Electricity Issues Stumbling Block for Albanian Business

The top three business environment obstacles identified by Albanian firms are electricity issues, competitors’ practices in the informal sector and corruption, the European Bank for Reconstruction and Development said on Thursday.

Competitors’ practices in the informal sector were the main obstacle for small and medium enterprises, corruption was more problematic for large firms, while tax administration and access to land were among the chief constraints for young firms, the EBRD said in a summary of the fifth EBRD and World Bank Business Environment and Enterprise Performance Survey (BEEPS) from across the transition region.

Although the number of power outages in a typical month in Albania decreased from 32.8 in 2007 to 7.8 in the latest BEEPS round, partly owing to increased precipitation, it still exceeded the Southeast Europe (SEE) average of 5.4, the EBRD said.

The informal sector is an important contributor to employment and production in Albania, the EBRD noted.

"According to the International Labour Organization, 30% of the total workforce in the construction sector is employed informally," the EBRD said.

"Discrepancies in Albania’s national accounts suggest that the informal sector accounted on average for 36.2% of GDP over the period 1996-2012," the EBRD said, adding that this leads to tax revenue losses, a lack of labour protection and unfair competition among firms.

According to the survey, although relatively few Albanian 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, well above the SEE average of 18.8%.

Source: SeeNews