Pacific Magazine > Magazine > September 1, 2006

Doing Business

Pacific Islands "Moving Sideways" In Business Index

Only FSM Improves

By Samantha Magick, Sydney

The World Bank's "Doing Business 2007" report has seen most Pacific Island countries "moving sideways" according to the Bank's Senior Investment Policy Officer, Alan Moody.

The Doing Business report measures the time and ease of operating a  business--from start up to potential bankruptcy--and stages in between such as registration, access to credit, registering property and labor regulation.

This year the report measured two main shifts for island nations.  The Federated States of Micronesia improved on two measures--albeit from a low base.

"There was the introduction of bankruptcy laws in Federated States of Micronesia, which makes the wheels of capitalism turn a little bit more easily," says Moody.

He says this means entrepreneurs can get back up and running in business if they wish, and a line can be drawn under the 'failed' business activity.

"The second thing was the abolition of minimum capital (to start a business)...and that is something that is hapenning across the world," Moody says.

Palau however has gone backwards, something the World Bank attributes to dual licensing requirements to start a new business, with the introduction of state licenses, alongside national ones. Moody says this can double the cost and time to start businesses.

Moody is hopeful the rating of Pacific Island economies will improve next year, pointing to reforms in Fiji and Solomon Islands' new foreign investment act and taxation measures as promising.

"Fiji is looking at computerising its business registration process, which will bring it down to a three day process which is in line with world standards."

"If you look at most indicators, some Pacific Island governments are doing very well," says Moody. "It shows these things are possible in the region."

Highlights of the Doing Business report: