92372 COUNTRY HIGHLIGHTS RUSSIAN FEDERATION 2012 The World Bank interviewed a representative sample of the private sector composed of 4220 business establishments during August 2011 and June 2012 across Russia. The Enterprise Survey covers several topics of the business environment as well as performance measures for each firm. Below are the main highlights from the survey. Firms in Russia exhibit robust and accelerating growth Comparing the performance of Russian firms in 10 2012 RUSSIAN FEDERATION ENTERPRISE SURVEY 2012 by sales, employment and labor 8 productivity growth with those of other percentage of annual growth 6 countries the results show that firms in Russia exhibited higher real annual sales and labor 4 productivity growth. The growth figures for 2 Russia 2012 are higher than those reported in a similar survey for Russia implemented in 2009, 0 Real annual sales growth Annual employment Annual labor productivity indicating an accelerated growth performance of -2 (%) growth (%) growth (%) the private sector in the country over the three -4 years. Russia 2012 Russia 2009 China 2012 All countries Firms in Russia show higher female participation in the workforce and top management, but less in ownership 70 Firms in Russia show higher female participation in 60 percentage of annual growth the workforce and top management compared to 50 those in other countries. However, Russian firms lag behind in terms of female participation in ownership. 40 Only about a quarter of the firms report female 30 participation in ownership, less than half the figure 20 for China. Although female participation in the 10 workforce and management slightly increased over 0 its 2009 level, female participation in ownership has Proportion of Permanent Percent of Firms With a Percent of Firms With Full-Time Workers that Female Top Manager Female Participation in declined over the three years period. are Female* Ownership Russia 2012 Russia 2009 China 2012 All countries Over one third of firms in Russia cite tax rates as the biggest obstacle to their growth O of Out f 15 areas of h b f the business i i environment, h the Tax rates private sector in Russia cites tax rates as the biggest Access to finance obstacle to its operations, followed by access to Corruption Political instability finance and corruption. Over 36% of firms in the Informal competitors country report tax rates as their biggest obstacle, Poorly educated workers Licensing and permits compared to just about 10% of firms in other Transport Access to land countries. For access to finance, 15 percent of the Customs & trade regulations firms in the country rank it as the biggest obstacle. Tax administration Electricity Over 8% of firms cite corruption is their biggest Crime, theft and disorder obstacle in the business environment. Courts Labor regulations 0% 10% 20% 30% 40% Percentage of firms Firms in Russia face higher costs of regulation compared to those in other countries 30 The cost of regulation, measured by senior Russia 2012 management’s time spent dealing with 25 Russia 2009 All countries government regulations, is higher in Russia compared to other countries. For an average 20 Cities in Russia Percentage firm, 15% of the senior management’s time is 15 consumed complying with regulations, considerably higher than the world average 10 but much lower than the one experienced by 2012 RUSSIAN FEDERATION ENTERPRISE SURVEY Russian firms in 2009. In 2012 there was also 5 large regional variation within Russia, with 0 regulation cost taking about 25% of senior managements’ time in some regions and nil in others. Firms in Russia face a relatively inefficient public service delivery 140 Obtaining key public services, such as import licenses, construction permits and electricity and 120 water connections is more difficult in Russia than 100 it is in other countries. An average firm in Russia 80 Days waits for over 4 months to secure a construction 60 permit, twice (four times) the figure for other 40 countries (China). The problem appears to have 20 worsened over the last 4 years, as delays in obtaining these services have increased compared 0 Obtainan import Obtain Delay in obtaining Delay in obtaining a to results reported in 2009. license construction-related an electrical water connections permit connection Russia 2012 Russia 2009 China 2012 All countries Not surprisingly, informal payments are indispensable to get some key public services Firms in Russia face a lower incidence and depth of 45 40 bribery compared to their counterparts in other 35 countries (although higher than firms in upper middle 30 Percentage income countries), and saw substantial improvement 25 over the 2009 level. Nevertheless, gifts and informal 20 15 payments are still indispensable to obtain key public 10 services – water and electric connections. Over 25% of 5 firms in Russia report that informal gifts are needed to 0 get electricity connections, about nine times the figure Bribery incidence Bribery depth Gifts expected to Gifts expected to get an electrical get a water reported for Upper Middle Income countries and connection connection slightly higher than in 2009 in Russia. Russia 2012 Russia 2009 Upper middle income All countries The Enterprise Analysis Unit is a joint World Bank and IFC team of economists, survey experts specialized in private sector development. Surveys implemented by the team reveal what businesses and firms experience across the world by interviewing representative samples of the formal, non-agricultural, non-extractive, private sector with 5 employees or more. The resulting globally comparable firm-level data is used to construct business environment indicators and measure firm performance. The findings and recommendations help policy makers identify, prioritize, and implement policy reforms that support efficient private economic activity. For more information on the survey visit http://www.enterprisesurveys.org Generated using Enterprise Survey data as of October 22, 2013