Corruption biggest obstacle to developing business in Moldova

Chisinau, 10 April /MOLDPRES/- Corruption is the biggest challenge for the business sector of Moldova, according to a survey carried out by the European Bank for Reconstruction and Development (EBRD). Namely corruption continues to be "one of the biggest obstacles to developing business", especially in countries with transition economies, according to a communique by the European financial institution.

Businesses are also affected by political instability and shortage of skilled workers. The Moldovan big companies are facing problems related to electricity, while small companies see labor legislation among the greatest obstacles. The previous study showed that the access to land, workforce qualification and access to financing had been the three major constraints.

The Business Environment and Enterprise Performance Survey (BEEPS) 2013/2014 is the fifth one conducted jointly by EBRD and World Bank.

Under the survey, unveiled at a roundtable at the WB Office in Chisinau on 9 April, "in general, the results show improvement of business sentiment in all 16 fields of business climate measured by BEEPS". The sectors with "the worst scores" are corruption and political instability.

"Perception on large-scale corruption was most probably influenced by "raider attacks" in the financial sector, attempts of hostile takeovers by non-transparent investors, which could imply fraudulent actions affecting at least four financial institutions", the survey's authors said.

According to the survey, the payments or other benefits provided to employees to get certain advantages increased and reached the rate of 53 per cent in 2013 against 12 per cent in 2008. Also, civil servants of the local public administration demand bribes too, with the payments rising up to a rate of 53 per cent against 16 per cent in 2008. 

The recent survey showed that the biggest problem faced by managers was unfair competition in informal economy, where the companies try to avoid paying taxes or paying wages in envelopes, not to declare all incomes, the EBRD's communique also says.

The concerned problem was seen as a severe obstacle in business sector for one third of the states where the study has been conducted. It was identified in different economies, from Azerbaijan to Slovakia.

The next problem is access to financing. This was named as the biggest obstacle in Armenia, Croatia, Russia and Mongolia. In almost all countries, less companies took loans on the concerned period, against the previous poll of 2008/09. Almost a half of all firms needing credits has been refused financing, or they were discouraged to demand a loan.

(Reporter V. Bercu, editor L. Alcază)