Heavy insurance encumbrances are the most serious hindrance for carrying out trade activities, shows a survey of the Bulgarian Chamber of Commerce and Industry amongst managers and company owners
In the period December 12th -15th 2005, the Bulgarian Chamber of Commerce and Industry carried out a sociological survey amongst 300 managers and company owners, members of the Chamber. The survey
covered all sectors of the economy, as well as large, average and small companies. As a whole, the companies describe year 2005 as successful for their business – only 3 percent of the questioned
declared deterioration of their company’s financial condition.
76% of the companies have expanded their range of products and 79% expect to succeed in this in 2006.
There is a positive tendency as regards export – 62% of the companies have expanded their list of exported products and 72% expect the same tendency also in the next year. Companies are mainly
oriented towards external trade – 72% have exported goods or services during the year and 28% have been occupied only on the internal market. Though, we should bear in mind that one part of these
28% are companies operating in the finance sector (banks), that by definition do not export goods and services.
Extremely low is the percent of companies that pay adequate attention to the objects of intellectual property for the sake prosperity and in view to better performance on the competitive market.
Only 11% of those questioned have invested in acquiring of industrial property – patents, trade marks, designs etc.
With regard to business environment, heavy insurance encumbrance was described as the most serious hindrance to carrying out of trade activities. More than one third part of the companies (34%)
expect that insurance encumbrance be alleviated. Bureaucracy hinders the activities of one of every four entrepreneurs (24%) and unfair competition impedes one of every five (21%). Lack of
qualified labour force is a problem for 21% of the companies; imperfect legal framework restrains the activity of 20%, high taxes – of 19%, low quality of the administrative services -1of
7%.
Corruption ranks far back – by 11% - which is a positive tendency as compared with the alarming rates of previous years.
Clumsy and ineffective judicial system represents a problem for 9% of the entrepreneurs.
Only 8% complain against illegal import.
Questioned about the international price conjuncture, only 6% answered that high prices of gasoline and its derivatives have not influenced their activity.
Large overdue liabilities between companies are one of the most serious problems of the Bulgarian economic environment. Credit expansion in 2005 has influenced strongly trade entities – 61% of the
companies have financed their activity via bank credit. The same percentage (61%) plan to do so also in the next year and other 30 % still reflect on the opportunity. Only 9% do not plan to seek
financial support from the banks.
It is alarming that one third part of the questioned (36-37%) deem that the level of crime and corruption has increased during this year and according to other 36-43% there has been no change since
2004. Only 4% think that crime levels have fallen and 21% reserve judgment.
One of every five businessmen thinks that percentage of grey economy has fallen in 2005; 52%, however, think that there has been no change. Amongst the causes of the so called informal economy have
been pointed out: corruption amongst state supervisory bodies (31%), low quality of administrative control (26%), heavy insurance encumbrance (20%), low business culture (18%), illegal import (18%)
and ineffective legislation (13%).
In order to restrain grey economy businessmen suggest that insurance encumbrance should be significantly alleviated (22%), that administrative (20%) and customs (15%) control be improved, and that
mandatory VAT registration be imposed. Besides, more than half of those questioned fully support the imposition of a VAT registration mandatory for all trade entities notwithstanding their annual
turnover and only 9% are against this. 42% hesitate about the necessity of such measure. Last but not the least, it is important to register business’s attitude towards authority representatives,
whose decisions and actions determine the quality of the business environment in Bulgaria. Greatest approval entertains the presidential institution (61%), followed by communal administration
(34%); legislative and executive powers, as well as tax administration receive 24%. Least popular are the judicial system (9%) and customs administration.
Most inadequate to the business’s demands have proved to be the executive (61%) and the judicial (58%) powers, followed by the customs administration (49%), the Parliament and the tax
administration (46% each) and communal administration (33%).
It is interesting that approximately 30% of the questioned cannot judge about the qualities of the given state bodies.
