The poor efficiency of the public administration and the judiciary are a concern for 90 percent of the surveyed businesses
TIRANA, July 23 – Regardless of reforms the Albanian government has undertaken to improve the business climate by reducing barriers, corruption perception remains high, with more than one third of businesses admitting to paying bribes. A survey conducted by Business Albania Association has revealed that corruption is the top concern for the overwhelming majority of 98 percent of enterprises.
“In Albania, corruption is viewed as the key barrier affecting the efficiency of businesses for 97.8 percent of the surveyed,” says the poll with 500 companies conducted in late 2011.
What’s most concerning is that 40 percent of the surveyed businesses admit to bribing in exchange for services. “More than 40 percent of the surveyed said they bribed in order to benefit services as the most efficient way in order not to get punished. Some 37 percent of businesses say they face lower costs if they pay bribes while 10 percent did not have a solution in the short-term.”
Around 83 percent of surveyed businesses are optimistic the establishment of the Administrative Courts, expected in early 2013, will reduce costs for businesses.
“Only 5 percent of the businesses said they faced no barriers in their activity while another 5 percent did not respond to the question.”
The poor efficiency of the public administration and the judiciary are a concern for 90 percent of the surveyed businesses. Pressure against businesses through intentional inspections, bribery and arbitrariness are some of the most problematic issues preventing the growth and development of enterprises. Some 76 percent of surveyed businesses said they were concerned by public administration pressure which causes inequality in the treatment of enterprises, lack of fair competition and preferential political treatment of special businesses.
Poor access to financing because of high interest rates is a barrier for one-third of businesses.
Inability to access new markets is another concerning issue for the future of the companies, which complain about lack of stimulating and facilitating measures making them competitive in regional markets.
While the tax rates are in general perceived as affordable, social security contributions which currently stand at 24.5 percent are perceived as too high.
Expectations
More than half of the surveyed companies expect the number of employees in the private sector to drop in 2012. Only 12 percent of companies are optimistic on employment prospects. As far as investments are concerned, 22 percent of surveyed businesses said they are expected to drop in 2012 while 70 percent say they are expected at the same levels.
More than 60 percent say the Business Consultative Council, a state body, has not influenced in improving the business climate or lowering the business burden.
Doing Business
Albania lost five places in the ease of doing business in the latest 2012 Doing Business report by published by the World Bank and IFC. The report notes Albania’s ongoing difficulty in dealing with construction permits.
“In Albania dealing with construction permits became more difficult because the main authority in charge of issuing building permits has not met since April 2009.” However, registering property has progressed and is mentioned as a reform. “Albania made property registration easier by setting time limits for the land registry to register a title,” says the report.
Albania’s best performance was reported in the protecting investors and getting credit categories ranking the world’s 16th and 24th, respectively. Albania’s third best indicator in the report was starting a business in which the country ranked 61th especially because of the short time it takes, five days and few procedures which are carried out at the National Registration Center, a one-stop-shop facility.
Albania ranked 64th in resolving insolvency, 76th in trading across borders, 85th in enforcing contracts. Registering property, paying taxes, getting electricity and dealing with construction permits are the worst indicators for Albania ranking the country from the word’s 118th to 183th.
