EBA: TOP factors that complicate doing-business in Southern Ukraine are bureaucracy and corruption
Kateryna Morozova, Team Lead of EBA Southern Ukrainian Office describes the results of a Regional index survey conducted among member-companies of the EBA Southern Ukrainian Office to determine the level of ease-of-doing business and the factors that negatively affect it.
30 member companies of the Southern Ukrainian office of the European Business Association took part in the EBA Regional Index Survey. The questionnaire consisted of 9 questions, the survey was conducted from 7 to 27 October 2020.
Namely 51% of respondents believe that the conditions for doing business in the Southern region are satisfactory, 36% report some difficulties in their activities, while 13% said that conditions of doing business are quite good for them.
So, what exactly is negatively affecting the ease of doing business in the region? The main negative factors are bureaucracy and corruption – 50% of surveyed entrepreneurs believe so. Another 21% – complain about the unsatisfactory state of infrastructure, 14% – about the lack of the rule of law, 8% of respondents noticed pressure from law enforcement agencies, and 6% of participants told about difficulties in relations with authorities.
The Southern region has a fairly multiple transport complex, represented by all types of transport, including the largest sea freight forwarding trading ports, shipping companies, developed railway and road facilities, airport and airfield complexes, airlines. However, there are comments on the quality of these infrastructure systems. More than half of the respondents, namely 56% believe that the condition of transport infrastructure in the region is bad, another 30% – satisfactory and only 13% believe that transport infrastructure is well developed.
To improve the situation, 51% of entrepreneurs propose the reconstruction of roads, 21% believe it is necessary to modernize the railway and 15% point to the need of developing river infrastructure. In this context, the European Business Association welcomes the long-awaited start of river transport reform and supports the need to adopt a sectoral Law Project “On Inland Water Transport” for the development of Ukraine’s inland waterways, in case the principles developed with the participation of business before the second reading are adopted.
Business has a mostly neutral attitude to cooperation with local authorities and a level of satisfaction with the services of a number of authorities in the regions. The business in the South has the most complaints about the work of the Ecological inspection (56% are dissatisfied with its work), the Odesa City Council (40% of respondents are dissatisfied), The Regional Customs Authority and the National Police (33% – dissatisfied entrepreneurs).
What are the business plans for the next 6 months? According to the results of the Regional index survey in the context of the uncertainty and quarantine restrictions, companies plan to: digitalize enterprises – 31%, reduce their costs – 19%, expand and attract new investment – 15%, optimize office space – 15%, access new/other markets – 10%, and another 10% of respondents experience difficulties planning now. About 57% of enterprises in the Southern region report income losses due to quarantine restrictions.
The companies refer to the need to develop infrastructure, effectively combat the shadow economy, and improve the work of courts and law enforcement agencies. Despite a number of problems and complications, the business in the region is quite optimistic and declares its readiness to attract new investments.
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