Business environment improves slightly, bureaucracy still suffocates business – What does USAID survey of 1000 companies show?

The third annual USAID survey conducted among 1000 companies in Serbia shows their managers think that business environment in Serbia improved slightly during 2013 although time-consuming and expensive regulatory procedures still have negative effect on competitiveness, USAID announced on Wednesday (November 13, 2013).

Upon presentation of the report data, U.S. Ambassador to the Republic of Serbia, Michael Kirby, stressed out positive moves: almost half of the asked (46%) says that in 2013 corruption did not affect their business, compared to only 26% who had the same opinion last year.

The Ambassador Kirby also said he was satisfied with development of inspection monitoring and better environment for economy it brought. The questioned say the time company managers have to set aside for cooperation with inspectors decreased to 22 hours in 2013, from 70 hours 2011 as well as that penalties continue decrease: the average 2013 amount paid fell to EUR 1.154 EUR, compared to 2011 average of EUR 2.128 EUR.

The USAID survey within the Project for better business environment enables businessmen to estimate the effects of regulations, economy policies and access to funding sources on competitiveness and further development options for their businesses. Many claim they face the same trouble spots as in the previous years – inflation, taxes on salaries and added value, foreign currency rate, the USAID announcement says.

Businessmen complain that inadequate access to funding sources limits their development options: 90% of the questioned mentions that high interest rates and compensations of banks halt development; 76% of them has the same opinion when it comes to provision of assets for loans while 72% thinks loans indexed in foreign currency negative affect funding sources. They also mention that this year their companies invested as much time for regulatory issues as last year.

When it comes to future prospects, businessmen in Serbia are cautious when it comes to next year: 31% says they are optimistic while 60% is neutral when it comes to profit increase, new hires or introduction of new products or services. The situation is similar as it was last year but far more negative compared to 2011 when 45 % of the questioned were optimistic.

The survey revealed that only 7% of businesses in Serbia export their products which negatively affect economy growth. Majority of them mostly operate on local markets. Therefore, they place 70% of their products only within boundaries of its municipality; it was concluded in the USAID announcement.

The survey was conducted between September 9 and October 4, 2013 and 1000 private businesses with at least three employees participated.

Have a look at this year’s survey details.