Vision Reporter
19 November 2007
Kampala — COMMONWEALTH countries have less than ideal scores on the critical areas of infrastructure, skills shortage, business friendly tax policies and corruption according to the latest survey by the Commonwealth Business Council.
The "Business Environment Survey 2007" listed these as the major impediments to an enhanced business environment, while noting that these issues were pronounced in the lesser developed countries than in the developed countries.
The report surveyed business peoples' perceptions on the respective countries business environments. The survey also noted that unlike the previous one that was conducted in 2005, limited capital flows was not a major issue,
"This appears to reflect enhanced global financial liquidity and freer movement of capital including into emerging markets and developing countries," the report said, but warned: "However, financial markets might tighten in the near future in response to turmoil experienced in mid 2007 as a result of the credit crunch."
In 2007, bad debts arising out of the US mortgage markets are expected to lead to tightening of credit as banks globally become more cautious in their lending policies.
Of the 33 countries surveyed the average score on infrastructure was below adequate. There were concerns about energy supplies, road and water availability but less so with Telecommunications, which sector has experienced a boom in recent years.
"Accelerating economic growth has added to strains on already creaking infrastructure. In contrast, those countries that have invested in infrastructure are reaping the benefits," the report said.
The report also noted that there was increased private sector involvement in infrastructure projects, "By the end of 20001, developing countries had received over $755b in private investment flows for nearly 2500 infrastructure projects."
There were startling revelations as to the levels of brain drain from lesser developed commonwealth countries to the richer members, further eroding the business environment.
"Some 1 million skilled persons from the world's LDCS lived and worked in developed countries in 2004, a brain drain of 15%... the LDCs most affected by brain drain are African LDCs, Haiti and some island LDCs," the report said quoting the UN Conference for Trade and Development. It says brain-drain from lesse developed members is expected to go on.
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