the public purse!
Posted 17 July 2015, 3:25 p.m. Suggest removal
sheeprunner12 says...
Bahamians do not need to have foreigners come in here and research corruption in government ..... we live it daily ............... KB song says ........ "tip,tip,tip everyone want tip"
Posted 17 July 2015, 10:19 a.m. Suggest removal
akbar says...
The last part of the story is also quite troubling in respect to this technological age. The fact that there is a lack of persons with IT skills. A few years ago I happen to be at an opening of an Apple store in the US and was taken aback by the setup and a thought dawned on me that the Bahamas is getting left behind in the IT field. Bahamians think once the can operate a smartphone, navigate Facebook, or gamble online they are tech savvy. But there is something deeper. There are very few tech firms here and very few businesses seem to be update with the tech way of business. Our government institutions are prime examples still writing up things and the recent chaos at the Passport office. While these and other businesses need to update themselves my question is where are the tech firms that can assist with them?
I remember at one point when every graduating student wanted to study something in the computer science field. Where are they now? Was the employment environment here not conducive to pursue an IT career? Did they abandon their studies or just did not return home if they studied abroad.
Yes tourism is our number one industry but have we over pursued it to the detriment of other industries such as the IT industry?
We need to wake up and wake up fast.
Posted 18 July 2015, 12:42 p.m. Suggest removal
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