Survey of foreign investors, the bureaucracy in the country increases significantly

2024-11-21 15:15:00, Ekonomi CNA

Survey of foreign investors, the bureaucracy in the country increases

Despite the fact that almost every action with the administration in the country has gone online, foreign businesses perceive that in 2024 there has been a significant increase in bureaucracy in the country, according to the Business Environment Survey in Albania 2024.

Business representatives believe that there is an increase in the level of bureaucracy they face, reaching 64 points out of 100, 21 points more compared to 2023, where there were 43 points on the same scale.

The survey still shows a slight improvement in the environment for doing business in the country, but it remains below the average in favorability, not exceeding the level of 50, out of 100, which is the maximum indicator.

The survey for the Business Environment in Albania 2024 was carried out during the months of August - October 2024 through the involvement of the foreign investor community in the country. The findings were presented by the Association of Foreign Investors in Albania, Confindustria Albania, the Italian Chamber of Commerce in Albania and the Greek Business Association in Albania.

The main respondents of this survey were important foreign businesses in Albania, in the sectors of information and communication technologies, heavy industries and mining, energy and environment, financial services, trade, logistics, tourism, consulting services, etc.

Foreign investors evaluate the current situation of doing business in Albania with 49 out of 100 points, with an increase of 3 points compared to 2023 (46 points), however they do not manage to exceed the average in favorability. When looking at the expectations for the business climate in the future, they reach the same result as in 2023, with 52 points out of 100, also in 2024. In terms of the global and national macroeconomic situation, foreign investors consider "the current devaluation of the euro and the impact on their business", as well as "the impact of the current high rate of inflation", as the two most serious issues affecting their business, with a slight decrease in the degree of intensity compared to the 2023 survey .

Looking at internal factors, business representatives believe that there is an increase in the level of bureaucracy they face, reaching 64 points out of 100, 21 points more than in 2023, where there were 43 points on the same scale. Up to 69% of business representatives also affirm that informality is present in the sectors where they operate. Order and security are the dimensions with the best performance in this category, where 33% respond that they face problems in this direction, however, the intensity of these problems is estimated with 61 points out of 100 on the same scale. Furthermore, over 63% of respondents believe that the government is not transparent enough to their business. When you think about it

to do business in Albania, an improvement of 7 points is observed for the Albanian political climate, considered problematic with 49 points, compared to 56 in 2023, on the intensity scale. The Albanian judiciary, on the other hand, received 55 points, an increase of 12 points compared to 43 points in 2023. The energy supply section of the 2024 survey sees an overall improvement compared to 2023, with all dimensions that do not cross the midline of intensity on the rating scale.

The situation does not look very positive when assessing the tax system in the country, with only 3 dimensions out of 9 assessed slightly exceeding the average intensity on the assessment scale. Specifically, "Frequency of changes in tax legislation and practices and its impact on business" (55 points), "Importance and clarity of decisions / interpretations issued by tax authorities and their impact on business" (51 points), and " The level of interconnection/communication between different government platforms/institutions" (51 points).

When we look at relations with Albanian institutions, even though only 1 dimension crosses the middle line in the scale of intensity (Capacities of institutions, local or central, as well as the level of expertise of public officials, in the performance of their functions, with 56 points), there is a slight decrease in overall performance in this regard, in almost all dimensions assessed.

The situation regarding the Labor market in Albania is again among the weakest dimensions evaluated by foreign investors, specifically when it comes to the increase in wages in the country, which received 65 points on the intensity scale, an increase of 21 points compared with 44 points in 2023. Also, when looking at access to qualified/trained workforce and its impact on business, it has received 74 points, 5 points more compared to 69 points in 2023.

The situation regarding pro-business strategies and incentives feels "lukewarm" at best, with foreign investors rating the impact of Albanian economic reforms and policies on foreign business with 48 points (a slight increase of 1 point compared to year 2023), as well as the evaluation of policies and incentives for the promotion of investments is 45 points (a slight decrease of 2 points, compared to 2023).

Foreign investors do not expect major changes in the Albanian economy in the coming year, receiving 55 points on a scale where 0 = significantly weakens and 100 = significantly improves. This is followed by a slight optimism for business turnover growth, which is expected to increase by 60 points on a scale where 0 = significantly decreased and 100 = significantly increased.

The results of the survey were presented in the presence of the Head of Cooperation from the EU Delegation in Albania Mr. Hubert Perr, the Minister of State for Entrepreneurship and Business Climate Mrs. Delina Ibrahimaj, the Deputy Minister for Economy, Culture and Innovation Mr. Enkelejd Musabelliu, as well as other distinguished guests and diplomatic representatives in Albania./ Monitor.al