This article was published in The Malta Independent on Sunday 04 November 2012
The World Bank Group has just published a study ranking 185 world countries by the ease of doing business in their territory. Countries were judged as of June 2012 by ten criteria with equal weighting. These are the ease of starting a business, the efficiency of dealing with building permits, how difficult it is to get electricity supply, how smooth it is to register property, the access to bank credit, the protection of investors, payment of taxes, facility to trade across borders, effectiveness in enforcing contracts and the ability to resolve insolvency.
These are all basic criteria that any business large or small has to take into consideration and which influence investors where to locate their ventures to ensure they can make efficient use of their capital and that they can contribute to the growth of their business venture and to the well-being of society at large.
Probably I would have added at least another two criteria including the ease to travel around by public and private means during rush hours and reliability of essential services like energy and water.
Malta ranked very badly. We placed number 102 and behind all other European countries except Russia which ranked 112. Even Greece, a country corrupt to its inner bones, ranked ahead of us in the 78th place.
Coming to the individual criteria we performed very badly in the access to credit in the 176th place which is strange when our banking system has not experienced any crisis. In starting a business we ranked in the 150th place and dealing in construction permits we ranked 167th. Our best performance is the 27th place for paying taxes and 34th place for trading across borders.
This is nothing short of our being awarded a Master's, even conrorate in bureaucracy. If there is something this country needs to do to achieve economic growth without massive investment which impact negatively on the government fiscal position, that is purely and simply dismantling the suffocating bureaucracy. We have invested so much in IT without getting proper reward because we have failed to re-engineer the processes to maximise efficiency through the IT investments. Often we have overlaid the IT over the paperwork bureaucracy so basically to gain a service one needs to go through two processes not one, the IT process and the traditional paper process.
What this means is that government as the imposer of bureaucratic systems has not saved the expenses involved in the paper based traditional system so we have the worst of both worlds: we incurred substantial investment in IT but have not achieved savings by elimination of the traditional systems so that government is having to carry the operational cost of both systems.
I suspect that the ranking given to us by the World Bank Group is too bad to be true and one needs to study better the methodology used to ensure that we are not being disadvantaged. I find it hard to believe that we would rank relatively well in payment of taxes when tax evasion is still rampant and I trust that the index did not just a measure of the facility to make tax payments on line without measuring the fiscal morality and tax compliance in general of the country. Per contra I find it hard to believe that we rank so poorly in the access of credit when our banking system has not suffered any crisis and that Spain, Italy and Greece score better than us on this criterion when their banking system has practically been wiped away by the crisis.
Yet whilst it is quite possible that this Report does not do us justice still I have enough personal experience of suffocating bureaucracy which just leaves many breathless and without any incentive to take business initiative.
Let me recount two recent personal experiences. For a long time I have been entitled to receive free medicine to control cholesterol in the blood. Some time back I switched to the POYC system. Recently my doctor who controls my blood tests every so often suggested I change to new type of statins and arranged for me to procure a Consultant’s recipe based on the blood test to justify such switch of medicine.
After some time I received a note from the Government Pharmacy at St Luke’s that I am not entitled to have the new medicine under the POYC before I can produce a Consultant Certificate on a particular form so that the medicine recommended can be included in my yellow card. So I went back to the Consultant waited for so many hours at Mater Dei and then he suggested I go straight to St. Luke’s Pharmacy to have it sorted out. There was another forty five minutes wait at St Luke’s in the queue only to be informed that the form used by the Consultant is not the correct one as recently they had introduced a new form. So I was sent back to Mater Dei where I had to wait again for my turn and there was a telephone debate between the secretary of the Consultant and the person at government pharmacy about the correct form to be used.
When this was sorted out it was too late to go again to the St Luke’s Hospital Pharmacy so I had to try on another day until this could be sorted out and have the correct paperwork through which I gained the right to access the new medicine through the POYC. In the meantime for a month or so I had to buy the new medicine the doctor wanted me to switch to through full market pricing.
Can anyone please explain why with the sort of investments we have made in IT the Consultant cannot simply log on to my health records and attach his request/authority to the blood test and authorise the switch of medicine through the POYC on-line without the patient having to make all these rounds and without so many clerks filling this or that form?
Again last year I entered into a small business catering venture in a village core where I converted a family one room tenement into modern cafeteria. The process of getting MTA and MEPA permits took about two years which is not unusual and I had to pay contribution to the parking scheme. This venture was closed down in less than 12 months when I received a utility bill claiming EUR 15512 for 9 months.
I can work for no profit but such utility bills will put anyone deeply in the red, so I closed it down. On investigation it resulted I was charged at residential tariff rather than commercial retail tariff which makes a big difference as the residential tariff shoots up astronomically once a certain consumption level linked to personal use is exceeded. I explained this to ARMS and they sent me a request form to change the tariff but indicated this would only apply going forward not retroactively. I complained and said the application made was always for a commercial retail outlet and in any case the MEPA permit is for a retail outlet and normally ARMS do not install without MEPA clearance. In any case a one roomed tenement cannot be used for residential purposes and if it were so used the consumption would have been much less.
I was then asked to submit photos of the meter readings which I did and last June ARMS told me they have to send someone to inspect the meters on the spot. I told then it would be no problem and they can phone me to ensure that I go down to open the closed premises for their inspection. Nothing happened I was not contacted and busy as I am I forgot about it for a while. But just recently I applied for installation of meters at a new residence and after making all the paperwork and the substantial payments and started chasing to see when the installation was to be effected I was informed that before I settle the bill under protest they cannot provide the new service.
Do not such things drive you up the wall? Can’t ARMS have on line linkage with MEPA to get their clearance for the correct approved use of the premises without have to pass the consumer through the torture machine?
The only other thing that puts up my blood pressure more than this suffocating bureaucracy is when I am forced to spend an hour in bumper to bumper traffic because it would have drizzled or rained during the rush hour. Getting through traffic junctions like –L-iklin, Marsa and Kappara in such conditions is surely a stress even on healthy hearts. After having run up our national debt to atrocious levels we still do not have a road network worthy of a civilised country.
Incidentally the number one sport in the World Bank Report was clinched by the small island state of Singapore who recently also scored highly in business and innovation ranking by the World Economic Forum.
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