Cost of Doing Business in the Pacific: Enabling the Local Economy Pacific Local Government Forum

1. Cost of Doing Business in the Pacific: Enabling the Local Economy Pacific Local Government Forum Port Moresby, PNG 20-21 May 2014 Henry Sanday Suva, Fiji hesanday@gmail.com

2. Outline of Presentation • Motivation • Power & Influence of Local Governments • Doing Business Rankings • Regulations for Starting a Business • Formal sector • Informal sector • Key Issues • Suggested Way Forward

3. Motivation • Recurring Donor/Govt concern on difficulties with doing business • PLGF 2010:LG economic strategies to provide for ”enabling conducive business environments through effective planning, regulation and service delivery” • PIPSO (2012):“high level of bureaucracy in companies registration and local government business licences” • PIC Development Plans: commitments to create an enabling national policy climate supportive of private sector-led growth • World Bank: deteriorating DB regulatory rankings since 2006 • PROBLEM? Rising cost of domestic bureaucracy at LG level

4. Power & Influence of Local Governments “The firestorm in the Middle East was sparked by a single act of protest: Muhammad Bouazizi, a young Tunisian fruit seller, set himself on fire when municipal inspectors made it impossible for him to eke out a modest living. He later died of his injuries.” Source: The Economist, 26 February 2011, p.60

5. Doing Business Rankings, 2006 & 2014Source: World Bank (2014) www.doingbusiness.org 2006 (of 175) Fiji 29 Samoa 36 Tonga 46 PNG 53 Vanuatu 54 Palau 57 Kiribati 58 Sol Is 61 RMI 86 FSM 105 2014 (of 189) Tonga 46 Samoa 61 Fiji 62 Vanuatu 74 Sol Is 97 Palau 100 PNG 113 RMI 114 Kiribati 122 FSM 156

6. Performance of PICs in Starting a Business, 2014Source: World Bank Doing Business 2014, www.doingbusiness.org

7. Reforms to Starting a BusinessSource: World Bank Doing Business 2014, www.doingbusiness.org

8. Starting a Business, Suva, FIJI, 2014(Source: Doing Business 2014 Report, www.doingbusiness.org)

9. SCC Business Licence Requirements, 2014Source: www.suvacity.org • Completed application form: SCC, Victoria Parade • Company registration certificate: Companies Office, Victoria Parade • Investment Fiji certificate (if foreign-owned): Investment Fiji, Victoria Parade • Tax registration certificate: FRCA, Queen Elizabeth Drive, Nasese • Health licence (if applicable): Min. of Health, Toorak • Name, contacts & photos of Directors/Owners: Applicant • Landlord’s consent letter (if renting): Applicant & Landlord • Liquor licence (if applicable): Min. of Justice, Victoria Parade • Fire compliance certificate: National Fire Authority, Argo St, Walu Bay • Occupational health & safety certificate: Min. of Labour, Civic House (behind SCC) • Building completion certificate: SCC, Victoria Parade • Environment certificate (if applicable): Environment Dept, Raojibhai Patel St • Processing fees ($23.00): SCC, Victoria Parade Applicants to submit completed form + 2 copies of each licence & certificate Comparison of Licensing Categories & Fees Suva City: 390 licence categories; fees FJD4.61 - FJD4,603.50 Lae City: 49 categories; 107 licences; fees PGK106 – PGK5,000 (Source: Lae Chamber) Honiara City: 172 categories; fees SBD116 - SBD116,000 (Source: Honiara City Council)

10. SCC Hawkers Licence Requirements, 2014Source: www.suvacity.org APPLICATION FOR HAWKERS / STREET TRADERS PERMIT UNDER THE SUVA AREA [HAWKERS AND STREET TRADERS] BY – LAW, 1997 Name of Applicant: Mr / Mrs / Miss: _____________________________________________ Fathers Name: _______________________________________________________________ Occupation of Applicant: _______________________________________________________ Parents Occupation: ___________________________________________________________ Residential Address H/ N ____________________________ Street / Road: ________________ Ward: ___________________________________________ (For Suva Residents) City or Town: _____________________________________ Postal Address: _______________________________________________________________ Phone Number: ___________________________________ Last License Number: ______________________________Expiry Date: ___________________ Do you or any members of your family operate any stall in Suva Market, Curio And or Handicraft Centre or a street trader’s pitch or any other Hawkers License If yes, Please give details ________________________________________________________________________________ Type Of Goods/ Products to be sold : __________________________________________________ ________________________________________________________________________________ WITNESS: NAME: ______________________________________ ADDRESS: ____________________________________ PHONE CONTACT: ___________________ SIGNATURE: _________________________ {SIGNATURE OF APPLICANT}__________________________ {DATE}___________________ REQUIREMENTS **2 Passport photo **2 copies of suppliers letter **2 copies of TIN Registration letter **2 copies of HEALTH License **2 copies of consent Letter

11. FOR OFFICIAL USE ONLY A. Business License Section New Application / Renewal: _________________________________________________________________ Method of Business Operation: Street Trader: Hand cart or Table / Hawker: in box, Basket or tray, Carried or borne by hawker in box, Bicycle, motor Vehicle, or other type of conveyance herein specified_____________ Location of Business Operation: ______________________________________________________________ B. Administration Department Comments by Enforcement Officer: ___________________________________________________________ ________________________________________________________________________________________ Comments By Admin Department (if applicable)_________________________________________________ ________________________________________________________________________________________ Approved/Not Approved Director Admin/Operation:______________________________________________ C. Health Department Health requirements checked and remarks below: ________________________________________________________________________________________ Date: _____________ Designation: ___________________ Signature: _______________________________ Approved / Not Approved Director Health: _____________________________________________________ D. Engineering Department Requirements checked and remarks below: ________________________________________________________________________________________ Date: _____________ Designation: _______________ Signature: ___________________________________ Approved / Not Approved Director Engineers: ___________________________________________________ E. Finance Department Remarks of Business License Officer: __________________________________________________________ ______________________________________________________________________________ Approved / Not Approved Director Finance: ____________________________________

12. Key Issues • Capacity constraints & internal/external delays • National vs. Local Government regulations • DB rankings important but actual reforms to improve regulatory services more important • Excessive red tape at LG level • LG-Regulator & LG-Private Sector disconnects • New fees & regulations without consultation • Non-availability /different forms of authorities • Informal sector issues

13. Suggested Way Forward • LGs: to be empowered & adequately resourced • One-stop information centres • Standardised application forms 2. Regulatory reforms: • Local/National Govt consistency • Combined regulatory functions & extended times 3. Informal sector: need voice & empowerment 4. LG Dialogue with Regulators, Formal/Informal sectors Partners: LGs, LGA, National Govts, CLGF Pacific & Donors

14. The high cost of doing business, in both the formal and informal sectors, is an area requiring attention, not only at National Government level but also at LOCAL GOVERNMENT level.

15. Vinaka vakalevu