Costa Rica and Jamaica are the biggest reformers in Latin America and the Caribbean, according to the World Bank Ease of Doing Business report released last week. These two tiny countries are among the economies that implemented at least three reforms during the past year.
Yet Mexico holds the top spot in the regional ranking and is number 38 globally, followed by Chile (48), Peru (50) and Colombia (54). But the success of Costa Rica and Jamaica is something unprecedented. The Central American country has leapt 21 places to be ranked 58th on the global ranking. Jamaica has decreased the time to incorporate a business from 15 to three days.
Thanks to reforms, paying taxes and getting electricity and credit is easier than ever before in Costa Rica and Jamaica. For example, now an entrepreneur in Costa Rica can get connected to the electrical grid in a span of just 45 days. A year ago, businesses took 55 days to get electricity connection.
And the Central American country made getting credit easier by adopting a new law on secured transactions, implementing a fully operational collateral registry, and allowing out-of-court enforcement.
Jamaica recorded four reforms. For example, it made dealing with construction permits easier by implementing a new workflow for processing building permit applications. Mexico and Peru were among the six economies in the region implementing multiple reforms in the past year.
The Washington-based bank said several economies in the region have also digitized procedures for trading across borders. Even Suriname implemented an automated system that allows the electronic submission of customs declarations and supporting documents for exports and imports.
Other large economies in the region and their rankings are Argentina (121), Brazil (116). Brazil, Guatemala and Bahamas also introduced or improved systems allowing electronic submission and processing of trade-related documents for exports, imports or both, the bank said.
But the region as a whole does not seem to have performed well. “Latin America and the Caribbean region had the smallest share of reforms, with less than half of the region’s 32 economies undertaking a total of 24 reforms,” says the report.
The area where the regional countries could improve the most is paying taxes, because the report says a local entrepreneur in the region spends 361 hours a year on average to prepare, file, and pay taxes, compared with 177 hours on average in OECD high-income economies.