BEEPS V and MENA ES: Business environment

In BEEPS V, the top three business environment obstacles identified by Albanian firms were electricity issues; competitors’ practices in the informal sector; and corruption (Chart 1). Competitors’ practices in the informal sector were the main obstacle for SMEs, while corruption was more problematic for large firms. Tax administration and access to land were among the chief constraints for young firms.

In BEEPS V, the top three business environment obstacles identified by Armenian firms were access to finance; tax administration; and political instability (Chart 1). Young firms complained heavily about customs and trade regulations. In BEEPS IV, political instability, access to finance and the informal sector were the top obstacles.

In BEEPS V, the top three business environment obstacles identified by Azerbaijani firms were competitors’ practices in the informal sector; access to finance; and access to land (Chart 1). Access to finance was the main constraint for young firms and firms in the service sector. In BEEPS IV, corruption replaced access to finance as one of the top obstacles.

In BEEPS V, the top three obstacles identified by firms in Belarus were workforce skills; access to finance; and competitors’ practices in the informal sector (Chart 1). Large and manufacturing firms found access to land particularly difficult, while firms in the service sector were hampered by electricity- related issues. Workforce skills and electricity are persistent obstacles as they also topped the list in BEEPS IV.

In BEEPS V, the top three business environment obstacles identified by firms in Bosnia and Herzegovina were political instability; access to finance; and competitors’ practices in the informal sector (Chart 1). SMEs ranked the practices of the informal sector above access to finance, while electricity issues were in third place for large firms. Access to finance and corruption were the main constraints for young firms, while old firms were concerned about corruption. In BEEPS IV, the top two obstacles were the same, with tax administration taking third place.

In BEEPS V, the top three business environment obstacles identified by Bulgarian firms were competitors’ practices in the informal sector; political instability; and corruption (Chart 1). Large firms also complained about labour regulations, while young firms were concerned about transport, competitors’ practices in the informal sector and workforce skills. Since BEEPS IV, access to finance and electricity issues have become relatively less problematic.

In BEEPS V, the top three business environment obstacles identified by Croatian firms were access to finance; competitors’ practices in the informal sector; and tax administration (Chart 1). The same obstacles were also ranked at the top in BEEPS IV, pointing to little improvement in these areas. Large firms found tax administration to be their biggest struggle, followed by access to finance and labour regulations, while manufacturing firms ranked corruption as the second main constraint.

In BEEPS V, the top three obstacles that Cypriot firms identified in the business environment were competitors’ practices in the informal sector; political instability; and access to finance (see Chart 1). Issues with electricity and transport were more problematic for large firms. In the northern part of Cyprus, political instability was the most severe constraint for firms and workforce skills the third most severe.

In MENA ES 2013-14, the top three business environment obstacles identified by Egyptian firms were political instability; corruption; and competitors’ practices in the informal sector (Chart 1). Young firms were more often constrained by electricity issues and access to land. There were significant regional differences within the top constraints. In particular, electricity issues were the second most severe constraint in Dakahliya, Gharbiya and Kafr El Sheikh/Menoufiya/Beheira, while firms located in governorates along the Suez Canal complained about customs and trade regulations.

In BEEPS V, the top three business environment obstacles identified by Estonian firms were competitors’ practices in the informal sector; electricity issues; and workforce skills (Chart 1). Large firms felt most constrained by workforce skills, while young firms complained about electricity issues, tax rates and transport. In BEEPS IV, the top three obstacles were workforce skills, political instability and labour regulations.

In BEEPS V, the top three obstacles that Greek firms identified in the business environment were competitors’ practices in the informal sector; political instability; and electricity issues (Chart 1).

In BEEPS V, the top three obstacles in the business environment that Hungarian firms identified were tax administration; political instability; and competitors’ practices in the informal sector (Chart 1). The most severe constraints for large firms were competitors’ practices in the informal sector, labour regulations and electricity issues. Transport, telecommunications and electricity issues topped the list for young firms.

In MENA ES 2013-14, the top three business environment obstacles identified by Jordanian firms were access to finance; political instability due to the uncertain regional environment; and access to land (Chart 1). Young firms were most concerned about access to land, access to finance and tax administration.

In BEEPS V, the top three business environment obstacles identified by firms in Kazakhstan were competitors’ practices in the informal sector; electricity issues; and access to finance (Chart 1). For large firms, electricity issues and workforce skills were among the biggest challenges. Young firms listed corruption as a major constraint. In BEEPS IV, the top three obstacles were workforce skills, access to finance and electricity issues.

In BEEPS V, the top three business environment obstacles identified by Kosovan firms were competitors’ practices in the informal sector; electricity issues; and corruption (Chart 1). SMEs placed corruption ahead of electricity issues, while electricity issues; access to finance; and crime, theft and disorder topped the list for large firms. Crime, theft and disorder were also a concern for young firms. In BEEPS IV, crime, theft and disorder replaced competitors’ practices in the informal sector to appear among the biggest challenges in the business environment.

In BEEPS V, the top three business environment obstacles identified by Kyrgyz firms were political instability; corruption; and electricity issues (Chart 1). Large and manufacturing firms felt more constrained by competitors’ practices in the informal sector. In BEEPS IV, competitors’ practices in the informal sector were among the most binding business environment constraints, instead of political instability.

In BEEPS V, the top three business environment obstacles identified by Latvian firms were workforce skills; access to finance; and political instability (Chart 1). SMEs and young firms were mostly concerned about access to finance, while large and manufacturing firms were constrained by electricity issues. Young firms were also affected by competitors’ practices in the informal sector. In BEEPS IV tax administration, rather than access to finance, was among the top three business environment obstacles.

In BEEPS V, the three largest obstacles in the business environment, as identified by Lithuanian firms, were workforce skills; competitors’ practices in the informal sector; and electricity issues (Chart 1). Corruption was one of the most binding constraints for large and young firms, while manufacturing firms cited limited access to finance. In BEEPS IV political instability; workforce skills; and electricity issues were considered the three major business environment obstacles, while competitors’ practices in the informal sector ranked eighth.

In BEEPS V, the three largest business environment obstacles identified by Moldovan firms were corruption; political instability; and workforce skills (Chart 1). Large firms also felt constrained by electricity issues, while young firms placed labour regulations among the biggest obstacles. In BEEPS IV, access to land; workforce skills; and access to finance were the three major constraints.

In BEEPS V, the top three business environment obstacles identified by Mongolian firms were access to finance; competitors’ practices in the informal sector; and electricity issues (Chart 1). Access to land was among the top obstacles for SMEs, young and manufacturing firms, while large firms were concerned about workforce skills and corruption. In BEEPS IV political instability replaced electricity issues as one of the main constraints.

In BEEPS V, the top three business environment obstacles identified by Montenegrin firms were competitors’ practices in the informal sector; access to finance; and electricity issues (Chart 1). Large firms found issues with customs and trade regulations and workforce skills the most problematic. Manufacturing firms found electricity issues to be a more binding constraint than access to finance. In BEEPS IV access to finance was replaced by tax administration as one of the main business environment obstacles.

In MENA ES 2013-14, the top three business environment obstacles identified by Moroccan firms were competitors’ practices in the informal sector; corruption; and workforce skills (Chart 1). Young firms were most concerned about corruption, access to land and problems related to transport.

In BEEPS V, the top three business environment obstacles identified by North Macedonian firms were competitors’ practices in the informal sector; access to finance; and electricity issues (Chart 1). Electricity issues, transport and competitors’ practices in the informal sector were most problematic for large firms, while young firms also complained about tax administration. Electricity issues were more pressing than access to finance for old firms, manufacturing companies and firms in the service sector. In BEEPS IV, political instability was in third place.

In BEEPS V, the three largest obstacles to conducting business, as identified by Polish firms, were tax administration; competitors’ practices in the informal sector; and access to finance (Chart 1). Large and old firms cited labour regulations as being a major issue, while young firms considered access to finance, tax administration and courts to be the most binding constraints. In BEEPS IV, political instability, workforce skills and electricity issues were identified as the top business environment obstacles.

In BEEPS V, the top three business environment obstacles identified by Romanian firms were tax administration; corruption; and political instability (Chart 1). Large firms complained about the practices of competitors in the informal sector. In contrast young firms complained more about inadequate access to a skilled workforce. In BEEPS IV, workforce skills were among the top three obstacles however corruption was not.

In BEEPS V, the top three business environment obstacles identified by Russian firms were access to finance; corruption; and electricity issues (Chart 1). Competitors’ practices in the informal sector were important, too, for SMEs, while large, old and manufacturing firms were concerned about workforce skills. There were significant differences in top obstacles by region.

In BEEPS V, the top three business environment obstacles identified by Serbian firms were political instability; tax administration; and access to finance (Chart 1). Large firms were concerned about electricity issues and practices of informal sector competitors, while services firms complained about corruption. Tax administration was the top obstacle named by young firms. In BEEPS IV, competitors’ practices in the informal sector were among the most binding of business environment obstacles instead of tax administration.

In BEEPS V, the top three business environment obstacles identified by Slovak firms were competitors’ practices in the informal sector; electricity issues; and access to finance. SMEs were more concerned about access to finance than electricity issues, while corruption topped the list for large firms, followed by courts and labour regulations. Young firms also complained about crime, theft and disorder. In BEEPS IV crime, theft and disorder were among the top obstacles instead of competitors’ practices in the informal sector.

In BEEPS V, the top three business environment obstacles identified by Slovenian firms were political instability; tax administration; and access to finance (Chart 1). Labour regulations were among the top obstacles for young, large and manufacturing firms. The latter were also concerned about corruption. In BEEPS IV, the top three obstacles were access to finance; competitors’ practices in the informal sector; and electricity issues.

In BEEPS V, the top three business environment obstacles faced by Tajik firms were electricity issues; access to finance; and competitors’ practices in the informal sector (Chart 1). Large firms were more concerned about tax administration than access to finance. Young firms complained most about access to finance and political instability. In BEEPS IV workforce skills were in third place. Notably, tax administration was in the ninth place.

In MENA ES 2013-14, the top three business environment obstacles identified by Tunisian firms were political instability; workforce skills; and competitors’ practices in the informal sector (Chart 1). Young firms were much less concerned about competitors’ practices in the informal sector; instead, they were worried about corruption and access to land.

In BEEPS V, the top three business environment obstacles identified by Turkish firms were competitors’ practices in the informal sector; political instability; and electricity issues (Chart 1). Large and services firms were most concerned about political instability. Corruption was no longer among the top three constraints, except for young firms.

In BEEPS V, the top three business environment obstacles identified by Ukrainian firms were political instability; corruption; and competitors’ practices in the informal sector (Chart 1). Large, young and manufacturing firms were more concerned about access to finance than the practices of informal sector competitors. In BEEPS IV, tax administration was in third place.