Doing business the New Zealand way - First of a two-part series
published: Thursday | October 14, 2004

Martin Henry

NEW ZEALAND leads the world in ease of doing business. This according to the World Bank/International Finance Corporation report 'Doing Business in 2005: Removing Obstacles to Growth'. Other little places on the top 20 list include the no-surprise Singapore and Hong Kong, and the surprise Lithuania, Ireland and Botswana.

The report covers 145 countries and governments have been requesting that their countries be included, 13 since last year when Jamaica was listed in the top ten. So there seems to be something to the report which ranks countries by the ease of doing business indicators of: starting a business, hiring and firing workers, enforcing contracts, getting credit, registering property, protecting investors and closing a business.

OBSTACLES TO GROWTH

In general, the 'Doing Business' report does not have good news about developing countries: Their administrative "obstacles to growth" make it twice as hard than more developed nations for entrepreneurs to start, operate, or close a business. Their businesses have less than half the property rights protections available to their counterparts in highly developed countries. The stats could frighten you: While, on average, it takes a new business in the developed countries six steps, eight per cent of income per capita, and 27 days to get started, in a less developed country getting up and running could take 11 steps, 122 per cent of income per capita and 59 days. Those are just global averages.

Jamaica has done pretty well in creating a business-friendly legal and regulatory environment by the World Bank criteria. If only we could get the big anti-business factors like crime and violence, work attitudes, skills training and retention, and the tax and debt burdens under control. Several of the top business-friendly countries, by the way, are net importers of labour as growth pulls in migrant workers. The United States, Canada and the United Kingdom we know well. We go there in droves to work at both the low end and the high end of their economies. If we weren't exporting doctors, nurses and teachers there would be an oversupply here in this poor growth/no growth economy. And those countries can't get enough of them.

The US has had to aggressively expand quotas for highly skilled workers in IT and other areas. Canada is selectively poaching skills from other countries through its immigration policy. What may be less well known is that Ireland, the traditional European exporter of labour, is now a net importer. We have skilled people in labour-importing Botswana. And the Scandinavian countries and Australia are pulling in quite a bit of non-white labour.

MORE SKILLED LABOUR

While unemployment is high here, interestingly, Jamaica is also pulling in more skilled labour in some critical areas, creating some disquiet over losing jobs to foreigners. New Zealand wasn't always such an investment and business friendly place. Government itself can be the biggest obstacle in getting business done. And government was getting in the way in New Zealand. Imprimis, the monthly speech digest magazine of Hillsdale College (USA), April 2004, carried Maurice McTigue, giving his version of how New Zealand got back on track. McTigue is a former Minister of Government in New Zealand going through multiple portfolios, ambassador, and now a distinguished visiting scholar at George Mason University in the US. In the 1950s the per capita income of New Zealand was number three in the world behind only Canada and the United States.

Martin Henry is a communication specialist.