Updated 2008 Data for Belarus, Georgia, Tajikistan, Ukraine and Uzbekistan

Here are some of the notable findings:

In Belarus, access to finance appears to have improved considerably since 2005’s survey results. An impressive 49% of Belarusian companies reported having lines of credit or loans from financial institutions -- putting Belarus above regional (40%) and global* (32%) averages. The collateral needed to secure a loan has fallen from 130% of the underlying value of the loan in 2005 to 118% in 2008 -- both are below the regional (151%) and global (137%) averages. Meanwhile, “tax rates” were identified as the greatest obstacle to business operations on a list of 10. In fact, more than a quarter (26%) of the 273 firms surveyed in Belarus thought tax rates were more constraining than the country’s regulatory requirements, access to finance, corruption, crime, political instability or other potential obstacles. (See graph.)

 

In neighboring Ukraine, “political instability” tops the list of perceived obstacles to business operations, followed by “tax rates.” (See graph.) Of the 851 Ukrainian firms surveyed, more than half (55%) cited tax rates as “a major constraint” to operations.** Meanwhile, in good news, the prevalence of corruption fell considerably since the last survey. This year, under a quarter (23%) of Ukrainian firms reported that informal payments to public officials were expected “to get things done” -- compared to almost half (48%) in 2005.

 

In Georgia, the lack of corruption is a bright spot that keeps burning brighter. Only 4% of 373 Georgian firms reported that informal payments to public officials were expected in order to “get things done” in 2008. That’s well below the 11% reported in 2005, well below the 13% reported by OECD nations and enviable worldwide. Drilling down in the data, only 8% of Georgian firms said gifts were expected in meetings with tax officials this year -- compared to 36% in 2005’s results and 28% reported in all OECD counties surveyed. Of the potential obstacles to Georgian businesses, “corruption” is predictably low on the list. Up at the top are “access to finance” and “political instability.” (See graph.) Although a healthy 42% of Georgian firms report lines of credit or loans from financial institutions, the collateral required to secure loans is a steep 185% of the underlying loan amount -- which is above regional and worldwide averages.

 

Although corruption appears to be more prevalent in Tajikistan than it is elsewhere in the ECA region, the country made strides since 2005. Most strikingly, the percentage of firms reporting that gifts are expected in meetings with tax officials dropped from 68% in 2005 to 33% in 2008. Meanwhile, “electricity” tops the list of obstacles to operations, followed closely by “tax rates.” 360 firms surveyed. (See graph.)

 

In neighboring Uzbekistan, corruption appears to be more rampant. More than half (50%+) of the survey respondents reported that gifts were expected (1) to secure a government contracts, (2) in meetings with tax officials and (3) to get an operating license. However, note that a definitive 100% of the 366 firms surveyed said they were formally registered when they started operations in the country. That’s the only country in the world to report 100%, but it’s followed closely by fellow ECA countries Georgia (99.6%) and Belarus (98.5%). (See “infomality.”) At the same time, women’s participation in firm ownership has spiked from 17% in 2005 to 40% in 2008. At its current level, female participation in firm ownership in Uzbekistan stands above both regional and global averages -- which both hover around 29%. (See "gender.")

 

* The “global” average covers the 106 economies currently covered by enterprise surveys.

** Note that statistics regarding business constraints are not fully comparable from 2005 to 2008 because a four-point scale was used in 2005 while a five-point scale was introduced in 2008.