Graft and Grey Economy Hindering Balkan Business, EBRD

The EBRD's business environment in the transition region survey, BEEPS, interviewed some 15,000 business leaders in 24 countries during 2013 shows that in Albania, electricity shortages, unfair competition from the informal sector and corruption are seen as the main obstacles to business.

About 40 per cent of the firms surveyed reported having to compete against firms in the informal sector.

Corruption, especially over construction permits is another major concern in Albania, the survey said.

"Although relatively few firms applied for construction-related permits, almost one-third of the firms that did said that an informal gift or payment was expected or requested during the application process," EBRD noted in the report.

In Croatia, business leaders ranked difficulties in accessing bank loans as their first concern, followed by competition with the informal sector and complex taxes.

"Of the firms surveyed, 29 per cent applied for a loan or a line of credit and almost 30 per cent of them reported that their application was rejected," the report stated.

Among the companies that did not apply for any loans, high interest rates were cited as the main reason for not applying.

In Kosovo, competition from the informal sector, power cuts and corruption were the main problems encountered by business leaders.

"The share of firms that reported competing against firms in the informal sector amounted to 66 per cent and was the highest among all the 30 countries covered in the survey," the report said.

About 80 per cent of the companies surveyed said that power cuts were almost a daily issue in Kosovo. Corruption, ranked in third place, registered an increase since the last survey in 2007.

"The percentage of contract...