57166 The World Bank Group BEEPS At-A-Glance 2008 Cross Country Report January 2010 1 Table of Contents Introduction…………………………………………………………………………………………. 3 Sample Summary………………………………………………………………………….………. 4 1. Problems Doing Business…………………………………………………………….……….. 6 Problems Doing Business: Ranking of Problems 2008 ……………………………… 6 Problems Doing Business: Ranking of Problems 2005……………………………… 7 2. Unofficial Payments and Corruption………………………………………………….………. 8 Corruption: Not a Problem Doing Business…………………………………………… 8 Bribe Frequency………………………………………………………………………….. 9 Bribe Tax: Reports of Unofficial Payments……………………………………………. 10 Bribe Tax – All Firms…………………………………………………………………….. 11 Unofficial Payments: Taxes……………………………………………………………... 12 Unofficial Payments: Customs………………………………………………………….. 13 Unofficial Payments: Courts…………………………………………………………….. 14 Unofficial Payments: Government Contracts – All Firms……………………………. 15 3. Crime………………………………….………………………………………………... .………. 16 Crime: Not a Problem Doing Business….…………………………………………….. 16 Payments for Security…………………………………………………………………… 17 Security Costs – All Firms………………………………………………………………. 18 Losses as a Consequence of Crime…………………………………………………… 19 Losses as a Consequence of Crime: Percentage of Annual Sales – All Firms…… 20 4. Regulations and Red Tape…..…….……………………………………………….....………. 21 Business Licensing: Not a Problem Doing Business………………………………… 21 Time Tax – All Firms…………………………………………………………………….. 22 Access to Land: Not a Problem Doing Business…………………………………….. 23 5. Customs and Cross Border Trade…….……………………………………………………… 24 Customs Regulations: Not a Problem Doing Business……………………………… 24 Direct Exports – All Firms……………………………………………………………….. 25 6. Taxation………………………………….……………………………………………………… 26 Tax Rates: Not a Problem Doing Business….……………………………………….. 26 Tax Administration: Not a Problem Doing Business….……………………………… 27 Tax Inspections…………………………………………………………………………... 28 Frequency of Tax Inspections…………………………………………………………... 29 7. Labor and Workforce Development…….…………………………………………….………. 30 Labor Regulations: Not a Problem Doing Business….………………………………. 30 Skills and Education of Workers: Not a Problem Doing Business………………….. 31 Professionalism of Labor……………………………………………………………….. 32 Percent of Employees Trained: Production…………………………………………… 33 Percent of Employees Trained: Non-Production……………………………………… 34 BEEPS-at-a-Glance Cross Country Report 2 Table of Contents - Continued 8. Firm Financing………………………….……………………………………………....………. 35 Access to Financing: Not a Problem Doing Business….…………………………….. 35 Adequacy of Firm Finances…………………………………………………………….. 36 Purchasing on Credit…………………………………………………………………….. 37 Purchases Made on Credit – All Firms………………………………………………… 38 Credit Extensions to Clients – All Firms……………………………………………….. 39 Sources of Financing: Borrowing from Private Banks……………………………….. 40 Sources of Financing: Borrowing from State-Owned Banks………………………… 41 Sources of Financing: Trade Credit from Suppliers or Customers …………………. 42 Loan Applications: Application Procedures are too Complex……………………….. 43 Loan Applications: Unfavorable Interest Rates……………………………………….. 44 Loan Applications: Collateral Requirements………………………………………….. 45 9. Legal and Judicial Issues….…….…………………………………………………………….. 46 Courts: Not a Problem Doing Business….…………………………………………….. 46 Use of Courts…………………………………………………………………………….. 47 10. Infrastructure…………………………….…………………………………………………….. 48 Electricity: Not a Problem Doing Business….………………………………………… 48 Experienced Power Outages…………………………………………………………… 49 Sales Lost Due to Power Outages…………………………………………………….. 50 Telecommunications: Not a Problem Doing Business……………………………….. 51 Use of Email Communication…………………………………………………………… 52 Transport: Not a Problem Doing Business….………………………………………… 53 11. Innovation………………………….…….…………………………………………………….. 54 New Product/Service Development……………………………………………………. 54 Research and Development Activities…………………………….…………………… 55 Factors Affecting Innovation: Domestic Competitors………………………………… 56 Factors Affecting Innovation: Foreign Competitors ………………………..………… 57 Factors Affecting Innovation: Customers……………………………………………… 58 Annex I: Problems Doing Business Percentage Changes and Statistical Significance….. 50 Annex II: Methodological Notes…………………………………………………………………. 60 BEEPS-at-a-Glance Cross Country Report 3 Introduction Introduction have changes in wording and/or response options and thus The EBRD-World Bank Business Environment and are limited in their comparability. BEEPS at-a-Glance is Enterprise Performance Survey (BEEPS) is a joint initiative dedicated to questions that are at least partially of the European Bank for Reconstruction and Development comparable across periods. The Annex to the BEEPS at-a- and the World Bank. The BEEPS has been carried out in Glance document provides additional information on the four rounds: in 1999, 2002, 2005, and 2008 and covers comparability of indicators, specific differences and virtually all of the countries of Central and Eastern Europe methods of calculation. and the former Soviet Union, as well as Turkey. The BEEPS covers a broad range of issues about the business The Sampling Frame and Sampling Methodology environment, and this note presents some simple indicators The sampling frame and sampling methodology were for key areas. modified between the 2005 and 2008 cycles. The latter round utilized stratified random sampling, while the earlier round used simple random sampling supplemented in Notice of Caution some cases by elements of quota sampling. Steps have The BEEPS questionnaire and sampling methodology were been taken to match 2005 and 2008 sample frames as modified between the 2005 and 2008 cycles (see below). closely as possible. These steps filtered out a number of While steps have been taken to mitigate these changes observations for each country based on firm size, age, and produce results comparable across periods, all cross- primary area of activity, and ownership of the firm. The period comparisons should be considered illustrative and steps may also result in different values for specific care should be taken when interpreting changes over time. indicators shown in earlier releases of the BEEPS-at-a- Glance (e.g. in 2005-06). Care should be taken when Warning on Albania and Croatia: For Albania and Croatia, comparing current results to earlier versions of BEEPS-at- two datasets were used for analysis. The 2008 values a-Glance. presented for Albania and Croatia for charts marked with a 3 ( ) reflect data from the 2007 Enterprise Survey. ECA and the South Eastern Europe (SEE) sub-regional average values for these indicators also include the 2007 Enterprise Survey values for Albania and Croatia. All other 2008 Data Notes values reflect data from the 2008 BEEPS survey. Two  This note focuses exclusively on the Main BEEPS datasets were used due to a small universe of firms in questionnaires for 2005 and 2008 and presents simple these countries and survey fatigue. Some firms were re- averages over all firms with non-missing data. interviewed in 2008 using a shorter questionnaire. The data  Many apparent changes over time may not be from the 2007 Enterprise Survey covers fiscal year 2006, statistically significant. whereas the 2008 BEEPS survey covers fiscal year 2007.  See the Annex for descriptions and definitions of the Caution must be taken when interpreting these values. regional and sub-regional comparators. When comparing these values to other country values, keep in mind these values capture a different fiscal year than other ECA countries. Citation Many quantitative indicators from the 2005 BEEPS survey Please refer to the data in all uses as the ―EBRD-World cover fiscal year 2004, while the 2008 BEEPS survey cover Bank Business Environment and Enterprise Performance fiscal year 2007. Other questions pertain to the firms’ most Survey (BEEPS)‖. Standard practice is to use this lengthy recent experiences. Caution must be taken when citation the first time the BEEPS is referenced in the interpreting these values. See the Annex for more document and the shorthand ―BEEPS‖ thereafter. information on specific indicators. The Instrument Some questions used in the 2005 questionnaire and present in prior versions of BEEPS at-a-Glance were dropped from the survey. Some new questions were added to the 2008 questionnaire. In some cases, the questions were modified in terms of wording or response options, thus care should be taken in comparing the results. For easy identification, charts marked with an asterisk (*) represent questions that are identical in question wording and response options. Charts marked with two asterisks (**) represent questions addressing the same issue but BEEPS-at-a-Glance Cross Country Report 4 Sample Summary The sampling approach used in 2008 differs from that of prior years 1999, 2002, and 2005 in several ways. In order to improve comparability, the 2005 sample was modified to match the 2008 sample as closely as possible. • Sampling Methodology: The sampling methodology was modified between the 2005 and 2008 cycles. The 2008 round utilized stratified random sampling, while the 2005 round used simple random sampling supplemented in some cases by elements of quota sampling. • Sampling Frame: • Sector: the sectoral composition of the sample changed from 2005 to 2008. A number of manufacturing and service sectors were excluded from the 2008 sample. The 2005 sample was modified to exclude firms in certain sectors (e.g. mining and quarrying) to best match the 2008 sample. • Size: the 2005 sample included firms with two or more employees, in 2008 the firm si ze strata changed to include only firms with five or more employees. In both cycles, a panel component included firms with less than five employees. The samples in both 2005 and 2008 were modified to exclude firms with less than 5 employees. In both cycles, firms with over ten-thousand employees were excluded. • Ownership: the 2005 sample included firms that were one hundred percent state owned. In 2008, one hundred percent state owned firms were excluded from the sample. Firms that were one hundred percent state owned were excluded from the 2005 sample. • Age: the 2005 sample included firms that had been operating for three years or more. Firms that were established after 2006 were excluded from the 2008 sample. These changes limit the direct comparability of the samples between 2008 and earlier rounds of BEEPS. The table below shows the transformations and subsequent changes in sample sizes. 2005 Sample for All Countries 2008 Sample for All Countries Total Total Firms Total Firms Firms Excluded Percent of Reduced Total Firms Excluded Percent Reduced Dates of Data Surveyed (Size, Sector Firms Sample Surveyed in (Size and of Firms Sample Collection Country in 2005 and Ownership) Excluded Size 2008 Age) Excluded Size 2008/2009 Albania1 204 50 24.5 154 304 1 0.3 303 12/2007-3/2008 Armenia 351 79 22.5 272 374 52 13.9 322 10/2008 - 2/2009 Azerbaijan 350 63 18.0 287 380 25 6.6 355 9/2008 - 2/2009 Belarus 325 116 35.7 209 273 9 3.3 264 5/2008 - 8/2008 Bosnia and Herzegovina 200 56 28.0 144 361 26 7.2 335 9/2008 - 3/2009 Bulgaria 300 138 46.0 162 288 37 12.9 251 9/2008 - 12/2008 Croatia2 236 88 37.3 148 633 3 0.5 630 1/2007-12/2007 Czech Rep. 343 176 51.3 167 250 20 8.0 230 9/2008 - 3/2009 Estonia 219 91 41.6 128 273 7 2.6 266 4/2008 - 10/2008 FYR Macedonia 200 88 44.0 112 366 40 10.9 326 9/2008 - 1/2009 Georgia 200 90 45.0 110 373 19 5.1 354 4/2008 - 8/2008 Hungary 610 170 27.9 440 291 22 7.6 269 8/2008 - 2/2009 Kazakhstan 585 150 25.6 435 544 44 8.1 500 9/2008 - 1/2009 Kyrgyz Rep. 202 60 29.7 142 235 16 6.8 219 9/2008 - 3/2009 Latvia 205 100 48.8 105 271 19 7.0 252 9/2008 - 10/2008 Lithuania 205 76 37.1 129 276 23 8.3 253 9/2008 - 3/2009 Moldova 350 71 20.3 279 363 39 10.7 324 9/2008 - 2/2009 Poland 975 447 45.9 528 455 36 7.9 419 8/2008 - 3/2009 Romania 600 145 24.2 455 541 38 7.0 503 9/2008 - 12/2008 Russia 601 209 34.8 392 1004 35 3.5 969 9/2008 - 3/2009 Serbia 282 139 49.3 148 388 35 9.0 353 9/2008 - 12/2008 Slovak Rep. 220 110 50.0 110 275 27 9.8 248 9/2008 - 3/2009 Slovenia 223 110 49.3 113 276 17 6.2 259 9/2008 - 3/2009 Tajikistan 200 66 33.0 134 360 38 10.6 322 5/2008 - 8/2008 Turkey 557 183 32.9 374 1152 27 2.3 1125 4/2008 - 1/2009 Ukraine 594 238 40.1 356 851 46 5.4 805 6/2008 - 8-2008 Uzbekistan 300 98 32.7 202 366 3 0.8 363 4/2008 - 8/2008 Kosovo* 270 12 4.4 258 10/2008 - 2/2009 Montenegro* 116 5 4.3 111 9/2008 - 2/2009 Total 9637 3407 35.4 6235 11909 721 6.1 11188 *Kosovo and Montenegro were included in the 2008 cycle. 1 The Albania BEEPS 2008 dataset consisted of a total of 175 firms. Seven firms (4.0 % of the sample) were excluded on the basis of size and age. The reduced sample size was 168 firms. The dates of data collection for Albania for 2008/2009 were from 10/2008 to 2/2009. 2 The Croatia BEEPS 2008 dataset consisted of a total of 159 firms. Seventeen firms (10.7% of the sample) were excluded on the basis of size and age. The reduced sample size was 142 firms. The dates of data collection for Croatia for 2008/2009 were from 9/2008 to 3/2009. BEEPS-at-a-Glance Cross Country Report 5 Sample Summary 2005 Sample for ECA Other Svc Transport 1% 7% Construction 12% Hotels/Rest 6% Manufacturing 49% W&R 25% 2008 Sample for ECA Other Svc 4% Transport 5% Construction 8% Hotels/Rest 3% Manufacturing 48% W&R 32% Title 2005 Sample Description 2008 Sample Description Construction Construction Construction Hotels/Rest Hotels and restaurants Hotels and restaurants Manufacturing Manufacturing Food, Textiles, Garments, Plastics and rubber, Chemicals, Non- metallic mineral products, Basic metals, Metal fabrication, Machinery and equipment, Electronics, Other manufacturing W&R Wholesale and retail trade Wholesale, Retail Transport Transport, storage and communication Transport, storage and communication Other Svc Other services Other services, IT The above charts are graphical representations of the modified samples for 2005 and 2008. BEEPS-at-a-Glance Cross Country Report 6 1. Problems Doing Business 1.1: Problems Doing Business: Ranking of Problems 2008 Ranks of problems by country measured by mean score. The most severe problem ranks number 1, the least 14. Crime, Theft and Access to Land Administration Licensing and Customs and Education of Regulations Regulations Corruption Tax Rates Financing Access to Skills and Electricity Transport Business Telecom Disorder Workers Permits Courts Trade Labor Tax Alb 4 2 1 3 9 8 5 10 14 7 12 11 13 6 Arm 1 3 9 10 2 4 7 5 12 11 14 6 13 8 Aze 3 1 9 6 4 7 5 13 11 2 8 12 14 10 Bel 1 10 5 2 8 3 9 6 13 7 4 11 14 12 BiH 1 2 9 7 3 8 4 13 5 14 6 12 10 11 Bul 2 1 9 6 8 3 5 4 7 13 12 11 10 14 Cro 1 5 7 4 6 11 3 9 2 12 10 13 8 14 Cze 3 9 1 4 8 10 7 2 6 12 13 5 11 14 Est 2 10 5 1 8 6 11 4 13 9 12 7 3 14 Mac 3 4 7 10 1 5 6 12 2 9 8 13 14 11 Geo 3 9 1 5 2 4 10 7 11 6 13 8 14 12 Hun 1 3 6 11 7 12 2 8 9 14 4 10 5 13 Kaz 2 3 4 1 6 5 8 9 12 11 10 7 14 13 Kos 11 2 1 5 4 3 12 6 7 8 13 10 14 9 Kyr 3 2 1 8 7 5 6 4 10 11 12 9 14 13 Lat 1 3 10 2 5 6 4 13 8 9 11 7 12 14 Lit 1 5 4 2 7 3 6 9 12 13 10 11 8 14 Mol 3 5 8 2 4 6 10 7 9 1 13 12 14 11 Mon 2 6 1 5 3 11 4 14 10 13 8 7 9 11 Pol 1 8 3 2 7 6 5 9 11 12 10 13 4 14 Rom 1 3 10 4 5 9 2 14 7 11 6 12 8 13 Rus 2 3 4 1 8 6 10 7 12 5 11 9 14 13 Ser 3 1 6 5 2 10 9 14 4 13 12 11 8 7 Slk 1 2 3 5 7 4 8 10 6 13 9 12 11 14 Sln 1 13 4 7 2 9 11 5 10 8 12 6 3 14 Taj 1 3 2 4 5 6 9 12 13 7 10 11 14 8 Tur 1 2 7 3 9 13 5 6 8 14 4 11 10 12 Ukr 1 2 10 6 8 7 4 9 5 3 11 12 14 13 Uzb 4 7 3 2 5 1 6 8 11 9 10 13 12 14 Total Countries Where the Rank <=3 26 17 10 11 7 5 3 1 2 3 0 0 2 0 Total Countries Where the Rank <=7 28 23 21 25 21 19 18 12 10 7 5 7 4 2 The problems are presented in the table in the order that they rank in severity ECA-wide. The most severe problem, Tax Rates, is presented first in the table. The least severe problem, Customs and Trade Regulations, is presented last. BEEPS-at-a-Glance Cross Country Report 7 1. Problems Doing Business 1.2: Problems Doing Business: Ranking of Problems 2005 Ranks of problems by country measured by mean score. The most severe problem ranks number 1, the least 14. Crime, Theft and Access to Land Administration Licensing and Customs and Education of Regulations Regulations Corruption Tax Rates Financing Access to Skills and Electricity Transport Business Telecom Disorder Workers Permits Courts Trade Labor Tax Alb 1 2 4 9 7 13 3 14 5 12 8 10 11 6 Arm 2 5 13 12 3 14 1 10 8 7 6 9 11 4 Aze 2 3 7 13 4 8 1 14 11 10 6 12 9 5 Bel 2 9 14 5 1 11 4 13 10 7 3 12 8 6 BiH 3 4 11 12 1 7 6 13 2 14 8 9 10 5 Bul 1 3 11 5 6 8 4 12 2 14 7 13 9 10 Cro 2 3 13 6 4 9 10 12 1 14 5 11 7 8 Cze 1 3 14 9 4 8 2 13 5 11 10 12 6 7 Est 7 3 13 2 4 12 8 14 9 11 5 10 1 6 Mac 3 1 10 12 4 8 5 11 2 14 6 13 9 7 Geo 1 4 2 8 3 5 10 14 7 13 11 9 12 6 Hun 1 8 14 4 2 11 3 12 9 13 7 10 5 6 Kaz 2 5 13 6 4 10 1 14 8 9 3 12 11 7 Kos Kyr 1 3 12 5 7 4 2 14 6 10 8 13 11 9 Lat 1 4 14 3 10 8 2 12 9 13 6 11 5 7 Lit 1 4 12 2 11 8 6 14 7 3 9 13 5 10 Mol 1 7 13 9 5 10 2 14 4 11 6 12 8 3 Mon Pol 1 6 14 8 3 9 2 13 4 11 10 12 5 7 Rom 2 3 13 8 6 10 1 14 4 11 5 12 7 9 Rus 2 3 13 4 6 8 1 14 7 10 5 12 11 9 Ser 1 4 14 9 2 10 5 12 3 11 8 13 7 6 Slk 2 3 12 4 9 5 6 14 1 13 8 11 7 10 Sln 2 9 13 5 6 11 1 14 3 7 8 12 4 10 Taj 1 4 5 9 6 11 2 14 8 10 3 12 13 7 Tur 1 4 10 8 3 6 2 13 7 14 9 12 5 11 Ukr 1 2 12 2 5 10 4 14 6 8 7 13 11 9 Uzb 1 9 6 8 3 7 2 14 10 13 4 11 12 5 Total Countries Where the Rank <=3 26 13 1 4 9 0 16 0 8 1 2 0 1 0 Total Countries Where the Rank <=7 27 24 4 13 25 7 24 0 18 4 16 0 11 17 The problems are presented in the table in the order that they rank in severity ECA-wide for 2008. The most severe problem, Tax Rates, is presented first in the table. The least severe problem, Customs and Trade Regulations, is presented last. No data is presented for Kosovo or Montenegro. BEEPS-at-a-Glance Cross Country Report 8 2. Unofficial Payments and Corruption 3 2.1: Corruption: Not a Problem Doing Business** Percentage of firms indicating corruption is not an obstacle to doing business Alb 10 18 Arm 29 36 Aze 27 15 Bel 62 32 BiH 30 31 Bul 35 30 Cro 40 44 Cze 21 36 Est 54 64 Mac 27 30 Geo 31 58 Hun 59 25 Kaz 44 21 Kos 5 Kyr 22 16 Lat 55 31 Lit 31 28 Mol 29 36 Mon 65 Pol 32 33 Rom 20 18 Rus 36 19 Ser 27 31 Slk 54 21 Sln 59 65 Taj 46 40 Tur 46 26 Ukr 34 16 Uzb 73 53 EU-10 42 35 FSU N 44 22 FSU S 37 36 SEE 27 32 ECA 38 33 100 80 60 40 20 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 9 2. Unofficial Payments and Corruption 2.2: Bribe Frequency* Percentage of firms saying unofficial payments are frequent Alb 47.9 13.0 Arm 10.4 15.8 Aze 30.0 23.0 Bel 25.1 13.1 BiH 17.9 12.6 Bul 20.1 10.0 Cro 13.6 10.3 Cze 11.1 3.1 Est 5.9 2.8 Mac 26.9 12.3 Geo 10.2 4.0 Hun 10.6 7.3 Kaz 27.1 19.6 Kos 0.4 Kyr 52.6 28.8 Lat 12.5 8.5 Lit 25.6 3.0 Mol 20.4 17.9 Mon 3.7 Pol 13.9 5.4 Rom 22.4 16.9 Rus 41.3 21.8 Ser 32.2 16.1 Slk 12.6 13.7 Sln 1.8 3.3 Taj 24.1 20.3 Tur 16.5 11.5 Ukr 30.3 27.3 Uzb 20.4 26.9 EU-10 13.7 7.4 FSU N 31.0 20.4 FSU S 24.0 19.5 SEE 27.7 9.8 ECA 21.6 12.8 0 10 20 30 40 50 60 2005 2008 BEEPS-at-a-Glance Cross Country Report 10 2. Unofficial Payments and Corruption 3 2.3a: Bribe Tax: Reports of Unofficial Payments** Percentage of firms reporting unofficial payments Alb 70 43 Arm 25 11 Aze 39 31 Bel 32 14 BiH 25 8 Bul 43 10 Cro 22 10 Cze 32 9 Est 18 2 Mac 31 13 Geo 12 4 Hun 33 4 Kaz 48 22 Kos 2 Kyr 69 34 Lat 31 9 Lit 43 9 Mol 38 29 Mon 7 Pol 25 5 Rom 33 8 Rus 62 31 Ser 34 17 Slk 34 11 Sln 12 2 Taj 51 43 Tur 44 12 Ukr 50 23 Uzb 37 56 EU-10 30 7 FSU N 48 23 FSU S 39 30 SEE 36 14 ECA 37 17 100 80 60 40 20 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 11 2. Unofficial Payments and Corruption 3 2.3b: Bribe Tax - All Firms** Bribe payments as a share of annual sales, for all firms Alb 1.8 4.2 Arm 1.2 0.6 Aze 2.8 0.8 Bel 1.3 0.7 BiH 0.4 0.2 Bul 1.9 0.4 Cro 0.6 0.4 Cze 0.7 0.3 Est 0.4 0.1 Mac 0.7 0.5 Geo 0.4 0.1 Hun 0.6 0.3 Kaz 1.4 1.3 Kos 0.1 Kyr 2.3 2.8 Lat 0.6 0.6 Lit 0.8 0.3 Mol 1.1 0.9 Mon 0.2 Pol 0.6 0.2 Rom 0.8 0.4 Rus 1.1 1.4 Ser 0.6 0.7 Slk 1.1 0.8 Sln 0.2 0.1 Taj 1.2 4.7 Tur 1.0 0.5 Ukr 1.6 1.5 Uzb 1.0 2.9 EU-10 0.8 0.3 FSU N 1.3 1.2 FSU S 1.4 1.8 SEE 0.8 0.9 ECA 1.0 1.0 5 4 3 2 1 0 1 2 3 4 5 2005 2008 BEEPS-at-a-Glance Cross Country Report 12 2. Unofficial Payments and Corruption 2.4: Unofficial Payments: Taxes* Percentage of firms stating bribery is frequent in dealing with taxes Alb 45.0 14.9 Arm 36.6 15.7 Aze 30.6 13.1 Bel 4.8 2.7 BiH 13.9 1.4 Bul 7.1 8.4 Cro 4.1 2.4 Cze 7.1 1.8 Est 1.1 0.1 Mac 10.8 4.1 Geo 13.4 3.2 Hun 6.1 11.5 Kaz 20.1 12.7 Kos 0.4 Kyr 52.6 31.3 Lat 5.3 3.6 Lit 6.1 1.8 Mol 12.9 10.7 Mon 0.0 Pol 6.8 2.1 Rom 4.4 8.6 Rus 22.0 8.6 Ser 20.7 9.5 Slk 2.1 0.1 Sln 1.8 0.0 Taj 41.2 23.5 Tur 9.2 5.1 Ukr 17.6 25.5 Uzb 19.6 25.8 EU-10 4.8 3.8 FSU N 16.2 12.4 FSU S 29.6 17.6 SEE 18.9 4.7 ECA 15.7 8.6 0 10 20 30 40 50 60 2005 2008 BEEPS-at-a-Glance Cross Country Report 13 2. Unofficial Payments and Corruption 2.5: Unofficial Payments: Customs* Percentage of firms stating bribery is frequent in dealing with customs Alb 45.7 9.7 Arm 25.3 14.9 Aze 15.2 12.8 Bel 4.1 1.9 BiH 15.3 5.0 Bul 17.9 3.5 Cro 1.7 2.1 Cze 8.5 0.4 Est 0.0 1.5 Mac 8.9 6.4 Geo 8.5 9.6 Hun 7.7 0.6 Kaz 12.7 13.0 Kos 0.2 Kyr 31.6 20.6 Lat 6.5 1.4 Lit 10.9 0.7 Mol 14.7 15.1 Mon 0.7 Pol 6.8 1.9 Rom 9.5 8.1 Rus 11.0 6.1 Ser 24.0 8.7 Slk 2.2 0.0 Sln 1.8 0.4 Taj 18.7 17.2 Tur 9.3 9.7 Ukr 15.2 13.2 Uzb 6.1 21.6 EU-10 7.2 1.9 FSU N 10.8 8.5 FSU S 17.2 16.0 SEE 19.1 4.7 ECA 12.6 7.1 0 5 10 15 20 25 30 35 40 45 50 2005 2008 BEEPS-at-a-Glance Cross Country Report 14 2. Unofficial Payments and Corruption 2.6: Unofficial Payments: Courts* Percentage of firms stating bribery is frequent in dealing with courts Alb 37.0 8.0 Arm 23.1 9.3 Aze 4.7 4.1 Bel 3.7 4.3 BiH 17.2 2.8 Bul 13.4 1.6 Cro 5.8 0.0 Cze 2.6 1.1 Est 1.1 0.1 Mac 10.8 10.8 Geo 8.6 7.6 Hun 3.8 1.5 Kaz 7.0 9.1 Kos 0.2 Kyr 23.3 12.8 Lat 5.4 4.1 Lit 9.6 3.9 Mol 9.4 9.9 Mon 0.7 Pol 7.4 1.8 Rom 5.9 13.6 Rus 9.5 2.7 Ser 21.6 9.3 Slk 1.1 0.0 Sln 1.8 0.0 Taj 13.6 13.3 Tur 4.0 4.1 Ukr 14.2 15.6 Uzb 6.5 21.9 EU-10 5.2 2.8 FSU N 8.6 7.9 FSU S 12.7 11.3 SEE 18.5 4.5 ECA 10.1 6.0 0 5 10 15 20 25 30 35 40 2005 2008 BEEPS-at-a-Glance Cross Country Report 15 2. Unofficial Payments and Corruption 3 2.7: Unofficial Payments: Government Contracts - All Firms* Percentage of contract value typically paid to secure a government contract, for all firms Alb 6.7 4.4 Arm 1.0 0.6 Aze 4.2 2.1 Bel 1.3 1.0 BiH 0.6 0.1 Bul 3.7 1.3 Cro 0.7 0.2 Cze 2.1 1.6 Est 0.4 0.1 Mac 2.3 0.0 Geo 0.8 0.0 Hun 1.5 0.2 Kaz 2.0 6.0 Kos 1.1 Kyr 2.3 5.7 Lat 1.6 5.0 Lit 2.1 0.6 Mol 1.0 2.0 Mon 1.6 Pol 0.9 1.8 Rom 0.5 2.8 Rus 2.2 4.1 Ser 1.5 1.7 Slk 1.9 2.3 Sln 0.5 0.0 Taj 1.3 3.0 Tur 6.5 3.9 Ukr 2.0 4.6 Uzb 1.3 3.8 EU-10 1.5 1.6 FSU N 1.9 3.9 FSU S 1.7 2.5 SEE 2.3 1.3 ECA 2.0 2.1 0 1 2 3 4 5 6 7 8 2005 2008 BEEPS-at-a-Glance Cross Country Report 16 3. Crime 3 3.1: Crime: Not a Problem Doing Business** Percentage of firms indicating crime is not an obstacle to doing business Alb 52 47 Arm 56 46 Aze 68 41 Bel 78 18 BiH 42 41 Bul 51 34 Cro 65 61 Cze 24 23 Est 76 54 Mac 43 45 Geo 36 51 Hun 72 75 Kaz 54 27 Kos 8 Kyr 35 23 Lat 54 36 Lit 31 22 Mol 40 38 Mon 70 Pol 34 23 Rom 44 40 Rus 43 22 Ser 56 54 Slk 56 20 Sln 79 48 Taj 62 55 Tur 50 67 Ukr 46 27 Uzb 67 20 EU-10 52 38 FSU N 55 23 FSU S 52 39 SEE 52 47 ECA 52 39 100 80 60 40 20 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 17 3. Crime 3 3.2: Payments for Security* Percentage of firms that pay for security, e.g. equipment, personnel, or professional security services Alb 88 57 Arm 42 60 Aze 61 61 Bel 56 62 BiH 44 60 Bul 83 76 Cro 58 47 Cze 57 66 Est 68 85 Mac 69 72 Geo 60 65 Hun 60 41 Kaz 44 61 Kos 91 Kyr 73 45 Lat 73 74 Lit 65 69 Mol 53 66 Mon 30 Pol 57 53 Rom 51 59 Rus 55 78 Ser 39 41 Slk 55 56 Sln 63 61 Taj 82 48 Tur 30 46 Ukr 55 55 Uzb 60 30 EU-10 63 64 FSU N 52 64 FSU S 61 54 SEE 59 57 ECA 59 59 0 10 20 30 40 50 60 70 80 90 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 18 3. Crime 3 3.3: Security Costs - All Firms** Percentage of annual sales used for security payments, for all firms Alb 2.1 2.2 Arm 1.2 1.4 Aze 4.2 2.0 Bel 0.7 1.5 BiH 0.4 1.1 Bul 1.0 0.9 Cro 0.4 0.5 Cze 0.7 1.0 Est 0.8 2.0 Mac 1.6 3.9 Geo 2.3 1.5 Hun 0.4 0.3 Kaz 1.2 2.2 Kos 9.0 Kyr 2.0 3.0 Lat 0.9 1.1 Lit 0.8 0.5 Mol 1.6 1.6 Mon 0.5 Pol 0.5 1.0 Rom 0.8 1.5 Rus 1.1 2.3 Ser 0.5 1.1 Slk 0.8 1.6 Sln 0.3 0.8 Taj 2.4 1.6 Tur 0.7 1.0 Ukr 0.8 1.8 Uzb 0.4 0.9 EU-10 0.7 1.1 FSU N 1.0 2.0 FSU S 2.0 1.7 SEE 1.0 2.6 ECA 1.1 1.7 10 8 6 4 2 0 2 4 6 8 10 2005 2008 BEEPS-at-a-Glance Cross Country Report 19 3. Crime 3 3.4: Losses as a Consequence of Crime* Percentage of firms that suffered from losses as a result of theft, robbery, vandalism or arson over the previous 12 months Alb 8 17 Arm 4 10 Aze 7 2 Bel 22 28 BiH 17 20 Bul 33 18 Cro 32 29 Cze 46 39 Est 42 44 Mac 21 25 Geo 15 18 Hun 30 18 Kaz 16 17 Kos 5 Kyr 32 13 Lat 39 36 Lit 31 31 Mol 12 20 Mon 12 Pol 24 24 Rom 16 13 Rus 27 36 Ser 23 28 Slk 44 31 Sln 30 25 Taj 16 6 Tur 12 12 Ukr 28 21 Uzb 3 3 EU-10 34 28 FSU N 23 25 FSU S 13 11 SEE 20 19 ECA 23 21 0 5 10 15 20 25 30 35 40 45 50 2005 2008 BEEPS-at-a-Glance Cross Country Report 20 3. Crime 3 3.5: Losses as a Consequence of Crime: Percentage of Annual Sales - All Firms** Estimated losses due to theft, robbery, vandalism or arson, for all firms Alb 0.0 0.5 Arm 0.1 0.7 Aze 0.4 0.2 Bel 0.4 0.5 BiH 0.8 0.5 Bul 0.7 0.4 Cro 0.3 0.2 Cze 1.2 0.6 Est 0.7 1.2 Mac 0.5 0.8 Geo 0.4 0.3 Hun 0.1 0.1 Kaz 0.7 1.0 Kos 0.3 Kyr 1.2 0.4 Lat 1.2 0.3 Lit 0.8 0.3 Mol 0.4 0.5 Mon 0.3 Pol 0.6 0.6 Rom 0.3 0.4 Rus 0.9 0.9 Ser 0.3 0.7 Slk 0.9 0.7 Sln 0.6 0.6 Taj 0.4 0.2 Tur 0.5 0.4 Ukr 0.8 0.7 Uzb 0.2 0.7 EU-10 0.7 0.5 FSU N 0.7 0.7 FSU S 0.5 0.4 SEE 0.4 0.5 ECA 0.6 0.5 2 2 1 1 0 1 1 2 2 2005 2008 BEEPS-at-a-Glance Cross Country Report 21 4. Regulations and Red Tape 3 4.1: Business Licensing: Not a Problem Doing Business** Percentage of firms indicating business licensing and permits are not an obstacle to doing business Alb 28 51 Arm 33 64 Aze 36 44 Bel 32 17 BiH 43 40 Bul 46 41 Cro 45 61 Cze 38 44 Est 54 71 Mac 39 41 Geo 52 70 Hun 59 38 Kaz 43 30 Kos 62 Kyr 42 51 Lat 51 49 Lit 48 38 Mol 22 43 Mon 68 Pol 45 35 Rom 23 20 Rus 38 29 Ser 45 53 Slk 62 29 Sln 54 56 Taj 29 44 Tur 51 36 Ukr 38 29 Uzb 44 48 EU-10 48 42 FSU N 38 26 FSU S 37 52 SEE 40 54 ECA 42 45 100 80 60 40 20 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 22 4. Regulations and Red Tape 3 4.2: Time Tax - All Firms* Percentage of senior management's time spent dealing with public officials or public services, for all firms Alb 10 20 Arm 4 12 Aze 6 3 Bel 6 14 BiH 5 13 Bul 4 11 Cro 3 11 Cze 2 13 Est 2 7 Mac 11 17 Geo 6 3 Hun 5 16 Kaz 5 6 Kos 10 Kyr 7 6 Lat 5 10 Lit 5 11 Mol 5 8 Mon 13 Pol 4 14 Rom 1 11 Rus 7 23 Ser 10 14 Slk 3 10 Sln 3 9 Taj 5 14 Tur 11 28 Ukr 9 15 Uzb 3 13 EU-10 4 11 FSU N 7 14 FSU S 5 9 SEE 8 14 ECA 6 12 0 5 10 15 20 25 30 2005 2008 BEEPS-at-a-Glance Cross Country Report 23 4. Regulations and Red Tape 3 4.3: Access to Land: Not a Problem Doing Business** Percentage of firms indicating access to land is not an obstacle to doing business Alb 53 42 Arm 39 65 Aze 72 29 Bel 57 30 BiH 62 66 Bul 81 66 Cro 85 73 Cze 50 55 Est 78 80 Mac 63 59 Geo 69 56 Hun 83 94 Kaz 59 42 Kos 27 Kyr 64 46 Lat 76 57 Lit 42 73 Mol 52 28 Mon 81 Pol 58 39 Rom 56 41 Rus 63 36 Ser 63 63 Slk 82 50 Sln 66 57 Taj 60 56 Tur 77 77 Ukr 51 32 Uzb 81 59 EU-10 67 61 FSU N 57 35 FSU S 62 48 SEE 65 59 ECA 65 54 100 80 60 40 20 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 24 5. Customs and Cross Border Trade 3 5.1: Customs Regulations: Not a Problem Doing Business** Percentage of firms indicating customs regulations are not an obstacle to doing business Alb 21 35 Arm 34 45 Aze 32 58 Bel 56 39 BiH 34 62 Bul 55 62 Cro 63 74 Cze 31 60 Est 61 82 Mac 45 56 Geo 39 68 Hun 56 80 Kaz 51 50 Kos 43 Kyr 52 55 Lat 59 63 Lit 53 79 Mol 22 45 Mon 75 Pol 35 57 Rom 34 43 Rus 51 59 Ser 42 51 Slk 68 64 Sln 50 64 Taj 47 51 Tur 63 64 Ukr 51 52 Uzb 49 69 EU-10 50 65 FSU N 52 50 FSU S 39 56 SEE 41 57 ECA 46 59 100 80 60 40 20 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 25 5. Customs and Cross Border Trade 3 5.2: Direct Exports - All Firms* Percentage of total sales coming from direct exports, for all firms Alb 17.4 7.1 Arm 7.3 8.5 Aze 3.5 1.4 Bel 12.5 7.2 BiH 11.3 12.7 Bul 13.8 8.9 Cro 16.3 7.2 Cze 11.0 10.9 Est 13.6 10.7 Mac 17.1 15.6 Geo 11.2 3.5 Hun 16.9 8.6 Kaz 3.3 1.4 Kos 4.0 Kyr 10.1 6.6 Lat 11.7 10.0 Lit 17.5 12.5 Mol 15.6 7.0 Mon 1.7 Pol 12.4 5.9 Rom 13.6 4.9 Rus 4.5 1.2 Ser 9.7 9.7 Slk 14.8 6.5 Sln 30.3 16.5 Taj 9.3 4.6 Tur 13.4 10.6 Ukr 6.8 4.6 Uzb 8.7 0.4 EU-10 15.5 9.6 FSU N 6.8 3.6 FSU S 9.4 4.6 SEE 14.3 8.3 ECA 12.3 7.3 0 5 10 15 20 25 30 35 2005 2008 BEEPS-at-a-Glance Cross Country Report 26 6. Taxation 3 6.1: Tax Rates: Not a Problem Doing Business** Percentage of firms indicating tax rates are not an obstacle to doing business Alb 5 23 Arm 15 19 Aze 12 18 Bel 33 5 BiH 20 15 Bul 23 15 Cro 27 21 Cze 4 10 Est 62 38 Mac 28 28 Geo 15 36 Hun 10 2 Kaz 20 16 Kos 45 Kyr 16 8 Lat 14 9 Lit 9 6 Mol 8 24 Mon 39 Pol 8 4 Rom 14 5 Rus 20 11 Ser 18 28 Slk 42 11 Sln 26 21 Taj 17 14 Tur 16 12 Ukr 12 10 Uzb 22 23 EU-10 21 12 FSU N 21 10 FSU S 15 20 SEE 20 28 ECA 19 18 70 60 50 40 30 20 10 0 10 20 30 40 50 60 70 2005 2008 BEEPS-at-a-Glance Cross Country Report 27 6. Taxation 3 6.2: Tax Administration: Not a Problem Doing Business** Percentage of firms indicating tax administration is not an obstacle to doing business Alb 11 31 Arm 10 38 Aze 14 35 Bel 47 24 BiH 34 26 Bul 33 27 Cro 66 34 Cze 8 23 Est 63 70 Mac 36 33 Geo 56 61 Hun 33 15 Kaz 20 28 Kos 61 Kyr 16 21 Lat 14 26 Lit 26 20 Mol 16 35 Mon 51 Pol 12 22 Rom 14 9 Rus 17 23 Ser 34 48 Slk 59 20 Sln 25 55 Taj 18 44 Tur 25 36 Ukr 33 18 Uzb 26 39 EU-10 29 29 FSU N 29 23 FSU S 22 39 SEE 36 40 ECA 28 33 80 70 60 50 40 30 20 10 0 10 20 30 40 50 60 70 80 2005 2008 BEEPS-at-a-Glance Cross Country Report 28 6. Taxation 3 6.3: Tax Inspections* Percentage of firms visited by tax officials in the last year Alb 99 87 Arm 94 84 Aze 44 86 Bel 76 57 BiH 71 53 Bul 81 68 Cro 37 40 Cze 49 53 Est 27 22 Mac 86 72 Geo 89 41 Hun 69 52 Kaz 75 52 Kos 95 Kyr 100 86 Lat 69 61 Lit 78 42 Mol 77 66 Mon 57 Pol 51 37 Rom 82 68 Rus 66 64 Ser 80 49 Slk 53 54 Sln 35 22 Taj 96 62 Tur 48 55 Ukr 76 58 Uzb 72 43 EU-10 59 48 FSU N 73 58 FSU S 82 67 SEE 75 65 ECA 70 58 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 29 6. Taxation 3 6.4: Frequency of Tax Inspections* Average number of times firms were inspected by tax officials in the last year Alb 7.4 7.8 Arm 3.0 3.4 Aze 1.6 3.2 Bel 3.3 2.7 BiH 2.3 2.8 Bul 5.7 3.6 Cro 2.3 1.8 Cze 2.2 2.9 Est 1.8 1.7 Mac 2.9 4.6 Geo 7.7 2.0 Hun 2.6 1.9 Kaz 4.4 5.6 Kos 5.1 Kyr 4.3 2.6 Lat 2.6 2.9 Lit 4.1 2.4 Mol 3.0 4.8 Mon 3.6 Pol 3.7 1.8 Rom 1.9 3.5 Rus 3.0 3.2 Ser 4.1 4.2 Slk 2.0 3.0 Sln 2.0 1.7 Taj 3.0 3.5 Tur 2.3 3.4 Ukr 7.0 5.8 Uzb 3.4 2.2 EU-10 2.9 2.5 FSU N 4.4 4.3 FSU S 3.7 3.1 SEE 3.8 4.3 ECA 3.5 3.4 0 2 4 6 8 10 2005 2008 BEEPS-at-a-Glance Cross Country Report 30 7. Labor and Workforce Development 3 7.1: Labor Regulations: Not a Problem Doing Business** Percentage of firms indicating labor regulations are not an obstacle to doing business Alb 45 50 Arm 45 57 Aze 68 72 Bel 56 47 BiH 44 53 Bul 49 40 Cro 62 50 Cze 21 24 Est 20 47 Mac 51 60 Geo 57 70 Hun 41 44 Kaz 65 69 Kos 72 Kyr 64 59 Lat 46 48 Lit 25 29 Mol 20 56 Mon 67 Pol 24 22 Rom 27 28 Rus 52 52 Ser 37 46 Slk 56 32 Sln 38 34 Taj 67 81 Tur 48 48 Ukr 51 45 Uzb 70 58 EU-10 35 35 FSU N 56 53 FSU S 56 65 SEE 48 57 ECA 46 50 100 80 60 40 20 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 31 7. Labor and Workforce Development 3 7.2: Skills and Education of Workers: Not a Problem Doing Business** Percentage of firms indicating skills and education of available workers is not an obstacle to doing business Alb 40 27 Arm 49 46 Aze 82 46 Bel 40 8 BiH 57 44 Bul 42 38 Cro 50 39 Cze 30 25 Est 40 26 Mac 60 53 Geo 56 50 Hun 38 75 Kaz 45 18 Kos 24 Kyr 47 28 Lat 14 29 Lit 26 21 Mol 26 21 Mon 62 Pol 34 19 Rom 31 22 Rus 40 12 Ser 59 46 Slk 45 25 Sln 42 47 Taj 50 31 Tur 51 32 Ukr 31 23 Uzb 60 27 EU-10 34 33 FSU N 39 15 FSU S 53 36 SEE 53 42 ECA 44 33 100 80 60 40 20 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 32 7. Labor and Workforce Development 7.3: Professionalism of Labor** Percentage of employees that have a university degree or higher Alb 23 30 Arm 22 55 Aze 43 31 Bel 38 36 BiH 22 10 Bul 26 22 Cro 21 13 Cze 14 6 Est 25 19 Mac 21 14 Geo 57 46 Hun 15 9 Kaz 25 34 Kos 7 Kyr 34 39 Lat 24 26 Lit 25 18 Mol 31 25 Mon 16 Pol 18 19 Rom 14 17 Rus 38 37 Ser 22 16 Slk 21 13 Sln 15 10 Taj 28 32 Tur 19 18 Ukr 39 40 Uzb 22 31 EU-10 20 16 FSU N 35 37 FSU S 34 37 SEE 22 15 ECA 26 24 60 40 20 0 20 40 60 2005 2008 BEEPS-at-a-Glance Cross Country Report 33 7. Labor and Workforce Development 3 7.4a: Percent of Employees Trained: Production** Percentage of production employees participating in training Alb 24 62 Arm 15 24 Aze 6 21 Bel 26 19 BiH 25 48 Bul 20 71 Cro 22 58 Cze 47 51 Est 36 12 Mac 31 32 Geo 17 29 Hun 27 27 Kaz 12 22 Kos 9 Kyr 18 17 Lat 24 30 Lit 16 40 Mol 11 33 Mon 53 Pol 42 63 Rom 12 25 Rus 14 31 Ser 36 62 Slk 78 36 Sln 47 40 Taj 8 23 Tur 17 67 Ukr 21 22 Uzb 4 13 EU-10 35 39 FSU N 18 24 FSU S 11 23 SEE 27 46 ECA 24 36 100 80 60 40 20 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 34 7. Labor and Workforce Development 3 7.4b: Percent of Employees Trained: Non Production** Percentage of non-production employees participating in training Alb 62 42 Arm 59 35 Aze 40 12 Bel 41 17 BiH 65 34 Bul 73 38 Cro 41 36 Cze 78 33 Est 60 13 Mac 72 12 Geo 79 19 Hun 67 38 Kaz 41 11 Kos 9 Kyr 67 6 Lat 48 18 Lit 42 28 Mol 33 13 Mon 56 Pol 79 47 Rom 53 10 Rus 51 27 Ser 74 63 Slk 93 39 Sln 63 37 Taj 43 8 Tur 75 50 Ukr 54 12 Uzb 34 4 EU-10 66 30 FSU N 47 17 FSU S 51 14 SEE 63 36 ECA 59 26 100 80 60 40 20 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 35 8. Firm Financing 3 8.1: Access to Financing: Not a Problem Doing Business** Percentage of firms indicating access to financing is not an obstacle to doing business Alb 33 39 Arm 18 28 Aze 25 30 Bel 31 29 BiH 19 28 Bul 50 37 Cro 47 43 Cze 23 26 Est 61 69 Fmac 32 28 Geo 40 38 Hun 33 65 Kaz 45 26 Kos 14 Kyr 47 24 Lat 66 38 Lit 66 31 Mol 24 28 Mon 55 Pol 20 24 Rom 28 25 Rus 44 25 Ser 21 30 Slk 63 23 Sln 47 37 Taj 42 32 Tur 41 52 Ukr 35 23 Uzb 40 31 EU-10 46 37 FSU N 39 26 FSU S 34 30 SEE 30 34 ECA 39 34 100 80 60 40 20 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 36 8. Firm Financing 3 8.2: Adequacy of Firm Finances** Percentage of firms stating they did not apply for a loan because it was not needed Alb 69 72 Arm 60 76 Aze 63 56 Bel 53 41 BiH 69 61 Bul 84 62 Cro 79 70 Cze 80 87 Est 90 80 Mac 65 64 Geo 68 73 Hun 60 82 Kaz 60 60 Kos 80 Kyr 52 48 Lat 81 73 Lit 68 82 Mol 61 63 Mon 44 Pol 70 75 Rom 71 66 Rus 65 67 Ser 58 60 Slk 87 72 Sln 89 87 Taj 60 59 Tur 86 80 Ukr 58 58 Uzb 80 49 EU-10 78 77 FSU N 59 57 FSU S 64 61 SEE 68 64 ECA 70 67 100 80 60 40 20 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 37 8. Firm Financing 8.3: Purchasing on Credit** Percentage of businesses purchasing input materials paid for on credit Alb 57 57 Arm 57 44 Aze 52 37 Bel 51 76 BiH 69 64 Bul 60 50 Cro 76 76 Cze 66 89 Est 87 92 Mac 63 85 Geo 50 38 Hun 83 75 Kaz 28 51 Kos 69 Kyr 36 30 Lat 84 82 Lit 87 77 Mol 64 69 Mon 62 Pol 81 63 Rom 75 71 Rus 45 73 Ser 72 69 Slk 71 62 Sln 88 99 Taj 25 44 Tur 68 54 Ukr 50 58 Uzb 16 38 EU-10 78 76 FSU N 44 64 FSU S 43 43 SEE 67 69 ECA 61 64 100 80 60 40 20 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 38 8. Firm Financing 8.4: Purchases Made on Credit - All Firms* Percentage of purchases of input materials paid for on credit, for all firms Alb 25 34 Arm 16 19 Aze 23 18 Bel 29 43 BiH 41 38 Bul 32 22 Cro 55 47 Cze 46 63 Est 69 76 Mac 41 55 Geo 25 15 Hun 61 64 Kaz 11 23 Kos 34 Kyr 18 14 Lat 53 63 Lit 58 58 Mol 37 34 Mon 36 Pol 48 42 Rom 48 45 Rus 20 36 Ser 48 47 Slk 48 43 Sln 74 87 Taj 10 20 Tur 47 35 Ukr 25 30 Uzb 7 22 EU-10 54 56 FSU N 21 33 FSU S 19 20 SEE 42 42 ECA 38 40 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 39 8. Firm Financing 8.5: Credit Extensions to Clients - All Firms* Percentage of sales to customers sold on credit, for all firms Alb 37 36 Arm 17 32 Aze 20 23 Bel 25 47 BiH 46 59 Bul 32 32 Cro 53 69 Cze 46 69 Est 52 83 Mac 43 62 Geo 26 18 Hun 62 77 Kaz 15 28 Kos 12 Kyr 17 31 Lat 51 74 Lit 57 74 Mol 35 36 Mon 63 Pol 48 63 Rom 48 54 Rus 16 38 Ser 52 57 Slk 45 62 Sln 71 86 Taj 11 33 Tur 40 66 Ukr 21 35 Uzb 7 24 EU-10 51 67 FSU N 19 37 FSU S 19 28 SEE 46 51 ECA 37 50 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 40 8. Firm Financing 8.6a: Sources of Financing: Borrowing from Private Banks** Percentage of firm financing coming from loans from private banks Alb 19.9 14.0 Arm 21.5 16.9 Aze 0.0 11.8 Bel 5.2 10.2 BiH 26.5 25.8 Bul 25.9 27.3 Cro 28.2 25.2 Cze 9.9 11.5 Est 13.4 21.5 Mac 15.5 26.7 Geo 30.4 24.6 Hun 16.0 21.7 Kaz 16.4 14.9 Kos 9.4 Kyr 8.4 10.0 Lat 19.6 23.2 Lit 10.9 32.3 Mol 16.3 22.0 Mon 39.4 Pol 12.8 17.3 Rom 16.3 18.0 Rus 5.7 7.3 Ser 10.6 25.4 Slk 11.3 16.5 Sln 18.8 12.2 Taj 0.3 4.9 Tur 6.6 35.1 Ukr 12.1 16.1 Uzb 2.8 3.3 EU-10 15.5 20.2 FSU N 9.9 12.1 FSU S 11.4 13.3 SEE 20.1 23.7 ECA 14.1 18.8 50 40 30 20 10 0 10 20 30 40 50 2005 2008 BEEPS-at-a-Glance Cross Country Report 41 8. Firm Financing 8.6b: Sources of Financing: Borrowing from State-OwnedBanks** Percentage of firm financing coming from loans from state-owned banks Alb 0.6 Arm 2.0 4.2 Aze 0.2 Bel 3.8 10.9 BiH 1.6 1.8 Bul 1.4 1.6 Cro 2.2 8.2 Cze 0.7 5.9 Est 0.4 0.7 Mac 4.5 Geo 2.1 0.8 Hun 4.3 8.1 Kaz 2.5 2.2 Kos 0.0 Kyr 1.0 1.4 Lat 0.5 6.4 Lit 2.2 3.4 Mol 1.5 Mon 3.0 Pol 4.3 6.6 Rom 1.8 1.5 Rus 1.9 5.2 Ser 3.3 3.9 Slk 1.6 2.5 Sln 9.9 20.3 Taj 6.7 Tur 0.9 3.4 Ukr 1.2 1.1 Uzb 0.6 1.0 EU-10 2.7 5.7 FSU N 2.4 4.8 FSU S 0.9 2.3 SEE 1.4 3.1 ECA 1.9 4.1 25 20 15 10 5 0 5 10 15 20 25 2005 2008 •Albania, Azerbaijan, Macedonia, Moldova, and Tajikistan had zero values for 2005 BEEPS-at-a-Glance Cross Country Report 42 8. Firm Financing 3 8.6c: Sources of Financing: Trade Credit from Suppliers or Customers** Percentage of firm financing coming from trade credit from suppliers or customers Alb 1.0 1.6 Arm 0.2 3.4 Aze 1.3 6.7 Bel 3.3 8.0 BiH 2.3 13.4 Bul 2.7 2.7 Cro 2.5 2.3 Cze 4.8 10.6 Est 5.1 4.7 Mac 2.8 2.8 Geo 2.0 0.4 Hun 1.1 1.4 Kaz 0.6 4.7 Kos 2.5 Kyr 0.4 1.4 Lat 6.0 5.6 Lit 1.4 5.5 Mol 3.8 5.6 Mon 9.8 Pol 1.7 7.4 Rom 3.7 4.6 Rus 2.3 9.3 Ser 1.4 6.5 Slk 1.8 6.0 Sln 0.2 3.9 Taj 3.6 7.1 Tur 1.5 2.1 Ukr 4.1 7.5 Uzb 0.4 EU-10 2.8 5.3 FSU N 2.6 7.4 FSU S 1.6 3.6 SEE 2.0 5.5 ECA 2.3 5.1 15 10 5 0 5 10 15 2005 2008 •Uzbekistan had a zero value for 2005 BEEPS-at-a-Glance Cross Country Report 43 8. Firm Financing 3 8.7a: Loan Applications: Application Procedures are Too Complex** Percentage of firms indicating application procedures as the main reason the firm did not apply for a loan Alb 11.3 14.2 Arm 17.7 4.9 Aze 16.4 6.5 Bel 41.9 13.3 BiH 9.5 6.5 Bul 11.9 7.2 Cro 18.2 3.9 Cze 6.9 0.4 Est 4.1 5.9 Mac 13.3 4.2 Geo 24.5 4.1 Hun 15.5 3.5 Kaz 19.2 3.8 Kos 0.1 Kyr 18.8 12.4 Lat 2.6 Lit 11.4 2.7 Mol 36.8 6.7 Mon 6.3 Pol 17.3 4.1 Rom 25.0 13.0 Rus 19.7 5.5 Ser 18.6 2.7 Slk 6.7 2.5 Sln 11.1 2.6 Taj 28.6 5.4 Tur 6.2 2.1 Ukr 14.9 3.2 Uzb 9.1 19.0 EU-10 11.0 4.5 FSU N 23.9 6.4 FSU S 21.7 8.4 SEE 14.2 5.4 ECA 16.1 5.8 50 40 30 20 10 0 10 20 30 40 50 2005 2008 •Latvia had a zero value for 2005 BEEPS-at-a-Glance Cross Country Report 44 8. Firm Financing 3 8.7b: Loan Applications: Unfavorable Interest Rates** Percentage of firms indicating unfavorable interest rates as the main reason the firm did not apply for a loan Alb 27 12 Arm 24 15 Aze 4 14 Bel 31 21 BiH 29 24 Bul 19 15 Cro 18 9 Cze 13 6 Est 6 2 Mac 38 17 Geo 9 16 Hun 35 5 Kaz 38 27 Kos 11 Kyr 49 25 Lat 10 9 Lit 20 5 Mol 41 25 Mon 42 Pol 29 10 Rom 23 10 Rus 31 13 Ser 32 20 Slk 13 9 Sln 7 4 Taj 31 23 Tur 5 9 Ukr 38 26 Uzb 8 14 EU-10 18 7 FSU N 34 22 FSU S 24 19 SEE 29 19 ECA 23 15 50 40 30 20 10 0 10 20 30 40 50 2005 2008 BEEPS-at-a-Glance Cross Country Report 45 8. Firm Financing 3 8.7c: Loan Applications: Collateral Requirements** Percentage of firms indicating collateral requirements as the main reason the firm did not apply for a loan Alb 11.3 0.0 Arm 15.0 3.5 Aze 11.0 11.5 Bel 24.7 3.6 BiH 9.5 3.5 Bul 6.0 10.1 Cro 12.1 3.8 Cze 12.6 0.8 Est 8.2 2.7 Mac 10.0 1.3 Geo 5.7 3.7 Hun 24.5 2.8 Kaz 29.5 3.1 Kos 0.0 Kyr 27.5 6.7 Lat 6.5 3.6 Lit 18.2 3.9 Mol 25.4 1.9 Mon 3.8 Pol 26.6 3.6 Rom 21.1 6.6 Rus 22.7 7.1 Ser 18.6 7.8 Slk 4.4 4.8 Sln 4.6 Taj 26.4 5.0 Tur 2.4 1.8 Ukr 19.6 6.5 Uzb 14.5 7.6 EU-10 12.8 4.4 FSU N 24.2 5.1 FSU S 17.9 5.7 SEE 12.3 2.9 ECA 15.3 4.3 50 40 30 20 10 0 10 20 30 40 50 2005 2008 •Slovenia had a zero value for 2005 BEEPS-at-a-Glance Cross Country Report 46 9. Legal and Judicial Issues 3 9.1: Courts: Not a Problem Doing Business** Percentage of firms indicating courts are not an obstacle to doing business Alb 17 50 Arm 42 66 Aze 79 57 Bel 68 36 BiH 30 38 Bul 31 36 Cro 30 31 Cze 24 31 Est 64 Mac 26 34 Geo 54 66 Hun 61 67 Kaz 50 40 Kos 56 Kyr 48 39 Lat 62 40 Lit 25 46 Mol 21 41 Mon 75 Pol 22 36 Rom 21 28 Rus 41 32 Ser 23 42 Slk 54 22 Sln 34 53 Taj 50 68 Tur 51 52 Ukr 39 22 Uzb 67 61 EU-10 40 44 FSU N 49 33 FSU S 51 57 SEE 25 47 ECA 42 46 80 70 60 50 40 30 20 10 0 10 20 30 40 50 60 70 80 2005 2008 BEEPS-at-a-Glance Cross Country Report 47 9. Legal and Judicial Issues 9.2: Use of Courts** Percentage of firms that have been to court in the past three years Alb 18 22 Arm 3 25 Aze 3 7 Bel 42 36 BiH 35 41 Bul 49 13 Cro 66 48 Cze 41 25 Est 30 24 Mac 42 43 Geo 21 28 Hun 25 16 Kaz 24 26 Kos 3 Kyr 35 16 Lat 27 32 Lit 51 34 Mol 26 25 Mon 15 Pol 49 27 Rom 34 14 Rus 27 45 Ser 55 54 Slk 46 25 Sln 72 47 Taj 9 20 Tur 17 38 Ukr 45 25 Uzb 27 17 EU-10 42 26 FSU N 34 33 FSU S 18 19 SEE 43 32 ECA 34 27 80 60 40 20 0 20 40 60 80 2005 2008 BEEPS-at-a-Glance Cross Country Report 48 10. Infrastructure 3 10.1: Electricity: Not a Problem Doing Business** Percentage of firms indicating electricity is not an obstacle to doing business Alb 21 8 Arm 58 42 Aze 59 55 Bel 86 31 BiH 62 53 Bul 80 41 Cro 83 62 Cze 63 24 Est 78 66 Mac 59 49 Geo 31 30 Hun 83 63 Kaz 74 28 Kos 2 Kyr 72 11 Lat 75 56 Lit 73 35 Mol 67 46 Mon 43 Pol 69 35 Rom 64 44 Rus 76 31 Ser 67 51 Slk 76 34 Sln 82 50 Taj 35 25 Tur 54 50 Ukr 76 34 Uzb 62 27 EU-10 74 45 FSU N 78 31 FSU S 55 34 SEE 58 38 ECA 66 39 100 80 60 40 20 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 49 10. Infrastructure 3 10.2: Experienced Power Outages** Percentage of firms experiencing power outages over the last 12 months Alb 95 90 Arm 35 40 Aze 37 30 Bel 30 20 BiH 25 32 Bul 48 37 Cro 37 30 Cze 14 34 Est 44 61 Mac 27 38 Geo 62 42 Hun 51 17 Kaz 49 40 Kos 97 Kyr 61 47 Lat 57 43 Lit 43 27 Mol 36 34 Mon 56 Pol 31 23 Rom 53 57 Rus 40 28 Ser 32 60 Slk 13 29 Sln 42 43 Taj 82 61 Tur 44 57 Ukr 46 33 Uzb 42 53 EU-10 40 37 FSU N 41 30 FSU S 51 44 SEE 43 57 ECA 44 44 100 80 60 40 20 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 50 10. Infrastructure 3 10.3: Sales Lost due to Power Outages - All Firms** Losses due to power outages as a percent of total annual sales, for all firms Alb 10.3 11.9 Arm 0.3 0.5 Aze 1.4 0.5 Bel 0.3 0.1 BiH 0.3 0.4 Bul 0.4 0.4 Cro 0.3 0.3 Cze 0.1 0.1 Est 0.2 0.2 Mac 0.4 1.3 Geo 5.2 0.8 Hun 0.2 0.1 Kaz 0.8 1.3 Kos 15.5 Kyr 2.5 4.0 Lat 0.4 0.3 Lit 0.2 0.1 Mol 0.5 0.2 Mon 2.5 Pol 0.3 0.4 Rom 0.8 1.3 Rus 0.3 0.2 Ser 0.6 0.5 Slk 0.0 Sln 0.2 0.2 Taj 5.9 7.9 Tur 0.5 1.7 Ukr 0.9 1.9 Uzb 0.9 3.2 EU-10 0.3 0.3 FSU N 0.6 0.9 FSU S 2.4 2.4 SEE 2.4 4.6 ECA 1.3 2.0 20 15 10 5 0 5 10 15 20 2005 2008 BEEPS-at-a-Glance Cross Country Report 51 10. Infrastructure 3 10.4: Telecommunications: Not a Problem Doing Business** Percentage of firms indicating telecommunications is not an obstacle to doing business Alb 54 52 Arm 50 39 Aze 78 67 Bel 83 33 BiH 64 62 Bul 80 41 Cro 80 61 Cze 60 19 Est 86 66 Mac 60 61 Geo 73 58 Hun 79 70 Kaz 79 40 Kos 27 Kyr 85 33 Lat 75 58 Lit 82 46 Mol 72 44 Mon 77 Pol 66 42 Rom 66 55 Rus 78 16 Ser 62 71 Slk 86 49 Sln 88 62 Taj 66 65 Tur 62 50 Ukr 78 27 Uzb 81 47 EU-10 77 51 FSU N 80 29 FSU S 72 50 SEE 64 59 ECA 73 50 100 80 60 40 20 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 52 10. Infrastructure 3 10.5: Use of Email Communication* Percentage of firms using email to communicate with clients or suppliers Alb 52 62 Arm 49 80 Aze 47 40 Bel 80 81 BiH 85 84 Bul 79 78 Cro 91 90 Cze 86 98 Est 98 96 Mac 72 79 Geo 55 41 Hun 93 96 Kaz 58 67 Kos 53 Kyr 48 43 Lat 79 86 Lit 92 92 Mol 57 61 Mon 61 Pol 85 86 Rom 69 65 Rus 75 87 Ser 86 91 Slk 95 94 Sln 97 99 Taj 31 41 Tur 71 89 Ukr 66 66 Uzb 19 18 EU-10 87 89 FSU N 70 75 FSU S 44 46 SEE 77 74 ECA 71 73 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 53 10. Infrastructure 3 10.6: Transport: Not a Problem Doing Business** Percentage of firms indicating transport is not an obstacle to doing business Alb 52 46 Arm 45 40 Aze 78 62 Bel 81 35 BiH 50 60 Bul 79 54 Cro 79 69 Cze 56 32 Est 78 68 Mac 61 57 Geo 55 60 Hun 71 74 Kaz 72 35 Kos 48 Kyr 79 39 Lat 70 46 Lit 75 49 Mol 63 48 Mon 67 Pol 64 49 Rom 60 45 Rus 72 36 Ser 62 54 Slk 73 42 Sln 81 45 Taj 61 56 Tur 59 58 Ukr 78 40 Uzb 66 59 EU-10 71 50 FSU N 76 37 FSU S 64 52 SEE 61 57 ECA 67 51 100 80 60 40 20 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 54 11. Innovation 11.1: New Product/Service Development** Percentage of firms that have developed new products in the past three years Alb 44 40 Arm 46 62 Aze 52 42 Bel 49 69 BiH 44 57 Bul 42 47 Cro 48 66 Cze 25 47 Est 35 59 Mac 41 54 Geo 40 36 Hun 31 39 Kaz 31 44 Kos 59 Kyr 37 47 Lat 43 53 Lit 50 65 Mol 50 55 Mon 50 Pol 43 54 Rom 34 45 Rus 39 63 Ser 46 60 Slk 35 43 Sln 23 70 Taj 37 50 Tur 34 44 Ukr 53 56 Uzb 19 21 EU-10 36 52 FSU N 43 58 FSU S 40 45 SEE 45 55 ECA 40 52 80 60 40 20 0 20 40 60 80 2005 2008 BEEPS-at-a-Glance Cross Country Report 55 11. Innovation 11.2: Research and Development Activities** Percentage of firms that have spent funds on research and development in the past three years Alb 9.3 29.8 Arm 13.9 24.5 Aze 6.6 Bel 73.1 27.8 BiH 17.0 41.9 Bul 12.5 33.2 Cro 19.8 55.1 Cze 23.1 23.1 Est 21.9 30.9 Mac 23.8 39.5 Geo 18.3 15.7 Hun 19.5 12.6 Kaz 8.2 9.2 Kos 25.0 Kyr 14.8 11.6 Lat 13.6 12.5 Lit 21.7 14.3 Mol 22.1 29.0 Mon 22.3 Pol 24.7 15.1 Rom 19.6 18.6 Rus 21.4 26.4 Ser 19.0 32.5 Slk 23.1 7.6 Sln 50.0 39.6 Taj 13.8 11.0 Tur 16.7 22.9 Ukr 8.5 14.9 Uzb 5.9 0.3 EU-10 23.0 20.8 FSU N 27.8 19.6 FSU S 14.8 14.1 SEE 17.8 35.2 ECA 20.6 22.5 80 60 40 20 0 20 40 60 80 2005 2008 •Azerbaijan had no data for 2005. BEEPS-at-a-Glance Cross Country Report 56 11. Innovation 11.3: Factors Affecting Innovation: Domestic Competitors* Percentage of firms stating domestic competitors are an important influence in new product development Alb 74 60 Arm 61 39 Aze 64 72 Bel 58 42 BiH 74 68 Bul 51 56 Cro 68 74 Cze 78 69 Est 82 61 Mac 82 77 Geo 43 42 Hun 84 84 Kaz 56 64 Kos 74 Kyr 63 57 Lat 74 67 Lit 77 63 Mol 78 53 Mon 68 Pol 86 77 Rom 66 67 Rus 70 66 Ser 81 72 Slk 70 72 Sln 75 66 Taj 56 43 Tur 68 67 Ukr 69 64 Uzb 48 47 EU-10 74 68 FSU N 63 59 FSU S 59 50 SEE 76 71 ECA 69 63 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 57 11. Innovation 11.4: Factors Affecting Innovation: Foreign Competitors* Percentage of firms stating foreign competitors are an important influence in new product development Alb 39 31 Arm 45 14 Aze 34 29 Bel 30 34 BiH 56 38 Bul 34 33 Cro 50 48 Cze 50 40 Est 41 25 Mac 63 47 Geo 25 19 Hun 56 42 Kaz 23 22 Kos 63 Kyr 33 37 Lat 50 46 Lit 42 27 Mol 48 20 Mon 40 Pol 57 38 Rom 43 40 Rus 27 19 Ser 53 48 Slk 52 39 Sln 59 49 Taj 29 29 Tur 35 52 Ukr 30 32 Uzb 18 17 EU-10 48 38 FSU N 27 27 FSU S 33 24 SEE 52 45 ECA 41 35 0 20 40 60 80 2005 2008 BEEPS-at-a-Glance Cross Country Report 58 11. Innovation 11.5: Factors Affecting Innovation: Customers* Percentage of firms stating customers are an important influence in new product development Alb 75 45 Arm 74 49 Aze 71 76 Bel 61 47 BiH 84 70 Bul 53 60 Cro 65 66 Cze 87 76 Est 85 64 Mac 84 74 Geo 28 21 Hun 89 71 Kaz 49 52 Kos 29 Kyr 53 53 Lat 72 74 Lit 68 58 Mol 72 32 Mon 72 Pol 93 84 Rom 71 64 Rus 62 62 Ser 85 57 Slk 83 76 Sln 83 74 Taj 50 48 Tur 91 77 Ukr 74 60 Uzb 55 46 FSU N 62 55 FSU S 58 46 EU-10 78 70 SEE 78 59 ECA 71 60 0 20 40 60 80 100 2005 2008 BEEPS-at-a-Glance Cross Country Report 59 Annex I: Problems Doing Business Percentage Changes and Statistical Significance (1) A1: Factors that are Not a Problem Doing Business: Percentage Changes and Statistical Significance The table below shows the changes in the percentage of firms indicating a certain factor is not an obstacle to doing business. Access to Land Administration Sig. Negative Licensing and Customs and Sig. Positive Crime, Theft, and Disorder Education of Regulations Regulations Corruption Tax Rates Access to Skills and Electricity Transport Business Changes Changes Telecom Workers Finance Permits Courts Trade Labor Tax Alb 17.5 7.9 -12.5 -13.0 6.1 -4.6 19.5 -2.1 32.7 -11.5 22.7 -5.8 4.7 13.8 6 3 Arm 4.3 6.8 -15.6 -3.2 10.2 -10.4 28.1 -11.5 24.4 25.9 31.1 -4.2 11.4 11.3 8 3 Aze 5.7 -11.6 -4.8 -36.0 5.0 -26.6 21.0 -10.8 -21.9 -42.6 7.9 -15.9 4.3 26.1 4 7 Bel -28.2 -30.4 -55.2 -31.8 -1.9 -59.8 -23.0 -50.6 -32.1 -26.3 -15.4 -45.9 -9.3 -17.6 0 13 BiH -4.7 1.0 -8.5 -13.2 8.1 -0.7 -7.5 -2.0 7.8 3.3 -3.7 9.9 8.5 28.8 5 2 Bul -8.0 -5.7 -38.1 -3.6 -13.0 -16.9 -6.0 -38.9 5.4 -14.8 -4.5 -25.3 -9.2 6.7 1 7 Cro -6.4 4.0 -20.6 -10.5 -3.9 -4.5 -32.7 -19.6 0.8 -11.9 16.5 -9.6 -11.9 10.8 2 7 Cze 6.0 15.2 -38.3 -5.6 2.9 -0.4 14.5 -40.4 7.1 5.1 6.2 -24.4 3.2 29.5 4 3 Est -24.6 10.0 -11.4 -14.2 8.5 -21.8 6.3 -19.9 18.9 1.7 16.5 -9.5 26.9 21.1 5 6 Mac -0.2 3.5 -9.6 -7.6 -4.5 2.0 -2.9 0.4 7.1 -4.5 1.5 -4.2 9.4 11.6 2 1 Geo 21.2 27.4 -1.8 -5.1 -1.6 15.0 5.7 -15.5 12.3 -12.7 18.0 4.6 13.1 28.4 7 2 Hun -7.2 -33.3 -20.3 36.3 32.0 3.1 -17.8 -8.8 6.1 11.3 -20.5 3.2 2.8 24.4 4 5 Kaz -4.0 -22.8 -46.3 -26.4 -19.4 -26.7 8.2 -39.0 -9.6 -16.6 -12.3 -37.8 3.8 -0.6 1 10 Kyr -8.1 -6.2 -60.9 -19.0 -23.4 -11.5 4.6 -52.4 -8.7 -18.2 8.5 -39.4 -5.0 3.1 0 8 Lat -5.7 -23.3 -19.1 15.0 -28.8 -18.3 12.7 -16.1 -22.8 -19.9 -1.7 -24.3 2.0 3.8 2 8 Lit -3.1 -3.2 -38.5 -4.8 -35.4 -8.8 -6.3 -36.3 20.2 30.5 -9.8 -25.8 4.0 25.8 3 6 Mol 15.7 7.0 -21.1 -5.1 4.0 -1.9 18.5 -27.8 20.0 -24.1 20.3 -15.5 35.7 23.1 7 4 Pol -3.2 0.3 -33.9 -15.5 4.2 -10.9 9.5 -23.9 13.0 -19.4 -9.7 -14.8 -1.9 22.0 2 9 Rom -9.1 -2.1 -19.6 -8.8 -3.4 -3.6 -5.4 -10.6 6.2 -14.7 -3.2 -15.6 0.9 9.1 3 6 Rus -9.0 -16.4 -45.6 -27.9 -19.0 -21.4 5.7 -62.9 -8.6 -27.1 -9.1 -35.5 -0.1 8.1 1 12 Ser 10.6 4.0 -16.2 -12.9 9.1 -2.4 13.6 8.8 18.9 -0.4 7.7 -7.9 8.2 9.6 6 3 Slk -31.1 -32.7 -42.5 -19.5 -39.6 -36.1 -39.5 -36.9 -32.2 -31.6 -32.3 -30.8 -24.4 3.9 1 12 Sln -5.4 6.2 -32.2 5.5 -9.7 -30.9 30.2 -26.7 19.1 -8.3 2.7 -35.3 -4.5 13.3 2 6 Taj -2.2 -6.2 -10.1 -19.5 -10.4 -7.0 25.7 -0.6 18.0 -4.0 14.4 -5.4 13.2 4.0 4 3 Tur -4.6 -20.1 -4.0 -19.7 11.2 16.9 11.1 -11.8 0.8 -0.5 -15.3 -1.2 0.1 1.5 3 5 Ukr -2.6 -18.5 -42.7 -7.9 -12.4 -18.9 -15.2 -50.6 -16.7 -18.6 -8.8 -37.6 -5.1 0.8 0 11 Uzb 1.3 -19.4 -35.5 -32.3 -8.4 -46.9 12.4 -34.2 -5.8 -22.0 3.4 -7.4 -11.7 20.0 2 9 ANALYSIS OF CHANGES Positive Change 7 12 0 3 11 4 17 2 18 6 14 3 17 25 Sig. Pos. Change 6 6 0 2 5 2 14 0 12 3 8 1 8 18 Negative Change 20 15 27 24 16 23 10 25 9 21 13 24 10 2 Sig. Neg. Change 10 10 24 17 11 15 6 21 7 16 9 19 5 1 (1) Cells above present the percentage point changes in responses from 2005 to 2008. Highlighted cells indicate changes that are statistically significant at p=0.10 or above. Green cells show significant positive changes, meaning that there is a significant increase in the percentage of firms that indicated the factor was not an obstacle to doing business. Pink cells show significant negative changes, indicating there is a significant decrease in the percentage of firms indicating the factor was not an obstacle to doing business. The counts represent the overall number of countries experiencing the stated type of change. BEEPS-at-a-Glance Cross Country Report 60 Annex II: Methodological Notes Contents  Methodological Notes page 60  Differences in Question Wording and Response Options by Chart page 61  Survey Questions for Corresponding Charts page 64 Methodological Notes  For a brief explanation of the changes in the sampling methodology, which changed in terms of sample frame and method, please see the Sample Summary on page 3.  The 2008 round of the BEEPS consisted of three parts: the Main BEEPS sample was drawn from a universe of eligible firms in manufacturing and retail/wholesale industries with five or more full time employees located in major urban centers. The Manufacturing Module refers to additional questions asked only of firms in the manufacturing sector. The Services Module refers to additional questions asked only of firms in the services sector.  ECA and sub-regional averages are simple averages across countries, with each country having an equal weight.  The regional and sub-regional comparators are constructed as follows: The ECA average (ECA) includes all 29 countries: Albania (Alb), Armenia (Arm), Azerbaijan (Aze), Belarus (Bel), Bosnia and Herzegovina (BiH), Bulgaria (Bul), Croatia (Cro), Czech Republic (Cze), Estonia (Est), FYR Macedonia (Mac), Georgia (Geo), Hungary (Hun), Kazakhstan (Kaz), Kosovo (Kos), Kyrgyz Republic (Kyr), Latvia (Lat), Lithuania (Lit), Moldova (Mol), Montenegro (Mon), Poland (Pol), Romania (Rom), Russia (Rus), Serbia (Ser), Slovak Republic (Slk), Slovenia (Sln), Tajikistan (Taj), Turkey (Tur), Ukraine (Ukr), and Uzbekistan (Uzb). Northern FSU (FSU N) countries include Belarus, Kazakhstan, Russia and Ukraine. Southern FSU (FSU S) countries include Armenia, Azerbaijan, Georgia, Kyrgyz Republic, Moldova, Tajikistan and Uzbekistan. South Eastern Europe (SEE) countries include Albania, Bosnia and Herzegovina, Croatia, FYR Macedonia, and Serbia in addition to both Kosovo and Montenegro in 2008. European Union (EU-10) countries include Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovak Republic and Slovenia. For comparative purposes, the 2005 sub-regional averages for the EU-10 include Romania and Bulgaria although they were not member countries of the European Union until 2007. Turkey is included in the ECA average, but is not included in any sub-regional category.  Transformation of 2008 Data: The 2008 instrument included coding for Don’t Know (DK), Not Applicable (NA), and Refuse to Answer (REF). These responses were transformed to system missing and were removed before analysis. These steps were also taken with the 2005 data: non-valid responses including Don’t Know (DK) and Not Applicable (NA) and other missing values were removed before analysis.  Changes in the Survey Instrument: Some questions used in the 2005 questionnaire and present in prior versions of BEEPS at-a-Glance were dropped from the survey. Some new questions were added to the 2008 questionnaire. In some cases, the questions were modified in terms of wording or response options, thus care should be taken in comparing the results. For easy identification, charts marked with an asterisk (*) represent questions that are identical in question wording and response options. Charts marked with two asterisks (**) represent questions addressing the same issue but have changes in wording and/or response options and thus are limited in their comparability. Explanations of pertinent differences in the measures for 2005 and 2008 are presented later in this Annex.  Notes on Albania and Croatia: For Albania and Croatia, two datasets were used for analysis. The 2008 values presented for Albania and Croatia for BEEPS-at-a-Glance Cross Country Report 61 3 charts marked with a ( ) reflect data from the 2007 Enterprise Survey. All other 2008 values reflect data from the 2008 BEEPS survey. The data from the 2007 Enterprise Survey covers fiscal year 2006, whereas the 2008 BEEPS survey covers fiscal year 2007. ECA and the South Eastern Europe (SEE) sub-regional average values for these indicators also include the 2007 Enterprise Survey values for Albania and Croatia. The sampling methodology used for Albania and Croatia in 2007 was the same used for BEEPS in 2008. Firms in Albania and Croatia had been interviewed in 2007 for the Enterprise Survey and due to the combination of a small universe of firms comprising the sample frame and survey fatigue, certain firms were re-interviewed in 2008 using a shorter questionnaire. This was requested by the contracting firm responsible for completing the interviews. The result is two separate datasets that comprise the overall pictures in Albania and Croatia, respectively. The question wording for the indicators using the 2007 Enterprise Survey data do not differ from the BEEPS survey questionnaire. The charts using the 2008 BEEPS data are: 2.2 Bribe Frequency 2.4 Unofficial Payments for Taxes (also 6.3) 2.5 Unofficial Payments for Customs (also 5.2) 2.6 Unofficial Payments on Courts (also 9.3) 7.3 Professionalism of Labor 8.3 Purchasing on Credit 8.4a Purchases Made on Credit (all firms) 8.4b Purchases Made on Credit (firms using credit) 8.6 Sources of Firm Financing: Borrowed from Private Banks and Borrowed from State-Owned Banks 9.2 Use of Courts 11.1-11.5 All innovation charts The remaining charts use the 2006/07 Enterprise Survey data. All of the ECA and the South Eastern Europe (SEE) sub-regional average values include Albania and Croatia values. Caution must be taken when making inferences about the current state of affairs in Albania and Croatia based on the charts using 2007 Enterprise Surveys data. The values for these charts capture a different fiscal year than those based on BEEPS 2008 data.  Percentage Changes and Statistical Significance: Table 1.3, and Tables AI.3, AII.1 and AII.2 provided in Annex I and Annex II show the percentage point changes in responses from 2005 to 2008 and test for statistical significance of the differences. Statistical significance was determined by simple t-tests for difference in means, and the threshold was set for a p-value of 10 percent. Results for Kosovo and Montenegro are unavailable due to lack of data for 2005. Differences in Question Wording and Response Options by Chart The following paragraphs present a brief discussion on the differences in question wording or response options.  Tables 1.1 and 1.2 The ranking of problems are based on the mean score across all firms in each country for each indicator for the respective year. In 2008, the score is based on a five point scale where ―no obstacle‖ is given a value of zero, ―minor obstacle‖ a value of 1, ―moderate obstacle‖ a value of 2, ―major obstacle‖ a value of 3, and ―very severe obstacle‖ a value of 4. The mean values were then ranked highest to lowest. The most severe problem, or that with the highest mean score is ranked number 1, the least severe, or that with the lowest mean score is ranked 14.  Charts 2.1, 3.1, 4.1, 4.3, 5.1, 6.1, 6.2, 7.1, 7.2, 8.1, 9.1, 10.1, 10.4, and 10.6: In 2005, the Problems Doing Business indicators were measured using a four point scale: ―no obstacle‖, ―minor obstacle‖, ―moderate obstacle‖, and ―major obstacle‖. In 2008, the scale was expanded to five points including: ―no obstacle‖, ―minor obstacle‖, ―moderate obstacle‖, ―major obstacle‖ and ―very severe obstacle‖ as valid responses. The data shown in this note encompasses responses indicating an individual issue as ―no obstacle‖ in the respective year. The question regarding telecommunication as an obstacle was asked of all respondents in 2005, but only of service sector respondents in 2008.  Chart 2.3 (b): Respondents in 2005 could indicate the value of unofficial payments made as a percent of annual sales, BEEPS-at-a-Glance Cross Country Report 62 whereas respondents in 2008 could indicate the value of unofficial payments as a percent of annual sales or as a total cost. For those respondents in 2008 who indicated a numeric value, the percentage of annual sales was estimated via calculation with a question on total annual sales. The data shown is the mean value of the composite responses given in percentages and the estimated percentages for respondents indicating a total value.  Chart 3.3: Respondents in both 2005 and 2008 cycles could indicate the cost of security payments as a percent of annual sales or as a total cost. For those respondents in both 2005 and 2008 who indicated a numeric value, the percentage of annual sales was estimated via calculation with a question on total annual sales. The data shown is the mean value of the composite responses given in percentages and the estimated percentages for respondents indicating a total value. These questions were only posed to certain respondents indicating that they paid for security.  Chart 3.5: Respondents in 2005 could indicate the value of losses due to theft, robbery, vandalism or arson as a percent of annual sales, whereas respondents in 2008 could indicate the estimated losses as a percent of annual sales or as a total cost. For those respondents who indicated a numeric value, the percentage of annual sales was estimated via calculation with a question on total annual sales. The data shown is the mean value of the composite responses given in percentages and the estimated percentages for respondents indicating a total value. These questions were only posed to certain respondents indicating that they experienced losses due to theft, robbery, vandalism or arson.  Chart 7.3: The response scale changed between 2005 and 2008 on the question regarding professionalization of labor. For 2005, percentage responses for ―some university education or higher‖ were used to compare to the 2008 responses of ―what percent of this establishment’s labor force employed at the end of fiscal y ear 2007 had a university degree?‖  Chart 7.4 (a & b): The questions regarding formal training differed across 2005 and 2008. In 2005, the percent of workers participating in formal training was broken out into three categories, skilled workers, unskilled workers, and non-production employees. In 2008, these categories were condensed into production and non-production employees. In order to compare responses, a composite variable was created for 2005 which captures skilled and unskilled workers as production workers. The data presented reflects production and non-production workers.  Chart 8.2: The response scales for the question on reasons for not applying for a loan were changed between cycles. In 2005, the types of responses differed and multiple answers were allowed. In 2008, respondents were asked for the ―primary reason‖ they did not apply for a loan. The data presented for 2005 reflects the percent of respondents indicating ―did not need a loan‖ as one of their responses. This was completed by using a simple count of occurrences of each value and calculating the percentage across all firms.  Chart 8.3: The response type changed between 2005 and 2008. In 2005 this value was a percentage of input materials purchased on credit, whereas in 2008 it is a binary response indicating whether or not they purchased input materials on credit. The data presented for 2005 is a transformed value that assigns a value of 1 to respondent firms that indicated values above zero percent for the original measure.  Chart 8.6 (a-c): The response scale changed across cycles on the question regarding sources of firm financing. In 2005, thirteen response options were presented, whereas in 2008, only six response options were presented. In order to compare responses across cycles, some 2005 variables were combined to match as closely as possible the 2008 responses. Specifically, 1) Borrowing from Private Banks is a composite of Borrowing from Private Banks and Borrowing from Foreign Banks; 2) Purchased on Trade Credit from Suppliers or Customers is a composite of Trade Credit from Suppliers and Trade Credit from Customers. Due to the structure of the question and multiple response options, the total value of the responses does not equal one hundred percent. The question focuses on sources of financing other than internal funds or retained earnings; internal financing was not included as a response option in the 2005 or 2008 questionnaires.  Chart 8.7 (a-c): The response scales for the question on reasons for not applying for a loan were changed between cycles. In 2005, the types of responses differed and multiple answers were allowed. In 2008, respondents were asked for the ―primary reason‖ they did not apply for a loan. The data presented for 2005 reflects the percent of respond ents indicating each reason as one of their responses. This was completed by using a simple count of occurrences of each value and calculating the percentage across all firms. Due to the structure of the question, the total value of the responses does not equal one hundred percent. In 2005, respondents could provide multiple answers, and the chart does not present data on the response option of ―did not need a loan‖, which is presented in Chart 8.2.  Chart 9.2: The question wording and response options changed across cycles. In 2005, the survey asked two BEEPS-at-a-Glance Cross Country Report 63 questions: whether the respondent had been a plaintiff in a court case in the last three years, and if they had been a defendant. In the 2008 instrument, the question was worded more generally: if the respondent had been to court as a plaintiff or defendant in the last three years. The 2005 data was transformed into a dummy variable, assigned a value of 1 if the respondent had indicated either ―yes‖ to being a plaintiff, defendant, or both in a court case in the last three years. The 2008 data was not transformed.  Chart 10.2: The question wording and response options changed across cycles. In 2005, the survey asked how many days over the past 12 months did the firm experience power outages, whereas in the 2008 questionnaire the question was worded more generally: if a firm experienced power outages in the 2007 fiscal year. The 2005 data was transformed into a dummy variable, assigned a value of 1 if the firm had experienced one or more outages.  Chart 10.3: Respondents in 2005 could indicate the value of losses due to power outages as a percent of annual sales, whereas respondents in 2008 could indicate the value of losses as a percent of annual sales or as a total cost. For those respondents who indicated a numeric value, the percentage of annual sales was estimated via calculation with a question on total annual sales. The data shown is the mean value of the composite responses given in percentages and the estimated percentages for respondents indicating a total value.  Chart 11.1: The question regarding new product/service development was modified slightly in its wording from 2005 to 2008. In 2005, firms were asked if they successfully developed a new product or service over the last three years, whereas in 2008 they were asked if they introduced new products or services.  Chart 11.2: The question regarding research and development activities varied across cycles. In 2005, firms were asked how much they spent on research and development activities; in 2008 they were asked if they spent funds on research and development activities. The data presented for 2005 is a transformed value that assigns a value of 1 to respondent firms that indicated values above zero for the original measure. BEEPS-at-a-Glance Cross Country Report 64 Survey Questions for Corresponding Charts Chart/ Chart Name Comparability Survey Survey Table Question Question 2005 2008 1.1, 1.2 Problems Doing Business 2005 and 2008 Tax Rates P Q54 (h) J30 (a) Corruption P Q54 (q) J30 (f) Electricity P Q54 (d) C30 (a) Skills and education of workers P Q54 (m) L30 (b) Access to financing P Q54 (a) K30 Crime, theft and disorder P Q54 (r) I30 Tax administration P Q54 (i) J30 (b) Telecommunications* P Q54 (c) C30 (b)* Courts P Q54 (p) J30 (h30) Access to land P Q54 (f) G30 (a) Business, licensing and permits P Q54 (k) J30 (c) Transport P Q54 (e) D30 (a) Labor regulations P Q54 (l) L30 (a) Customs and trade regulations P Q54 (j) D30 (b) 2.2 Bribe Frequency F Q39 (a) Q39 2.3 Bribe Tax P Q40 J7 (a & b) 2.4 Unofficial Payments: Taxes F Q41(g) Q41c 2.5 Unofficial Payments: Customs F Q41(h) Q41a 2.6 Unofficial Payments: Courts F Q41(i) Q41b 2.7 Unofficial Payments: Government Contracts F Q42 J6 3.2 Payments for Security FY2 F Q32 (a) I1 3.3 Security Costs FY2 P Q32 (a) I2 (a & b) 3.4 Losses as a Consequence of Crime FY1,2 F Q33 (a) I3 3.5 Losses as a Consequence of Crime: Percent of Annual Sales P Q33 (b) I4 (a & b) FY1,2 4.2 Time Tax FY1,2 F Q35 J2 5.2 Direct Exports FY2 F Q7 (b) D3 6.3 Tax Inspections FY1,2 F Q38b (a1) J3 6.4 Frequency of Tax Inspections FY1,2 F Q38b (b1) J4 7.3 Professionalism of Labor FY2 P Q69 (a4) Q69 7.4a Percent of Employees Trained: Production** FY1,2 N Q71 (b1, b2) L11a** 7.4b Percent of Employees Trained: Non-Production** FY1,2 P Q71 (b3) L11b** 8.2 Adequacy of Firm Financing FY1,2 P Q47 (a) K17 8.3 Purchasing on Credit FY1,2 P Q30 (c) K1d 8.4 Purchases Made on Credit FY1,2 F Q30 (c) K1e 8.5 Credit Extensions to Clients FY1,2 F Q29 (c) K2 (c) 8.6 Sources of Firm Financing FY1,2 P Q45 (a) K5 (i, b, c, f, (a,b,c) hdej) 8.7 Loan Applications FY1,2 P Q47 (b) K17 (a,b,c) 9.2 Use of Courts P Q31 (e) Q31 (e) 10.2 Experienced Power Outages FY1,2 P Q23 (a1) C6 10.3 Sales Lost due to Power Outages FY1,2 P Q23 (c1) C9 10.5 Use of Email Communication F Q24 C22 11.1 New Product/Service Development P Q60 (a1) O1 11.2 Research and Development Activities FY1,2 P Q58 (b) O3 11.3 Factors Affecting Innovation: Domestic Competitors F Q63 (a) Q63 (a) 11.4 Foreign Competitors F Q63 (b) Q63 (b) 11.5 Customers F Q63 (c) Q63 (c) * Service module only for 2008 **Manufacturing module only for 2008 FY Question covers the previous year or fiscal year 2004 for the 2005 cycle (1), the previous year or fiscal year 2007 for the 2008 cycle (2) F= Wording is fully comparable, P= Wording is partially comparable (compare with caution), N= Wording is not comparable—for descriptive purposes only BEEPS-at-a-Glance Cross Country Report