Balkan Barometer 2022

BALKAN BAROMETER 2022
BUSINESS OPINION
Co-funded by
the European Union
Title: BALKAN BAROMETER 2022
Business Opinion
Analytical report
Publisher: Regional Cooperation Council

Trg Bosne i Hercegovine 1/V, 71000 Sarajevo
Bosnia and Herzegovina
Tel: +387 33 561 700; Fax: +387 33 561 701
E-mail: rcc@rcc.int
Website: www.rcc.int
Authors: ACIT Centre & Finance Think
Editor: Bojana Zoric, Senior Policy Analyst RCC
Design: Samir Dedić
June 2022
©RCC2022 All rights reserved. This document is prepared and developed in cooperation be-
tween Regional Cooperation Council and the ACIT Centre & Finance Think.
This survey has been funded by the Regional Cooperation Council.
The responsibility for the content, the views, interpretations and conditions expressed herein
rests solely with the authors and can in no way be taken to reflect the views of the RCC or of its
participants, partners, donors or of the European Union.
BALKAN BAROMETER 2022
BUSINESS OPINION
BALKAN BAROMETER 2022 BUSINESS OPINION
CONTENTS
FOREWORD .........................................................................................................................21
INTRODUCTION....................................................................................................................23
MAIN FINDINGS...................................................................................................................24
REGIONAL OVERVIEW..........................................................................................................26
BALKAN BUSINESS SENTIMENT INDEX................................................................................29
PERCEPTIONS OF THE BUSINESS ENVIRONMENT AND ECONOMIC TRENDS.......................33
BUSINESS TRENDS IN THE WESTERN BALKANS..................................................................39
BUSINESS ENVIRONMENT IN THE WESTERN BALKANS.......................................................44
LEGAL AND REGULATORY FRAMEWORK..............................................................................76
ACCESSIBILITY OF LOANS...................................................................................................88
CORRUPTION.......................................................................................................................91
TRADE AND INVESTMENT..................................................................................................103
INNOVATION AND TECHNOLOGY.......................................................................................122
HUMAN CAPITAL...............................................................................................................132
EMPLOYMENT PRACTICES.................................................................................................140
COVID-19 IMPACT..............................................................................................................150
FINANCIAL AND OPERATIONAL PERFORMANCE................................................................152
FOCUS ON LARGE COMPANIES..........................................................................................154
FOCUS ON EXPORTERS......................................................................................................163
CONCLUSIONS...................................................................................................................171
NOTE ON METHODOLOGY..................................................................................................173
4
LIST OF TABLES
TABLE 1 CAN YOU TELL HOW PROBLEMATIC ARE THESE DIFFERENT FACTORS
FOR THE OPERATION AND GROWTH OF YOUR BUSINESS? CAN
YOU PLEASE RATE EACH?..................................................................................... 45
TABLE 2 HAVE YOU USED ANY OF THE FOLLOWING SOURCES OF CAPITAL
OVER THE PAST 12 MONTHS?.............................................................................. 88
TABLE 3 PLEASE ESTIMATE WHAT IS THE APPROXIMATE AMOUNT (IN EUR)
OF UNOFFICIAL PAYMENTS/GIFTS THAT COMPANIES LIKE YOURS
WOULD MAKE IN A GIVEN YEAR FOR THE FOLLOWING PURPOSES................. 99
TABLE 4 ACCORDING TO YOUR OPINION, WHICH MARKET IN THE WB
REGION IS THE MOST OPEN ONE? PLEASE GIVE US YOUR OPINION
NO MATTER IF YOU/YOUR COMPANY HAD DIRECT EXPERIENCE
WITH IT.................................................................................................................. 121
List of tables
5
LIST OF FIGURES
FIGURE 1 REAL GDP GROWTH IN THE WESTERN BALKANS 2008-2023............................ 26
FIGURE 2 UNEMPLOYMENT RATES IN THE WESTERN BALKANS, 2010-2021................... 27
FIGURE 3 BALKAN BUSINESS SENTIMENT INDEX (BBSI) - 2022......................................... 30
FIGURE 4 BALKAN BUSINESS SENTIMENT INDEX (BBSI) OVER TIME................................ 30
FIGURE 5 BALKAN BUSINESS SENTIMENT INDEX (BBSI) - PRESENT
SITUATION INDEX................................................................................................... 31
FIGURE 6 BALKAN BUSINESS SENTIMENT INDEX (BBSI) – EXPECTATION INDEX............ 32
FIGURE 7 HOW HAS THE GENERAL ECONOMIC SITUATION IN YOUR
ECONOMY CHANGED OVER THE PAST 12 MONTHS? HAS
IT DETERIORATED, REMAINED UNCHANGED OR IMPROVED?............................ 33
FIGURE 8 HOW DO YOU EXPECT THE GENERAL ECONOMIC SITUATION IN
YOUR ECONOMY TO DEVELOP OVER THE NEXT 12 MONTHS?
WILL IT MOSTLY DETERIORATE, REMAIN UNCHANGED OR IMPROVE?............. 34
FIGURE 9 HOW DO YOU EXPECT THE NUMBER OF PEOPLE EMPLOYED IN YOUR
COMPANY TO CHANGE OVER THE NEXT 12 MONTHS?...................................... 35
FIGURE 10 DO YOU BELIEVE THAT YOUR ECONOMY IS A GOOD PLACE TO
INVEST?................................................................................................................... 35
FIGURE 11 HOW HAS YOUR BUSINESS SITUATION DEVELOPED OVER THE
PAST 12 MONTHS? HAS IT DETERIORATED, REMAINED
UNCHANGED OR IMPROVED?................................................................................ 36
FIGURE 12 HOW IMPORTANT IS THE QUALITY OF REGIONAL COOPERATION
IN THE WESTERN BALKANS TO YOUR BUSINESS?.............................................. 37
FIGURE 13 DO YOU THINK THAT YOUR ECONOMY’S EU MEMBERSHIP WOULD
BE/IS A GOOD THING, A BAD THING, OR NEITHER GOOD NOR
BAD FOR YOUR COMPANY?................................................................................... 38
FIGURE 14 HOW DO YOU EXPECT THE DEMAND FOR YOUR COMPANY’S
PRODUCTS/SERVICES TO CHANGE OVER THE NEXT 12 MONTHS?
WILL IT DECREASE, REMAIN MOSTLY UNCHANGED OR INCREASE?................. 39
FIGURE 15 HOW HAVE YOUR LABOUR AND OTHER COSTS (E.G. ENERGY, ETC.)
CHANGED OVER THE PAST 12 MONTHS?............................................................ 40
FIGURE 16 HAS YOUR BUSINESS TAKEN ANY STEPS TO REDUCE THE
ENVIRONMENTAL IMPACT IT MAKES, SUCH AS REDUCING ENERGY
CONSUMPTION, WASTE REDUCTION OR SWITCHING TO
RECYCLED/SUSTAINABLE MATERIALS ETC.?...................................................... 41
FIGURE 17 DOES YOUR CURRENT BUSINESS MODEL ALLOW FOR A SHIFT
TOWARDS A CIRCULAR (ECONOMY) MODEL?..................................................... 42
6
FIGURE 18 WHAT ARE THE MAIN BARRIERS TO SHIFTING TOWARDS CIRCULAR
ECONOMY IN YOUR LINE OF BUSINESS?.............................................................. 43
FIGURE 19 WHAT ARE THE MAJOR CHALLENGES FACED WHEN TRYING TO
SCALE UP YOUR BUSINESS?.................................................................................. 43
FIGURE 20 CAN YOU TELL HOW PROBLEMATIC ARE THESE DIFFERENT FACTORS
FOR THE OPERATION AND GROWTH OF YOUR BUSINESS? CAN
YOU PLEASE RATE EACH?...................................................................................... 44
FIGURE 21 HOW DO YOU PERCEIVE THE FOLLOWING FACTORS RELATED TO
GOVERNMENT CONDUCT, BASED ON YOUR EXPERIENCE OR OF OTHER
INVESTORS THAT YOU HAVE HEARD OF?............................................................ 46
GOVERNMENT CONDUCT, BASED ON YOUR EXPERIENCE OR OF
OTHER INVESTORS THAT YOU HAVE HEARD OF? GOVERNANCE,
PUBLIC INTEGRITY, AND CORRUPTION................................................................ 47
OTHER INVESTORS THAT YOU HAVE HEARD OF? TRANSPARENCY OF
GOVERNMENT REGULATIONS AND DECISION-MAKING..................................... 48
OTHER INVESTORS THAT YOU HAVE HEARD OF? – COORDINATION
AND COMMUNICATION BETWEEN REGULATORY AUTHORITIES....................... 48
INVESTORS THAT YOU HAVE HEARD OF? – PREDICTABILITY AND
STABILITY OF POLICIES AND RULES..................................................................... 49
OTHER INVESTORS THAT YOU HAVE HEARD OF? – PREDICTABILITY
OF THE CONDUCT OF PUBLIC AGENCIES (SUCH AS REGULATORY
AUTHORITIES)......................................................................................................... 50
INVESTORS THAT YOU HAVE HEARD OF? – EXISTENCE OF EFFECTIVE
PROCESSES IN PLACE FOR CONSULTATION ON PROPOSED LAWS
AND REGULATIONS................................................................................................. 51
INVESTORS THAT YOU HAVE HEARD OF? – DIGITALISATION
OF PUBLIC SERVICES.............................................................................................. 52
FIGURE 29 IN THE PROCESS OF OBTAINING LICENCES FOR YOUR BUSINESS,
List of figures
HOW MUCH OF AN OBSTACLE WERE THE FOLLOWING FACTORS?.................. 53
7

HOW MUCH OF AN OBSTACLE WERE THE FOLLOWING FACTORS? –
BURDENSOME NUMBER OF PROCEDURES, REQUIREMENTS,
PAPERWORK AND COST......................................................................................... 54
HOW MUCH OF AN OBSTACLE WERE THE FOLLOWING FACTORS? -
LACK OF AVAILABILITY AND ACCESSIBILITY OF RELEVANT
INFORMATION......................................................................................................... 54
EXCESSIVE DISCRETIONARY POWER OF GOVERNMENT OFFICIALS
AND INCONSISTENT APPLICATION OF REGULATIONS....................................... 55
EXPLICIT OR IMPLICIT NORM TO GIVE BRIBES.................................................... 56
NEED TO RELY ON PERSONAL/ PRIVATE CONNECTIONS TO SOLVE
PROBLEMS.............................................................................................................. 57
LACK OF A FULLY DIGITALISED PROCESS FOR APPLICATION AND
APPROVAL OF THE LICENCE................................................................................. 58
FIGURE 36 HOW HAVE THE FOLLOWING CHARACTERISTICS OF THE BUSINESS
ENVIRONMENT IN YOUR ECONOMY CHANGED OVER THE
LAST 12 MONTHS?................................................................................................. 59
ENVIRONMENT IN YOUR ECONOMY CHANGED OVER THE LAST
12 MONTHS? – MARKET SIZE AND POTENTIAL.................................................. 60
12 MONTHS? - MACRO-ECONOMIC STABILITY AND FAVOURABILITY
OF EXCHANGE RATE............................................................................................... 60
12 MONTHS? - AVAILABILITY OF LABOUR............................................................ 61
12 MONTHS? - LABOUR FORCE COST................................................................... 62
12 MONTHS? - TALENT AND SKILLS OF LABOUR POOL...................................... 63
8
12 MONTHS? - PHYSICAL INFRASTRUCTURE...................................................... 64
12 MONTHS? - ACCESS TO LAND OR REAL ESTATE............................................ 64
12 MONTHS? - AVAILABILITY OF FINANCIAL CAPITAL IN THE
DOMESTIC MARKET............................................................................................... 65
12 MONTHS? - POLITICAL STABILITY AND SECURITY........................................ 66
12 MONTHS? - TECHNOLOGICAL INNOVATION AND CAPABILITIES.................. 66
12 MONTHS? - TAX RATES..................................................................................... 67
12 MONTHS? - BUSINESS-FRIENDLY LEGAL AND REGULATORY
ENVIRONMENT........................................................................................................ 68
12 MONTHS? - AVAILABILITY OF LINKAGES WITH LOCAL FIRMS...................... 68
12 MONTHS? - AVAILABILITY OF GOVERNMENT DIGITAL SERVICE TO
COMPLETE ADMINISTRATIVE PROCEDURES....................................................... 69
FIGURE 51: HOW HAVE THE FOLLOWING CHARACTERISTICS OF THE BUSINESS
12 MONTHS? - AVAILABILITY OF GOVERNMENT SUPPORT
SCHEMES TO EMPLOY VULNERABLE GROUPS.................................................... 70
12 MONTHS? - AVAILABILITY OF FINANCIAL SERVICES
TAILORED BY INDUSTRY......................................................................................... 70
FIGURE 53 HOW OFTEN HAVE YOU ENGAGED IN SELLING AND BUYING
ONLINE DURING THE LAST YEAR?........................................................................ 71
List of figures
FIGURE 54 DID YOU SWITCH TO MORE ONLINE/DIGITAL SERVICES DURING

THE LAST YEAR?..................................................................................................... 72
9
FIGURE 55 THE REASON FOR SWITCHING TO ONLINE/DIGITAL SERVICES......................... 72

FIGURE 56 THE REASON FOR NOT SWITCHING TO ONLINE/DIGITAL SERVICES................ 73
FIGURE 57 HOW WOULD YOU RATE THE IMPACT THE REGIONAL ROAMING
AGREEMENT HAS ON YOUR BUSINESS OPERATIONS? IT HAD:......................... 74
FIGURE 58 HAVE ANY OF YOUR COMPANY’S OWNERS OR SENIOR MANAGERS
SPENT TIME LIVING AND WORKING ABROAD AS MEMBERS
OF THE DIASPORA?................................................................................................. 74
FIGURE 59 WOULD IT BENEFIT YOUR BUSINESS IF TRAVEL ACROSS THE REGION
WAS POSSIBLE WITH A VALID ID CARD ONLY?.................................................... 75
FIGURE 60 HOW MUCH DO YOU FEEL THE GOVERNMENT OF YOUR ECONOMY
TAKES INTO ACCOUNT THE CONCERNS OF BUSINESSES?................................ 76
FIGURE 61 TO WHAT EXTENT DO YOU AGREE WITH THE FOLLOWING
STATEMENT - LAWS AND REGULATIONS AFFECTING MY COMPANY
ARE CLEARLY WRITTEN, NOT CONTRADICTORY AND DO NOT
CHANGE TOO FREQUENTLY?................................................................................. 77
STATEMENT - INFORMATION ON THE LAWS AND REGULATIONS
AFFECTING MY COMPANY IS EASY TO OBTAIN FROM THE
AUTHORITIES?......................................................................................................... 77
STATEMENT - THE STATE ADMINISTRATION’S INTERPRETATIONS
OF THE LAWS AND REGULATIONS AFFECTING MY COMPANY
ARE CONSISTENT AND PREDICTABLE?................................................................ 78
STATEMENT - REQUESTS FOR INFORMATION HELD BY A
GOVERNMENT AGENCY ARE GRANTED IN TIMELY MANNER?........................... 79
STATEMENT - THE INFORMATION PROVIDED IS PERTINENT
AND COMPLETE?.................................................................................................... 79
STATEMENT - REQUESTS FOR INFORMATION ARE GRANTED AT
A REASONABLE COST?........................................................................................... 80
FIGURE 67 COULD YOU PLEASE TELL ME HOW SATISFIED ARE YOU WITH
EACH OF THE FOLLOWING IN YOUR PLACE OF LIVING - PUBLIC
SERVICES FOR BUSINESSES?................................................................................ 81
EACH OF THE FOLLOWING IN YOUR PLACE OF LIVING - DIGITAL
SERVICES CURRENTLY PROVIDED TO BUSINESS BY PUBLIC
ADMINISTRATION?................................................................................................. 82
10
FIGURE 69 TO WHAT EXTENT ARE YOU SATISFIED WITH HOW THE
GOVERNMENT CONSULTS AND INVOLVES PRIVATE SECTOR
WHEN DEVELOPING NEW LAWS AND REGULATIONS RELEVANT
FOR DOING BUSINESS?.......................................................................................... 83
FIGURE 70 WHICH REGULATIONS DO YOU CONSIDER TO BE AN OBSTACLE
TO THE SUCCESS OF A BUSINESS?....................................................................... 83
FIGURE 71 HAS YOUR FIRM HAD ANY CASES IN MEDIATION COURTS IN THE
LAST 36 MONTHS?................................................................................................. 84
FIGURE 72 HOW MANY CASES IN CIVIL OR COMMERCIAL MATTERS WERE
SOLVED BY YOUR COMPANY THROUGH MEDIATION IN THE LAST 36
MONTHS?................................................................................................................ 84
FIGURE 73 DO YOU CONSIDER MEDIATION AS A QUICK AND COST-EFFECTIVE
EXTRA JUDICIAL ALTERNATIVE TO RESOLVING DISPUTES IN CIVIL
AND COMMERCIAL MATTERS?............................................................................. 85
FIGURE 74 WOULD YOUR COMPANY CONSIDER MEDIATION EVEN IN
CASES OF CROSS-BORDER/BOUNDARY CONFLICT RESOLUTION
FOR THE SETTLEMENT OF DISPUTES IN CIVIL AND COMMERCIAL
MATTERS SO AS TO SIMPLIFY AND IMPROVE ACCESS TO JUSTICE?............... 85
FIGURE 75 DO YOU AGREE WITH THE FOLLOWING STATEMENT ABOUT STATE
AID - CITIZENS AND COMPANIES HAVE FULL ACCESS TO
INFORMATION RELATED TO STATE AID POLICIES AND GRANTS
AWARDED TO COMPANIES BY THE PUBLIC AUTHORITIES?............................... 86
AID - SUFFICIENT INFORMATION ON THE STATE AID GIVEN TO
COMPANIES BY THE PUBLIC AUTHORITIES IS ALREADY PUBLICLY
AVAILABLE............................................................................................................... 87
AID - INFORMATION ABOUT STATE AID RECEIVED BY COMPANIES
SHOULD REMAIN CONFIDENTIAL BETWEEN PUBLIC AUTHORITIES
AND COMPANIES.................................................................................................... 87
FIGURE 78 HAS YOUR COMPANY APPLIED FOR A LOAN FROM A BANK IN THE
PAST 12 MONTHS?................................................................................................. 89
FIGURE 79 HOW MANY DAYS DID IT TAKE TO AGREE THE LOAN WITH THE BANK
FROM THE DATE OF APPLICATION?..................................................................... 89
FIGURE 80 YOU SAID THAT YOUR COMPANY’S LOAN APPLICATION WAS
REJECTED, WHAT WAS THE MAIN REASON FOR THAT?..................................... 90
FIGURE 81 THINKING ABOUT OFFICIALS, TO WHAT EXTENT WOULD YOU
AGREE WITH THE FOLLOWING STATEMENTS? - IT IS COMMON
FOR COMPANIES IN MY LINE OF BUSINESS TO HAVE TO PAY SOME
IRREGULAR “ADDITIONAL PAYMENTS/GIFT” TO “GET THINGS DONE”.............. 91
List of figures
11
FIGURE 82 THINKING ABOUT OFFICIALS, TO WHAT EXTENT WOULD YOU AGREE

WITH THE FOLLOWING STATEMENTS? - COMPANIES IN MY LINE
OF BUSINESS USUALLY KNOW IN ADVANCE HOW MUCH THIS
‘ADDITIONAL PAYMENT/GIFTS’ WILL COST......................................................... 92
FIGURE 83 THINKING NOW OF UNOFFICIAL PAYMENTS/GIFTS THAT
COMPANIES LIKE YOURS WOULD MAKE IN A GIVEN YEAR, COULD
YOU PLEASE TELL ME HOW OFTEN WOULD THEY MAKE
PAYMENTS/GIFTS FOR THE FOLLOWING PURPOSES?....................................... 93
PAYMENTS/GIFTS FOR THE FOLLOWING PURPOSES? - TO GET
CONNECTED TO AND MAINTAIN PUBLIC SERVICES........................................... 94
PAYMENTS/GIFTS FOR THE FOLLOWING PURPOSES? - TO OBTAIN
BUSINESS LICENCES AND PERMITS..................................................................... 94
PAYMENTS/GIFTS FOR THE FOLLOWING PURPOSES? - TO OBTAIN
GOVERNMENT CONTRACTS.................................................................................. 95
PAYMENTS/GIFTS FOR THE FOLLOWING PURPOSES? - TO DEAL
WITH OCCUPATIONAL HEALTH AND SAFETY INSPECTIONS............................. 95
WITH LABOUR INSPECTIONS................................................................................. 96
WITH FIRE AND BUILDING INSPECTIONS............................................................. 96
WITH ENVIRONMENTAL INSPECTIONS................................................................ 97
12
WITH TAXES AND TAX COLLECTION..................................................................... 97
WITH CUSTOMS/IMPORTS..................................................................................... 98
WITH COURTS......................................................................................................... 98
PAYMENTS/GIFTS FOR THE FOLLOWING PURPOSES? - TO
INFLUENCE THE CONTENT OF NEW LEGISLATION, RULES,
DECREES, ETC......................................................................................................... 99
FIGURE 95 HOW WOULD YOU RATE THE FOLLOWING ENTITIES IN
REPORTING AND PROCESSING CORRUPTION CASES, OR
PROVIDING SUPPORT IN THE FIGHT AGAINST CORRUPTION
IN YOUR ECONOMY?............................................................................................. 100
FIGURE 96 HOW WOULD YOU RATE THE FOLLOWING ENTITIES IN
REPORTING AND PROCESSING CORRUPTION CASES, OR PROVIDING
SUPPORT IN FIGHT AGAINST CORRUPTION IN YOUR ECONOMY?
A) CSOS; B) MEDIA; C) POLICE AND OTHER LAW ENFORCEMENT
AGENCIES; D) OTHER GOVERNMENT AGENCIES............................................... 101
FIGURE 97 HOW MUCH DO YOU AGREE OR DISAGREE WITH THE FOLLOWING
STATEMENT: FIGHT AGAINST CORRUPTION IN MY ECONOMY IS
EFFECTIVE............................................................................................................. 102
FIGURE 98 TO WHAT EXTENT DO YOU BELIEVE DIGITALISATION OF PUBLIC
SERVICES WOULD HAVE A POSITIVE IMPACT ON PREVENTING
CORRUPTIVE PRACTICES?................................................................................... 102
FIGURE 99 HAS YOUR COMPANY INVESTED ABROAD, OR PLANS TO DO SO
IN THE NEXT 12 MONTHS?.................................................................................. 103
FIGURE 100 WHERE DID YOU INVEST OR PLAN TO DO SO?.................................................. 104
FIGURE 101 WHICH OF THE FOLLOWING REASONS BEST DESCRIBES YOUR
COMPANY’S MOTIVATION TO INVEST ABROAD?............................................... 104
List of figures
13

COMPANY’S MOTIVATION TO INVEST ABROAD? - TO ACCESS
NEW MARKETS...................................................................................................... 105
COMPANY’S MOTIVATION TO INVEST ABROAD? - TO LOWER
PRODUCTION COSTS............................................................................................ 106
COMPANY’S MOTIVATION TO INVEST ABROAD? - TO BETTER
INTEGRATE YOUR COMPANY’S VALUE CHAIN................................................... 106
COMPANY’S MOTIVATION TO INVEST ABROAD? - TO ACCESS NATURAL
RESOURCES AND RAW MATERIALS.................................................................... 107
COMPANY’S MOTIVATION TO INVEST ABROAD? - TO ACQUIRE OR
COMPLEMENT NEW TECHNOLOGIES OR BRAND.............................................. 107
FIGURE 107 IN THE PROCESS OF CHOOSING WHERE TO INVEST ABROAD,
HOW IMPORTANT WERE THE FOLLOWING FACTORS?...................................... 108
FIGURE 108 WHEN INVESTING ABROAD, HOW MUCH DO AVAILABLE
INVESTMENT INCENTIVES INFLUENCE THE DECISION ON
WHERE TO INVEST?.............................................................................................. 109
FIGURE 109 COULD THEY BE CONSIDERED TRANSPARENT?................................................ 109
FIGURE 110 HAS YOUR COMPANY EXPORTED GOODS OR SERVICES OVER THE
PAST 12 MONTHS?............................................................................................... 110
FIGURE 111 WHAT PERCENTAGE OF YOUR COMPANY’S SALES ARE MADE
DOMESTICALLY, EXPORTED TO THE WB REGION, TO THE EU OR
TO THE THIRD COUNTRIES?................................................................................ 110
FIGURE 112 WHY DOESN’T YOUR COMPANY EXPORT?......................................................... 111
FIGURE 113 HAS YOUR COMPANY IMPORTED GOODS OR SERVICES OVER THE
PAST 12 MONTHS?............................................................................................... 112
FIGURE 114 WHAT PERCENTAGE OF YOUR COMPANY’S INPUTS AND
SUPPLIES ARE…..................................................................................................... 112
FIGURE 115 WHAT PERCENTAGE OF YOUR DOMESTIC SALES ARE MADE TO?.................. 113
FIGURE 116 IF YOU HAVE IMPORTED GOODS IN THE PAST 12 MONTHS, WHAT
IS THE AVERAGE NUMBER OF DAYS TO CLEAR IMPORTS THROUGH
CUSTOMS?............................................................................................................. 113
FIGURE 117 IF YOU HAVE EXPORTED GOODS IN THE PAST 12 MONTHS, WHAT
IS THE AVERAGE NUMBER OF DAYS TO CLEAR EXPORTS THROUGH
CUSTOMS?............................................................................................................. 114
FIGURE 118 IF YOUR COMPANY EXPORTS TO THE WESTERN BALKANS REGION,
WHAT ARE THE MAIN OBSTACLES TO YOUR EXPORTS?.................................. 115
14
FIGURE 119 DO YOU THINK THAT CROSS-BORDER/BOUNDARY TRANSACTION
COSTS ARE TOO HIGH AMONG WESTERN BALKAN ECONOMIES?.................. 116
FIGURE 120 TO WHAT EXTENT DO YOU AGREE THAT YOUR COMPANY IS
THREATENED BY THE GLOBAL COMPETITION?................................................ 116
STATEMENTS - MY COMPANY’S PRODUCTS, GOODS AND
SERVICES CAN COMPETE WELL WITH PRODUCTS, GOODS
AND SERVICES FROM THE WESTERN BALKANS?............................................. 117
STATEMENTS - MY COMPANY’S PRODUCTS, GOODS AND SERVICES
CAN COMPETE WELL WITH PRODUCTS, GOODS AND SERVICES
FROM OTHER EU COUNTRIES?............................................................................ 118
STATEMENTS - “MY COMPANY HAS BENEFITED FROM THE
REGIONAL FREE TRADE AGREEMENT (CEFTA 2006)”?..................................... 119
FIGURE 124 IF YOUR COMPANY IS AN EXPORTER, CAN YOU TELL US WHETHER
IT IS EASIER TO EXPORT TO THE CEFTA REGION, OR TO THE EU?................... 119
FIGURE 125 IN YOUR OPINION, WHEN PROCURING PRODUCTS AND SERVICES,
SHOULD THE GOVERNMENTS IN THE REGION GIVE PREFERENTIAL
TREATMENT TO SUPPLIERS WHICH ARE SOCIAL BUSINESSES, OR
SHOULD THEY BE TREATED THE SAME AS ALL OTHER SUPPLIERS
(PROVIDED PRICE AND QUALITY ARE EQUAL)................................................... 120
FIGURE 126 IN YOUR OPINION, WHICH MARKET IN THE WB REGION IS THE
MOST OPEN ONE? PLEASE GIVE US YOUR OPINION NO MATTER
IF YOU/YOUR COMPANY HAD DIRECT EXPERIENCE WITH IT........................... 121
FIGURE 127 DOES YOUR COMPANY USE THE INTERNET FOR…?.......................................... 122
FIGURE 128 WHAT PERCENTAGE OF YOUR TOTAL SALES IS CURRENTLY
GENERATED THROUGH ONLINE SALES?............................................................ 123
FIGURE 129 IN THE LAST SIX MONTHS, HAVE YOU EXPERIENCED ANY OF
THE FOLLOWING INTERNET SECURITY PROBLEMS?........................................ 123
FIGURE 130 ARE YOU SATISFIED WITH YOUR INTERNET CONNECTION?............................ 124
FIGURE 131 HAVE YOU INTRODUCED NEW OR SIGNIFICANTLY IMPROVED
PRODUCTS?........................................................................................................... 124
FIGURE 132 WHO DEVELOPED THESE PRODUCT INNOVATIONS?........................................ 125
FIGURE 133 WERE ANY OF YOUR PRODUCT INNOVATIONS (GOODS OR
SERVICES)?............................................................................................................ 126
FIGURE 134 TO THE BEST OF YOUR KNOWLEDGE, WERE ANY OF YOUR
PRODUCT INNOVATIONS DURING THE THREE YEARS (2019 – 2021)
- A FIRST IN YOUR ECONOMY?............................................................................. 127
List of figures
15
FIGURE 135 TO THE BEST OF YOUR KNOWLEDGE, WERE ANY OF YOUR PRODUCT
INNOVATIONS DURING THE THREE YEARS 2019 TO 2021 – A
FIRST IN EUROPE.................................................................................................. 127
FIGURE 136 TO THE BEST OF YOUR KNOWLEDGE, WERE ANY OF YOUR PRODUCT
INNOVATIONS DURING THE THREE YEARS 2019 TO 2021 – A WORLD
FIRST...................................................................................................................... 128
EACH OF THE FOLLOWING IN YOUR ECONOMY:............................................... 129
EACH OF THE FOLLOWING IN YOUR ECONOMY? A) POLICIES
THAT PROMOTE AND ENCOURAGE INNOVATIVE ACTIVITIES; B)
INNOVATION INFRASTRUCTURE (INNOVATION CENTERS,
INCUBATORS, ACCELERATORS, HUBS); C) UNIVERSITY BUSINESS
COLLABORATION AIMED TOWARDS SOLVING PRACTICAL PROBLEMS:
D) SUPPORT TO INNOVATIVE IDEAS FROM PUBLIC SOURCES (LOCAL
OR ECONOMY LEVEL); E) SUPPORT TO INNOVATIVE IDEAS FROM
PRIVATE SOURCES; F) ENABLING ENVIRONMENT FOR IDEA MAKING,
INTRODUCING AND DIFFUSION OF INNOVATION; G) INNOVATION
CAPABILITIES OF STARTUPS, INNOVATORS AND ACADEMIC
COMMUNITY TO OFFER APPLICABLE SOLUTIONS............................................ 129
FIGURE 139 DURING THE PAST THREE YEARS (2019 TO 2021), DID YOUR
ENTERPRISE RECEIVE ANY PUBLIC AND/OR DONOR’S FINANCIAL
SUPPORT FOR INNOVATION ACTIVITIES FROM THE FOLLOWING
LEVELS OF GOVERNMENT? LOCAL OR REGIONAL AUTHORITIES.................... 130
LEVELS OF GOVERNMENT? - CENTRAL GOVERNMENT (INCLUDING
CENTRAL GOVERNMENT AGENCIES OR MINISTRIES)...................................... 131
LEVELS OF GOVERNMENT? - THE EUROPEAN UNION (EU) OR OTHER
DONORS................................................................................................................. 131
FIGURE 142 WHAT PERCENTAGE OF THE WORKFORCE AT YOUR FIRM HAS
THE FOLLOWING EDUCATION LEVELS?.............................................................. 132
FIGURE 143 WOULD YOU AGREE WITH THE FOLLOWING STATEMENTS?........................... 133
FIGURE 144 HOW IMPORTANT ARE DIGITAL SKILLS FOR YOUR COMPANY?....................... 134
FIGURE 145 DO YOU TAKE CONCRETE MEASURES TO IMPROVE THE DIGITAL
SKILLS OF YOUR EMPLOYEES?............................................................................ 134
FIGURE 146 HAS YOUR COMPANY TAKEN PART IN ANY ACTIVE LABOUR
MARKET MEASURES THROUGH THE GOVERNMENT PROGRAMMES?............ 135
16
FIGURE 147 PLEASE SELECT ALL GOVERNMENT PROGRAMMES RELATED TO
EMPLOYMENT THAT APPLY IN YOUR CASE....................................................... 135
FIGURE 148 OVER THE PAST 12 MONTHS, HAS YOUR BUSINESS FUNDED OR
ARRANGED ANY TRAINING AND DEVELOPMENT FOR STAFF IN
THE ORGANISATION, INCLUDING ANY INFORMAL ON-THE-JOB
TRAINING, EXCEPT TRAINING REQUIRED BY THE LAW?................................... 136
FIGURE 149 THINKING ABOUT SKILLS REQUIREMENTS, DOES YOUR COMPANY
REGULARLY REVIEW THE SKILL AND TRAINING NEEDS OF INDIVIDUAL
EMPLOYEES?......................................................................................................... 136
FIGURE 150 HOW WOULD YOU ASSESS THE READINESS OF EMPLOYEES IN YOUR
COMPANY TO ACQUIRE ADDITIONAL QUALIFICATIONS IN ORDER
TO ADVANCE AND GET PROMOTED?.................................................................. 137
FIGURE 151 IN YOUR OPINION, WHAT ARE THE MOST EFFECTIVE WAYS TO
INCREASE THE NUMBER OF WOMEN IN THE LABOUR MARKET?.................... 138
FIGURE 152 TO CURB THE PROBLEM OF LABOUR FORCE SHORTAGES AND
BRAIN DRAIN, OUR GOVERNMENT SHOULD:..................................................... 139
FIGURE 153 HOW OFTEN DO YOU USE THE FOLLOWING WHEN HIRING NEW
EMPLOYEES?......................................................................................................... 140
EMPLOYEES? - THROUGH PERSONAL CONTACT (FOLLOWING
RECOMMENDATIONS OF FRIENDS AND COLLEAGUES).................................... 141
EMPLOYEES? - THROUGH PLACING ADVERTISEMENTS IN THE PAPERS
AND/OR ONLINE.................................................................................................... 141
EMPLOYEES? - WITH THE INTERMEDIATION OF THE OFFICIAL
EMPLOYMENT AGENCY....................................................................................... 142
EMPLOYEES? - BY COOPERATING DIRECTLY WITH EDUCATION
INSTITUTIONS....................................................................................................... 142
EMPLOYEES? - WITH THE INTERMEDIATION OF PRIVATE
EMPLOYMENT AGENCIES AND/OR HEAD HUNTERS......................................... 143
EMPLOYEES? - “POACHING” EMPLOYEES FROM THE COMPETITORS............ 143
FIGURE 160 OF THE TOTAL NUMBER, HOW MANY OF YOUR EMPLOYEES ARE
MEN AND HOW MANY WOMEN?......................................................................... 144
FIGURE 161 HOW LIKELY WOULD IT BE FOR YOU TO HIRE A ROMA PERSON
WHOSE EDUCATIONAL PROFILE AND EXPERIENCE COMPLETELY
MEET THE NEEDS OF YOUR BUSINESS?............................................................. 144
List of figures
17
FIGURE 162 IN YOUR OPINION, DO COMPANIES LIKE YOURS HAVE A GENDER

PREFERENCE IN TERMS OF HIRING?.................................................................. 145
FIGURE 163 DO YOU HAVE SOMEBODY FROM THE BELOW MENTIONED
VULNERABLE GROUPS WORKING IN YOUR COMPANY?................................... 146
FIGURE 164 DO YOU THINK THAT EMPLOYING ROMA PERSONS WOULD AFFECT
COMPANY SALES OR THE WORKING ENVIRONMENT IN A POSITIVE
OR A NEGATIVE WAY?.......................................................................................... 146
FIGURE 165 HOW LIKELY WOULD YOU EMPLOY WORKERS FROM ABROAD IN
YOUR COMPANY?.................................................................................................. 147
FIGURE 166 HOW LIKELY WOULD YOU EMPLOY WORKERS FROM THE WB
REGION IN YOUR COMPANY?............................................................................... 147
FIGURE 167 YOU SAID THAT YOU WOULD EMPLOY WORKERS FROM THE WB
REGION IN YOUR COMPANY, FROM WHICH ECONOMY/ECONOMIES
EXACTLY?............................................................................................................... 148
FIGURE 168 HAVE YOU HEARD OF THE REGIONAL COOPERATION COUNCIL?................... 149
FIGURE 169 IN WHAT WAYS HAS YOUR BUSINESS BEEN AFFECTED, I.E. WHAT
SPECIFIC PROBLEMS, IF ANY, HAS YOUR BUSINESS FACED?........................... 150
FIGURE 170 HAVE THE FOLLOWING TRENDS INFLUENCED THE STRUCTURE
AND/OR OPERATIONS OF YOUR COMPANY?..................................................... 151
FIGURE 171 HAS YOUR BUSINESS’S ACCESS TO FINANCIAL RESOURCES
CHANGED SINCE THE OUTBREAK OF COVID-19?.............................................. 152
FIGURE 172 IN YOUR OPINION HOW USEFUL ARE THE GOV’S ECONOMIC
MEASURES FOR MITIGATING CONSEQUENCES OF COVID-19
PANDEMIC IN YOUR ECONOMY?......................................................................... 153
FIGURE 173 HOW HAS THE GENERAL ECONOMIC SITUATION CHANGED OVER
THE PAST 12 MONTHS? HAS IT DETERIORATED, REMAINED
UNCHANGED OR IMPROVED?.............................................................................. 154
FIGURE 174 HOW DO YOU EXPECT THE GENERAL ECONOMIC SITUATION IN
YOUR ECONOMY TO DEVELOP OVER THE NEXT 12 MONTHS?
WILL IT MOSTLY DETERIORATE, REMAIN UNCHANGED OR
IMPROVE?.............................................................................................................. 155
PAST 12 MONTHS? HAS IT DETERIORATED, REMAINED UNCHANGED
OR IMPROVED?...................................................................................................... 155
FIGURE 176 HOW DO YOU EXPECT THE NUMBER OF PEOPLE EMPLOYED IN
YOUR COMPANY TO CHANGE OVER THE NEXT 12 MONTHS?......................... 156
FIGURE 177 CAN YOU TELL HOW PROBLEMATIC ARE THESE DIFFERENT
FACTORS FOR THE OPERATION AND GROWTH OF YOUR BUSINESS?
CAN YOU PLEASE RATE EACH?........................................................................... 156
18
FIGURE 178 WHAT PERCENTAGES OF YOUR COMPANY’S SALES ARE MADE
DOMESTICALLY, EXPORTED TO THE WB REGION, TO THE EU OR TO THE
THIRD COUNTRIES?.............................................................................................. 157
CAN COMPETE WELL WITH PRODUCTS, GOODS, AND SERVICES
FROM THE WESTERN BALKANS?........................................................................ 158
CAN COMPETE WELL WITH PRODUCTS, GOODS, AND SERVICES
FROM THE WESTERN BALKANS?........................................................................ 158
STATEMENTS - “MY COMPANY HAS BENEFITED FROM THE REGIONAL
FREE TRADE AGREEMENT (CEFTA 2006)”?........................................................ 159
FIGURE 184 HAVE YOU INTRODUCED NEW OR SIGNIFICANTLY IMPROVED
PRODUCT OR SERVICE?........................................................................................ 160
EMPLOYEES?......................................................................................................... 161
FIGURE 186 DO YOU HAVE SOMEBODY FROM THE BELOW MENTIONED
VULNERABLE GROUPS WORKING IN YOUR COMPANY?................................... 162
FIGURE 187 HOW WOULD YOU ASSESS THE READINESS OF EMPLOYEES IN
YOUR COMPANY TO ACQUIRE ADDITIONAL QUALIFICATIONS IN
ORDER TO ADVANCE AND GET PROMOTED?..................................................... 162
FIGURE 188 1. HOW HAS THE GENERAL ECONOMIC SITUATION CHANGED
OVER THE PAST 12 MONTHS? HAS IT DETERIORATED, REMAINED
PAST 12 MONTHS? HAS IT DETERIORATED, REMAINED
FIGURE 190 HOW DO YOU EXPECT THE DEMAND FOR YOUR COMPANY’S
PRODUCTS/SERVICES TO CHANGE OVER THE NEXT 12 MONTHS?
WILL IT DECREASE, REMAIN MOSTLY UNCHANGED OR INCREASE?............... 164
List of figures
19
FIGURE 191 HOW HAVE YOUR LABOUR AND OTHER COSTS (E.G.
ENERGY, ETC.) CHANGED OVER THE PAST 12 MONTHS?................................ 165
FIGURE 192 HOW DO YOU EXPECT THE NUMBER OF PEOPLE EMPLOYED IN
YOUR COMPANY TO CHANGE OVER THE NEXT 12 MONTHS?......................... 165
COMPANIES LIKE YOURS WOULD MAKE IN A GIVEN YEAR,
COULD YOU PLEASE TELL ME HOW OFTEN WOULD THEY
MAKE PAYMENTS/GIFTS FOR THE FOLLOWING PURPOSES?.......................... 166
FIGURE 194 WHAT PERCENTAGES OF YOUR COMPANY’S SALES ARE MADE
DOMESTICALLY, EXPORTED TO THE WESTERN BALKANS REGION,
TO THE EU, OR TO THE THIRD COUNTRIES?....................................................... 167
FIGURE 195 DOES YOUR COMPANY USE THE INTERNET FOR…?.......................................... 167
EMPLOYEES?......................................................................................................... 168
FIGURE 197 HOW LIKELY WOULD YOU EMPLOY WORKERS FROM ABROAD IN
YOUR COMPANY?.................................................................................................. 169
FIGURE 198 HOW LIKELY WOULD YOU EMPLOY WORKERS FROM THE REGION
IN YOUR COMPANY?............................................................................................. 169
FIGURE 199 OVER THE PAST 12 MONTHS, HAS YOUR BUSINESS FUNDED OR
ARRANGED ANY TRAINING AND DEVELOPMENT FOR STAFF IN THE
ORGANISATION, INCLUDING ANY INFORMAL ON-THE-JOB
TRAINING, EXCEPT FOR TRAINING REQUIRED BY THE LAW?........................... 169
FIGURE 200 IN YOUR OPINION, WHAT ARE THE MOST EFFECTIVE WAYS TO
INCREASE THE NUMBER OF WOMEN IN THE LABOUR MARKET?.................... 170
FIGURE 201 SAMPLE STRUCTURE BY RESPONDENT’S POSITION........................................ 175
FIGURE 202 SAMPLE STRUCTURE BY NUMBER OF EMPLOYEES.......................................... 175
FIGURE 203 SAMPLE STRUCTURE BY LARGEST SHAREHOLDER.......................................... 176
FIGURE 204 SAMPLE STRUCTURE BY BUSINESS AREA......................................................... 176
FIGURE 205 SAMPLE STRUCTURE BY OWNERSHIP............................................................... 177
20
FOREWORD
The Regional Cooperation Council has the pleasure to present the 2022 edition of the Balkan Ba-
rometer- the annual survey of Western Balkan citizens and business perceptions. The analysis of
the results provides a detailed insight into trends and evolution of the attitudes of thousands of
region’s citizens and businesses across socio-economic-environmental topics affecting their ev-
eryday lives. We are certain that monitoring the public sentiment will once again prove to be of a
great importance to understand the citizens’ and businesses’ attitudes towards current situation
and the expectations for the region’s recovery under the new circumstances created as result of
a war in the European continent amid the pandemic.
The period when the interviews were conducted coincided with the emergence of the new strain
of SARS-COV2 virus, labelled Omicron2 that led to an increase in cases throughout the region,
followed by the outbreak of war in Ukraine. Therefore, this Barometer edition reflects the new
reality created on one hand by the pandemic entering the third year and on the other hand, by the
war in Ukraine which has the potential to re-define global security for the decades to come. With-
out doubts, the findings of this last edition are particularly significant in offering a clear under-
standing of what these subsequent global crises mean on the ground, what are the impacts and
consequences in the economy and daily life of the citizens, and what are the citizens’ prospects.
This extreme moment has created opportunities for greater solidarity and sentiments for stron-
ger cooperation in the region. We are particularly proud that this year’s edition reconfirms the
ongoing incremental improvements in sentiment in the region related to regional cooperation.
Solidarity can be easily described as the epitome for the Western Balkans, as more than two-
thirds (69%) of participants believed that what brings the region together is bigger than what
drives it apart (from 29% in 2020). The vast majority of citizens in the Western Balkans (76%) saw
a positive correlation between regional cooperation and better political, security and economic
situation. Additionally, findings note an increase of positive feelings related to the region. While
in 2020, 36% of respondents associated positive feelings with the Western Balkans, this number
has incremented by 6 points.
As the COVID-19 pandemic has almost been overcome in all economies of the region, the virus
threat perception is much lower. However, the region is still on the recovery path from the pan-
demic, and in light of the war in Ukraine, the possible new socio-economic challenges have the
potential to jeopardise the IMF projections that the WB economies will return to the pre-pandemic
GDP level over 2022.
Economic development and unemployment remain the two most pressing obstacles in the re-
gion. The current economic situation is considered the biggest challenge by 47% in the Western
Balkans. On the other hand, unemployment is most detrimental to the economy, according to 39%
of respondents. Corruption is again ranked third with 27%, while emigration the share of those
seeing emigration as a negative trend is increasing (18%, from 13% in 2020).
Confidence in the socio-economic benefits of EU membership prevails in the region, with 60%
endorsing accession. While in general the Western Balkan economies are the EU’s greatest cheer-
FOREWORD
leaders, the number of respondents who expect EU integration by 2025, has further subtracted
(22% from 24% in 2020 and 28% in 2019). In addition, 28% of participants considered EU acces-
21
sion a mere desire rather than a realistic scenario and this percentage is consecutively ris-
ing. 37% others believed that their economies would integrate in the EU by 2030 the latest.
This worrying trend can be understood as a direct consequence of the frustration in the
region at consecutive delays in moving forward on the EU path. More than ever before the
EU must be firm in accelerating merit-based prospect of EU membership for the Western
Balkans first and foremost as a geostrategic investment in the EU's own security.
Results of this cycle of the Balkan Barometer show that the region remains firmly in favour
of more free trade in the region and with the EU. Despite a moderate decrease, support
for strengthening trade links within the region remains high (a regional average of 51% of
respondents, 58% in 2020), while almost one-third (31%, same as in 2020) believe current
trade links within the region are sufficient. The share of those expecting that the entry of
foreign companies into the domestic market will improve conditions for costumers is as
high as in the previous round (68%).
However, the number of those not aware is to be read in conjunction with the fact that 40%
of the respondents had not recently travelled in the region and consequently did not made
use of the roaming free regime.
When it comes to environment, the level of climate awareness has not changed. Over two-
thirds (67%) consider climate change a problem and nearly a third (31%) do not see it as
a pressing concern. Less people than a year ago (66%, 73% in 2020) see pollution as a
problem. In addition, half of respondents of the region are sceptical of achieving climate
neutrality by 2050%. Six in ten respondents (62%) are willing to buy environmentally friend-
ly products even if they cost more. A vast majority of over three-quarters (77%) of survey
participants are unaware of what circular economy is.
These figures are a strong call to action for promoting environmental awareness and ed-
ucation of citizens for better understanding of natural environment protection and the ac-
tivities that can cause harm to the environment. Proper information of citizens about the
environmental challenges that the region faces, and inspiring them to act by demanding
change will also support the implementation of the ambitious Green Agenda for the West-
ern Balkans.
22
INTRODUCTION
The release of the eighth edition of the Balkan Barometer comes at times when Europe is fac-
ing unparalleled challenges to its security, while still facing the perils of the economic crisis in-
duced by the outbreak of the Covid-19. The war has aggravated uncertainties caused by the pan-
demic in ways that will reverberate across the world, and the Western Balkans region cannot
remain intact. Yet, the 2022 edition of the Balkan Barometer, sharing evidence and insights of
citizens and businesses perceptions, builds on its firmly established tradition as independent,
reliable source of regional data widely employed and referenced by media, business, civil society,
and decision makers alike.
The 2022 Balkan Barometer surveys were conducted between mid-February to mid-March 2022
in Albania, Bosnia and Herzegovina, Kosovo*, Montenegro, North Macedonia, and Serbia. The
Public Opinion survey posed 109 questions to 6029 citizens and the Business Opinion survey
presented 177 questions to 1203 business owners, managers, or executives. Answers by survey
respondents have been systemised, analysed, and presented in the two reports – Public Opinion
Survey and Business Opinion Survey.
Since its first edition, the Balkan Barometer has increasingly evolved to remain relevant, and up
to date in a challenging regional landscape. Questions are added and removed to better serve
the usefulness in reading and interpreting trends across the region, therefore making the Balkan
Barometer an independent guide to attitudes towards cooperation and integration, as well as
attitudes to other key policy areas both at domestic and regional levels, that affect daily lives of
the Western Balkan citizens. We take satisfaction in the fact that Balkan Barometer findings are
used to inform the work of decision makers, scholars, and other interested regional stakeholders,
by also making them aware of the societal eagerness for sustainable and far-reaching reforms.
INTRODUCTION
* This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo
declaration of independence
23
MAIN FINDINGS
The emergence of the Western Balkan economies from the Covid-19 pandemic over 2021 has
been crucial for the improvement in the business perceptions. The Balkan Business Sentiment
Index 2022 improved to 59 points after its lowest point of 39 a year ago. Yet, as the overall eco-
nomic activity in the Western Balkans did not fully recover over 2021, the BBSI in the year likewise
did not recuperate to its pre-pandemic level of 65. The value of BBSI has been accompanied by 53
points of the present situation index and 69 points of the expectation index, which suggests that
the outlook is considered bright and at the pre-pandemic level.
The economies of the Western Balkans continued to operate under varying conditions in 2021,
determined by the new variants of the coronavirus Covid-19 and the commencement and pro-
gression of the immunisation process. On average, the total regional economy recovered with a
growth rate of 5.4% in 2021, with Montenegro experiencing the steepest growth and Bosnia and
Herzegovina experiencing the smallest increase. Consumption recovered with the easement of
the restrictive measures, which resulted in businesses reverting to reporting an increase in de-
mand for their products. 44% of them reported expectations in increase of demand, an important
increase from 33% a year before, while 60% expect that the number of employees will stay the
same.
While expectations for the business climate and structural issues across the region largely im-
proved compared to the previous year, the analysis corroborates important intra-regional varia-
tions. If an overall pattern needs to be established, then Kosovo* leads the optimism and the view
of conditions as fairly favourable, while North Macedonia stands on the other end of the spec-
trum. In terms of perceptions of various aspects, Albania and Kosovo* share similar perceptions,
while Serbia inclines towards Macedonians’ perceptions, with Bosnia and Herzegovina roughly in
the middle. However, for an important set of questions, such order varies.
Irrespective of the overall economic situation in the Western Balkan economies determined by
the post-pandemic recovery and the old structural problems, the support to the regional cooper-
ation remained constant. The leaders in viewing the regional cooperation as important and ben-
eficial are Kosovo* and Albania, while the businesspersons in North Macedonia have been most
hesitant in this regard. Likewise, the satisfaction with CEFTA has been maintained in 2021, but
mostly driven by large companies which are more frequently exporters. Overall, businesspersons
from the region even improved their perception of the easiness to export to CEFTA members
when compared to EU members.
Despite the improvement in the business perception amid the post-pandemic recovery, old struc-
tural problems continued to determine key aspects of doing business in the Western Balkans.
The macroeconomic environment, likely determined by the increasing prices in the second half
of 2021, then the informal economy and the access to finance have been spelled out as lingering
obstacles to operation and growth of businesses, with similar or higher intensity than a year ago.
Infrastructure – in the broadest sense of the word - was assessed as deteriorating, although in
Albania and Kosovo*, an important share of respondents was quite optimistic. Likewise on the
positive side, businesspersons in the Western Balkans reiterated their positive attitude towards
the Regional Roaming Agreement (RRA).
24
Labour markets in the Western Balkans likewise recovered over 2021, still not reaching the
pre-pandemic level in terms of the working hours. The government support to retain jobs was
yet present in some of the Western Balkan economies from the outset of 2021, after massive
interventions in 2020 were assessed as critical. Yet, the structural problems continue to exert
challenges for the labour markets; in particular, the lack of appropriate skills and labour force
emigration intensified their pressure onto the available labour, but affecting the growth of wages.
One of the positive consequences is that the companies in the region became more open towards
employment of youth, women, and Roma.
Economies of the region remain concentrated on domestic markets. Albeit 77% of businesses
claim that their products can compete with those from the EU, only 3 in 10 are engaged in exports,
which is an improvement compared to 2020. Non-exporters usually cite lack of plans, interest, or
capacities to export, while exporters complain about the need to hardcopy documents and get
licences, and about slow import-export procedures, factors which did not change compared to a
year ago.
Only one in ten companies decided to invest abroad, and an even smaller share of these invest-
ments ended up in the region. Moreover, there is a trend of increasing investments in the EU,
rather than in the region. As companies consider and value a lot of different factors when making
an investment decision, political stability, and quality of regulatory environment among others, it
does not come as a surprise that the region is not becoming a preferable option for investing, as
not a lot of progress has been done.
Stronger preference for male workers and prejudices against Roma workers continue to perse-
vere, although some improvement is evident. This situation continues to be one of the reasons of
the persistent gender and Roma employment gap across all the economies in the region. More-
over, not so negligible share of employers continues to believe that employing a Roma worker
would negatively impact the working environment of their company, albeit this is less the case
for the large and exporting companies which are more frequently exposed to foreign cultures and
diversities.
Western Balkan companies have still used the Internet in traditional fashion, mostly for commu-
nication and advertising and less so for e-trade. Despite widespread internet usage, not much of
companies’ sales in the region is generated online: 38% of respondents said sales of less than 5%
was generated online, which is a striking decline compared to a year ago, likely driven by the ease-
ment of the restrictive measures. The usage of e-banking continued to grow over the past year.
Innovative dynamism has not seen much of a change as businesses continue to rely on their own
strengths in terms of both capacity and financing.
MAIN FINDINGS
25
REGIONAL OVERVIEW
The economies of the Western Balkans continued to operate under varying conditions in 2021,
determined with the new variants of the coronavirus Covid-19 and the commencement and pro-
gression of the immunisation process. From the beginning of the year, the delta variant of the
virus has been dominant, but has been intercepted with the start of the immunisation process,
the earliest in Serbia approximately in February 2021, followed by other economies in the second
quarter of 2021. Yet, the pace of the immunisation process stalled after the summer, amid the
spread of the omicron variant in the last quarter.
On average, the total regional economy recovered with a growth rate of 5.4% in 2021, with some
between-economy differences (Figure 1). While these figures are not final yet (i.e. present the
latest estimates), they suggest that the WB economies have been on the path or post-pandemic
recovery, yet on average not reaching their pre-pandemic level. There is some variation in the GDP
growth in 2021: Montenegro faced the steepest growth of 7%, after the severest drop of -15.2%,
followed by Serbia (6.5%), Kosovo* (6%), Albania (5.3%), North Macedonia (4%), while the small-
est growth is observed in Bosnia and Herzegovina (2.8%) (IMF World Economic Outlook).
IMF projections suggest that the WB economies will return to the pre-pandemic GDP level over
2022, which is a slight delay compared to the previous assessment, but apparently driven by the
new waves of the pandemic over 2021 and the more-sluggish-than-expected vaccination prog-
ress. An average WB growth of 4.3% is expected over 2022, with growth rates ranging between
3.3% and 5.6% across the region (IMF World Economic Outlook). Yet, these projections have been
made in October 2021, while the beginning of 2022 brought new and serious geopolitical risks and
developments, with the invasion of the Russian Federation over Ukraine. While the dependence of
the Western Balkan economies on trade and financial flows with Russia and Ukraine is small (yet
varying), the region will likely experience growth deceleration channelled through the deceleration
of the economic activity in the European Union and the soaring prices of primary food and energy.
Figure 1: Real GDP Growth in the Western Balkans 2008-2023
10
0 5.9 4.3 4.1

3.3 4.1 5.4
1.7 2.2 2.6 2.6 2.7 3.6
-0.2 0.3
-10 -1.0
-3.2
-20
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Albania Montenegro Western Balkan

Bosnia and Herzegovina Republic of North Macedonia
Kosovo* Serbia
(Source: IMF World Economic Outlook, WB GDP weighted average growth rate)
26
In 2020, the unweighted average unemployment rate for six Western Balkan economies was
16.6%, while in the EU (27), this average was 7.2%. In 2021, the unweighted average unemploy-
ment rate for selected WB economies was 14.9%. Across the WB region, there were some dis-
tinctive patterns in 2021. In 2021, compared to 2020, Albania and Montenegro lowered their un-
employment rate by 0.2 pp and 1.5 pp respectively. On the other hand, Bosnia and Herzegovina,
North Macedonia and Serbia had an increase of the unemployment rate by 1.3 pp, 0.2 pp and 1.3
pp respectively. Unemployment data for Kosovo* for 2021 is not yet available (Figure 2).
Figure 2: Unemployment rates in the Western Balkans, 2010-2021

(% of the labour force; LFS, 15-64 age group)
40
35
30
25
20
15
10
5
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Albania Montenegro Western Balkans Average

Bosnia and Herzegovina Republic of North Macedonia EU Average (27)
Kosovo* Serbia
Source: RCC ESAP 2 Observatory (https://www.esap.online/observatory/)
The Covid-19 pandemic caused fiscal deficit to soar in all Western Balkan economies in 2020,
while consolidation in 2021 has been rather gradual. The average deficit rose from 0.6% of GDP in
2019 to 7% in 2020, while it declined to only 5.7% in 2021. The latter reflects the persistent need
for the government to continue with some key measures in the first quarter to first half of 2021,
as well as the general need not to tighten fiscal policy too rapidly and kill the recovery. The largest
deficit was incurred in Albania, 6.7% in 2021, with lack of fiscal consolidation (a deficit of 6.9% in
2020). Likewise, Serbia tightened only slightly (a fiscal deficit of 6.5% in 2021 compared to 7.3%
in 2020), while the rest of the economies tightened fiscal spending more decisively: it was Monte-
negro which reduced the fiscal deficit the most, from 10.9% in 2020 to 5% in 2021. Such deficits
across all economies of the Western Balkans are still above pre-pandemic trends, and the legacy
of the pandemic is a stock of public debt that has now reached historic highs in all economies
except Serbia and Bosnia and Herzegovina.
In line with global conditions, by the end of 2021, inflationary pressures in the Western Balkans
have been on an upward trajectory. Average inflation was projected to reach 2.6 percent in 2021
from 0.9 percent in 2020, driven by the post-pandemic rebalancing and the price pressures on the
REGIONAL OVERVIEW
markets for primary commodities and energy. In fact, such price pressures significantly soared
by the end of the year, as year-end inflation rate averaged 3.4% for the entire WB region, with
27
pronounced intra-regional differences. It was Kosovo* which experienced the most significant
price increases by the end of 2021: 5.4%, followed by Serbia 4.1%, North Macedonia 3.8%, Mon-
tenegro 2.9%, Albania 2.1% and Bosnia and Herzegovina 1.6%. Such price movements, although
single-digit and fairly low, posed significant concerns pertinent to the real living standard, since
the region has undergone a decade of very low inflation rates: the average for the five years before
the pandemic hovered from 0% in Bosnia and Herzegovina to 1.9% in Serbia.
28
BALKAN BUSINESS SENTIMENT INDEX
In order to monitor the present business sentiment and optimism changes over time, the Balkan
Business Sentiment Index (BBSI) is conducted, which consists of the following five questions:
1) How has your business situation developed over the past 12 months? Has it deteriorated,
remained unchanged or improved?
2) How has demand for your company’s products/services changed over the past 12 months?
Has it deteriorated, remained unchanged or improved?
3) How has the general economic situation in your place of living changed over the past 12
months? Has it deteriorated, remained unchanged or improved?
4) How do you expect the demand for your company’s products/services to change over the
next 12 months? Will it decline, remain mostly unchanged or increase?
5) How do you expect the general economic situation in your place of living to develop over the
next 12 months? Will it mostly deteriorate, remain unchanged or improve?
BBSI contains questions related to the respondents’ experience of the general economic situa-
tion and the situation in their business with regards to development and demand for products or
services over the past 12 months. Simultaneously, the index contains questions related to the re-
spondents’ expectations for the coming 12 months, again in terms of anticipated and the general
economic situation in their place of living.
The index is scored as follows: better – 100 points, worse – 0 points, no change – 50 points.
After responses are recoded, the average value is calculated for the whole Western Balkans re-
gion as well as for each economy separately. The index values are expressed on a scale of 0 to
100. Figure 3 presents BBSI for the current round of the Balkan Barometer: the value stands at
around 59 for all Western Balkan economies, suggesting a satisfaction with the overall and the
economic situation in the society to an extent, and an increased satisfaction compared to the
previous year. However, the business sentiment increased sluggishly in all Western Balkan econ-
omies, except in Kosovo* and Albania. The increase in Kosovo* has been double (by 54 points),
while in Albania by 25 points. A similar across-economies pattern is observed for the business
sentiment expectations, whereby the annual improvement has been even higher.
29
Figure 3: Balkan Business Sentiment Index (BBSI) - 2022
100
92
89 87
79
80
67 67 69
66 65
63
59 59 59
60 53 53 53
51 50
44 45
40 39
20
0
Albania Bosnia Kosovo* Republic of Montenegro Serbia Western
and Herzegovina North Macedonia Balkans
2022 BBSI 2022 BBSI - Expectation index 2022 BBSI - Present situation index
(Scores are on a scale from 0 to 100)
A more thorough overview of the business sentiment in the Western Balkans over time (Figure 4)
reveals that despite the significant jump in 2021 at 59 index points, the index has not yet achieved
the pre-pandemic level (65 index points in 2019). This average, however, conceals important in-
tra-regional differences. Kosovo*, for example, outpaced the pre-pandemic level, as well as Alba-
nia, which observed a worsening even in the year before the pandemic hit. The rest of the econo-
mies have not fully recovered in terms of their perception of the business environment, albeit the
situation seems worst in Montenegro as it is yet by nearly 17 points lower than the pre-pandemic
level.
Figure 4: Balkan Business Sentiment index (BBSI) over time
100
89
85
79
78
80
75
73
70
69
67
66
65
65
63
63
62
62
61
61
60
59
59
59
59
59
59
58
58
58
57
57
57
60
56
56
56
56
55
54
53
53
53
53
52
51
51
50
48
48
47
44
42
40
39
39
40
36
36
35
20
0
2014 BBSI 2016 BBSI 2018 BBSI 2020/21 BBSI

2015 BBSI 2017 BBSI 2019/20 BBSI 2022 BBSI
30
The index can be broken down into two sub-indices, separately monitoring the prevalent senti-
ment within the business community, as well as their expectations of the future.
a) BBSI – Present Situation Index

b) BBSI – Expectation Index
Along with the overall BBSI, businesses in the region were happy with both their current situation
and prospects for the future until the crisis induced by Covid-19 hit in early 2020. Yet, a reversal
of significant but not full amount is observed in 2021. 2019 recorded the highest satisfaction rat-
ings since the Barometer’s inception, a trend which was suddenly halted. Figure 5 reveals a drop
and then a recovery in the BBSI-PSI of a similar magnitude and pattern as for the overall index.
Again, Kosovo* and Albania in 2022 are already at higher levels as compared to 2019, Albania is
almost at par, while all the other economies are lower than their pre-pandemic level. Serbia and
Montenegro recovered without having reached the pre-pandemic level, but the recovery of Serbia
is faster. On the other hand, the BBSI-PSI stagnates in 2021 in Bosnia and Herzegovina and North
Macedonia, although it was also among the lowest in the region even before the pandemic hit.
Figure 5: Balkan Business Sentiment Index (BBSI) – Present Situation Index
100
87
84
80
76
75
73
68
68
65
63
62
61
60
59
59
59
58
58
58
57
57
60
56
56
56
54
53
53
53
53
52
51
51
51
50
50
50
49
49
49
48
48
46
46
45
44
42
42
42
39
37
40
36
35
34
31
29
26
25
20
0
2014 BBSI - Present Situation Index 2017 BBSI - Present Situation Index 2020/21 BBSI - Present Situation Index
2015 BBSI - Present Situation Index 2018 BBSI - Present Situation Index 2022 BBSI - Present Situation Index
2016 BBSI - Present Situation Index 2019/20 BBSI - Present Situation Index
Expectations were suppressed during the pandemic, but swiftly recovered (Figure 6). Along the
entire BBSI and BBSI-PSI, the BBSI – Expectation Index recorded a drop in 2020: from 71 points
in 2019 to 49 points in 2020; and then a full recovery: to 69 points in 2022. This suggests that
the optimism swiftly returned in the Western Balkans after a gloomy period during the pandemic.
However, inside the region, such optimism is generally drawn from Kosovo* and Albania. Kosovo*
recorded a large increase of the BBSI-expectations index by 92%, followed by Albania by 79%.
In Bosnia and Herzegovina and North Macedonia, optimism only returned at its pre-pandemic
level, while in Serbia and Montenegro it remains contained, i.e., about 10 index points below its
pre-pandemic level.
31
Figure 6: Balkan Business Sentiment Index (BBSI) – Expectation Index
100
92
86
85
82
81
79
80
76
76
76
72
71
70
70
70
70
69
69
68
67
67
67
67
67
67
67
66
66
66
66
65
65
64
63
63
62
62
62
62
60
60
60
60
60
59
59
58
57
60
56
55
50
50
50
49
46
46
45
40
20
0
2014 BBSI - Expectation Index 2017 BBSI - Expectation Index 2020/21 BBSI - Expectation Index
2015 BBSI - Expectation Index 2018 BBSI - Expectation Index 2022 BBSI - Expectation Index
2016 BBSI - Expectation Index 2019/20 BBSI - Expectation Index
32
PERCEPTIONS OF THE BUSINESS
ENVIRONMENT AND ECONOMIC TRENDS
The overall economic situation significantly improved in 2021 for the Western Balkans. Figure 7
reveals that - compared to 74% in 2020 who reported such deterioration – in 2021 only 41% of
respondents said that the general economic situation in their economy deteriorated, a noticeable
positive shift. Such sentiment has been more evident in Bosnia and Herzegovina with 69% and
North Macedonia with 63%. Out of the WB economies, the economic situation in Kosovo* seems
to have completely changed; while 89% saw deterioration in the economy in 2020, in 2021, for
77% of the respondents the situation has improved significantly. Although it is difficult to properly
assess the reasons behind it, this considerable shift might be explained with the very low point
which characterised Kosovo* the year before, on the one hand, and the political changes that
happened in 2021, on the other.
Figure 7: How has the general economic situation in your economy changed over the past 12
months? Has it deteriorated, remained unchanged or improved?1
100 0 0 0 0 1 1 0
6
14 14
28 20 22
80 31
18
30
60 77 36
40 48
40
69
63
56
20 41
33 16 31
0
6
Albania Bosnia and Kosovo* Republic of Montenegro Serbia Western
Herzegovina North Macedonia Balkans
PERCEPTIONS OF THE BUSINESS ENVIRONMENT AND ECONOMIC TRENDS
Deteriorated Remained unchanged Improved DK/refuse
(All respondents - N=1203, share of total, %)
The opinion on what the economic situation is expected to be in the upcoming year is divided
(Figure 8). 36% of the respondents in the Western Balkan economies expect that the situation will
improve, while 30% expect it to deteriorate, compared to 30% and 26%, respectively, a year ago.
The ongoing effect of the pandemic and the slow immunisation rates may have contributed to
this effect. The share of respondents seems to be more pessimistic in Bosnia and Herzegovina
where 53% are expecting the economy to deteriorate while this share is the lowest in Kosovo*;
1 The figures might not add to 100% due to rounding.
33
only 1%. For the second year in a row, Kosovo* respondents remain most optimistic for the future,
since 78% of them responded that the overall economic situation would improve in 2022.
Figure 8: How do you expect the general economic situation in your economy to develop over
the next 12 months? Will it mostly deteriorate, remain unchanged or improve?
100 0 2 1 1 3
7 10
20
80 20 38 36
43
30
60 19
78 42
35 33 32
40 39
53
20 37
26 27 30
19 18
0 1
The following chart reflects that the companies in each of the economies do not expect changes
in the employment rates. Figure 9 reveals 27% of respondents expect that the number of those
employed will increase, as compared to only 15% who had such expectations in 2020.
Within this indicator, Kosovo* respondents remain likewise most optimistic, since only 2% of them
said that the number of the employed would decrease. Business representatives of Bosnia and
Herzegovina are the most pessimistic about employment, as 15% answered that employment
would decline. Still, majority of respondents in each economy, between 50% and 75%, expect that
the number of the employed will remain intact, probably reflecting the focus of government mea-
sures to preserve jobs.
34
Figure 9: How do you expect the number of people employed in your company to change over
the next 12 months?
100 0 3 1 3 3
6 9
14
29 22 27
80 28 21
60
78
75
40 63 50 65 60
66
20
15 16
9 10 6 9 10
0 2
Decrease Remained unchanged Increase DK/refuse
Business representatives of the Western Balkan economies have shared an overall belief in the
attractiveness of their economy for investment. 15% believe the region is a great place to invest,
which constitutes a slight increase from 11% in 2020; and 39% said it was mostly a good place to
invest, approximately sharing the same opinion as a year ago. The ones who have remained most
trustful towards their economies are Kosovo* and Montenegro, while citizens of Bosnia and Her-
zegovina and North Macedonia on the other hand believe that their economy is not at all a good
place to invest with 18% and 24%, respectively.
Figure 10: Do you believe that your economy is a good place to invest?
100 0 2 0 0 4 0 1 5
7 7 7
17 15
45 15
80 25 4,2 26
3,7 3,8 39
3,6 3,5
60 60 40
50
3,0 3,0 3
36 36
40
37
30
29
20 27 18 24 26
13 13
6 11 3 5 12
7 4
0 1 2 1 1 1
It is not a good place to invest at all It is mostly a good place to invest Mean
It is mostly not a good place to invest It is a great place to invest
It is neither good nor bad place to invest DK/refuse
35
The opening up of the economies assisted by the active vaccine boosting campaigns in the region
helped reverse the 2020 trend in economic activity. According to Figure 11, the situation seems
to have completely reversed from the last year. The Western Balkan businesses responded of an
economic decline in nearly half of the percentage from 2020 (only 25%). Kosovo* in particular is
an interesting case since 74% of respondents considered business situation had deteriorated in
2020, but only 5% see an economic decline in 2021. The share of those who considered business
situation unchanged varies between 17% in Kosovo* and 55% in Serbia while North Macedonia
and Montenegro seem to be the most pessimistic regarding the economic situation.
A notably high share of respondents considered the business situation to have improved over
2021, most evident in Kosovo* (77%) and Albania (41%). The easement of some of the most
stringent lockdown measures did revive most of the economic sectors, which were affected by
the pandemic and the subsequent crisis.
Figure 11: How has your business situation developed over the past 12 months? Has it deterio-
rated, remained unchanged or improved?
100 0 0 0 0 3 1 1
11
25 19 23 28
80 41
47
60 77
43
41
55 46
40 37
20 42
33 36
23 17 25
21
0 5
The share of respondents who believe in regional cooperation has been constant (Figure 12). 25%
said that the quality of regional cooperation was very important, followed by 44% who marked
it as important. Although there have been various public discussions on regional agendas and
ideas, the share of respondents who considered quality of regional cooperation as not important
at all has shown a slight increase from 10% in 2020 to 13% in 2021.
However, within the region, regional cooperation is perceived distinctively. For example, respon-
dents in Kosovo* and Albania have been at the forefront in viewing regional cooperation as very
important (43%) and (35%) respectively, which is different than the last year where specifically
these two economies were more hesitant towards regional cooperation. On the contrary, busi-
ness representatives of North Macedonia have been more hesitant towards regional cooperation
and considered regional cooperation as not very important (24%). The shares also evidence a
pessimism from Serbians, considering the regional cooperation as not important at all in quite a
substantial percentage (20%) which is 9% higher than the last year.
36
Figure 12: How important is the quality of regional cooperation in the Western Balkans to your
business?
Albania 1 15 50 35 0
Bosnia and Herzegovina 3 17 45 30 4
Kosovo* 3 4 49 43 0
Republic of North Macedonia 18 24 40 17 0
Montenegro 14 22 49 11 4
Serbia 20 15 42 21 0
Western Balkans 13 16 44 25 1
0 20 40 60 80 100
Not important at all Not very important Important Very important DK/refuse
Like 2020, 2021 was not a year of great progress in the EU accession process of regional econ-
omies. For the second year in a row, Albanian respondents considered EU membership a good
thing (90%), followed by Kosovo* (86%) with an important 19% increase from 2020. Interesting
about Kosovo* is also the fact that in 2021, none of the respondents perceived the EU member-
ship as a bad thing compared to 7% in 2020. Serbia, on the other hand, observed a decrease of EU
membership optimism, from 65% to 49%, in 2021 (Figure 13). In a more general overview, 60% of
respondents considered it a good thing, with a decrease of 6 p.p. compared to 2020, at the benefit
of those who said it was a bad thing (a slight increase from 4% in 2020 to 7% in 2021).
37
Figure 13: Do you think that your economy’s EU membership would be/is a good thing, a bad
thing, or neither good nor bad for your company?
100 0 1 1 3 3
6 9
80
59 49
57 60
60 58
90 86
40
39
20 28 35 27 30
7 12
4 8 4 7 8 7
0 0
Bad thing Neither good nor bad Good thing DK/refuse
38
BUSINESS TRENDS IN THE WESTERN
BALKANS
In 2020, surely the pandemic put negative pressure on both supply and demand. Less circulation,
lack of movement and an overall uncertain economic environment contributed to a pessimistic
year. However, in 2021 things seem to have improved considerably, although not yet to pre-pan-
demic levels. The easing of the pandemic measures and the vaccinations helped in improving
economies. On the other hand, differently from 2020, in 2021, the world in general learnt how to
cope and live with the virus.
According to the shares, respondents are quite optimistic over the next year (Figure 14) with 44%
of them expecting the demand to increase in the upcoming year (11 p.p more than 2020). With the
removal or easement of most lockdown measures, the downward pressure on market demand
and supply has eased as a result. Kosovo* is the most optimistic (80% of respondents said the de-
mand for their company’s product/service would increase), followed by Albania (50%) and Bosnia
and Herzegovina (44%). On the other hand, Montenegro and North Macedonia face constrained
optimism. North Macedonia, surprisingly, also has the largest share of respondents who reported
an expected decrease (14%), while Kosovo* and Montenegro have the lowest (2%), as expected.
Unlike the last year, Montenegro recorded the largest shares of respondents who expect that the
situation will likely remain unchanged.
Figure 14: How do you expect the demand for your company’s products/services to change
over the next 12 months? Will it decrease, remain mostly unchanged or increase?
100 1 2 2 2 3
6 7
80 37 31 39
50 44
44
60 80
40
48
61 48 43
39 37
20
16
11 12 14 10 10
0 2 2
BUSINESS TRENDS IN THE WESTERN BALKANS
Decrease Mostly unchanged Increase DK/refuse
39
As the pandemic impact started to ease, companies returned partially to working from office,
although a few continued remote working. According to the respondents, the labour and other
costs decreased in 1% of the business cases (a 22-points decrease compared to 2020), while
remaining unchanged for only 28% (Figure 15). This might be due to the rebalancing of goods and
services market in the second half of 2021, when inflationary pressures commenced. Another
effect was the soaring energy prices due to the green energy transition in Europe. The situation is
very interesting but at the same time contrasting to that of 2020 when only 18% of respondents
said the costs in their companies increased, while in 2021, 71% responded on an increase. How-
ever, non-negligible share of those indicating higher costs (18%) suggests that for some compa-
nies (usually those which are part of the global value chains) some of the inputs have increased
to the level that triggered an overall increase in costs.
Figure 15: How have your labour and other costs (e.g., energy, etc.) changed over the past 12
months?
100 0 0 1 0 5 0 1
80
52 58
71
60 80 82
90 88
40
20 43 40
28
19 16
10 10
0 0 0 0 2 1 1 1
Decreased Mostly unchanged Increased DK/refuse
The environmental impact of the businesses has not received the needed attention yet (Figure
16). 43% of respondents said their company did not take any steps to reduce such environmental
effect, compared to 44% in 2020 and only 26% in 2019. The main reason behind this deterioration
is closely related to the crisis effect where the environmental issues are usually perceived of a
lesser importance, and economic survival is at the forefront for companies. The environmental
impact has been considered the highest in Kosovo* (62%) and the lowest in North Macedonia
(51%). Opposite of last year, Albania seems to have taken considerable steps towards the envi-
ronmental effects reduction.
40
Figure 16: Has your business taken any steps to reduce the environmental impact it makes,
such as reducing energy consumption, waste reduction or switching to recycled/sustainable
materials etc.?
Albania 12 40 47 2
Bosnia and Herzegovina 10 50 38 2
Kosovo* 13 62 23 2
Republic of North Macedonia 19 27 51 2
Montenegro 10 34 47 10
Serbia 16 39 45 0
Western Balkans 14 41 43 1
0 20 40 60 80 100
Yes - a lot Yes - a little No DK/refuse
Figure 17 presents an overview of the capacity of business models in the Western Balkans to
move to a circular economy model. According to the grey areas below, we can evidence that the
Western Balkan economies are far behind in their efforts to shifting towards a circular economy.
On a regional level, almost a quarter of respondents (25%) said they were not sure if their busi-
ness model allows it, followed by another 31% who said that they either did not consider this at
all, or that it could be difficult to achieve without proper incentives. The share of respondents who
answered affirmative was only 20%, with only 14% in 2020.
However, we can evidence differences inside the region and based on the last year’s analysis.
Kosovo* is the forerunner with 64% of respondents being prepared and leaning over a circular
economic model. In the meantime, North Macedonia was the most likely to reject the model
(38%), followed by Albania (31%).
41
Figure 17: Does your current business model allow for a shift towards a circular (economy)
model?
Albania 20 31 25 10 16
Kosovo* 64 13 16 3 4
Republic of North Macedonia 15 38 24 19 5
Serbia 18 22 23 24 12
0 20 40 60 80 100
Yes Not sure It is difficult but could be achieved with proper

No Not considering this incentives (technical support/government subsidies, etc.)
According to 64% of respondents, the most significant impediment to moving toward a circular
economy model continues to be the added expenses (Figure 18). Considering the rising prices
due to the crisis, this is no surprise. Costs are the most pressing issue in Albania and North Mace-
donia (78% and 77%, respectively), the lack of skills and experience and a regulatory framework
is a major issue in Kosovo* and Montenegro, while the lack of government subsidies appears to
be an issue that affects both Albania and Kosovo* more than the other economies. Even though
Kosovo* showed the most readiness to shift their business models to a circular economy (Figure
17), this chart proves that the businesses there face the most barriers to doing so.
42
Figure 18: What are the main barriers to shifting towards circular economy in your line of busi-
ness?
100
78 78 77
80
68 68 67 65 64
60 54 56
48 48
43
38 38 38 40
40 37 37 35 35
33 33
30
23
20 19 19
20 17
12 12
7 8
5
0
0
Added costs Lack of regulatory framework Lack of consumer demand

Lack of skills and experience Lack of government subsidies
(Respondents who answered “Yes” that their current business model allows for a shift towards a circular (economy)
model - N=286, multiple answers, %)
Access to finance continues to be a problem faced by Western Balkan businesses when trying to
scale up their business, (Figure 19) with Kosovo* leading the charts with 81% of the respondents
confirming so, followed by Montenegro (63%) and Albania (58%). This year, the respondents from
all the region also brought to attention the lack of skills (20%) and competition from incumbents
(47%) as the main challenge of scaling up their businesses. For Montenegro, specifically the lack
of skills has shifted from 1% in 2020 to 13% in 2021.
Figure 19: What are the major challenges faced when trying to scale up your business?
100
81
80
63 63
58 57 57
60 58 50 48 50
48 45 47
44
39 39
40 33 33 32
24 22 22
19 20 20
20 13 15
11 10 10 8
2 3 3 1
0
Lack of skills Access to finance Others

Lack of technology/expensive technology Competition from incumbents
43
BUSINESS ENVIRONMENT IN THE

WESTERN BALKANS
The economies of the Western Balkans continue to face similar obstacles to trade operations
over the years. The COVID-19 pandemic continues to be the main impediment to business in the
Western Balkans in 2021, with 2.2 rating. Macroeconomic stability, access to financing and infor-
mal economy have been perceived as moderate. The migration crisis seems to have returned to
the same score of 3% as in 2019, and together with the access to lend and social infrastructure,
have significantly improved. As in the previous years, the highest ranked factor (lowest obstacle)
continues to be discrimination based on ethnicity, gender, age, sexual orientation.
Figure 20: Can you tell how problematic are these different factors for the operation and growth
of your business? Can you please rate each?
3,5
3,3
3,0 3,0 3,0 3,0 3,0

2,9 2,9 2,9
2,8 2,8 2,8 2,8
2,7
2,6
2,5 2,5 2,5 2,5
2,4 2,4 2,4
2,2
2,0
1,5
1,0
and functioning of the judiciary
Macroeconomic instability
Access to land and title or leasing of land
Telecommunications, transportation and
Customs and trade regulations
anti-competitive practices of other competitors
Availability of labour
Skills and education of available workers
Organised crime, street crime,

theft and/or violent crime
Business licensing and permits
Access to financing and cost of financing
Labour regulations
Tax administration and tax rates
Corruption
Migration crisis
COVID-19 pandemic
age, sexual orientation, or other

(COSME, Creative Europe, etc.)
(maternity leave, kindergartens etc.)
or the Western Balkans region

Contract violations by customers and suppliers
electricity and investment in broadband
Social infrastructure which should enable women
Access to EU funding and programmes

Informal economy and
Political or social instability, breakup of law and
Discrimination based on ethnicity, gender,

to accept and develop leading business positions
Negative image of your economy

order and uncertainty about regulatory policies
Western Balkan
(All respondents - N=1203, scores are on a scale of 1 to 4 where 1 means major obstacle, 2 moderate obstacle, 3
minor obstacle and 4 no obstacle, mean)
According to Table 1, the main obstacle on a regional level but also separately in each of the econ-
omies continues to be the Covid-19 pandemic with a score of 1.9 in Kosovo* and Montenegro,
respectively, which are mainly affected. Another obstacle that persists especially in Albania and
44
Kosovo* (2.1 and 2.0 respectively) but far less in Montenegro and the North Macedonia is the
migration crisis. In spite of the pressure of increasing prices in the second half of 2021, macro-
economic instability is placed quite low as an obstacle. This shows that despite many other chal-
lenges that the crisis brought, the overall macroeconomic environment has not been affected in
a considerable manner. In addition, informal economy is a significant problem across the region.
On the other side of the spectrum, discrimination based on ethnicity, gender, age and the like is
identified as the smallest obstacle in all Western Balkan economies, whereas in Kosovo*, it has a
score of 2.4, still considered as a moderate obstacle.
Table 1 - Can you tell how problematic are these different factors for the operation and growth
of your business? Can you please rate each?
Western Bosnia and North

Albania Kosovo* Montenegro Serbia
Balkans Herzegovina Macedonia
Macroeconomic instability 2.4 2.2 2.1 2.3 2.2 2.3 2.6
Access to land and title or leas-
3 2.9 2.9 2.6 3.3 2.7 3
ing of land
Telecommunications, transporta-
tion and electricity and invest- 2.9 2.9 2.8 2.5 3.3 2.7 3
ment in broadband
Customs and trade regulations 2.9 3 2.5 2.6 3.1 2.6 3
Informal economy and an-
ti-competitive practices of other 2.4 2.6 2.2 2.6 2.4 2.3 2.4
competitors
Availability of labour 2.5 2.5 2.3 2.5 2.7 2.6 2.6
Skills and education of available
2.7 2.8 2.5 2.7 2.8 2.6 2.8
workers
Social infrastructure which
should enable women to accept
and develop leading business po- 3 3.3 2.9 2.5 3.3 2.8 3
sitions (maternity leave, kinder-
gartens etc.)
Organised crime, street crime,
2.8 2.6 2.6 2.5 3 2.8 3
theft and/or violent crime
Political or social instability,
breakup of law and order and
2.5 2.3 2.2 2.6 2.6 2.4 2.8
uncertainty about regulatory
policies
Business licensing and permits 2.8 3.1 2.6 2.7 2.9 2.6 2.9
Access to financing and cost of
2.4 2.3 2.2 2.4 2.5 2.3 2.5
financing
Access to EU funding and
BUSINESS ENVIRONMENT IN THE WESTERN BALKANS
programmes (COSME, Creative 2.8 3.1 2.4 2.4 2.8 2.8 3

Europe, etc.)
Labour regulations 2.9 3.3 2.6 2.6 3 2.7 2.8
Contract violations by customers
and suppliers and functioning of 2.8 2.9 2.6 2.7 2.8 2.8 2.7
the judiciary
Tax administration and tax rates 2.6 2.6 2.5 2.6 2.7 2.4 2.6
Corruption 2.5 2.1 2.2 2.1 2.6 2.6 2.7
Migration crisis 3 2.1 2.9 2 3.4 3.5 3.2
45

COVID-19 pandemic 2.2 2 2 1.9 2 1.9 2.4
Discrimination based on ethnic-
ity, gender, age, sexual orienta- 3.3 3.8 3.1 2.4 3.6 3.4 3.3
tion, or other
Negative image of your economy
3 3.4 2.6 2.2 3.1 3.1 3.1
or the Western Balkans region
(All respondents - N=1203, scores are on a scale of 1 to 4 where 1 means major obstacle, 2 moderate obstacle, 3
minor obstacle and 4 no obstacle, mean)
Respondents rated a few key factors related to government behaviour as either very negative or
very positive. In continuation of the last year shares, Figure 21 still reveals a negative to neutral
sentiment regarding the overall governments’ conduct. The highest share of respondents per-
ceives governance, public integrity and corruption records to scale from negative to very negative,
with a total share (34%) remaining unchanged compared to 2020 and 2019 (36% in both years).
On the other hand, digitalisation of public services which received the largest share of positive or
very positive opinion last year (41%), had a slight increase to 50% in 2021. The trend continues
to show optimism also related to transparency of government (34%) and the predictability and
stability of policies, laws, and rules (32%).
Figure 21: How do you perceive the following factors related to government conduct, based on
your experience or of other investors that you have heard of?
100 2 1 3 3 3 4 1 5
6 6 6 8 7 7 17
17
80 28 25 24 26 23
33
60
3,5
39 3,1 3,2
3,1 3,0 3,1 3
2,9 38 41 36 41 39
40
34
20 27
22 24
21 17 22
11
7 5 4 6 5 4 3
0 1
Governance, Transparency of Coordination and Predictability Predictability in Existence of Digitalization of
public integrity, government communication and stability of the conduct of effective public services
and corruption regulations and between policies, laws public agencies processes in
decision-making regulatory and rules (such as place for
authorities regulatory consultation on
authorities) proposed laws
and regulations
Very negative Neither positive nor negative Very positive Mean

Negative Positive DK/refuse
(All respondents - N=1203, scores are on a scale of 1 to 5 where 1 means very negative and 5 very positive, share of
total, %)
Figure 22 presents the evaluation of governance, public integrity, and corruption in each of the
Western Balkan economies as well as on a regional level. Albania and Bosnia and Herzegovina
46
(43%) and North Macedonia (59%) suggest an increase in the perception of these factors as neg-
ative and very negative. On the other end, Kosovo* shares the most positive inclination towards
governance reaching a staggering high share of 81%. This unusual increase is difficult to explain
consistently, although a change in the political landscape might have influenced in the short-
term. However, at regional level, a significant share of 39% continues to remain neutral, which still
shows hesitation from the economies in answering these questions.
your experience or of other investors that you have heard of? Governance, public integrity, and
corruption
100 2 3 1 2 1 2 5
2 0 0 8 6
13 13 12 1 6
41 11 19 17
80
4,1
26
42 39
60 45
39
3,0 3
2,9
34 2,7 46
40 2,6 2,6 40
2,3
34 35
20 28 27
7 25 24
4
9 8 6 8 7
0 2 1

total, %)
Similarities in the perception of transparency and decision-making continue to show in the same
line as the factors mentioned above. Bosnia and Herzegovina and North Macedonia share mostly
a very negative and a negative perspective, approximately 34% and 38%, respectively. Unlike the
last year, Kosovo’s* situation has changed dramatically on reverse with only 12% of respondents
sharing a negative and very negative view on transparency of government regulations and deci-
sion-making, and Montenegro (48%) and Serbia (38%) having a neutral reaction to the factors.
47
Figure 23: How do you perceive the following factors related to government conduct, based
on your experience or of other investors that you have heard of? Transparency of government
regulations and decision-making
100 1 3 1 1 0 1 5
4 0 1 7 6 6
1
20 29 24 14
80 29 30 28
3,9
60
42 35 48
3,1 3,1 3,1 3
43 38
46 2,8 2,7 2,8 38
40
20
20 29 14 23
22 22
20
8 18
3 5 4 8 3 5
0 1

total, %)
Coordination and communication shares suggest that across the Western Balkan economies,
the perspective is neutral (Figure 24). The share of neutral respondents is dominant particularly
in Montenegro (50%) and Bosnia and Herzegovina (49%), while surprisingly Kosovo* and Albania
stand out with the share of positive and very positive attitudes, 32% and 75% respectively, fol-
lowed by Serbia (30%) on a slight increase from the last year shares.
your experience or of other investors that you have heard of? – Coordination and communica-
tion between regulatory authorities
100 4 3 1 4 2 3 5
6 1 3 9 5 6
2
21 29 7
80 21 25
26 25
3,9
60 49 50
3,1 37 3,1 3,1 3
2,9 46 42 41
43 2,8 2,7
40
22
20 28
20 13
23 21
20
7 13
0 2 5 3 6 2 4 1

total, %)
48
Predictability and stability of policies are the next important factors of the economies in the re-
gion (Figure 25). North Macedonia is the forerunner on this problem, with 39% of respondents
being negative or very negative followed by Bosnia and Herzegovina with a share of 36% (10 p.p
lower than the last year). In addition to the factors analysed in the above charts, Kosovo* contin-
ues to follow the same trend; it remains the economy with the most positive perception towards
the predictability and stability of rules and policies. Despite these percentages, what stands out
the most in the graph below is the neutrality to these factors both at the regional level and in par-
ticular in Montenegro (48%) and Bosnia and Herzegovina (42%).
your experience or of other investors that you have heard of? – Predictability and stability of
policies and rules
100 3 2 1 2 2 3 5
6 2 2 8 7
1 8
17 18 11
80 38 24
31 26
3,9
60 39
42 48
3,1 3,1 3,0 3
34 2,8 29 36 36
2,7 2,7
40
24
20 28 19 25
24 24
24
9 15
4 8 9 6
0 3 3 1

total, %)
Figure 26 reveals a strong connection between the policies and regulations regarding the conduct
of public agencies in their execution. Montenegro pioneers the neutral stance (54%) followed by
Serbia (46%), while Kosovo* and Albania reveal a non-negligible positive stance. However, most
WB economies are positioned as neutral in this spectrum of the economy.
49
your experience or of other investors that you have heard of? – Predictability of the conduct of
public agencies (such as regulatory authorities)
100 3 2 1 4 2 3 5
8 4 3 10 6 7
1
23 30 8
80 23
28 26
28 3,9
60
54 3,2 3,2
3,1 3,0 38 3
41 2,8 2,8
35 43 41
40 46
20 19
20 16
25 24 17
6 14
13
0 3 6 5 4 2 5 1

total, %)
The Western Balkans have received considerable technical assistance when it comes to working
towards improving the legal frameworks overall. However, most respondents perceive the exis-
tence of such consultative process as neutral and slightly positive. The situation is particularly
optimistic in Albania (35%) and Kosovo* (67%), whereby the shares of respondents with negative
attitude soar the highest in North Macedonia (37%). It should be noted that a very large share of
respondents has expressed very positive perceptions in Kosovo* with 32%, while the average of
Western Balkans for this category (very positive) is only at 7%, confirming once again interesting
developments in Kosovo* respondents' perceptions for this year.
50
your experience or of other investors that you have heard of? – Existence of effective process-
es in place for consultation on proposed laws and regulations
100 6 1 3 4 5
5 6
6 2 11 6 7
5
3
13 32
80 16 10
29 26 23
3,8
60
3,3 46 36 54 3,1 3,1
35 3
2,8 2,8 2,9 37 39
40
47
17 27
20 25
20 25 22
12 11
6 10
0 2 3 3 1 4 1

total, %)
Digitalisation of services, the final factor being considered as related to the government conduct,
reveals a totally different and positive picture. The share of respondents who said government
conduct related to digitalisation of public services is negative or very negative is lowest in Albania
and Kosovo,* and goes up to 24% in Bosnia and Herzegovina, a trend that continues from 2019
until now. The proportion of respondents who have a neutral stance is smaller, leaving more room
for those who have an extremely favourable stance. 'Very positive' responses to digitalisation of
public services account for significant shares, ranging from 2% in Montenegro to 48% in Albania.
51
your experience or of other investors that you have heard of? – Digitalisation of public services
100 0 3 2 2 0 1 5
5 7 12
17 2 17
4,3 33
80 23
28
48 3,9 34
37 33
3,5 3,5
60 3,4
3,0 3,1 3
44 40
40 47
40 41 34
29
20 14
18
8 6 11 14 11
12
4 6 5 4 3 3
0 1 1 1

total, %)
The procedure of obtaining numerous business-related licences is the next set of challenges (Fig-
ure 29). The cumbersome number of procedures, regulations, paperwork, and expense stands out
among the six identified impediments, corroborating central and municipal governments' heavy
dependence on parafiscal charges throughout the Western Balkans. This is still identified as a
significant or very big barrier by 35% of respondents, followed by a moderate obstacle by 29% of
those who responded. Excessive discretionary power of government officials is ranked second
(59% of respondents citing it as a moderate to a very significant barrier), while the need to rely on
personal connections is ranked third (56 %).
On the other end, the lack of digitalised processes for getting licences was a minor or non-exis-
tent barrier for a total of 50% respondents.
52
Figure 29: In the process of obtaining licences for your business, how much of an obstacle
were the following factors?
100 0 1 2 2 1 5
6
11 14 15 19 24
80
22
24
30 25
22 22
60 3,5
3,3 3,2 3,3 3,3 26
3,0 3
29 27 31 28
40 22
27
20 27
21 20 20 20
16
8 6 8 8 8 6
0 1
Burdensome number Lack of availability Excessive Explicit or implicit Need to rely on Lack of a fully
of procedures, and accessibility of discretionary power norm to give bribes personal / private digitalized process for
requirements, relevant information of government connections to solve application and
paperwork, and cost officials and problems approval of the
inconsistent licence
application of
regulations
Very big obstacle Moderate obstacle It’s not an obstacle at all Mean
Big obstacle Minor obstacle DK/refuse
(All respondents - N=1203, scores are on a scale of 1 to 5 where 1 means very big obstacle and 5 it’s not an obstacle at
all, share of total, %)
Within-region differences for each of the six major impediments to acquiring licences in the West-
ern Balkans are discussed below. The number of procedures, requirements, paperwork, and costs
are all evaluated in Figure 30. In Bosnia and Herzegovina (51%) and Albania (36%), this is regard-
ed as big or very big obstacle (while the average for the region is 35%). Meanwhile, Montenegro
stood out because 50% of respondents rated this barrier as moderate. Bosnia and Herzegovina
and Montenegro saw this barrier as a minor or non-existent concern, with 19% and 16% of respon-
dents, respectively, labelling it as such. Surprisingly, this obstacle is considered irrelevant for a
strong majority in Kosovo* (77%), indicating a very diverse attitude across the region. BUSINESS ENVIRONMENT IN THE WESTERN BALKANS
53
were the following factors? – Burdensome number of procedures, requirements, paperwork
and cost
100 0 0 2 0 3 0 0 5
11 5 11 5 12 11
14 24 11
80
29 21 24
34 3,9
30
60
50
3,1 3,1
53 3,0 3,0 3
21 25 2,8 31 29
40 2,6
33
24 22 29 27
20 31
14
18
6 11 10 6 8
0 5 2 1
The lack of availability and accessibility of crucial information follows a similar trend. With 37%,
30%, and 29% of respondents, Bosnia and Herzegovina, Montenegro and Serbia, respectively, con-
sider this a big or very big obstacle. Kosovo* continues to have the highest proportion of respon-
dents who consider this a minor hurdle (45%), while this year, North Macedonia has the highest
proportion of those who believe it is a non-existent obstacle (21%).
were the following factors? - Lack of availability and accessibility of relevant information
100 1 0 2 1 0 1 5
9 4
8 6 15 14
20 21
80 19 17
45 31 30
3,6 32
60 3,5 3,4
38 34 3,3 3,3
45
2,9 3
2,9
40 24 27
21
23
35
25
20 14 24 24 21
16
12 9 11
0 3 1 6 5 6 1
54
The assessment of government personnel overwhelming discretionary power and inconsistent
application of regulations portrays a more depressing picture. Albania joins Bosnia and Herze-
govina, North Macedonia, and Montenegro in revealing this to be a big or very big barrier to ac-
quiring licences while on the other end, Kosovo* considers this factor not being a significant
obstacle with 43% of respondents. However, Kosovo* and North Macedonia, with 61% and 46%
of respondents respectively, share an optimistic perception of the excessive discretionary power
of the government officials and inconsistent application of regulations as a minor or non-existent
obstacle. It was rated as a moderate obstacle by 43% of Kosovo* businesses.
were the following factors? - Excessive discretionary power of government officials and incon-
sistent application of regulations
100 2 0 2 2 1 2 5
11 9
15 18 16 16 15
7
80 20
17
24 23 25
3,6
30
60 36 43 3,2 3,3 3,2
20 3,0 3
2,9 3,0
45 34 31
40 23
21
24
20 24 15
20
19 21
20 10 14
7 3 5 4 8
0 1
The picture becomes even more complicated when the explicit or implied norm of giving bribes
is addressed (Figure 33). Bribery is viewed as a minor or non-existent obstacle by 60% of respon-
dents in Kosovo* and 29% of respondents in Montenegro. This percentage is lower in Albania
(40%) than in North Macedonia (47%), although the percentage of respondents who consider
bribery to be a major or major obstacle is higher in Albania (40%) than in North Macedonia (31%).
On a regional level, the highest share of the respondents (44%) consider bribes as not a major
obstacle.
55
were the following factors? - Explicit or implicit norm to give bribes
100 5 2 2 5
6 8 6
13
19 18 20
25 11 22
80 25
21 3,7 18
21 22
60
22
40 3,3 3,4
3,2 3,3
3,1 20
3,0 3
16 29
40 15 36 22
20
21
28 15
20 22 20
14 24
19 16
7 7 9 8
0 2 3 1
In Albania, Bosnia and Herzegovina, North Macedonia and Montenegro, business representatives
must rely on personal/private relationships to handle problems more frequently than in the other
two Western Balkan economies. In these four economies, respectively, 31%, 34%, 34% and 27%
of people believe this has been a big or very big difficulty, respectively. At the same time, a con-
siderable percentage of respondents in Albania (45%) cite personal relationships as a minor or
non-existent barrier, whereas Kosovo* has the highest percentage (59%). Personal/private con-
nections are a moderate obstacle for the majority of respondents in Montenegro and Bosnia and
Herzegovina, with 38% and 31%, respectively.
56
were the following factors? - Need to rely on personal/ private connections to solve problems
100 1 2 2 2 2 2 5
8
17 13 17 20 10 19
24
80
20 17
28 23 18 22
3,6
60 3,4
3,2 42 3,3
3,0 3,1 3,0 3
23 31 21 38 28
40 29
16 22 29 18
20 18 20
23
15 12 6 16
4 9 8
0 2 1
Previous patterns can also be seen in terms of the lack of a fully digitalised process for licence
application and approval. Albania had the highest percentage of respondents who did not see this
as an obstacle at all (52%), followed by North Macedonia (26%), and Serbia (22%). Bosnia and
Herzegovina and Montenegro have the largest percentage of respondents who say this is a big
or very big obstacle (37% and 27% respectively). At the same time, the majority of respondents in
these two economies (39% and 43%) regard digitalisation for acquiring permits to be a moderate
difficulty.
57
were the following factors? - Lack of a fully digitalised process for application and approval of
the licence
100 1 2 2 3 6 0 1 5
13
19 9 22 24
26
80 4,2 9
16
3,8 29
52 3,5 3,5 3,5
60
39 28 26
51
3,0 3
2,8 43
40
27 18 29 27
21
20 19 16
10 16
16
9 16 18
5 9 11 6
0 3 2 1 1
Figure 36 shows a variety of aspects of the business environment. Business-people were asked
to rate how much these factors have changed during the preceding year. The first thing to notice
is that the graph is dominated by blue, indicating that those traits have been concerning, ranging
from unchanged to greatly worsening.
Market size in the Western Balkans appears to have remained a major stumbling block in 2021:
33% of respondents said it had worsened. This is not surprising, given that the Western Balkan
economies are all relatively modest by European and global standards. Most notably, macroeco-
nomic stability and exchange rate considerations were deemed to have deteriorated (40%), prob-
ably driven by the increasing prices in the second half of the year.
Likewise, the political stability and security has been assessed as worsening by 43% of respon-
dents, followed by the availability of financial capital in the domestic market (35%). These issues
continued to be on the table for 2021, and the easement of the pandemic impact may make for
some progress in the near future.
There have been some notable shifts compared to 2020. For example, the cost of labour has been
assessed as aggravating (54% said somewhat or significantly worsened), followed by the avail-
ability of labour (43%). It is not surprising that the post-pandemic period brought about a patent
of strengthening the pressure on the labour market, hence bringing back to the table the pre-pan-
demic problem of lack of qualified labour. Yet, estimates suggest that by the end of the year, the
labour market in the WB did not fully return to the pre-pandemic levels.
For the most part, responses suggested no change in 2021. For example, 45% said so about la-
bour pool talent and skill, 41% about tax rates, 47% about a business-friendly legal and regulatory
framework, and 46% said so about the availability of links with the domestic firms.
58
On the plus side, the availability of government digital administrative services were reported as
improved by the most respondents (31%), followed by technical innovation and capacities (27%),
and the availability of government support schemes for vulnerable workers (25%).These three
factors remained positive in the business environment in 2021 compared to 2020, but many other
factors such as physical infrastructure, availability of financial services tailored to industry, and
access to land or real estate, which had previously gained significant shares of respondents re-
porting improvement, lost their importance.
Figure 36: How have the following characteristics of the business environment in your econo-
my changed over the last 12 months?
100 0 1 1 0 1 1 2 1 3 2 1 3 2 5
8 7 5 5 5 7 6 9 5 6 7 7
8 9 7 13
15 9 10 8
21 16 16 18 16
80 25 18 19 22
18 21
27 23
31 25
25
60 37 36 3,4
37 45 3,1 29 3,2 41 3,3 3,2
3,1 37 3,1
3,0 3,0 3
2,8 2,9 44 2,9 2,8 2,8 46
2,7 50 47
40 2,6 41 42
38 41
41
30 30 29
20 27 21 29 30
19 14 19 19
14 12 14 16
10 13 13 10 14
6 4 4 6 5 6 5 3 4 3 3 1
0
favourability of exchange rate
Availability of labour
Labour force cost
Talent and skill of labour pool
telecommunications, electricity, water, etc.)
Access to land or real estate
Availability of financial capital in the

domestic market
Political stability and security
Technological innovation and capabilities
Tax rates
Business-friendly legal and regulatory

environment
Availability of linkages with local firms
(e.g. obtaining intermediate inputs from
domestic suppliers, selling output to local firms, etc.)
Availability of Government digital service
to complete administrative procedures
Availability of Government support schemes

to employ vulnerable groups
Availability of financial services tailored by
industry, i.e. tourism needs special
insurance packages, online international payment
Physical infrastructure (e.g. transportation,
Macro-economic stability and
Market size and potential
Significantly worsened Stayed the same Significantly improved Mean

Somewhat worsened Somewhat improved DK/refuse
(All respondents - N=1203, scores are on a scale of 1 to 5 where 1 means significantly worsened and 5 significantly
improved, share of total, %)
Below is a breakdown of the distribution of each restricting factor to doing business in each WB
economy. Figure 37 shows market size and implies that overall, it is a still a limiting factor in each
economy. According to the results, the majority of respondents answered that the market size
has worsened (33%) or stayed the same (37%). This factor is particularly problematic in Bosnia
and Herzegovina (58 % of the respondents said market size has worsened somewhat or signifi-
cantly). Interestingly, respondents in Kosovo* were optimistic and believed that the market size
has improved, different from last year when it was seen as a key limiting factor in the Kosovo’s*
economy.
59
my changed over the last 12 months? – Market size and potential
100 0 0 1 0 0 0 5
2 1 5 8
7 1 10
14 14
12
28
80 20 21
33
25 3,9
40
60
52 37
3,1 3,1 3
42 3,0
28 45
40 2,6 2,7
2,5
45
33
20 30 24 27
22 22
13 5 11
4 7 3 6
0 0 1

The role of macro-stability has been rated as more favourable in Western Balkan economies, as
there have been some notable shifts compared to 2020. The situation is promising in Kosovo*
where 23% of the respondents consider macro-stability to have stayed the same, while 52% to
have somewhat or significantly improved. In Bosnia and Herzegovina, macroeconomic stability
and exchange rate favourability deteriorated the most, with 55% of respondents reporting some
or total deterioration.
Figure 38: How have the following characteristics of the business environment in your economy
changed over the last 12 months? - Macro-economic stability and favourability of exchange rate
100 0 1 2 1 0 1 5
2 2 1 9 10 7
11 14 9 2
25 7 16
80 15
31
38 43
60 28 3,4 37
40
52 3,0 3
36 2,8
40 2,6 2,7
2,5
23 2,4 23
30
30
20 33
23 19 23
19 16
9 10
0 4 1 1

60
Labour availability has been a serious obstacle to doing business in all WB economies where in
2021, nearly 43% of the respondents reported that the situation has worsened. For Bosnia and
Herzegovina in particular, this is a key limiting factor to the economy, with 61% of respondents
reporting that the situation somewhat or significantly worsened. With the lockdown measures
eased, most migrants returned to their host economies, and thus decreased the available labour
pool at home. However, this element is not equally important for all regional economies. Pressure
came also on the demand side, which increased amid the return of the economies towards nor-
malcy. Meanwhile, Kosovo* has the highest percentage of respondents who believe the situation
with labour availability has improved significantly or somewhat (50%).
my changed over the last 12 months? - Availability of labour
100 0 0 1 0 0 1 5
5 1 2 5 6 5
15 16 14 2
16 11 15 16
80
23
27 34 33
60 36
3,3 43
63 3
2,8 2,9
30 39 2,7
40 20
2,5 2,5
2,3 34 30
20 18 28
23 13
22 17
10 8 13
7
0 1

The cost of labour is still an issue. With the exception of Kosovo*, where the share of those re-
porting that labour costs significantly increased in 2021 is (18%), comparing to other economies,
this picture is consistent across the Western Balkan economies. In comparison to 2020, the pro-
portion of respondents who thought labour costs were increased rose from 36% to 54%. Albania
seems to be the most affected by labour cost issues (70% of the respondents stated that the sit-
uation has worsened overall), which is reflecting the ongoing pressure by the increase in the mini-
mum wage. This is also due to the rising demand and lower supply of labour, as explained above.
61
my changed over the last 12 months? - Labour force cost
100 0 0 0 0 0 0 5
5 2 3 5 5 5
6 18 2
19 18 11 14 15
80 20
19 26 29 25
26
60 43
3,1 3
52 40 18
40 2,6 2,6 2,6 2,6
2,3 2,4 40 41
20 24 43
20
18 19 17 16
13 8 13
0 1

Following the labour supply and cost, the situation with labour force talent and skills as shown in
Figure 41, suggests that these factors continue to stay intact. The situation with the skills did not
alter for 21% to 69% of respondents with a slight decrease from the last year on a regional level,
but with differences within each economy. Furthermore, Albania and Bosnia and Herzegovina had
the highest percentages of respondents who thought things were getting worse (40% and 49%),
while Kosovo*, in contrast to the last year data, had the highest percentages of respondents who
thought things were getting better (61%). Montenegro (69%) and Serbia (54%) perceive the situa-
tion to have remained the same.
62
my changed over the last 12 months? - Talent and skills of labour pool
100 0 0 0 4 0 1 5
4 5 4 6 3 5
2
15 16 12 17
22 21 18
80
32 3,7
60
36 43 45
40 69 54
2,9 2,9 2,9 3
2,7 2,8
40 2,6
21 34
21 21
20 21
19
19 9
15 8 13
7 5 10
0 4 1

When it comes to infrastructure, the situation is mixed across the Western Balkans. Bosnia and
Herzegovina confronts the most challenges with its physical infrastructure, as 41% of respon-
dents believe the situation is deteriorating and 40% believe it is stable. Furthermore, Kosovo* (32
%) and Albania (19%) come in second and third. Both Montenegro and Serbia have significant
shares of respondents who have a neutral opinion of infrastructure, while Kosovo* (44%) and
Albania seem to be the most optimistic regarding infrastructure . As in the last two years, Albania
remains the pioneer in this category, with 52% of respondents believing the economy's infrastruc-
ture has improved in the last year.
63
my changed over the last 12 months? - Physical infrastructure
100 0 0 2 1 0 1 5
9 2 9 7 6 7
17 16 3
11
80 25 25
26
43 28
60 3,4 40
3,2 3,2 3,2
3,0 3,1 3
2,7 22 69 51 44
40 45
30
33 20
20
16 13 19
10 17
8 12
0 3 5 2 1 4 1

In contrast, Western Balkan economies have not shown significant gains in land and real estate
access. Respondents who showed no change in this area make up the dominant share (21% to
70%). Contrary to 2020’s data, Kosovo* respondents show visible improvement with 52%, but at
the same time it is interesting to note that 12% of respondents from the economy refuse to share
their opinion on this matter. Bosnia and Herzegovina, on the other hand, appears to have the most
difficult situation on the land and real estate access with 27%.
my changed over the last 12 months? - Access to land or real estate
100 1 3 5 6
5
12 2 12 10 9
3 9 9
19 9 10
80 19 12
18
31 19
3,6
60 3,3 49 3,2
33 3,0 3,1 3,1 3
2,9 56
70 50
40
42 49
21
20
20
8 9 6 16 14
7 7 6 7
0 4 2 1 4 1

64
Due to the financial crisis posed by the pandemic, the availability of financial capital decreased in
most Western Balkan economies. A shift to securing funding through international sources was
evident. However, rather than lack of availability, this could reflect more insecurity and hesitation
and a "wait and see" approach in terms of investment, which is common during crises. Bosnia
and Herzegovina has the most severe financial market deterioration as 58% of respondents indi-
cated some or considerable deterioration, followed by North Macedonia (35%) and Albania (34%).
Surprisingly, in Albania (39%) and Kosovo* (54%), things were a little better, as most of the re-
spondents believe their financial condition was improving. However, the aggravating sentiments
across all WB economies are slightly better than what respondents thought in usual circumstanc-
es during 2020, when those who reported considerable deterioration ranged from an insignificant
3% to 16%, but the range in 2021 is 1% to 14 %.
my changed over the last 12 months? - Availability of financial capital in the domestic market
100 0 0 2 5
5 1 2 2 2
4 8 8
16 2 11
18
16 10
80 13 18
34
25 36
60 3,5
42 44
62 37
3,0 2,9 3,0 3
2,8 2,9
40 27
2,5
44 21
24
20 27 29
15 28
14
14 11
7 7 5 6
0 1 1

Political stability and security, on the other hand, has slightly changed from 2020 as shown in the
Figure 45. Only Serbia and Kosovo* had non-negligible proportions of respondents who thought
things were improving somewhat or significantly (37% and 50% respectively), while those who
thought things were getting worse ranged from 24% in Kosovo* to 64% in Bosnia and Herzegovina
(a position retained from the last year too). The deterioration in Bosnia and Herzegovina may be
attributed to the load that the political system placed on crisis management. Albania and Monte-
negro have the highest percentages of respondents who believe the problem of political stability
has not been altered (40% and 38%).
65
my changed over the last 12 months? - Political stability and security
100 0 0 1 1 1 1 5
1 3 3 8 9
12 18 13 2 14
16
7
80 19
17 23
40 32 32 38
60 3,4 29
3,1 3
37 29 2,8
40 22
2,5 24 2,5
26 2,3 33 2,3
29
20 28
27 16
22 25
18 14
8 5
0 1

Technological innovation and capacities in 2021 were generally behind in North Macedonia, Mon-
tenegro and Serbia: 61% to 75% of respondents observed worsening or unchanged condition in
this matter. On a regional level, the trend is the same; 55% perceive the situation in technological
innovation and capabilities to have stayed the same or worsened. Only in Albania and Kosovo*
are these percentages lower, allowing respondents to believe that technical capabilities and inno-
vation are improving: 48% and 58% respectively said so.
my changed over the last 12 months? - Technological innovation and capabilities
100 2 2 4 2 3 5
6 8
13 3 3 11 9
3
21
18 15
80
30 26 27
35
60 3,4 3,5
37 3,3 3,2
3,0 3,0 3
2,9
27 57 58
40 46 41
37 17
19
20
15 12 14
10 12
13 14
5 7 6 5 5
0 1 1

66
Tax rates have a negative rather than positive impact on the business climate, but the situation
seems to have slightly changed positively during 2021. The most interesting answers to be an-
alysed this year come from Kosovo* companies who have radically changed their perceptions
about taxes; they seem to have a significant improvement of 23%. Tax rates have not changed in
Kosovo*, hence this response might be related more to the general perception of improvement
of governance and the business environment. Other causes might be related to the introduction
of additional financial support for businesses from the government, which was post-COVID-19
related. This could have also impacted the perception of ease of fiscal burden, especially among
small companies. The responses have also been more positive this year in the overall Western
Balkan economies, but the dominating blue areas in Figure 50 imply that firms are still unsatisfied
with the tax rates. In Bosnia and Herzegovina, the situation has deteriorated from 32.5% to 53%.
my changed over the last 12 months? - Tax rates
100 0 1 2 1 1 2 5
3 2 1 8 5 5
11 12 2
23 9 12 16
80 35
33
32
60 3,4 54 44 45 41
3,1
3
38 2,7 2,8 2,8
40 2,5 2,6
41 16
20 16 30 30
16 35
20
12 11 14
5 8 6
0 1 1

In Bosnia and Herzegovina, the regulatory climate follows the same trend as 2020 in perception
as the least hospitable to companies, with 42% of respondents reporting some or significant
degradation. This percentage is also high in North Macedonia (31%). Kosovo*, in the other hand,
stands out for having the highest percentages of respondents reporting improved regulatory con-
ditions (52%). However, most respondents (47%) perceive the legal and regulatory environment to
have stayed the same, with each economy specifically ranging from 28% to 61%.
67
my changed over the last 12 months? - Business-friendly legal and regulatory environment
100 1 1 1 1 1 1 5
6 3 2 9 6 6
17 21 15 2
10 20
80 22
39
31
60 38 3,5
3,3 51
61 3,1
3,0 3
2,8 2,9 56
2,7 47
40 32
28
27
20 21
22 15 19
15 15
15 10
0 2 3 5 1 5 1

When businesspeople were questioned about their ties to local enterprises, a similar pattern
emerged. While this is a significant feature, particularly for the rooting of foreign-owned industries
into local economies so that the latter may join global value chains more quickly, all Western Balkan
economies saw a slight improvement in 2021. Bosnia and Herzegovina (43%), followed by Kosovo*
and Serbia (21%), are more pessimistic in this aspect of the economy, while Albania and surprisingly
Kosovo* are the strongest performers, with more respondents reporting improvement.
my changed over the last 12 months? - Availability of linkages with local firms
100 2 1 2 3 5
4 1 8 8
10 7
8 5
18 20 2
80
11 18
15 21
33
60 3,4 36 3,5
36 59 3,1
3,0 3,1 3
2,9 50 46
53
40 2,6
49 21
30
20
17 13 16 21 19
8 13
0 4 5 4 0 3 1
0

68
The view of digitisation of public administrative services in Western Balkan economies is margin-
ally better than in other parts of the business environment. Albania is in the first place, with 86%
of respondents believing that digitisation had improved in the previous year, followed by Kosovo*
(59%) and (Serbia 41%). Bosnia and Herzegovina is the economy with the highest percentage of
respondents who believe this metric is deteriorating: 31% believe the digitisation agenda for pub-
lic services is deteriorating and 42% believe the situation to have stayed the same.
my changed over the last 12 months? - Availability of government digital service to complete
administrative procedures
100 0 1 1 2 2 2 5
3 6 9 7
4 13
23 24
80 4,3
27 19
34
46 31
3,6
60 3,4 3,4
42 35 3,2 3,1
2,9 3
40
53
49
40 43 38
20
20 19
12 15 9 12 12
12 13
3 4 6 5 4
0 0 0 1

When government services are evaluated in terms of supporting the most vulnerable, the results
are comparable. The governments of Albania and Serbia were deemed to have done the least
for vulnerable populations, with only 13% reporting improved services, followed by Montenegro
(15%). This year, Kosovo* takes the lead, with 53% of respondents expecting this metric to have
improved, followed by Albania (48%).
69
my changed over the last 12 months? - Availability of government support schemes to employ
vulnerable groups
100 4 3 1 5
4 10 9 9 7
23 4 3 7 10
80
27
29 18
21
26 25
3,6 3,6
60 3,3
21 30 3,3
3,0 3,0 3,1 3
36 44 57
40
44 41
37 28
20 19
15 14
12 14 11
7 13
0 1 2 5 4 0 3 1

Finally, the extent to which financial services in the economy are customised to industry demands
paints a complex picture. Bosnia and Herzegovina (33%) and North Macedonia (23%) are the
most pessimistic, indicating some or significant worsening, and Albania and Kosovo* are the
frontrunners, with 47% and 63% percent, respectively, indicating progress. Surprisingly, Montene-
gro considered the situation to have stayed the same (53%).
my changed over the last 12 months? - Availability of financial services tailored by industry
100 1 5
7 5 7 7
3 14 12
10 2 8 8
26 3
80 22 15
19 19 23
37 3,7
60 3,5
36 37 3,2 3,2
3,0 3
2,8 2,9
40 53 49
40 42
37 20
20 24
14
14 17 16
9 16
9 9
0 1 2 2 0 3 1

70
The following graphs show some recent changes triggered by the pandemic or by initiatives spe-
cific to the Western Balkans. The participation of enterprises in online trading in the previous year
is seen in Figure 53. Compared to 2020, 16% more businesses have not engaged at all in selling
and buying online during 2021. The daily engagement appears to be higher in Kosovo* (20%) and
Montenegro (17%) and the lowest in Serbia (only 4%). Serbia represents the economy with the
highest share of respondents who claim to have not engaged in online trading at all. As a result,
while online trading has gained popularity in the Western Balkans because of the pandemic, many
businesses are still lagging behind.
Figure 53: How often have you engaged in selling and buying online during the last year?
100
80 34
49 44 50
60 55
69
60
34 18
40 22 21
5 19 23
2 4
12 7
20 13 13 3 20 3
11 3
9
20 17 2
15 14 11 5 10
0 4
Daily Monthly Quarterly Occassionally I did not engage at all
A similar picture at regional level is showed regarding online services during the pandemic, where
52% of firms turned to more online/digital services (Figure 54). Albania and Kosovo* made the
most progress (70% and 78% respectively) while Montenegro and Serbia made the least (36% and
44%).
71
Figure 54: Did you switch to more online/digital services during the last year?
Albania 70 31
Bosnia and Herzegovina 53 46
Kosovo* 78 22
Republic of North Macedonia 48 52
Montenegro 36 64
Serbia 44 56
Western Balkans 52 48
0 20 40 60 80 100
Yes No
The Covid-19 pandemic has certainly influenced this shift in Kosovo*, as 76% of respondents af-
firmed (Figure 55). Bosnia and Herzegovina and Kosovo*, on the other hand, perceive the switch
to digital services as cheaper, which is not the case in some other Western Balkan nations such
as Montenegro (only 6%). North Macedonia, Albania and Bosnia and Herzegovina cited conve-
nience and quickness as more key factors in their decision than the Covid-19 itself. The graphs
illustrate the clear driver of the shift to increased online commerce as being easier and faster, but
they also highlight other variables that are still important to businesses such as the pandemic.
Figure 55: The reason for switching to online/digital services
88
Albania 40
42
92
Bosnia and Herzegovina 51
38
38
Kosovo* 52
76
75
North Macedonia 37
61
68
Montenegro 6
60
73
Serbia 47
42
75
Western Balkans 45
47
0 20 40 60 80 100
It is easier and faster It is cheaper It was mainly driven by Covid induced context
(Those who have switched to more online/digital services, N=659, share of total, %)
72
On average, 85% of those who did not move to online trading/digital services (Figure 56) did so
because they did not see the need. Montenegro has the biggest share (94%) of non-switchers not
feeling a need to shift to online trading/digital services, followed by Albania with 93%. However,
it's worth noting that 10% of respondents in all WB economies indicated they weren’t willing to
switch due to the fear of disclosing any personal data (an increase of 3% from respondents of last
year). The most sceptical or afraid to share their data are Bosnia and Herzegovina businesses,
where 20% of respondents stated this specific reason for not switching to online trade or digital
services).
Figure 56: The reason for NOT switching to online/digital services
Albania 7 2 5 93
Kosovo* 14 9 11 80
North Macedonia 10 3 4 86
Montenegro 2 4 4 94
Serbia 8 6 9 85
0 20 40 60 80 100
I don’t have the required skills to use online services

I have no information what services are offered online or through digital platform
I’m afraid I have to agree and share my personal data
I didn’t feel the necessity to switch to online/digital services
(Those who have not switched to online/digital services- N=544, single answer, share of total, %)
Beyond the pandemic's impact, Western Balkan businesspeople reaffirmed their support for the
Regional Roaming Agreement (Figure 57). Despite the concerns, 43% thought it had a positive or
somewhat positive influence in their business operations. 38% of the respondents indicated there
was no impact and 10% said they were unaware of the RRA. Higher positive effect of the Regional
Roaming Agreement is expected in the next period, taking into account that more and more citi-
zens will be aware of it and its benefits.
The Regional Roaming Agreement is viewed positively by Albanians and Kosovo* respondents,
with 62% and 63%, respectively considering it positive or rather positive. Serbians and Montene-
grins, on the other hand, were unsure, with 49% and 39%, respectively, claiming no influence at all.
RRA was unknown to a very small proportion of the population in each economy. The percentages
varied from 5% in Kosovo* to 13% in North Macedonia.
73
Figure 57: How would you rate the impact the Regional Roaming Agreement has on your busi-
ness operations? It had:
100
6 5 10
3 11 4 13 12 11
7 2 2 2 3
4 5 4 8 7
80 7
27
30
27
60 39 38
36
49
30
40
25
48
18 22
15
20 16
32 30 26
24 21
15 13
0
Positive impact Higher positive effect is expected with complete elimination of roaming charges in WB6
Somewhat positive impact Higher positive effect is expected with substantial reduction of roaming charges between WB6 and EU
No impact at all I am not aware of any Regional Roaming Agreement
Company owners and senior managers in the Western Balkans were mostly residents of their
own economy, meaning they did not spend much time living and working outside the economy
(Figure 58). Kosovo* businesses reported the greatest cases of people who spent time abroad
(68%), followed by Albania with 21%, which could represent the magnitude of these economies’
diasporas. Yet, a very small share of respondents (18%), answered positively when asked if the
business owner or manager lives and works abroad.
Figure 58: Have any of your company’s owners or senior managers spent time living and work-
ing abroad as members of the diaspora?
100 2 4 2 1 2
11
80
30
60 77 80
83 85
94 76
40
68
20
21 18
14 14 14
0
6
Yes No DK/refuse
74
Eventually, Western Balkan enterprises will surely gain from only using ID cards to travel across
the region (Figure 59). Despite the fact that travel between some of the region's economies still
faces obstacles, 59% of respondents favour this project, which has progressed to a significant
level. Respondents from Albania and Kosovo* are the most enthusiastic supporters of the plan
(88% and 76%, respectively), while respondents from Serbia are the least enthusiastic (46%). The
latter may be influenced by the unsolved political concerns between Serbia and Kosovo* as well
as the fact that Serbia has the greatest economy in the region, making it the most self-sufficient.
Overall, a slight increase on those respondents who do not support this initiative is noticed (35%
in 2021 compared to 32% in 2020).
Figure 59: Would it benefit your business if travel across the region was possible with a valid ID
card only?
Albania 88 4 8
Bosnia and Herzegovina 67 27 6
Kosovo* 76 20 4
Republic of North Macedonia 49 45 6
Montenegro 57 26 18
Serbia 46 48 5
Western Balkans 59 35 7
0 20 40 60 80 100
Yes No DK/refuse to answer
75
LEGAL AND REGULATORY FRAMEWORK

Businesses in the Western Balkans are still dissatisfied with the impact of their concerns on pol-
icies, and there has been little change since the last review. The overall satisfaction with public
sector performance follows the same trend as last year (Figure 60): 21% are not satisfied, 42%
are neutral, and the rest are satisfied to some or full extent. There are also geographical differenc-
es, with businesses in North Macedonia expressing the most discontent, with 38% saying they
are dissatisfied with their role in public politics, followed by Bosnia and Herzegovina with 32% of
unsatisfied citizens. Serbian respondents are still of divided opinions, and Kosovo* businesses
show the highest satisfaction rate, at 78% (who answered quite a lot or fully satisfied).
Figure 60: How much do you feel the government of your economy takes into account the con-
cerns of businesses?
Albania 16 58 25 02
Kosovo* 7 15 66 12 0
Serbia 16 41 35 2 5
0 20 40 60 80 100
Not at all Somewhat Quite a lot Very much DK/refuse
Figure 61 depicts public opinion on whether rules and regulations are clearly written and do not
change frequently. On average, 53% of respondents on a regional level agree or strongly agree
with the statement, however, this percentage varies from 27% in Montenegro to 87% in Kosovo*.
Montenegro (40%) followed by Bosnia and Herzegovina (34%) have the highest levels of neutral-
ity.
76
Figure 61: To what extent do you agree with the following statement - Laws and regulations
affecting my company are clearly written, not contradictory and do not change too frequently?
100 0 1 0 0 0 1 5
11 9 7
2 15 16
21
80 4,3
25
31 51
50 3,7 35 37
60 3,5 3,4 3,5
3,2 45
3,0 3
34 40
40
26
25
21 36
20
20
22
18 21 21 18
6 7
3 5 6 6 3
0 2 1 2 1
Completely disagree Neither agree nor disagree Strongly agree Mean

Tend to disagree Tend to agree DK/refuse
(All respondents - N=1203, scores are on a scale of 1 to 5 where 1 means completely disagree and 5 strongly agree,
share of total, %, mean)
The flow of legal and regulatory information is also extensively analysed. On average, 55% of re-
spondents agreed or strongly agreed that such information is simple to acquire from authorities,
with figures as high as 76% in Kosovo* and 72% in Albania. Montenegro (28%) and Serbia (25%)
rank worst in terms of accessing information quickly, with Montenegro (38%) and Bosnia and
Herzegovina (34%) having the highest percentage of people who have a neutral stance.
Figure 62: To what extent do you agree with the following statement - Information on the laws
and regulations affecting my company is easy to obtain from the authorities?
100 0 1 0 1 0 1 5
6 10
12 11 3 12
19
27
80 27
4,0
3,8 32
43 43
3,6
60 3,4 3,5
60 3,3 45
49 3,0 3
38
40 34
21
23
15
20 20
17 23
20 12 23 18
8 4 7
0 1 2 2 5 2 3 1


77
According to Figure 63, quite a similar ranking is provided to the interpretation of laws and regula-
tions by the public administration. In North Macedonia and Kosovo*, 58% and 83% of respondents
respectively say that the government makes such interpretation consistent and predictable. On a
regional level, the respondents’ opinions seem to be totally divided.
Figure 63: To what extent do you agree with the following statement - The state administration’s
interpretations of the laws and regulations affecting my company are consistent and predict-
able?
100 1 2 0 0 1 1 5
6 6 8
17 2 12 12
80 4,2 24
33 31
39 41 35 35
60 3,5
3,2 3,3 3,3
3,0 3,0 3
25 35 41
40 44 27 27
25
20 29
22 25 22 20
9 10
8 4 6 4
0 3 2 2 2 1

56% of respondents believe that information held by governmental institutions is granted in time-
ly way, a percentage that has slightly increased since 2020. Such a percentage varies from 24% in
Montenegro, to 83% in Kosovo*). Albania is also a winner in terms of receiving public information
in a timely way, with 78% of respondents pleased. The similar result arises on the pertinence and
completeness of such public information on a regional level (Figure 65).
78
Figure 64: To what extent do you agree with the following statement - Requests for information
held by a government agency are granted in timely manner?
100 1 0 0 1 1 1 5
5 8 9
17 3 17 15
39
80 4,1 21
38
46
3,3 36 41
60
61 3,2 31 3,4 3,5
3,9 2,8 3
40 30
44
22 23 23
20 32
19 20 16
9 18 16
4 6 5 7 5 4 4
0 0 2 1

Figure 65: To what extent do you agree with the following statement - The information provided
is pertinent and complete?
100 1 1 0 1 1 1 5
6
11 10 14 5 15
18 18
80 19
30
3,8 3,8 48 40
60 3,5 3,5 3,5
65 3,2 49 37 36
2,9 3
40 33
21 23
18
20 23 29
14 20 11 20 17
9 6 8
0 1 5 2 5 3 4 1

36% of respondents said the cost of acquiring public information was appropriate (Figure 66).
They mostly complied with the costs of requiring information in Albania, where 74% of the re-
spondents somewhat or strongly agreed that the costs were reasonable. The opposite appears in
Montenegro, where 33% disagreed with the costs of information and 37% were indifferent.
79
Figure 66: To what extent do you agree with the following statement - Requests for information
are granted at a reasonable cost?
100 0 0 0 2 1 1 5
6 6 7
17 3 14 13
33
80 21
35 35
3,8 3,9
32 36
60 3,3 3,3
57 3,1 3,1 37
2,9 3
38
31 28
40 26
26
20 19 28
20 20 20 21 18
6 7 5 10 5 6 6
0 1 2 1

Figures 67 and 68 below show how satisfied businesses are with the public and digital services
they receive.
In terms of public services for businesses (Figure 67), 47% of the businesspersons said they were
(somewhat or significantly) satisfied with the public services they received, from 33% a year be-
fore. The most positive responses were recorded in Kosovo* where 79% of the answers showed
satisfied respondents followed by Albania with 67%. Montenegro has the highest proportion of
fully unsatisfied enterprises (8%) followed by North Macedonia and Serbia (with 7% each).
80
Figure 67: Could you please tell me how satisfied are you with each of the following in your
place of living - Public services for businesses?
100 0 0 0 0 0 0 5
2 1 5
6 1 13 10
27 39 21
80
4,1 47
61 33 37
3,6
60
3,2 38 3,2 3,3
3,0 3
42 2,8
40 40 24 28
32
22 29
20
23 21 19
12 12
12 5
5 7 8 7 6
0 1 3 1
Completely dissatisfied Neither satisfied nor dissatisfied Strongly satisfied Mean

Tend to be dissatisfied Tend to be satisfied DK/refuse
(All respondents - N=1203, scores are on a scale of 1 to 5 where 1 means completely dissatisfied and 5 strongly satis-
fied, share of total, %, mean)
Figure 68 shows that, across the region, 52% of respondents reported some or great satisfaction
with digital services for businesses, a significant increase from 2020 (39%). This could probably
be related to the intensification of the provision of digital services and the increasing demand for
digitalised services amid the pandemic. This year, Albanian businesses have the highest share of
respondents (79%) claiming to be satisfied, followed by Kosovo* (69%), Serbia (55%) and North
Macedonia (52%). Bosnia and Herzegovina and Montenegro, following the same trend as last
year, continue to keep a neutral position to this question.
81
place of living - Digital services currently provided to business by public administration?
100 0 1 4 5 2 3 5
6
5 10 5 11 13
21
34
80 21 21
4,0
3,8 42 44 39
60 3,5 3,5 3,4
35 36
48 3
2,9 2,9
45
40
26 26
33
20 24 26
10 20
6 12 13
5 6
6 8 4 8 4 5
0 3 1
Completely dissatisfied Neither satisfied nor dissatisfied Strongly satisfied Mean

Tend to be dissatisfied Tend to be satisfied DK/refuse
Businesses seem to be unsatisfied with how much the government consults and includes the
private sector when drafting new rules and regulations that affect their operations (Figure 69).
A total of 35% of respondents across the region revealed full or some dissatisfaction (the share
remains the same as in 2020), despite the share of those with neutral stance being of a slightly
higher magnitude (37%).
North Macedonia had the greatest level of unhappiness with these government practices, with
22% expressing absolute dissatisfaction and another 27% expressing moderate dissatisfaction.
These percentages are 4% and 5% in Kosovo*, respectively, while Kosovo* also has the highest
number of satisfied (56%) or fully satisfied (21%) respondents. In contrast, 27% of respondents
in the North Macedonia and Serbia expressed partial or complete satisfaction, presenting a bal-
anced situation.
82
Figure 69: To what extent are you satisfied with how the government consults and involves
private sector when developing new laws and regulations relevant for doing business?
100 2 1 0 1 1 1 5
0 0 1 8 7 5
15 13 21 1
26 10 21
80 20
3,9
43 44 35
60 22
40 37
56 3
2,9 2,8
40 2,7 2,6
2,5 2,4
27
24 30
33 23
20 22
13
18 22 17
8 5 10 12
0 4 1
Not satisfied at all Neither satisfied nor unsatisfied Fully satisfied Mean
Not satisfied Satisfied DK/refuse
Figure 70 shows that businesspeople, as in 2020, mostly highlighted tax-related difficulties as

major roadblocks in a share of 31%, followed by minimum-wage regulations (21%). However,
compared to a year earlier, environmental regulations have gained some relevance (from 8% to
14%) together with planning, building, and development issues (from 13% to 17%)
Figure 70: Which regulations do you consider to be an obstacle to the success of a business?
100
80
60
46
40 33
34 31 34 32 31
23 26 25
19 1318 17 19 15 12 12
23 20
14 2118
22
18
22 18
19 21 14
20 15 16 13
10 11 12 10 11 10 13 15 12
13 14 13 17 1610 14
11 9 8 11 12 9 9 11 11 9 11
4 9
6648 5 4 4
6 6 5 68 7 76 6 4 3
1 3 3 1 3 3 2
12 2 0
0
Minimum wage regulations Tax-related No specific regulations/all regulations

Health and safety regulations Employment regulations None – no regulations an obstacle
Environmental regulations Providing information/record-keeping DK/refuse
Pensions Trading standards
Planning/building/development Working time
(All respondents - N=1203, max 2 answers, share of total, %)
83
In the Western Balkan economies, 90% of businesses have never had a case heard in mediation
courts (Figure 71). Based on the evidence shown in Figure 72, the cases in each economy spe-
cifically vary from 1-2 cases in the last 36-month period. To improve access to justice, 49% of
businesses have found mediation to be an effective mechanism for dispute resolution (Figure
73) while 42% believe the opposite. However, given the fact that a small share has experienced
mediation, the above responses need to be considered adequately.
Figure 71: Has your firm had any cases in mediation courts in the last 36 months?
100 1 4 3
5 5 5
16
80
60
87
89 93 93 91 90
80
40
20
13
7 2 4 5 4 6
0
Yes No DK/refuse
(All respondents - N=1203, single answer, share of total, %)
Figure 72: How many cases in civil or commercial matters were solved by your company
through mediation in the last 36 months?
100
8 13
27 24
80 44
50 2
48 7 38 5
60 7 75
31
33 13
40
56
50
20 44
38 38
27 25
0
1 case 2 cases 3 cases 5 cases DK/refuse
(Respondents who had cases in arbitration courts - N=69, %)
84
Figure 73: Do you consider mediation as a quick and cost-effective extra judicial alternative to
resolving disputes in civil and commercial matters?
100
13 13 11 13 9
25
32
80 22
33 38 42
60
63
40
75
68 67
53 50 49
20
25
0
Yes No DK/refuse
(Respondents who had cases in arbitration courts - N=69, %)
Figure 74: Would your company consider mediation even in cases of cross-border/boundary
conflict resolution for the settlement of disputes in civil and commercial matters so as to sim-
plify and improve access to justice?
100
8 13 11
18
27 25
80 24 13
50
20 33
60
67
50
40
75
68
53 50 49
20
22 25
0
Yes No DK/refuse
(Respondents who had cases in civil or commercial matters solved by their company through mediation - N=69, single
answer, share of total, %)
According to the following three graphs, we can depict how businesspeople see state aid. In the
region, access to information on state aid and grants to businesses is accessible, according to
businesspeople (41%), who agree or are neutral (26%) (Figure 75). Kosovo* has the first place
in agreeing with this statement, with 84% of respondents. Information on state aid is difficult to
come by in Albania, with 45% of respondents disagreeing completely or partially that such infor-
mation is available, followed by Bosnia and Herzegovina (35%), and Montenegro (34%). At region-
85
al level, there is an increase of respondents who agree or strongly agree with this statement, when
compared to 2020 (31%), reaching 41% in 2021. This might be attributed to the variety of support
that governments across the region provided in the context of the pandemic crisis.
Figure 75: Do you agree with the following statement about state aid - Citizens and companies
have full access to information related to state aid policies and grants awarded to companies
by the public authorities?
100 3 2 4 2 4 5
2 8 10
2 6 14 11
5
80 26 4,2
22 16
44 37 30
32
60
26 31 3,3
37 3,2
3,1 3
2,7 2,8 2,8
40 22 26
26
40
33
20 22
20 23 22
22
15 7
12 3 7 12 7
0 3 3 1

Figure 76 shows that 39% of respondents on a regional level agreed completely or somewhat on
the question if sufficient information on state aid was publicly available. On the other hand, only
8% of respondents in Kosovo* believe that such information is difficult to acquire publicly. At the
same time, neutral opinion varies from 15% in Kosovo*, to 36% in Montenegro. Surprisingly, 74%
of respondents in Kosovo* and 53% in the North Macedonia believe that information on govern-
mental aid received by firms should be kept secret among signing parties (Figure 77). Meanwhile,
the opposite is suggested in Albania and Montenegro (47% and 46% respectively).
86
Figure 76: Do you agree with the following statement about state aid - Sufficient information on
the state aid given to companies by the public authorities is already publicly available.
100 1 5 2 2 3 3 5
2 8 7 6
4 13 10
4
80 29 14
27
32 33
3,8
41
60 3,3
28 62 36
3,1 3,1 3
2,8 2,9
29 2,7 29 27
40
22
33 21 28
20 23
15 17 24
9 13 4 8 11
4 4 7
0 1

Figure 77: Do you agree with the following statement about state aid - Information about state
aid received by companies should remain confidential between public authorities and compa-
nies.
100 2 2 2 1 1 2 5
5 7 7
12 13
22 8
80 29 18 33 9
4,0 23 24
31
60 3,4 31
19 33 27
3,0 3,0 3
2,7 2,7 41 25
40 2,6
25 18
27
20
21 20
20 17
15
22 19 19
4 11 15 16
0 4 1

87
ACCESSIBILITY OF LOANS
Western Balkan businesses continue to finance their operations from internal funds and retained
earnings, jumping from 55% in 2020 to 61% in 2021 (Table 2). Albania is dominant in using re-
tained earnings (90%), while Serbia and Kosovo* follow (respectively with 72% and 71%). In 2020,
only 50% of Albanian respondents claimed to have used this source, which shows a massive
contraction from other sources. Although still at very low levels (8% for Western Balkans), equity
financing has experienced a slight increase from 2020, which shows a slow expansion of financ-
ing forms in the region.
Table 2: Have you used any of the following sources of capital over the past 12 months?
(All respondents - N=1203, multiple answers, %)

Internal funds/retained earnings 61 90 28 71 50 17 72
Borrowing from local private
23 38 11 58 21 18 20
commercial banks
Borrowing from foreign banks 11 5 2 24 1 2 17
Equity (through share issues in
the capital market, equity invest-
ment by institutional investors, 8 2 8 5 0 2 12
or private placement to individ-
uals)
Borrowing from state-owned
banks, including state develop- 6 2 8 5 7 3 5
ment banks
Loans from family/friends 12 6 8 15 10 20 14
Money lenders or other informal
sources (other than family/ 3 3 3 3 3 7 3
friends)
Business angel funding 4 5 2 16 2 1 3
Trade credit from suppliers 10 3 13 3 7 13 13
Trade credit from customers 5 2 2 4 3 2 8
Factoring arrangements or sell-
5 0 0 1 1 1 10
ing accounts receivable
Credit cards 7 4 6 2 12 7 7
Leasing arrangement 5 5 4 0 1 2 7
The government (other than
2 0 3 0 0 2 2
state-owned banks)
Grants 4 1 3 0 6 2 6
DK/refuse 12 1 32 5 20 30 4
73% of businesses did not apply for a bank loan in the previous year (Figure 78), which is much
the same as in 2020 and 2019 (70% and 69%). Kosovo* has the highest loan demand, with 59% of
businesses applying for a bank loan during the crisis, while North Macedonia has the lowest de-
mand (13%). The average time it took to agree on a loan was 18 days, roughly the same as in 2020
88
(17 days) as shown in Figure 79. Albania has the longest procedure (25 days), while Montenegro
has the quickest (13 days), with the rest of the economies falling somewhere in the middle. This
procedure in all the economies increased by 1-3 days from 2020, possibly as a result of the crisis,
which disrupted banks’ physical operations. Serbia saw a high share of loans getting rejected
(36%), followed by Montenegro (27%), while Kosovo* leads the way in this area, with only 1% of
loan applications being denied.
Figure 78: Has your company applied for a loan from a bank in the past 12 months?
100 1
9 5 5 5
12
80 39
68
60 73
74 82 68 77
40
59
20
32
17 21 18 22
13
0
Yes No DK/refuse
(All respondents - N=1203, share of total, mean)
Figure 79: How many days did it take to agree the loan with the bank from the date of applica-
tion?
100 1
5
1 17 14
8 23 24
80 35 12
41 4 19
12
27 36
60 16
26
31 2
68 11 17
40 15
38 9 8
20 15 19 20 14 22
8 3
9 12 10 12 12 14 12
0
Up to 7 days 8 - 14 days 15 - 20 days Over 21 days The loan was not approved DK/refuse
Average number of days needed to agree a loan

ACCESSIBILITY OF LOANS
25 16 15 17 13 17 18
(Respondents who had a loan - N=320, open-ended answer, %)
89
This year, in the Western Balkan economies, the main reason behind a loan rejection is the in-
complete loan application. Figure 80 shows an irregular distribution of shares in each of the
economies without significant similarities. However, considering the size of the sample for those
who received a rejection, it is difficult to draw conclusions or identify patterns in this point. It is
interesting that in Kosovo* and North Macedonia, the respondents of each agree 100% in their
answers perceiving lack of profitability of the company and inadequate credit history as the only
reasons, respectively. Care should be exercised in this analysis due to the limited number or re-
spondents whose loans were denied.
Figure 80: You said that your company’s loan application was rejected, what was the main rea-
son for that?
100 1
9
33
80
44 27 47
54
60 9
11 100 100
16
40 15
67 22 10
55 8
20
22 23 27
0
Perceived lack of profitability of the company Inadequate credit history of the company DK/refuse
Lack of acceptable collateral Incomplete loan application
Average number of days needed to agree a loan

3 9 1 1 11 13 38
(Respondents whose loan was not approved - N=38, single answer, share of total, %)
90
CORRUPTION
Western Balkan economies continue to be plagued by corruption, being ranked at considerably
low positions in specialised reports (Transparency International ranked poorly regional econo-
mies in the 2021 Corruption Perception Index, from Montenegro ranked at 64th place, to Albania
and Bosnia and Herzegovina ranked 110th). In its Communication to the European Parliament
and Council, the European Commission also points out that Western Balkan leaders need to de-
liver more credibly in their commitments to fighting corruption2. However, despite these records,
the Business Opinion report of 2022 shows that there is an improvement in perceptions of re-
gion companies. Figure 81 shows the majority of businesspeople tend to completely disagree
with the statement that it was typical for corporations to provide additional payments/gifts. In
the region, the percentage of people who absolutely or somewhat disagreed with the statement
increased slightly from 46% in 2020 to 50% in 2021. Such an improvement may be a reflection
of the re-focusing of economies towards the rule of law and the credibility of institutions, driven
by the reforms undertaken within the EU accession or pre-accession processes. Despite a small
improvement, it is important to notice that this trend might indicate a better environment for busi-
nesses in this regard.
The graph shows similarities in the perception of respondents who agree varying from 15% in
Kosovo* to 24% in Bosnia and Herzegovina. Within the area, there are significant differences with
regard to the extent of disagreement with the statement, whereby Kosovars consistently assess
their environment more favourably, with 77% respondents disagreeing with the statement entirely
or mostly, and only 35% of Bosnians doing so.
Figure 81: Thinking about officials, to what extent would you agree with the following state-
ments? - It is common for companies in my line of business to have to pay some irregular
“additional payments/gift” to “get things done”
100 3 3 5
2 8 4 10 13 10
2 3 18
17 11 6
80 22 4 15 3 11
2 14
13 17 9
60 20 20
17 20
32 23 3
2,8 15
40 22 17
75 2,5 2,5 2,4
2,3 21
2,1
48 22
20
1,6 31 31 33
20
13
0 1

CORRUPTION
(All respondents - N=1203, scores are on a scale of 1 to 5 where 1 means completely disagree and 5 strongly agree, %,
mean)
2 European Commission, " Enhancing the accession process - A credible EU perspective for the Western Balkans", 05.02.2020
91
At a regional level, 20% of businesspeople knew how much the extra money or gift was worth
(Figure 82). In 2021, the percentage of people who disagreed with this statement increased from
38% to 46%. Again, the majority of Kosovo* respondents disapprove completely (74%), while only
18% of respondents in Montenegro share this view.
Figure 82: Thinking about officials, to what extent would you agree with the following state-
ments? - Companies in my line of business usually know in advance how much this ‘additional
payment/gifts’ will cost
100 4 5
8 7 3
4 15 17 13
3 8 25 4
7 4
80 21 19 4
3 10 16
3
15
15
60 20 24
18 21
33 3
25
2,7 16 16
40 2,5 74 17 2,6
2,3 2,4 2,4
24
15
15
20
25 1,6 30 29 30
20 18
0 1

(All respondents - N=1203, scores are on a scale of 1 to 5 where 1 means completely disagree and 5 strongly agree, %,
mean)
Figure 83 shows how often firms have been in a position to offer various unofficial payments/
gifts for different reasons, ranging from getting connected to and gaining access to public ser-
vices to influencing the drafting of new regulations and/or laws. 41% to 53% of the respondents
said they had never made an unofficial payment or gift for each function prone to unofficial pay-
ments, which may be considered an encouraging result. However, in the areas of dealing with
fire and building inspections, labour inspections, and government contracts, this percentage has
slightly increased in comparison to 2020.
92
Figure 83: Thinking now of unofficial payments/gifts that companies like yours would make
in a given year, could you please tell me how often would they make payments/gifts for the
following purposes?
100
15 16 17 15 14 15 15 16 19 19 20
5 3 3 3 3
80 5 5 5 6 5 2
12 14 20 14 12 10
15 14 13 13
18
60 20 16
21 20 20 19 17
23 21 19
19
40
48 48 50 53
46 43 46 44 47
20 41 41
0
To get connected to and maintain
To obtain business licenses and
To obtain government contracts
To deal with occupational health
To deal with labour inspections
To deal with fire and building
To deal with environmental
To deal with taxes and tax
To deal with customs/imports
To deal with courts
To influence the content of new

legislation, rules, decrees, etc.
and safety inspections
inspections
collection
inspections
public services
permits
Never Seldom Frequently Always DK/refuse
(All respondents - N=1203, scores are on a scale of 1 to 4 where 1 means never and 4 always, %)
Each of the 11 reasons is discussed separately in the following sections, illustrating the regional
differences (from Figure 84 to Figure 94). For example, on average, 68% of respondents said there
was no corruption in getting connected to and maintaining public services, but the situation is sig-
nificantly worse in Serbia and Bosnia and Herzegovina, where businesspeople were using these
payments in 23% and 22% of situations, respectively. The other causes of corporate corruption
are distributed in a similar manner in the region. The average percentage of individuals who stat-
ed they frequently paid bribes ranges from 1% to 20%, with Bosnia and Herzegovina respondents
having the highest rates. In some of the economies, these types of services are offered automati-
cally without too many procedures, reducing the contact with civil servants. Hence, we see that in
some cases a large majority declares to never have to give payments for these purposes.
63% of Kosovo* respondents never made unauthorised payments to obtain business licences
and permits, but 31% of Bosnians do. Digitalisation agendas might have played a role in this
case, as well. Albania and North Macedonia have fully implemented digital systems for obtaining
licences and permits, and this factor could have influenced the positive perception, with 82% and
74% of respondents, respectively, claiming to never pay or give gifts for licences and permits.
The same pattern is observed when asking about government contracts Exposure of corrupted
cases and related scandals (such as the wiretapping in North Macedonia) has had a continuous
impact in slowly improving public perception on how contracts are awarded. More specifically,
Kosovo*, North Macedonia, and Albania are the frontrunners in this category, with positive per-
CORRUPTION
ceptions, while in Bosnia and Herzegovina more than half of companies claim to make payments
93
for government contracts, rarely or frequently. This attitude is reflected similarly on all other an-
swers regarding inspection practices.
On a regional level, 6% of respondents shared that the main reason they always made payments/
gifts was to deal with customs/imports.
following purposes? - To get connected to and maintain public services
100 2
51
1 15 1 14 16
18 19
12 2
2 33 5
80 9
10 11
20 16
2 13
60 13 21
28
19 25
40 82
74
61
47
20
35 34 32
0
following purposes? - To obtain business licences and permits
100 4
5
4 13 3 16 16
20
11 4 15 30
80 1 5
9 7
19 28 15 2 15
11 13
60 19
23
28
40 26 17
62 63 61
20 41
29 34 32
0
94
following purposes? - To obtain government contracts
100 3
6
6 13 2 18 17
13 32
3 1 32
80 17 5 5
12 6
26 8 18
12 3
60 13 21
19
25 18
40 22
70 67
61
20 41
32 36
28
0
Figure 87: Thinking now of unofficial payments/gifts that companies like yours would make in
a given year, could you please tell me how often would they make payments/gifts for the fol-
lowing purposes? - To deal with occupational health and safety inspections
100 4 2
5 11 2 15
17 20
5 17 30
14 3
80 3 3
23 10 14
12 1 15
60 13
20
19
16 26
40 78
69 69
48
20 42 41
34
0
CORRUPTION
95
following purposes? - To deal with labour inspections
100 3
5
8 13 2 16 17 14
5 16 1 28 3
80 6 3
23
13 2 20
30 19 23
60 22
21
13 12 27
40
65 65
58
20 39 38 43
30
0
following purposes? - To deal with fire and building inspections
100 4 2
4 13 2 15 15
17 19
14 4 1 32 3
80 6 5
18 8 14
3 18
60 10
20
20
15
27
40 79 77
69
44 48
20 41
30
0
96
following purposes? - To deal with environmental inspections
100 4 2
1 13 2 15 15
7 17 20
3 1 31 3
80 1
19 7 5
17 11 12
1 13
9
60 20
20
16 24
40 75
70 68
47 50
20 44
36
0
following purposes? - To deal with taxes and tax collection
100 4 2
4 13 2 15 16
15 22
18 4 4 30
80 5
9 7
20 16 14
4
19 12
60 14
19 19
13 23
40
71
65
56
43 46
20 40 35
0
CORRUPTION
97
following purposes? - To deal with customs/imports
100 5 7
12 15 2 20 19
24
3 32
80 11 19 2 6
4 6
22 13
10 9 12 2
12
60 11
19
22 14 23
40
64 62 62
20 37 41 44
33
0
following purposes? - To deal with courts
100 4 2
17 1
12 16 20 19
25
2 1 33
80 12 5
9 4
18 7 5
10 2 13
10 13
60
20 17
11
22
40
71 67
62
20 43 46 47
35
0
98
Figure 94: Thinking now of unofficial payments/gifts that companies like yours would make in
a given year, could you please tell me how often would they make payments/gifts for the fol-
lowing purposes? - To influence the content of new legislation, rules, decrees, etc.
100 6 3
1 2 17
2 19 20
10 16 26
2 33
80 1 5 2
16 11 4 10
3 11
60 7 16
14
12
22
40 83 76
69
50 53
20
47
37
0
(All respondents - N=1203, scores are on a scale of 1 to 4 where 1 means never and 4 always,
Dealing with taxes and tax collection (1,882 EUR) is the most expensive unofficial payment/gift
(Table 3). The second-highest expenditure is dealing with labour inspections, at 1,799 EUR, which
doubled from the previous year (880 EUR). This might be explained by the restrictions imposed
due to the pandemic for companies, and their possible decision to continue economic activity
anyway. Customs (1,519 EUR) and dealing with environmental inspections (1,453 EUR) are two
examples of costly unofficial fees faced by Western Balkan firms. Four out of the eleven costed
briberies showed a rise in 2021, while dealing with courts, fire and building inspections and con-
necting to and maintaining public services, have significantly improved.
Table 3 - Please estimate what is the approximate amount (in EUR) of unofficial payments/gifts
that companies like yours would make in a given year for the following purposes.
Western Balkans 2022 Average amount of * Different base (No. of

unofficial payments/ respondents) for each
gifts purpose
To get connected to and maintain public services 264 EUR 388
To obtain business licenses and permits 1324 EUR 463
To obtain government contracts 1123 EUR 424
To deal with occupational health and safety inspections 439 EUR 370
To deal with labour inspections 1799 EUR 446
To deal with fire and building inspections 346 EUR 349
To deal with environmental inspections 1453 EUR 349
To deal with taxes and tax collection 1882 EUR 407
To deal with customs/imports 1519 EUR 396
To deal with courts 1794 EUR 352
CORRUPTION
To influence the content of new legislation, rules, decrees, etc. 556 EUR 271
(Respondents who consider that companies like theirs would make approximate amounts of unofficial payments/gifts
seldom, frequently or always and did not reply with DK/refuse in a given year, average amount)*.
99
Businesspeople in the Western Balkans usually give institutions in charge of reporting, processing
and fighting corruption a neutral rating. CSOs, the media, the police and other law enforcement
agencies, other government agencies, the prosecutor's office, the courts, and the government as
a whole were all evaluated. These institutional actors have a neutral rating, ranging from 31% to
39%. The media had the highest percentage of respondents who said they were adequate (24%),
while the police and other law enforcement agencies received 9% of responders who said they
were exceptional. However, a considerable percentage of responders describe these actor’s roles
as poor or very poor.
Figure 95: How would you rate the following entities in reporting and processing corruption
cases, or providing support in the fight against corruption in your economy?
CSOs 18 20 33 14 8 7
Media 18 19 31 24 5 3
Police and other law

enforcement agencies 11 17 39 21 9 3
Other government agencies
(i.e. superme audit institutions, 14 18 39 20 6 4
19 19 33 17 7 6
Courts 21 20 33 15 6 5
Government(s) at all levels, i.e.

existence of political will for reporting 15 19 35 18 7 5
and processing corruption cases
0 20 40 60 80 100
Very poor Poor Neutral Adequate Exceptional DK/refuse
Figure 96 assesses institutional stakeholders and provides an overview of regional differences.

The tendencies for the Western Balkan economies are consistent throughout the institutional
players studied. Respondents in Albania and North Macedonia rate corruption-related stakehold-
ers the least favourably: the share of those rating extremely poor or poor performance ranged
from 46% to 49% for the government as a whole. Bosnia and Herzegovina and Montenegro, for
the second year in a row, continue to exhibit a more neutral view, with 38% and 28% of the respon-
dents respectively assessing the government as a whole. Serbia and Kosovo* are on the other
end of the spectrum. Kosovo* companies are the most likely to rate corruption-related actors as
'extraordinary,' this percentage remains relatively high: from 13% for the prosecutors’ office to 42%
for CSO’s. Meanwhile, Serbia has 21% of the respondents who rated the government as a whole
as adequate, evaluating more positively the role of police, media and other agencies.
100
Figure 96: How would you rate the following entities in reporting and processing corruption
cases, or providing support in fight against corruption in your economy? A) CSOs; B) Media; C)
Police and other law enforcement agencies; D) Other government agencies
100 1 1 1 1 3 2 3 1 2 2 2 2 2
0 1 1 1 1 0 3 9 5 4 42 6 6 6 2 4 3
9 2 6 54 7 7 6 11 11 11 11 12 15 7 7
2 2 3 6 4 5
10 15 11 10 7 2 4 2 3 3 16 13 1 3 2 5 15 12 7 11 9 7
2 11 20 20 16 1 3 3 2 3 9
14 14 14 11 1
11 17 16 21 13 2
80 14 33 35 16 20 19 15 13 16 13 15 12 10 9
33 42 15 13 23 21 21 17 16 21
43 38 39 31 17 16 18
60 30
35 33 38 23 27 26 27
50 39 36 36 33 38
21 45 31 35 29 32 28
59 52 18 33 37 39 33 40
19 45 36 42
26 23 44
40 23 40
18 21 22 21 22 34 24
15 24 26 27 27
16 22 17 19 19 15 21 27
21 24 25 29
21 21
20 46 23 16 39 43 34 21 19 20
33 19 14 14 14 15 18
28 25 28 25 23 26 25 26 21 16 20 23 22 21 25 23 23 22
17 19 18
14 6 9 11 3 13 11 14 10 13 6 8 10 10 6
0 2 2 12 1 0 7 4
A B C D E F G A B C D E F G A B C D E F G A B C D E F G A B C D E F G A B C D E F G
Albania Bosnia and Kosovo* Republic of Montenegro Serbia
Herzegovina North Macedonia
Very poor Poor Neutral Adequate Exceptional DK/refuse
(All respondents, N=1203, single answer, scores on a scale from 1 to 5, where 1 means very poor and 5 means excep-
tional, share of total, %)
When asked about the fight against corruption, 22% of Western Balkan businesspeople believed
that it is effective in some way, 41% said they were neutral, while 36% said they disagreed (Figure
97). North Macedonia respondents are the most pessimistic regarding this topic, with the largest
share to believe the fight against corruption has been unsuccessful (58%). This might be related
to the revealing involvement of the highest government officials in crime of large magnitude in the
recent years. In 2019, the Special prosecutor’s office was not able to succeed in a few high-profile
cases, which might have affected short-term credibility and hopes for justice. Macedonians mis-
trust is followed by Bosnia and Herzegovina (46%) and Montenegro (43%). Despite the fact that
the share of those who agreed was considerable in Kosovo* (47%), respondents in Serbia, Bosnia
and Herzegovina, and Albania maintained a neutral position with 52%, 40% and 38% respectively.
CORRUPTION
101
Figure 97: How much do you agree or disagree with the following statement: Fight against cor-
ruption in my economy is effective
100 1 0 3 1 0 1
6
24 25
80 41 36
46
43
58
60 25
52
40 41
38
40 34
20
40
20
19 13 17 17
10 16
2 4 7 7 2 5 5
0
Strongly agree Agree Neither agree nor disagree Disagree DK/refuse
Respondents were in favour of digitising public services as a means of reducing corruption (Fig-
ure 98). Overall, in the Western Balkan economies, 69% thought it would have a complete or
partial beneficial impact across the area, with Albania having the highest percentage (83%), while
Serbia has the highest percentage of people who think the digitalisation process will have no
impact at all (35%).
Figure 98: To what extent do you believe digitalisation of public services would have a positive
impact on preventing corruptive practices?
100 1 2 2 3 4
6
17 15
25 23
80 24 10 27
35
60 39 25
41 41
43 39
40 40
44 46
20
34 35 30
27 22
0
To a great extent To a marginal extent It will have no impact DK/refuse
102
TRADE AND INVESTMENT
This year, the majority of businesses did not explore or plan any foreign investments (92% of
the respondents answered 'no' when asked if their company invested abroad or plans to do so
in the next 12 months (Figure 99). This could be related to the uncertainty and hesitation which
was widespread throughout 2021. Companies in Bosnia and Herzegovina were the most likely to
make a foreign investment (13% said they had made or planned to make one), while North Mace-
donia was the most hesitant (only 1% did or planned an investment).
There was an even distribution of those who pursued or planned an investment; to invest within
the Western Balkans (43%), in the EU (58%), and in both (13%) (Figure 100). Companies in Koso-
vo* and Montenegro tended to focus on investing both within the Western Balkans and the EU,
while companies in Albania and North Macedonia planned to keep their investments within WB.
Bosnia and Herzegovina, as well as Serbia businesses are predominant to expand the investment
in the EU, 50% and 70% respectively.
Figure 99: Has your company invested abroad, or plans to do so in the next 12 months?
100
80
60
87 91 90 92
96 99 95
40
20
13 8 10 8
0 4 1 5
Yes No

103
Figure 100: Where did you invest or plan to do so?
100
80
70
67
59 60 58
60
50 50 50
47 45 43
38
40 35 33
31
18
20 13 13
5 3
0 0 0 0 0 0 0 0
0
In the Western Balkans region In the EU In both the Western Balkan region and the EU Elsewhere
(Those who invested or plan to invest abroad in the next 12 months, N=84, share of total, %)
Companies that responded positively on planning to invest abroad were asked to rank the rea-
sons driving their incentive to expand their investment, from most to least significant in Figure
101. The ambition to access new markets again came out on top, with 51% of businesses saying
it was the most essential incentive. Better integrating the companies value chain is ranked as the
second most important motivator, leaving behind access to natural resources and lowering pric-
es. On the other hand, acquiring new technologies is the least driving factor to investing abroad.
Figure 101: Which of the following reasons best describes your company’s motivation to invest
abroad?
100 5
8 10
7 22 23
80 12 24 38
17 3,7
29
60 23
32 3,3
3,1 3,0 3
25 24
40 14
51
17
2,0 26 24 20
20
7
11 12 14 13
0 1
To access new To lower To better integrate To access natural To acquire or
markets production costs your company’s resources and raw complement new
value chain materials technologies or brand
Rank 1 (most important) Rank 3 Rank 5 (least important) Mean

Rank 2 Rank 4
(Respondents whose company invested abroad, or plans to do so in the next 12 months - N=84, ranks on a scale of 1
to 5 where 1 means most important and 5 least important, share of total, %, mean)
104
The importance of motivators varies in each of the Western Balkan economies, as seen in Figures
102 through 106. Accessing new markets is very important in the WB economies where 51% of
respondents ranked this motivator as the most crucial, especially for Kosovo* (71%) considering
the economy's small size and Montenegro (70%) and less important in Serbia (35%). Lowering
production costs is most significant in Bosnia and Herzegovina with 93% of the respondents giv-
ing it a rating from 1-3; while businesses in Montenegro seem unconcerned with decreasing ex-
penses (60% gave this motivation a ranking from 4-5). In Albania, better integration into the global
value chain is particularly significant, with 88% ranking it first in terms of the priority (ascribed to
the expansion of FDIs and their grounding in the domestic economy). The same can be said for
the need to acquire or complement new technologies or brands where Albanians together with
the Macedonian enterprises, outperformed their Western Balkan counterparts. Montenegrins and
Serbian respondents were the only ones who saw the need to access natural resources and raw
materials as a motivator to invest abroad with 90% and 65% respectively.
abroad? - To access new markets
0
100 0 5
6 10 8
13 12
6 20 7
12 33 10
80 13 19 0 12
0 6 0 10 15
13 0
0
60 0 23
30 3
40 67
69 71 70 2,3
63 2,3 51
2,0 2,0 2,0
20 1,7 35
1,4
0 1

Rank 2 Rank 4
105
abroad? - To lower production costs
100 4 5
6
4
12 22
33 30 30
80 38
35 12
3,8
0 17
60 3,4 3,5
13 3,3 25
30 3,1
33 3
25
40
2,5 2,5 10 20
38 50 71
10 26
20 10
33
20 15
13 8 11
0 0 0 0 1

Rank 2 Rank 4
abroad? - To better integrate your company’s value chain
100 0 4 0 0 5
6 10
13 15
0 19
80 24 40 24
25
67
60
38 3,2 3,3 3,2 32
75 3,0 3,0 3
2,7 20 30
40 59
0
2,1 19
24
20 40 20
33
19
13 12 10 12
0 0 0 0 1

Rank 2 Rank 4
106
abroad? - To access natural resources and raw materials
100 0 5
12 10
20 23
31 33
80 38
4,0 3,9 15
53 3,7
3,5 50 29
60
15 3,3
33 2,9
3
46
40 2,6 14
50
0 30
18 30 20
20 12
0 6 33
0 20
13 8 12 14
10
0 4 0 1

Rank 2 Rank 4
abroad? - To acquire or complement new technologies or brand
100 0 5
13 0
4,5 25
80 13 50 38
4,1 4,0
62 3,7
67 25
60 71
3,3
3,1 3
24
63
40 20 20
2,3
6 17
31 0 0 10 10
20 6
33 7
0
4 18 20 20
13 13
4
0 0 0 1

Rank 2 Rank 4
107
In 59% of situations, businesspeople evaluated market size and potential as extremely significant
when determining where to invest abroad (Figure 107). All other factors are deemed crucial, such
as political stability and security (51%), technological innovation and capabilities (51%), and tax
rates (48%). The sole factors listed as not important and not important at all (by a total of 1% of
respondents) are technological innovation and capabilities and the business-friendly legal and
regulatory environment, and yet all variables received relatively modest percentages of respon-
dents who assigned no value to them (ranging from 1% to 6%).
Figure 107: In the process of choosing where to invest abroad, how important were the follow-
ing factors?
100 0 1 2 3 1 0 0 0 0 0 0 1 5
43 37 40
4.4 38 30 39 43 4.3 4.3
80 4.2 4.2 4.2 4.2 4.2 4.2
4.1 4.1 4.1 51 51
59 42 48
60
3
49 37
40 41 42 50 41
41 36
43 43 34
26
20
13 11 16 16 16 15 10 10 13 11 10 14
0 2 3 0 1 5 2 2 0 2 1 3
0 2 3 2 2 1 1 2 1 1 3 0 1 1
Market size and potential
favourability of exchange rate
Labour force cost
Talent and skill of labour pool
Physical infrastructure
Access to land or real estate
Availability of financial capital

in thedomestic market
Political stability and security
and capabilities
Tax rates
Business-friendly legal and

regulatory environment
Availability of linkages
with local firms
Macro-economic stability and
Technological innovation
Not important at all Neither important nor not important Very important Mean
Not important Important DK/refuse
(Respondents whose companies invested abroad, or plans to do so in the next 12 months - N=84, single answer,
scores on a scale of 1 to 5 where 1 means not important at all and 5 very important, share of total, %, mean)
For enterprises in the Western Balkans, foreign investment incentives are critical (Figure 108). In
the region, 31% thought such incentives were extremely essential, while 14% said they were some-
what important. However, there are some notable variances among the economies. For example,
such incentives are very significant to Serbia (50%) and the North Macedonia (33%), whereas in
Albania none of the respondents perceives these incentives as very important. This might be re-
lated to the different policies applied in the economies for attracting foreign investments.
Figure 109 explains that 100% of Albanians and 92% of Kosovo* respondents (28% in 2020)
thought such investment incentives were transparent, albeit this percentage varied from 47%
in Bosnia and Herzegovina and 50% in North Macedonia. Most of the respondents who share a
neutral stance also come from these two economies.
108
Figure 108: When investing abroad, how much do available investment incentives influence the
decision on where to invest?
100 4 2
8 12
20
80
33 31
50 10
50
60
65 65 30
33 40
40 49
50
20 8 40 10
33
24 14
15
0 4
Not at all Somewhat Quite a lot Very much DK/refuse
(Respondents whose company invested abroad, or plans to do so in the next 12 months - N=84, single answer, scale of
1 to 4 where 1 means not at all and 4 means very much, share of total, %)
Figure 109: Could they be considered transparent?
100
8 11 9
25
32 13
80
50
60
21
100
92 89
40 78
75
47 50
20
0
Yes No DK/refuse
(Respondents who believe that available investment incentives are quite a lot or very much influencing the decision on
where to invest when investing abroad, N=60, single answer, scale of 1 to 4 where 1 means not at all and 4 means very
much, share of total, %)
Businesses in the Western Balkans still remain stuck in the home market, as shown in Figure 110
and Figure 111. 85% percent of them said they were only selling domestically, similar to the 86%
percent a year before. Competing in an international market is more difficult for companies in
the Western Balkans due to their low competitiveness, driven by low labour productivity and low
technological level. Joining global supply lines requires resources of a different scale and type.
Only 6% went to the Western Balkans, 7% to the EU, and 2% to the rest of the world. Within-region
109
variance is minimal, with the exception of Bosnia and Herzegovina, where enterprises showed a
greater proclivity to export: 9% claimed they exported to the Western Balkans, 11% to the EU, and
3% to other countries.
Understandably, 41% of enterprises that did not export stated that their goods/services weren’t
suitable for export (Figure 112). The lack of plans / interest to export is the second most common
factor with a share of 34%, while the lack of export capacities (17%) shows a significant decrease
from 57% in 2020. These factors are at the top of the list in each of the Western Balkan econo-
mies. This might be explained with the overall situation that affected export capacities and global
trade in general, throughout the pandemic restrictions.
Figure 110: Has your company exported goods or services over the past 12 months?
100
80
55 60
69 70
60 78
88 84
40
20 45 40
31 30
22
12 16
0
Exporters Non-exporters
Figure 111: What percentage of your company’s sales are made domestically, exported to the
WB region, to the EU or to the third countries?
100 2 3 1 3 2 2 2
6 7 3 3 8 7
3 11 3
13 6 6
80 9
60
89 94 92
40 84 85
78 79
20
0
Sold domestically Exported to the EU

Exported to the Western Balkans Exported to third countries
110
Figure 112: Why doesn’t your company export?
100
80
65
60
60
46
43 43 41
40
40 34 34
32 31 31
21 20 21 22
20 17
12 10 12 13
10 8 869
8 6 4 55 545 4 5 35 3 3 4
4 3 2 3 12 1 2 5 01 1
43
0 11 1 1 11201
0 0 10 1
We don’t have any plans / interest to export There is no competent authority in my economy
that could provide relevant information on export procedure
We don’t have capacities to export (e.g. manufacturing,
financial, transport capacity, human resource, etc.) Complicated administrative procedures
We don’t know how to export Linguistic barrier
Our goods/services aren’t suitable for export Other
We don’t know how to find foreign partner DK/refuse
(Respondents whose companies are non-exporters, N=870, %)
Non-exporters also lack integration into the global value chain on the import side (Figures 113
and 114), as the vast majority of their inputs are purchased domestically as in 2020 (Figures 113
and 114), with varying percentages ranging from 85% in Serbia and North Macedonia, to 59% in
Albania. Non-exporters, on the other hand, produce for small businesses and individuals (49% as
shown in Figure 115), while only 4% respectively produce for government or government agencies
and publicly owned or controlled enterprises.
There are still variances between regions. In Albania and Serbia, a substantial percentage of
non-exporters (57% and 56% respectively) work for small businesses and individuals, but in North
Macedonia, 47% produce for multinationals that are located in their economy. Meanwhile, a large
share of respondents in Montenegro produce for other types of businesses that are not included
in our analysis.
111
Figure 113: Has your company imported goods or services over the past 12 months?
100
29
80 40 40
55 56
68 70
60
40
72
59
59 45 44
20
32 30
0
Importers Non-importers
Figure 114: What percentage of your company’s inputs and supplies are…
100 2 3 4 3 4
8 6 6
9 8
14 17 7 12
3
80 25 19 8
14 22
9
60
40 85 85
75
66 68
59 60
20
0
Purchased from domestic sources Imported from the Western Balkans region
Imported from the EU Imported from third countries
(All respondents - N=1203, mean %)
112
Figure 115: What percentage of your domestic sales are made to?
100 1 1
9 6 11 9
80 35 25
44
57 4
46 49
2 56
60 12 4
12
4
40 2 11
1 42 10
4 14
4
6 13 5
20 32 6
21 1 5
21 47 1 6 19
12 5 7
0 4 3 6 1 1 4
Government or government agencies Large private domestic companies (with more than 250 employees,
Your company’s parent company or affiliated subsidiaries not including your parent company)
Multinationals located in your economy Small companies and individuals

State owned or controlled enterprises Other
With a slight decrease from 2020 (56%), 51% of non-exporters said they did not import (Figure
116), with North Macedonia leading the chart with 69% and Albania being in the bottom with 34%.
However, the proportion of people who needed up to two days for customs clearance for their
imports increased to 17% in 2021, from 10% in 2020. Within the area, Albania appears to have the
quickest customs clearance of imports, with nearly half of non-exporters completing it in as little
as two days. Over five days were most commonly required in Bosnia and Herzegovina and North
Macedonia (14% and 10% each).
Figure 116: If you have imported goods in the past 12 months, what is the average number of
days to clear imports through customs?
100 0 2 4 4 5
10
19
80
34
38
35 51
60
60 7 69 44
8
13
14
40 28 9
8 7
26 19
20
47 10 17 19
22 7
15 13 17
10 10
0

Up to 2 days 3 - 5 days Over 5 days Have not imported goods DK/refuse
113
Customs clearance for exports presents a more complex picture (Figure 117). On a regional level,
65% of the respondents reported that they did not export goods in the last 12 months. For those
who did, export clearance took 3-5 days for 13% of respondents, but only 5% took more than 5
days. Nonetheless, it is clear that Kosovo* and Albania are the fastest in terms of export clear-
ance (19% and 17%, respectively, said it took less than two days to export).
Figure 117: If you have exported goods in the past 12 months, what is the average number of
days to clear exports through customs?
100 1 3 3 3 5
11
18
80
49
51 64 65
60 79
84
66
3
40
9 25 6 5
20 3 14
2 2 18 13
19 2 7
17 15 4 11
6 8 8
0
Up to 2 days 3 - 5 days Over 5 days Did not export goods DK/refuse
Exporters to the Western Balkans have cited the requirement for licences and permits (16%) and
hardcopy documentation (15%) as major roadblocks, though the relevance of both has decreased
dramatically since 2020 (Figure 118). This could be explained through the various attempts to-
wards regional integration agendas, being discussed and promoted during 2021.
However, there are a few intraregional variances in terms of challenges. The need to provide
hard copy documents or certificates and the need for licences or permits are major obstacles for
Kosovo* with 56% and 54% respectively. These factors seem to be concerning for Bosnians (19%;
17%) and Serbians (12%; 17%) also. On a regional level, custom delays, the risk of unrealistic
compliance rules and the variability in clearance time are the least restricting factors to export.
114
Figure 118: If your company exports to the Western Balkan region, what are the main obstacles
to your exports?
100
81 83 82
80
61
60 56 54 58
49
40
28
19 17 17
20 14 12 10 1516
9 99 7 8 11 989 8767
5 5 5 6
23 1 21 1 3333 32424 4 43234 24 2 4 22
00 021 2021 1 11 2 11
0
Need to hardcopy documents or certificates Slow import-export procedures

Need for licenses or permits Wide variability in clearance time
Obscure or inconsistent rules of origin Classification uncertainty
Unnecessary physical examinations or inspections Custom delays
VAT Risks of unclear compliance rules
Cross-border/boundary transaction costs are excessively high in Western Balkan economies,

according to 34% of respondents (5% increase from 2020 as shown in Figure 119), with consid-
erable variations between 27% in Serbia to 70% in Kosovo*. Cross-border/boundary transaction
costs were not relevant to 46%, following the same trend as the last year, with the highest rate
(61%) in Montenegro and the lowest in Kosovo* (19%).
115
Figure 119: Do you think that cross-border/boundary transaction costs are too high among
Western Balkan economies?
100
19
80 41 35
10 51 46
57 61
60
19
31 20
40 22
70 14 11
20
46
29 29 34
28 27
0
Yes No Not relevant for my business
44% of respondents believe their own business is threatened by global competition, share that
has come to increase significantly from 2019 (27%) and 2020 (40%). (Figure 120). Businesses in
Kosovo* (55%) acknowledged being threatened by global competition, while this percentage was
lowest in Montenegro (20%) despite Montenegro having the highest refusal rate of 28% on this
issue.
Figure 120: To what extent do you agree that your company is threatened by the global compe-
tition?
100 2 2 5
6 7 6 7
12 9
8 8 9
16 28
80
1 32
36 41 35
43 19
60 36
3
40 2,7 27 25 29
2,5 28
2,4 2,4 2,4
16 36 2,2
20 40 1,9
26 29 25
20 20
12
0 3 1
Totally disagree Agree DK/refuse Mean

Disagree Totally agree
(All respondents - N=1203, single answer, scores on a scale from 1 to 4, where 1 means totally disagree and 4 means
totally agree, share of total, %)
116
When it came to market rivalry in the Western Balkans (Figure 121), companies were way more
optimistic. On average, 81% of respondents believed that their products, goods, and services can
compete favourably with those from the Western Balkans. Kosovo* businesses had the most
competitive spirit in the region, with 92% believing they could compete, followed by 87% in Serbia.
Albania businesses, on the other hand, are less optimistic, with 23% disagreeing that their prod-
ucts and services could compete well in the regional market, followed by Bosnia and Herzegovina
and Montenegro, both at 22%. The highest share of the respondents (25%) that refuse to answer
the question, is also in Montenegro, similar as in the results of Figure 120.
Figure 121: To what extent do you agree with the following statements - My company’s prod-
ucts, goods and services can compete well with products, goods and services from the West-
ern Balkans?
100 3 4 3 3 5
7 5
25
80 33
39 45 44
3,7 51
60 71 24
3,3 3,3 3,2
3,1 3,1 3
2,9
40
42
34
30
42 37
29
20
17 14 21 16
7 4 9
6 8 3 6 6 6 6
0 2 1

Apparently, as per the results shown in Figure 122, there is more trust in each economy’s own
products and services on the EU market. In the region, 77% of respondents believed their products
could compete successfully with those on the EU market, with Kosovo* (88%) having the greatest
number and Montenegro having the lowest (54%). Albania had the lowest level of confidence in
the 2022 report, with 36% of businesses expressing reservations about their ability to compete in
the EU market.
117
ucts, goods and services can compete well with products, goods and services from other EU
countries?
100 2 3 3 5
7 6 6
22 25
80 37 32
42 37
46
21
60
40 3,2 3,2 3,3
3,1
3,0 3
2,9
40 2,7 35
33 40
56 24
43
22
20
15 15
16 11
14 9 6 6
6 8 6
0 2 3 1

CEFTA 2006 had a greater beneficial than negative impact on the region: According to Figure
123, 60% of respondents believed the regional free trade agreement benefited their company, a
significantly higher share than in 2020 (38%). This might be explained also with the easement of
pandemic-related constraints to trade. In 2021, the refusal rate has decreased to 14% (from 39%
in 2020). The majority of Kosovo* respondents (80%) thought that CEFTA 2006 played a benefi-
cial impact, followed by Serbians (75%). In North Macedonia, the public opinion toward CEFTA
2006 has changed, with 53% of respondents agreeing that it benefited their business (in 2020,
40% disagreed with the statement).
118
Figure 123: To what extent do you agree with the following statements - “My company has ben-
efited from the regional free trade agreement (CEFTA 2006)”?
100 5
5 6
11 11 14
2 11
27 10 17
80 35
13
42 20
60 9
69 43
58
2,9 2,9 47 3
2,8 2,8 2,7
40 27 2,6
2,4 39
34
20 28
14 17
10
10 12
10 12 8 10 10
0 5 6 1

(Respondents who confirm exporting and importing from abroad - N=666, single answer, scores on scale from 1 to 4,
where 1 means totally disagree and 4 means totally agree, share of total, %)
Exporters seem slightly more positive on whether it is easier to export to CEFTA 2006 rather than
the EU (Figure 124). Exporting to CEFTA 2006 parties was easier for 23% of respondents, but still
36% percent said it was the same for CEFTA 2006 and the EU. Still, not everyone in the region
agrees: Albanians, Kosovars, and Macedonians found it easier to export to CEFTA 2006 than to
the EU, while Serbians were split between the two trading blocs (19% each). The high percentage
of refusal in Montenegro and Bosnia and Herzegovina prevents valid conclusions from being
drawn.
Figure 124: If your company is an exporter, can you tell us whether it is easier to export to the
CEFTA region, or to the EU?
Albania 41 18 25 16
Kosovo* 34 23 44 0
Serbia 19 19 50 11
0 20 40 60 80 100
It is easier to export to the CEFTA region It is easier to export to the EU It is the same DK/refuse
(Respondents whose companies are exporters, N=333, single answer, share of total, %)
119
As suggested in Figure 125, when it comes to social businesses, the average opinion on the
Western Balkans is that they should be given equal treatment, more frequently than preferential
treatment over the other enterprises. Such an opinion is particularly sharpened in Kosovo* (58%),
North Macedonia (55%) and Serbia (53%). Montenegro remains the only economy where the opin-
ion leans towards social businesses, but like in 2020, the county also has the highest share of
refusal (32%).
Figure 125: In your opinion, when procuring products and services, should the governments in
the region give preferential treatment to suppliers which are social businesses, or should they
be treated the same as all other suppliers (provided price and quality are equal)
100
8 7 7
18 17 15
32
80
51 55
58
60 42 50
23 53
40
42 46
20 40 35 38 35
29
0
Social businesses suppliers should be Social businesses suppliers should be DK/refuse

given preferential treatment treated the same as all other suppliers
According to Figure 126 and Table 4, although with modest differences, Albanian market is con-
sidered to be the most open market in the region (3.2), while Montenegrin market is the least
open one (4.0). Albanian businesses consider Serbian, Montenegrin and Bosnia and Herzegov-
ina markets to be the least open in the region. Businesses in North Macedonia think the same
for Montenegrin and Bosnian markets (4.4 respectively) but the opposite for Serbian ones (2.4).
These conclusions must be approached with caution because the patterns just described may be
also a reflection of the intra-regional political considerations, and a reflection of political relations,
ethnic divides, etc.
120
Figure 126: In your opinion, which market in the WB region is the most open one? Please give
us your opinion no matter if you/your company had direct experience with it.
Rank these 6 markets from 1 (most open) to 6 (least open).
2
Albania Bosnia and Herzegovina Kosovo* North Macedonia Montenegro Serbia
Albania Montenegro Western Balkan

Bosnia and Herzegovina Republic of North Macedonia
Kosovo* Serbia
(Respondents who can rank, N=336, mean)
Table 4: According to your opinion, which market in the WB region is the most open one?
Please give us your opinion no matter if you/your company had direct experience with it.
Rank these 6 markets from 1 (most open) to 6 (least open).
Bosnia and North Western

Herzegovina Macedonia Balkans
Albania 2 3 2.5 3.6 3 3.9 3.2
Bosnia and Herzegovina 4.9 2.3 3.5 4.4 3.4 2.5 3.3
Kosovo* 3.1 4 3.4 3.1 4.1 3.8 3.6
Market
North Macedonia 3.2 3.4 3.4 3.1 4.1 3.6 3.4

Montenegro 3.9 4.1 4.2 4.4 3.3 3.8 4
Serbia 3.9 4.2 4 2.4 3.1 3.4 3.5
(Respondents who can rank, N=336, mean)
121
INNOVATION AND TECHNOLOGY

According to Figure 127, the businesses around the region require intensive use of the internet.
83% of enterprises said they used the internet for routine communication, which is similar to its
use across all Western Balkan economies except for Kosovo*. Executing banking or financial
transactions online is ranked second, while advertising on social media sites is third.
Figure 127: Does your company use the Internet for…?
100
86 88
81 83
80 78 78
70 73 75
68
60 61
60 55 55
53
41 43 42 48 50
36 3741 42 38 43 41 40 39
35 36 27 33 30 35 38
40 29 35
30 33 27 17 27 35 30 27 27
24 23
24 20 22 2324 20
29 22 22 28
15 19 15 14 21 22 14
20 17 13
1511 13 14
11
6 53 7 77 6
10 33 2 30 13 23
0
Communication (email, skype, etc.) Provision of customer services or support online

Advertising on Facebook, YouTube, GoogleAds, etc. Online trainings – internal (organized by your company) or external ones
Selling your goods or services over the Internet Searching the Internet for innovative ideas, new trends, partners etc.
Purchasing goods or services for your company over the Internet Data storage (i.e. the cloud), web-based applications or
Executing banking or financial transactions online other internal operational needs
Presenting your company through company website We don’t use Internet

Communication with customers/clients/partners through
DK/refuse
social networks (Facebook, Twitter, LinkedIn, etc.)
Despite widespread internet use, online sales account for only a small portion of regional busi-
ness sales (Figure 128). In comparison to a year earlier, 38% of respondents claimed sales of
less than 5% were generated online, which is a significant fall (from 57 %). The easement of the
pandemic and the reopening of physical retail shops may have discouraged online sales and a
return to traditional modalities. Serbia and Kosovo* have the highest percentages (60% and 53%,
respectively), while Bosnia and Herzegovina has the lowest (12%). Bosnian businesses reported
that 5-20% of their sales were made online (47%).
122
Figure 128: What percentage of your total sales is currently generated through online sales?
100
6 8 7 10 10
12
4 20
16 17 8
80 16
29
35 23
30
60
37 36
48
40
47 28
60
53
20 39 38
30
22
12
0
Less than 5% Between 5-20% Between 20-50% More than 50%
(Respondents who sell their goods or services over the Internet - N=345, single answer, share of total, %)
Figure 129 reveals that 78% of the Western Balkan companies have not experienced any Internet
security problems, except for Kosovo* where this share is the lowest (37%). Viruses were the
most common issue that businesses had with internet usage, according to 16% percent of them.
Although other issues, such as illegal access and network attacks have gained importance in
Kosovo*, this is the most widespread concern across the region. 92% of respondents were happy
with their internet connection, with a slight increase from 82% in 2020. (Figure 130). Kosovo* re-
spondents are the happiest (95%), while Bosnians are the least happy (87%).
Figure 129: In the last six months, have you experienced any of the following Internet security
problems?
100
88
84 84
78
80 75
65
60
51
44
40 37
32
19 18
20 16
12 11
6 7 8 8 6 5 5 7 8 6
5
4 2 1 4 3
1 3 0
3 3 3 2 2
0 0 1
0
Viruses Attacks on your network Other

Illegal access ID misrepresentation / theft No, we have not experienced any Internet security problems
(Respondents whose companies are using the Internet - N=1135, multiple answers, %)
123
Figure 130: Are you satisfied with your Internet connection?
Albania 91 9
Kosovo* 95 5
Montenegro 92 8
Serbia 92 8
0 20 40 60 80 100
Yes No
(Respondents whose companies are using the Internet - N=1135, single answer, share of total, %)
Only 11% of Western Balkan enterprises developed a new or considerably upgraded product/
service in the previous 12 months in 2021. In the last three years, an additional 11% of enterpris-
es have done so as well. However, the percentage of those that presented a new product in the
two-time frames is 10 percent, indicating that innovation activity is still at the same level as a year
earlier. There is some variation across the region, with Bosnia and Herzegovina leading the way
with 16% of respondents saying they innovated in the last three years, while Kosovo* lags behind
with only 2%.
Figure 131: Have you introduced new or significantly improved products?
Western Balkans
Albania
Bosnia and Herzegovina
Kosovo*
North Macedonia
Montenegro
Serbia
0 20 40 60 80 100
Introduced new or significantly improved products Both under 1 and 2

and/or services in the past 12 months Neither
Introduced new or significantly improved products DK/Refuse
and/or service delivery processess in the last 3 years
(2019-2021)
(All respondents – N=1203, single answer, share of total, %)
124
The majority of these product improvements were generated by businesses themselves, with
62% (Figure 132). However, some techniques to generating innovation have gained significance
this year: for example, co-innovation with other enterprises was recorded in 27% of situations
and 24% indicated they innovated by adapting procedures created elsewhere. Within the region,
enterprises in Kosovo* were the most reliant on product innovation (89%), followed by Albania
(83%), Montenegro (70%). Serbia, Bosnia and Herzegovina and North Macedonia are significantly
different. Around 52% of Bosnian businesses put efforts into innovation on their own, while equal
efforts are put into adapting or modifying other companies' work (21%) and co-innovation with
other businesses (21%).
Figure 132: Who developed these product innovations?
100
89
83
80
70
62
59
60 55
52
40 36
40 33
30
27 27
24
21 21 20 19
20 14 12
7
10
7 9 9 11 10
5 5 5 4
0 2 2 0
0
Your enterprise by itself

Your enterprise together with other enterprises or organizations
Your enterprise by adapting or modifying goods or services originally developed by other enterprises or organisations
Other enterprises, including independent enterprises or other parts of your enterprise group
Other organizations (such as universities, research institutes, non-profits, etc.)
(Respondents who introduced new or significantly improved products and/or services - N=374, multiple answers, %)
Although the share of pure innovation decreased slightly to 31% from 35% a year ago, most of
the product innovations (62%) were only new to the company (therefore the product was already
on the market by competitors) (Figure 133). In Serbia, pure innovation leads the charts with 38%,
similar in Albania and North Macedonia with 33% each. The other three economies are still falling
behind in terms of innovation, with internal innovations still being the norm.
125
Figure 133: Were any of your product innovations (goods or services)…?
100
80
68
64 63 62
59 58 60
60
38
40 33 33
30 31
23 22
18 20 20 18
20 16
13
3
0
New to your market (Your enterprise introduced a new or significantly improved product onto your economy market before
your competitors (it may have been available in other markets))
Only new to your enterprise (Your enterprise introduced a new or significantly improved product that was already available
from your competitors in your economy market)
DK/refuse
(Respondents who introduced new or significantly improved products and/or services - N=374, multiple answers, %)
About 18% of the products developed were first in their own economy (Figure 134), down from
35% in 2020, indicating decreasing innovation across each of the economies. Albania is the lead-
er in this regard, accounting for 40% of all products in the economy, followed by North Macedonia
with 27%. In Europe (Figure 135), 3% of the products were first, while on a world level this share
was 2% (Figure 136). Both percentages lowered significantly from the previous year (13% each).
North Macedonia is the clear leader of new items reported in Europe (5%) but none on a world
level. Kosovo* holds the lowest level of innovative activity in both Europe and the world.
126
Figure 134: To the best of your knowledge, were any of your product innovations during the
three years (2019 – 2021) - A first in your economy?
Albania 40 57 3
Kosovo* 20 73 7
Montenegro 16 77 7
Serbia 13 70 17
0 20 40 60 80 100
Yes No DK/refuse
(Respondents who introduced new or significantly improved products and/or services - N=374, single answer, share of
total, %)
three years 2019 to 2021 – A first in Europe
Albania 2 91 7
Kosovo* 0 86 14
Montenegro 4 85 11
Serbia 3 81 16
0 20 40 60 80 100
Yes No DK/refuse
(Respondents who introduced new or significantly improved products and/or services - N= 374, single answer, share of
total)
127
three years 2019 to 2021 – A world first
Albania 2 90 9
Kosovo* 86 14
Montenegro 2 87 11
Serbia 2 83 16
0 20 40 60 80 100
Yes No DK/refuse
(Respondents who introduced new or significantly improved products and/or services - N=374, single answer, share of
total, %)
Businesspeople were asked to rate seven aspects of their economies' innovation policies on a
scale of complete satisfaction to complete dissatisfaction, including policies that promote inno-
vation, innovation infrastructure, university-business collaboration, public services that support
innovation, and so on (Figure 137). The prevailing opinion is that firms in the Western Balkans
are happier with the innovation-supporting environment than in 2020. However, the majority of
respondents (ranging from 35-40%) were neutral on all factors.
128
economy:
Policies that promote and

encourage innovative activities 8 18 36 23 8 6
Innovation infrastructure (innovation

centres, incubators, accelerators, hubs) 8 19 36 22 5 9
University business collaboration aimed

towards solving practical problems 8 20 35 18 7 11
Support to innovative ideas from public

sources (local or economy level) 7 21 35 23 5 9
Support to innovative
ideas from private sources 6 19 38 20 7 9
Enabling environment for idea making,

6 19 38 21 8 8
Innovation capabilities of
startups, innovators and academic 6 17 40 18 7 12
0 20 40 60 80 100
DK/refuse
(All respondents, N=1203, single answer, scores on a scale from 1 to 5, where 1 means completely dissatisfied and 5
means completely satisfied, share of total, %)
economy?
A) Policies that promote and encourage innovative activities; B) Innovation infrastructure (innovation centres, incuba-
tors, accelerators, hubs); C) University business collaboration aimed towards solving practical problems: D) Support to
innovative ideas from public sources (local or economy level); E) Support to innovative ideas from private sources; F)
Enabling environment for idea making, introducing and diffusion of innovation; G) Innovation capabilities of startups,
innovators and academic community to offer applicable solutions
100
9 10 8 8 9 6 7 7 8 10 6 11 0 08 0 1 1 2 2 7 5 7 10 10 9 7 9
1 1 14 2 3 3 19 3 3 3 2 4 5 15 20 1 20 12 13 18 19 11 15 14 11 11 12 15 9
21 21 20 1 3 1 1 1 1 8
14 13 1 13 9 13 14 14 18
4 30 2
11 71 9 10 10 9 18 9 6 10 11 9
80 8 1 19 15 18 1
16 45 30 2 1 19 3
8 21
22 19 28 25 20 25 21 19
20 18 23
60 59 48 37
39
40 38 42 42 42 42
48 47 44 47 56 48 44 42 35 35 35 34 32 47 44
44 42 35
31 29 31 32 30
40
30 35 33 35 33 37 37 46
36
21 23 25 29
20 16 15
21
21 17 16 19 22 18 26 23 23 25 21 23 23 17 23 21 19 29 31 31 29 29 30 30
16 18 20
9 18 20 21 21 17 21
13 14 13 10 10 12 13 13 11 16 13 12 11 9 4 6 9 7 10 7 7 14 14
4 3 4 4 2 2 2 8 10 10 11 8 10 10 9 8 9 8 7 5 4 5 3 3 2 2 2
0
A B C D E F G A B C D E F G A B C D E F G A B C D E F G A B C D E F G A B C D E F G
Albania Bosnia and Kosovo* Republic of Montenegro Serbia
Herzegovina North Macedonia
Completely dissatisfied Neither satisfied nor dissatisfied Completely satisfied

Mostly dissatisfied Mostly satisfied DK/refuse
(All respondents, N=1203, single answer, scores on a scale from 1 to 5, where 1 means completely dissatisfied and 5
means completely satisfied, share of total, %)
129
In the last three years, 11% of businesses received assistance from local or regional governments,
12% from the central government, and 6% from the EU or other donors (Figure 139 through Figure
141). There are no significant variations in the economies of the Western Balkans in this regard,
while support in Kosovo* has been much higher than in other economies.
Figure 139: During the past three years (2019 to 2021), did your enterprise receive any public
and/or donor’s financial support for innovation activities from the following levels of govern-
ment? Local or regional authorities.
Include financial support via tax credits or deductions, grants, subsidised loans, and loan guarantees. Exclude R&D and
other innovation activities conducted entirely for the public sector under contract.
Albania 4 97 0
Kosovo* 48 51 0
Montenegro 7 78 16
Serbia 5 88 6
0 20 40 60 80 100
Yes No DK/refuse
130
ment? - Central government (including central government agencies or ministries)
Albania 12 88 0
Kosovo* 44 55 0
Montenegro 6 80 15
Serbia 8 82 9
0 20 40 60 80 100
Yes No DK/refuse
(All respondents - N=1203, %)
ment? - The European Union (EU) or other donors.
Include financial support via tax credits or deductions, grants, subsidised loans, and loan guarantees. Exclude R&D and
other innovation activities conducted entirely for the public sector under contract.
Albania 4 97 0
Kosovo* 14 86 0
Montenegro 2 84 15
Serbia 4 87 9
0 20 40 60 80 100
Yes No DK/refuse
131
HUMAN CAPITAL
Finding an applicant with the required set of skills is a considerable challenge for employers in the
Western Balkans. Namely, more than a quarter of companies in the region have reported strug-
gling to fill vacancies, with the most commonly cited reason being the lack of necessary skills by
prospective applicants. With this issue likely to become increasingly important in the near future,
policymakers must invest considerable effort in increasing the size of the labour pool through
activation, training, and education of both the inactive and the unemployed. With women more
frequently inactive due to various reasons, including social stereotypes and marginalised posi-
tions in Western Balkan societies, special tailored programmes should be designed and deployed
to ensure their inclusion into the labour pool.
In the Western Balkans, the majority of employed people have completed secondary school (50%)
(Figure 142). The percentage of respondents with a university education is also significant, at
24%, albeit it is not particularly high among Western Balkan enterprises. Although the region elim-
inated full illiteracy among the working population, the number of individuals employed with only
an elementary education remains high. Montenegro and Bosnia and Herzegovina have the larg-
est pool of workers with secondary education (62%), whereas Albania has the highest educated
working population (32% of those employed have finished university education or higher). It's
worth mentioning that the proportion of employees with vocational qualifications (18%) is signifi-
cantly less than that of individuals with secondary general education (50%).
Figure 142: What percentage of the workforce at your firm has the following education levels?
100
22 22 26 21 24
32 28
80
60
31
41
40 52 50
62
40 62
25
20 29
22 14 18
16
12 9
6 3 9 3 1 4 5
0 0 0 0 1 1
1
Without or unfinished primary school Vocational qualification University education or higher

Primary school Secondary school qualification
(All respondents - N=1203, mean)
When asked about the following statements, businesspeople had an optimistic opinion generally
(Figure 143). On average, they agreed (68%) that skills match demand across the entire region
132
with an increasing share from the previous year (55% in 2020). Businesspeople in Kosovo* are
most likely to hire someone based on their educational profile (69%), whereas this is least true in
Montenegro, where 19% would not hire without any work experience. In addition, in Montenegro,
a large part of respondents expressed a neutral position on this point (33%), followed by Kosovo*
(23%). Albania (17%), North Macedonia (18%) and Montenegro (19%) had the most reservations
about the appropriateness of generated skills taught in the educational system.
Figure 143: Would you agree with the following statements?
A) The skills taught in the educational system meet the needs of your company; B) I am likely to hire a young person
without any work experience whose educational profile completely meets the needs of my business; C) I plan to intro-
duce a paid internship or apprenticeship programme to young people in my company
100 0 2 0 0 4 2 2 2 0 0 4 3 0 0 5 1 1
8 8 9 7
16 13 12 9
11 21 7 16 25 12
26 29 25 25 13
35 36 14
80 38 43 39 10
17
32
36 17 31 19 31 28
60 16 51
57
40 43
36 52 54 49
38 23 46
40 19 40 24
43 24 24 44 38 26
33
14 15 21 16
20 18 16
15 16 23 15 34 16 18
19 12 12 14 15 16 16
15 12 19 7
3 12 5 4 3 8 7 5 10 7 13
9 8 6 7 5 5 9
0 2 2 2 3 2 2 3 0 0 3 1
A B C A B C A B C A B C A B C A B C A B C
Completely disagree Neither agree nor disagree Completely satisfied

Partly disagree Partly agree DK/refuse
(All respondents - N=1203, single answer, scores on a scale from 1 to 5, where 1 means completely disagree and 5
means completely agree, share of total, %)
Companies in the Western Balkans continue to value digital skills (Figure 144). They are very
important or moderately important for 67% of respondents, showing a slight decrease from the
2021 edition. This might be due to an over-reaction to the pandemic, with businesses considering
digitalisation as a must, and later finding out that some aspect of their activity would go back to
the pre-pandemic situation. The same level of respect for digital abilities can be seen through-
out the area, while Albanians place the most value on it (33% of respondents rated digital skills
as very important), while North Macedonia (43%) followed by Montenegro (42%) have the most
reservations towards digital skills. Despite the fact that a solid 67% of respondents agreed that
digital skills are somewhat or extremely important for their business, 41% had not taken steps to
improve their employees' skills (Figure 145). It was mostly on-the-job/internal training for individ-
uals who participated in such activities (48% of all respondents, doubled from 23% a year ago).
The majority of Kosovo* respondents engaged in digital skills through internal training (49%) as
well as online courses (49%) and workshops (37%). In the other Western Balkan economies, atti-
tudes toward investing in digital skills were less favourable (46% of Macedonians admitted to not
have taken any course to improve their digital skills).
HUMAN CAPITAL
133
Figure 144: How important are digital skills for your company?
100 0 2 1 0 4 2 2
14
22 25
80 31
43 37
42
60 54
52
56 47
40 31 28
48
20
33
23 26 26
17 20
13
0
Very important Somewhat important Not important DK/refuse to answer
Figure 145: Do you take concrete measures to improve the digital skills of your employees?
100
80
64
60 57 56 54
49 49 48
46
41 41
37 38
40
31 29 29
28
19
20 13 15 15 14 14 13 12 13 15
9 8
0
Yes, through on the job training or internal training Yes, through workshops, seminars or conferences
Yes, through online courses or webinars No
(Respondents who answered that digital skills are very important or somewhat important - N=816, multiple answers, %)
134
Figure 146: Has your company taken part in any active labour market measures through the
government programmes?
100 3 2 0 4 4
5
13
80 32
60 79
81 74 77
85
74
40
65
20
17 20 21 19
14 11
0
Yes No DK/refuse
Figure 147: Please select all government programmes related to employment that apply in your
case.
100 94
88 87 86 85 83
78
80 73
62 64
59
60 56
50
42 41
40 36 34 32
27
22
18 19
20 14 15 15
9 10
3 2 4
0 0 0 0 1
0
Covid-19 support and incentives to retain employment related to pandemic (e.g., wage subsidies or other subsidies relate
Incentives to create employment (for example, wage and hiring subsidies, start-up support)
Training and upskilling of (prospective) employees through the government programs
Improved labor market matching using services of public employment offices
Other
(Respondents who confirmed their company has taken part in any active labour market measures through the govern-
ment programmes - N=296, multiple answers, %)
HUMAN CAPITAL
According to Figure 148, despite complaining about the availability and lack of skills, business-
people in the Western Balkan economies have neglected training of their employees in 69% of
situations (share remains nearly the same as in 2020). Kosovo* respondents were the most likely
135
to invest in non-formal education (69% said they organised some kind of training), while Mace-
donians were the least likely (16%, even less than 2020). Furthermore, the majority of employers
(45%) do not examine their individual employees' skill and training needs (Figure 149), a 6% in-
crease of this share from 2020. It was largely Kosovo* respondents who pursued such reviews
(54% said they examined the skill and training needs of individual employees on a frequent basis),
as opposed to Serbians who did it the least (12%), and Montenegrins showing a high refusal rate
of 21%.
Figure 148: Over the past 12 months, has your business funded or arranged any training and
development for staff in the organisation, including any informal on-the-job training, except
training required by the law?
100 1 2 2 0 2 2
14
29
80
62 64 69
60 84 76
65
40
69
20 38 33 29
21 22
16
0
Yes No DK/refuse
Figure 149: Thinking about skills requirements, does your company regularly review the skill
and training needs of individual employees?
100 0 3 4 1 0 2
21
22 26 29
80 37 31
41
19 26
60
48
38 45
40 32 58
31
54
20
26 24 25 23 21
12
0
Yes No Partly DK/refuse
(All respondents - N=1203, single answer, share of total %)
136
In contrast to the scarcity of training opportunities, employees often demonstrate an evident will-
ingness to learn new skills (Figure 150). 65% of companies in Kosovo* stated their staff were
interested or extremely interested in obtaining extra qualifications, the highest percentage of any
Western Balkan economy. Employees in Montenegro, on the other hand, are the least motivated
to acquire extra credentials, with 37% neutral and 21% not interested in acquiring additional qual-
ifications at all.
Figure 150: How would you assess the readiness of employees in your company to acquire
additional qualifications in order to advance and get promoted?
100 2 3 4 2 6 5
13 13 4
18 16 11
28 5
80
25 37
36 38
60 42 43
37
40 37
30 39
19 31
28
20
14
7 10 13
12 9
8 8
5 6 9 10 8 5 6
0
They are not interested in acquiring Neither interested nor disinterested They are very interested in acquiring
additional qualifications at all They are interested in acquiring additional qualifications
They are not interested in acquiring additional qualifications DK/refuse
additional qualifications
Making it easier for a woman to combine a job with household responsibilities is the most effec-
tive approach to increase the number of women working in the Western Balkans according to 40%
of respondents (Figure 151). Paying women and men the same will improve women's participa-
tion in the labour market, according to 39% of respondents, making it the second most popular
and effective method. Two more factors stand out in Kosovo* and North Macedonia: accessible
childcare and the flexibility to combine jobs and household chores. Other factors that have been
recognised as potentially useful in the region include improving access for women to better qual-
ity jobs (47% in Albania) and increasing flexible work arrangement (37% in Serbia).
HUMAN CAPITAL
137
Figure 151: In your opinion, what are the most effective ways to increase the number of women
in the labour market?
100
80
69
64 66
59 55
60
47 50
45 4741 46
37 41 41 41 39 40 38
40 38 3137 38 3832 37 39 34 40
32 32 35 31
18 30 27 24 29
23 24 25 25 22 24
10 21 22 24 19 19
19 19 14 16 18 15 19 18
20 14 11 13
12 15 13 15
5 7 7
3 4 3
0
Making sure women earn the same as men for the same work Improving access for women to better quality jobs
Making child care more accessible (e.g. without waiting list in Making sure it is beneficial financially to work for women
kindergartens, increasing the number of nurseries and ki (by changing rules on taxes and social benefits)
Increasing flexible work arrangement Improving access for women to traditionally “male jobs”
(e.g. part-time work, working from home) Making employers aware of the benefits of employing and promoting
Making it easier for women to combine a job with women (e.g. their openness and accessibility in commun
household and care responsibilities DK/refuse
Making sure that recruitment procedures
do not discriminate against women
As per the results shown in Figure 152, respondents believe that governments should implement
measures aimed at retaining workers in Western Balkan economies in order to address the prob-
lem of labour force shortages and brain drain. This response was given by 67% of respondents,
ranging from 60% in Bosnia and Herzegovina and Serbia, to 89% in Albania (this factor has shown
an enormous increase from 2020 when the share was only 37%). A second-placed policy option
was to encourage diaspora to return home, which was especially prominent in Kosovo* with 83%).
Policy solutions that received some attention among respondents included encouraging diaspora
knowledge transfer and incentivise for enterprises to offer attractive conditions for our diaspora
return (35% respectively). Nonetheless, institutional effectiveness was acknowledged as vital to
reducing brain drain in various Western Balkan economies; for example, this option was ranked
second in Montenegro.
138
Figure 152: To curb the problem of labour force shortages and brain drain, our government
should:
100
89
85 83
80 74 76
71 70
67
60 60
60 53
45
40
40 37 36 36 35 35
33 31 33 33 32
29 30
25 27
24 22
19 21 19 20
20 17 16
0
Introduce policies to retain labour force

Introduce policies to encourage our diaspora to return back home
Encourage our diaspora to transfer knowledge back home
Incentivise private businesses to offer more attractive conditions to our diaspora to return (*ex. Lowering taxes for al
Improve institutional effectiveness
HUMAN CAPITAL
139
EMPLOYMENT PRACTICES
Businesses in the Western Balkans use a variety of methods to hire new staff, with varying de-
grees of success (Figure 153). Personal contact is the most commonly employed method, ac-
cording to 54% of respondents, up from 49% a year ago. Advertisements in newspapers and on
the internet were utilised frequently in 28% of the cases, and occasionally in 47% of the cases.
Surprisingly, employment agencies' intermediation is employed only occasionally (43%) or never
(28%), indicating a potential mistrust that companies in the region might have for institutional
actors, including employment service agencies. Similarly, employment through collaboration with
educational institutions remains low, with 60% saying they never do it and 29% saying they do it
occasionally. On the other hand, in 66% of situations, "poaching" employees from competitors has
never been used as a hiring tactic, while only 6% admit to have used this method often.
Figure 153: How often do you use the following when hiring new employees?
100 1 2 2 3 3 5 5
8
23 28
80
37
60 64
60 66
47 3
43
40
54
29
20 26 23
28 27
9 7 6
0 1
Through personal Through placing With the By cooperating With the “Poaching”
contact advertisements in intermediation of directly with intermediation of employees from
the papers and/or the official education private competitors
online employment institutions employment
agency agencies and/or
“head hunters”
Often Sometimes Never DK/refuse
(All respondents - N=1203, single answer, scores on a scale from 1 to 3, where 1 means often, 2 – sometimes and 3
means never, share of total %)
The preferences in employment patterns among the Western Balkan economies are depicted in
Figures 154 through 159. Personal contacts are common in the region, ranging from 30% in Koso-
vo* to 65% in North Macedonia. In fact, the percentage of respondents who claimed this method
was occasionally utilised is high in Serbia (39%) and Bosnia and Herzegovina (37%). Advertising
is still most commonly used in Kosovo* (45%), followed by Bosnia and Herzegovina (40%), and
Albania (35%). However, the percentage of respondents who use it occasionally remains high in
all Western Balkan economies varying from 25% to 59%. On the contrary, employment agencies
are utilised infrequently or not at all in the Western Balkans, with 51% of respondents in North
Macedonia never using them and only 28% in Montenegro and Serbia. Direct interaction with edu-
140
cational institutions is much rarer: 30% of respondents in Kosovo* had never done so, compared
to 77% in North Macedonia. Businesses in the Western Balkans have a similar stance toward
private employment services (64% admit having never used these services). Finally, on the oth-
er side, 'stealing' employees from competitors is still uncommon: 41% (Kosovo*) to 82% (North
Macedonia) of respondents indicated they had never done so, while the percentage of those who
had done so frequently is insignificant (varying from never in some of the economies, to 18% in
Kosovo*).
Figure 154: How often do you use the following when hiring new employees? - Through per-
sonal contact (following recommendations of friends and colleagues)
100 0 2 0 0 1 1
7 6 6 7 8 8
20 3
80 30 29
37 33 39 37
60
49
40
63 65
54 58 52 54
20
30
0
Often Sometimes Never DK/refuse to answer
Figure 155: How often do you use the following when hiring new employees? - Through placing
advertisements in the papers and/or online
100 1 1 0 0 2 2
6
13
19 25 21 23
21
80 40
41
60 39
44 42 47
25 59
40
45
20
35 40
31 32 28
18
0
141
Figure 156: How often do you use the following when hiring new employees? - With the inter-
mediation of the official employment agency
100 1 3 0 1 1 2
6
17
24 19 28 28
80 28
51
60
35 41 52
39 48 43
40
35
20 40 35 30 27 27
23
13
0
Figure 157: How often do you use the following when hiring new employees? - By cooperating
directly with education institutions
100 2 4 0 2 3 3
7
30
80
49
57 61 60
70
60 77
42
40
36
20 16 31 29 29
27 19
13 11 9
0 2 6 6
(All respondents - N=1203, scores on a single answer, scale from 1 to 3, where 1 means often, 2 – sometimes and 3
142
Figure 158: How often do you use the following when hiring new employees? - With the inter-
mediation of private employment agencies and/or head hunters
100 4 0 1 2 3
5 10
80
34
51
63 72 70 64
60 61
40
45
25
20
28 26
25 25 23
21 20
3 2 4 4 7
0
Figure 159: How often do you use the following when hiring new employees? - "Poaching" em-
ployees from the competitors
100 0 1 4
9 5 8 5
80 41
65 66
60 64 72 67
82
40 40
20 17 24 23
22
23 18
11 16
4 6 6
0 0 0
The gender distribution of workers confirms the region's current gender employment disparities
(a trend that seems to be unchanged since 2020), i.e., men (63%) have greater employment rates
than women (37%). Figure 160 shows that Kosovo* leads the region with men as 70% of the em-
ployees, and Montenegro having the slightest disparity between genders (48% women and 52%
men).
143
Figure 160: Of the total number, how many of your employees are men and how many women?
100
34 30 35
80 41 37
43 48
60
40
66 70 65
59 63
57 52
20
0
Men Women
In the region, attitudes against Roma as employees are slightly improving from the last year.
This is a positive development, which presents that 36% of respondents said they would recruit a
Roma person with acceptable skills, and 21% responded they would “very likely” hire one. Bosnia
and Herzegovina has the most negative opinion against Roma, with 20% of respondents saying it
is unlikely or very unlikely that they would hire a Roma person.. Montenegro and Serbia took the
most neutral stance (30%), while Kosovo* was mostly in favour of hiring Roma, with 73% saying it
was likely or very likely, followed by Albania (65%).
Figure 161: How likely would it be for you to hire a Roma person whose educational profile and
experience completely meet the needs of your business?
100 4 1 3 4 5
5 7 7
20 19
14 21
80 28 28 25
3,9 4,0
36 3,6 3,6 3,6
60 36 3,4 37
3,3 36
20
37 3
45
40
22 30
28
30 27
20 25 5 16 10
15 10 6
3 5 9 6
0 3 2 4 3 6 1
Not likely at all Neither likely nor unlikely Very likely Mean
Not likely Likely DK/refuse
(All respondents - N=1203, single answers, share of total, %)
144
In the Western Balkans, the majority of enterprises (51%) indicated no gender preference in re-
cruiting (Figure 162). However, the vast majority of them expressing gender preferences stated
that they would prefer to work for a man (36% of total respondents). The chart suggests sig-
nificant differences across the region, where gender stereotyping in hiring is most prevalent in
Serbia; 42% prefer to hire a man and only 7% prefer to hire a woman. Also, Serbia, Bosnia and
Herzegovina and North Macedonia have the lowest gender preferences for women (7%, 5% and
10% respectively), while Montenegro has the lowest gender preference for men (16%).
Figure 162: In your opinion, do companies like yours have a gender preference in terms of hiring?
100 2 4 2 4
6 5 7
80
40 49
55 48 51
60
60 66
40 32
35 42 36
36 25
20 16
23
12 10 12 7 10
0 5
Yes, they would rather hire women They have no preference

Yes, they would rather hire men DK/refuse
Half of respondent companies (Figure 163) do not employ a representative from the represent-
ed vulnerable groups: persons with disabilities, displaced persons or refugees, Roma, and other
ethnic minorities. This is a slight decrease from 2020, and it comes at the expense of all of these
categories. Employment attitude against vulnerable groups is the most unfriendly in Kosovo*,
where 70% of respondents reported no vulnerable worker hired, followed by Montenegro (66%).
However, in Montenegro, 6% recruited individuals with disabilities and 9% hired displaced persons
or refugees. In other economies, attitudes toward employing Roma are the most positive in Serbia
(25%) and Albania (18%). Meanwhile, Bosnia and Herzegovina and Albania share the most posi-
tive attitudes toward persons with disabilities. These shares, however, are not just a reflection of
employer views, but also of disadvantaged groups in the working-age population's engagement
in the different economies.
145
Figure 163: Do you have somebody from the below mentioned vulnerable groups working in
your company?
100
80
70
64 66
60
48 50
44
38 38 36
40
18
24 25 26 24
18 18 19 17 19 17
20 16 14 15 17 14 13
11 12
7 8 8 9 9 9
6 6 4 5
2 2 0 1
0
Persons with disabilities (including persons with special needs) Other ethnic minorities
Displaced persons or refugees No, there are no members of the listed groups working in my company
Roma DK/refuse
65% of respondents believe that hiring Roma is neutral for sales and the workplace, from 63% in
2020 (Figure 164). However, 16% reported unfavourable assertiveness with a slight increase from
the last year. Bosnia and Herzegovina (26%) has the most negative attitude, while Kosovo*, Mon-
tenegro, and Albania have the least negative (7%, 12% and 11% respectively). Despite the region's
general neutrality, 23% of Kosovo* respondents believed Roma employees to be beneficial to their
company's sales and working environment.
Figure 164: Do you think that employing Roma persons would affect company sales or the
working environment in a positive or a negative way?
Albania 2 11 73 15
Kosovo* 23 7 65 3
Serbia 10 16 70 4
0 20 40 60 80 100
Positive Negative Would have no effect DK/refuse
146
In the Western Balkans, attitudes about hiring foreigners are mixed (Figure 165), with 29% per-
ceiving it as likely, 9% perceiving it as not likely, and another 27% considering it as neutral. Howev-
er, the situation in North Macedonia is noteworthy, with 51% expressing significant reservations
about hiring foreigners and another 19% expressing some reservations. On the contrary, Kosovo*
respondents were overwhelmingly in favour of foreign labour, with 48% perceiving it as very likely.
The situation is similar for employers in the Western Balkans towards workers from other econo-
mies in the region, as shown in Figure 166.
Figure 165: How likely would you employ workers from abroad in your company?
100 2 5 5
6 7 8 5 6
2
10 12
35 19 18
80 23
4,1 13
48
3,6 3,7 19 31 29
60 19 3,4 3,4 3,4
34
3
40 39 18
51 26
38 27
24 5
7 1,9
20
17 19 9
9 18 8
3 6 6 11
0 2 5 1
Figure 166: How likely would you employ workers from the WB region in your company?
100 4 2 5 4 5
8 8 5
3 10
22 12 15
27
80 23 23
19 40
3,6 3,5 3,6 3,5 33
60 3,4 32
29 3,3
30 16
35 3
40
28
20 27 11 2,1 24 35
20 7 46
5 7
5 17 14
15 5 12
8 3 5
0 1
147
Businesspeople that admitted they would hire people from the Western Balkan economies ex-
pressed a wide range of opinions (Figure 167). Albanians, for example, are overwhelmingly in fa-
vour of hiring Kosovars (97%) and Macedonians (85%), apparently owing to the lack of a language
barrier. While 95% of Kosovars said they would prefer Albanians, they also said they would prefer
Macedonians (80% percent) and Bosnians (71%). Serbians prefer Bosnian (81%) and Montene-
grin (78%) workers, reflecting the language advantage once again, and this tendency is reflected
in Montenegro too. Macedonians prefer Albanian (43%) and Serbian workers (53%). In compar-
ison to other Western Balkan economies, Bosnia and Herzegovina has a more balanced prefer-
ence towards workers.
Figure 167: You said that you would employ workers from the WB region in your company, from
which economy/economies exactly?
100 97 95
85 82
80 81
78
80 73
71 70
62 64 64 63
60 5555 56
53 52 53
47 47
43 43 43 41
40 40 38 38 40
40 34 33 33
25
22
20 17
12 14 13
0 0 0 0 0 1 0 0 0
0
Albania Kosovo* Montenegro DK/refuse

Bosnia and Herzegovina North Macedonia Serbia
(Respondents who would likely or very likely employ workers from the region - N=574, multiple answers, %)
In the Western Balkans, 36% of businesspeople have never heard of the Regional Cooperation
Council, a significant decrease from 47% a year ago. Albanians have the largest advantages in
this regard, with 84% of businesspeople knowing about the RCC, while Macedonians have the
least, with only 48% (Figure 168).
148
Figure 168: Have you heard of the Regional Cooperation Council?
100
16
26
80 36 36
42 48
52
60
40 84
73
64 64
57 52
48
20
0
Yes No
149
COVID-19 IMPACT
The biggest issue raised by businesspeople in relation to Covid-19 was problems with staff avail-
ability (43%). When the government's various initiatives are reviewed, however, it's likely that this
problem is revealed as a combination of Covid-19 pressure and inherited structural issues that
existed in the past. Problems with finances, on the other hand, might be specifically related to
the Covid-19, as 38% of companies pointed out. With minor variation, these two topped the list in
almost all Western Balkan economies. For example, in Montenegro, problems with finances are
listed second, while in Albania, problems with staff availability, supply chain, and problems with
finances remain of a very high importance (69%; 62% and 56% respectively).
Figure 169: In what ways has your business been affected, i.e., what specific problems, if any,
has your business faced?
100
80
69
62
56 58 58
60 55
51 51
43 42 42 42 42 43
39 38 40 39 38
40 34 35 36 35
31 31 30 31
27 2927 29 30 27
25 24 24 24 23
18 19 20 19
20 16 14 17
14 12 12
10 108
6 6 7 66
4 2 2 3 2
0 1
0
Problems with staff availability Problems with finances

Staff behavioural changes (such as low productivity, etc.) Containment measures affecting sales, transport etc.
Supply chain problems We faced no problems
Problems with access to domestic customers DK/refuse
Problems with access to customers abroad
150
Figure 170: Have the following trends influenced the structure and/or operations of your com-
pany?
A) Offshoring; B) Nearshoring; C) Onshoring
100
13 13 13 17 16 16
1 2 25 25 24 22 21 23 25 25 20 20 20 20 20 20
3 27
80 4 5 4 3 5
7 2 2 6 6
1 3 5 9 8 7 7
9 7 20 11 10 5
12 17 20 14 8 8 4 5 6 10 10 10
7
60 21
25 20
40 81 82 82
65 65 62 65 63 66 67 66 62 64 64
59 60 58 61
43 47
20 41
0
A B C A B C A B C A B C A B C A B C A B C
No influence at all Minor influence Strong influence DK/refuse
(All respondents - N=1203, single answer, scale from 1 to 3, where 1 means no influence at all, 2 – minor influence and
3 means strong influence, share of total, %)
COVID-19 IMPACT
151
FINANCIAL AND OPERATIONAL

PERFORMANCE
During Covid-19 pandemic, 52% of firms said their access to capital had deteriorated, from 62%
in 2020 (Figure 171). This might be attributed to the retraction of the Covid-19 measures. While
this percentage fluctuates across the region, ranging from 41% in North Macedonia to 63% in
Montenegro, it has remained a major component of the crisis when considering company liquid-
ity positions. Given that several of the implemented government actions were focused at directly
assisting companies' liquidity, the majority of businesses (45%) said they were useful to some
extent (Figure 172). However, satisfaction varied by economy: in Kosovo*, 13% rated measures
as extremely useful, 33% as useful, and 37% as somewhat useful, for a total of 83%). On the other
hand, only 57% of respondents in Bosnia and Herzegovina thought the government measures
were useful in any way, while in Kosovo* 83% found them useful, representing the lowest and
highest percentages in the region. On the other hand, Montenegro has the greatest percentage
of people who consider measures to be useless or extremely useless among the Western Balkan
economies, at 35%. Responses were more evenly distributed in North Macedonia and Serbia, with
the majority of respondents stating measures were moderately useful.
Figure 171: Has your business’s access to financial resources changed since the outbreak of
COVID-19?
Albania 1 57 37 5
Kosovo* 6 54 34 5
Serbia 2 50 45 2
0 20 40 60 80 100
Yes, access to finance has increased No, access to finance stayed the same
Yes, access to finance has decreased DK/refuse
152
Figure 172: In your opinion how useful are the Gov’s economic measures for mitigating conse-
quences of Covid-19 pandemic in your economy?
100 0 2 5
1 5 2 1 3
3 10 10 7
19 6 13
16 6
9
80 14 20
24
33
60 3,4
61 47 45 3,2
3,0 37 3,0 3
2,8 2,8 2,8 42 45
40
37
24 22
20 25
21
19 11 20
10 13
0 2 6 5 2 5 1
Extremely useless Somewhat useful Extremely useful Mean

Useless Useful DK/refuse
FINANCIAL AND OPERATIONAL PERFORMANCE
153
FOCUS ON LARGE COMPANIES

According to these yearly shares, 25% of large enterprises said that the economy had deteriorat-
ed (Figure 173), a share lower than the whole sample of companies (41%). However, companies
remain optimistic when asked about the economic situation in the upcoming months, with 36%
of respondents believing it will improve. 27% of small companies admit their business to have
deteriorated, unlike only 5% of large firms. Thus, it is clear that smaller businesses have weath-
ered the pandemic differently than bigger businesses, whose cushions are much bigger for crisis
mitigation. Regarding employee numbers in the coming year, 29% of small companies and 46% of
large companies expect an increase (Figure 176).
Figure 173: How has the general economic situation changed over the past 12 months? Has it
deteriorated, remained unchanged or improved?
100 0 0 0 1 1 2 0
6 11 4
23 22
31 30 20
80
36
55 37
60 36
45
44 45
40 31
21 74
53
20 41
27 30
24 25 24
0
Large 2018 Large 2019 Large 2020 Large 2022 Western Western Western Western
Balkans 2018 Balkans 2019 Balkans 2020 Balkans 2022
Deteriorated Remain unchanged Improved DK/refuse
154
Figure 174: How do you expect the general economic situation in your economy to develop
over the next 12 months? Will it mostly deteriorate, remain unchanged or improve?
100 4 3
5 6
80 30 36
37
43
60
38 32
40
52 40
20
26 30
8 12
0
Western Balkans Western Balkans Western Balkans Western Balkans
2018 2019 2020 2022
Deteriorate Remain unchanged Improve DK/refuse
(All respondents - N=1203, single answer share of total, %)
Figure 175: How has your business situation developed over the past 12 months? Has it deteri-
orated, remained unchanged or improved?
100 1 1 0 1
19
30
80 37 38
60
52
35 49
40
56
20
28 27
20
0 5
Micro Small Medium Large

155
Figure 176: How do you expect the number of people employed in your company to change
over the next 12 months?
100 4 2 2 3
5
20 29 27
80
36 46
60
65
40 61 60
50 38
20
11 9 14 10
8
0
Micro Small Medium Large Western Balkans
Decrease Remain unchanged Increase DK/refuse
Large enterprises, on average, cite labour legislation, skills, and labour quantity as more challeng-
ing than smaller businesses (Figure 176). The difference in averages, however, is too minor to be
statistically significant, particularly on skills and availability of labour. Similarly, major businesses
financed their operations mostly with internal money (58%) during the pandemic, but this percent-
age did not differ considerably from that of smaller businesses.
Figure 177: Can you tell how problematic are these different factors for the operation and
growth of your business? Can you please rate each?
4.0
3.3
3.0 2.9
3.0 2.8 2.8 2.8 2.8 2.7 2.7 2.7
2.6 2.6 2.5 2.5
2.4
2.0
1.0
0
Micro Small Medium Large Western Balkans
Labour regulations Skills and education of available workforce Availabillity of labour
(All respondents - N=1203, scores on a scale of 1 to 4 where 1 means major obstacle, 2 moderate obstacle, 3 minor
obstacle and 4 no obstacle, mean)
156
Large companies are more likely to export to EU (34%) and the Western Balkan region (9%) (Fig-
ure 178). Only 11% of micro-firms reported exporting in the region, the EU, or internationally, while
48% percent of large companies did. It is clear that the size of the company and its export orienta-
tion are related. Nevertheless, the proportion of large companies that primarily sell domestically
(52%) is still significant, but with a major decrease from 2020 (71%).
Figure 178: What percentages of your company’s sales are made domestically, exported to the
WB region, to the EU or to the third countries?
100 2 2 2 5
4 5
5 6 13
80 9 34
60
9
90 87
40 76
52
20
0
Sold domestically Exported to the EU

Exported to the Western Balkans region Exported to third countries
Figure 179 shows that 55% of large enterprises totally agree their products and services can
compete well in the Western Balkan market, whereas 68% totally agree they can compete in the
EU market (Figure 180). The entire sample of respondents came to the same conclusion as this
observation. Over the years, however, the perception of one's own competitiveness on regional
and European markets has changed (Figure 181 and Figure 182, respectively). For example, in
2017, 41% of major respondents said they could compete in the regional market, compared to
58% in the last year. In 2020, 73% of respondents perceived they were competitive in the European
market, but that number has increased to 94% during this year.
157
Figure 179: To what extent do you agree with Figure 180: To what extent do you agree
the following statements - My company’s prod- with the following statements - My com-
ucts, goods and services can compete well with pany’s products, goods and services can
products, goods, and services from the Western compete well with products, goods, and
Balkans? services from other EU countries?
100 3 3
80
55
60 68
40
35
20
26
4 0
0 2 2
Western Balkans competition EU competition
Totally disagree Disagree Agree Totally agree DK/refuse
(Large companies - N=33, share of total, %) (Large companies - N=33, share of total, %)
ucts, goods and services can compete well with products, goods and services from the West-
ern Balkans?
100 0 3 3
2 4
21
80
55
60 77 68 75 37
40
21
35
20 20
21 19
21
5 3 4
0 1 4 1 0 2
2017 2018 2019/20 2020/21 2022
(Large companies - N=33, share of total, %)
158
Figure 182 – Figure 182: To what extent do you agree with the following statements - My com-
pany’s products, goods and services can compete well with products, goods and services from
other EU countries?
100 2 1 3 3
26
80
70
60 55 71 68
47
40
22 24
20
10 21 26
25 26
10 4 0
0 4 2 0 2
2017 2018 2019/20 2020/21 2022
(Large companies - N=33, share of total, %)
Large companies, on average, believe CEFTA 2006 was more beneficial than what other com-
panies thought (Figure 183), since they are more frequently exporters. In comparison to 56%
of micro businesses, 81% of large businesses think that CEFTA 2006 has been advantageous
to them. Small and medium-sized businesses, on the other hand, have similar shares: 55% and
67%, respectively. However, only 3% of large companies have indicated complete dissatisfaction,
compared to 9% percent in micro businesses, 13% in small businesses, and 7% in medium-sized
businesses.
Figure 183: To what extent do you agree with the following statements - “My company has ben-
efited from the regional free trade agreement (CEFTA 2006)”?
100
8
16 17 16
7
80
14 13
22
60 48
42
40 45 68
24
20 18
9
9 13 0
7 3
0
(Respondents who confirm exporting and importing from abroad - N=666, single answer, scores on scale from 1 to 4,
where 1 means totally disagree and 4 means totally agree, share of total, %)
159
Small companies (12%) launched a new product last year, but their frequency is similar to that of
other enterprises. Meanwhile, large companies become more innovative in the last three years
(21% compared to 9% in the case of small companies). Furthermore, in the two timeframes stud-
ied, 30% of large enterprises explored product and service innovation, far more frequently than
small and micro-businesses.
Figure 184: Have you introduced new or significantly improved product or service?
Micro 11 10 9 65 5
Small 12 9 6 72 1
Medium 10 14 15 56 6
Large 10 21 30 33 6
0 20 40 60 80 100
Introduced new or significantly improved Both under 1 and 2

products and/or services in the past 12 months? Neither
Introduced new or significantly improved production DK/refuse
and/or service delivery processess in the last three (3) years
All respondents – N=1203, single answer, share of total, %)
160
Please mark each of the following methods with 1 often, 2 sometimes or 3 never.
100 1 5
7 7
13 17
7 19 19
80
8
36
31
60 56 41 46
55
3
40
29
56 18
20 38
31 24
23
17
0 2 1
“head hunters”
(Large companies- N=33, single answer, share of total, %)
When it comes to vulnerable groups, large corporations have a significantly diverse workforce
(Figure 186). Furthermore, 71% of them employ Roma, compared to only 8% of micro-businesses.
Ethnic minorities are employed by 86% of large corporations, compared to only 11% of micro-firms
and 36% of medium-sized businesses. Disabled people and displaced people or refugees show
similar differences in all businesses.
161
Figure 186: Do you have somebody from the below mentioned vulnerable groups working in
your company?
100
86
80
71
67
63 63
60
50
40 36
31
27 26 28
23
20 19
20 17
10 8 11 12
8
5 5 5 3
0
Persons with disabilities (including persons with special needs) Other ethnic minorities
Displaced persons or refugees No, there are no members of the listed groups working in my company
Roma DK/refuse
Employees of medium-sized companies (56%) show a greater willingness to learn new skills (Fig-
ure 187). In the case of large organisations, 50% stated they were interested or extremely inter-
ested in doing so, compared to 46% for micro businesses. However, large companies and micro
companies share the same lack of interest in acquiring additional qualifications (8% each).
Figure 187: How would you assess the readiness of employees in your company to acquire
additional qualifications in order to advance and get promoted?
100 4 5 0
6
8 12
12 16
80
38 38
36
60 40
40
29
32 40
31
20
11
8 2
8 6 8
0
6 3
They are not interested in acquiring Neither interested nor disinterested They are very interested in acquiring
additional qualifications at all They are interested in acquiring additional qualifications
They are not interested in acquiring additional qualifications DK/refuse
additional qualifications
162
FOCUS ON EXPORTERS
Export-oriented businesses have access to international markets and easier reach to them. How-
ever, for that reason they are also more susceptible to market pressure from foreign companies
and innovation from abroad. According to Figure 188, during 2021, only 37% of exporters felt the
economy had deteriorated, while 43% of non-exporters stated the same. These shares are roughly
half of what they were a year ago. Similarly, compared to 24% of exporters, 26% of non-exporters
reported a decline in business activity in 2021. (Figure 189). Both groups, however, share the idea
that the situation has remained unchanged (45% and 46% respectively). Thus, the speed of recov-
ery for exporters is faster than non-exporters, even though the crisis did hurt them considerably.
Exporters, on the other hand, do not differ significantly from non-exporters statistically in terms
of their expectations for the economy over the next year, demand for their products/services and
also the number of employees in their companies.
Figure 188: 1. How has the general economic situation changed over the past 12 months? Has
it deteriorated, remained unchanged or improved?
2. How do you expect the general economic situation in [ECONOMY] to develop over the next 12 months? Will it mostly
deteriorate, remain unchanged or improve?
100 0 1 4 2
27 20
80 35
39
60 37
36
26 34
40
20 37 43
32 29
0
Exporters Non-exporters Exporters Non-exporters

FOCUS ON EXPORTERS
163
Figure 189: How has your business situation developed over the past 12 months? Has it deteri-
orated, remained unchanged or improved?
100 0 1
31 27
80
60
45 46
40
20
24 26
0
Figure 190: How do you expect the demand for your company’s products/services to change
over the next 12 months? Will it decrease, remain mostly unchanged or increase?
100 4 3
80
40
52
60
40
47
35
20
9 10
0
164
Figure 191: How have your labour and other costs (e.g. energy, etc.) changed over the past 12
months?
100 1 1
80
69
60 75
40
20
30
23
0 1 1
Decreased Mostly unchanged Increased DK/refuse
Figure 192: How do you expect the number of people employed in your company to change
over the next 12 months?
100 3
5
25
80 32
60
40 63
52
20
11 9
0

FOCUS ON EXPORTERS
165
Figure 193 indicates how often exporters may have been in a position to offer various unofficial
payments/gifts for 11 varying reasons, ranging from gaining access to governmental services
to influencing the content of new laws. Generally, more than half of the respondents in each of
the following 11 purposes, never or seldom made an unofficial payment or a gift in any purpose
sensitive to unofficial payments.
Bribes were more evident among exporters. This may be a tell-tale sign that two factors might
be affecting it: government officials expect bribes from exporters, and exporters have power to
influence them through bribes. About 1%-5% of the total sample responded that they always give
bribes, while the highest shares when admitting to giving unofficial gifts/payments are mostly to
obtain government contracts and to deal with labour inspections.
following purposes?
100
23 21 21 19 22 20 24 23
26 25 26
80 2 2 2
2 4 2 3 4
3 14 3 1
13 20 16
15 16 14 15 13 11
60 18
18 18 14
22 20 19 17 18 16
20
40
20
46 44 47 43 47
20 38 39 40 42 37
34
0
To get connected to and maintain
To obtain business licenses and
To obtain government contracts
To deal with occupational health
To deal with labour inspections
To deal with fire and building
To deal with environmental
To deal with taxes and tax
To deal with customs/imports
To deal with courts
To influence the content of new

legislation, rules, decrees, etc.
and safety inspections
inspections
collection
inspections
public services
permits
(Exporters only - N=333, single answer, scores on a scale of 1 to 4 where 1 means never and 4 always, share of total, %)
Almost half of exporters sell domestically (Figure 194). Regarding the share of sales, 21% of them
reported to sell in the region, 24% in the EU, and 6% elsewhere in the world.
166
Figure 194: What percentages of your company’s sales are made domestically, exported to the
Western Balkans region, to the EU, or to the third countries?
24
Sold domestically
49
Exported to the Western Balkans region
Exported to the EU
Exported to third countries
21
(Exporters only- N=333, single answer, share of total, %)
Exporters use the internet more than non-exporters for a variety of reasons (Figure 195). The
differences in internet usage between the two groups are more pronounced for communication
(92% vs 79%), Financial transactions (60% vs 45%), presentation through website (49% vs 35%)
and provision of customer services or online support (32% vs 18%). In terms of productivity levels,
exporters and non-exporters may have disparities too.
Figure 195: Does your company use the Internet for…?
100
92
79
80
60
60
47 49 49
46 45
40 35 34
32 30
27 28 27 27 28
23 21
18 18
20
12
1 2 3 3
0
Communication (email, skype, etc.) Provision of customer services or support online

Advertising on Facebook, YouTube, GoogleAds, etc. Online trainings – internal (organized by your company) or external ones
Selling your goods or services over the Internet Searching the Internet for innovative ideas, new trends, partners etc.
Purchasing goods or services for your company over the Internet Data storage (i.e. the cloud), web-based applications or other
Executing banking or financial transactions online internal operational needs
Presenting your company through company website We don’t use Internet

Communication with customers/clients/partners through DK/refuse
FOCUS ON EXPORTERS
social networks (Facebook, Twitter, LinkedIn, etc.)
167
According to Figure 196, the hiring process happens through personal contact most of the time
(46%) followed by employment agencies (37%), and advertisement in papers or online (36%). The
least used method as we expected is “poaching” employees from competitors.
Please mark each of the following methods with 1 often, 2 sometimes or 3 never.
100 2 2 2 4
5 7
8
15 14
80
48
44 56
60 47 61
48
40
35
46 31
20 37 26
36
12 8
0
6
“head hunters”
(Exporters Only- N=333, single answer, share of total, %)
Exporters prefer employees from outside the economy (Figure 197) and within the region (Figure
198). The majority of respondents said this is likely or very likely to happen: 61% for foreign em-
ployees and 66% for regional ones. The exposure of exporters to international businesses and
cultures may lead to a more favourable attitude toward hiring foreign employees.
168
Figure 197: How likely would you employ Figure 198: How likely would you employ
workers from abroad in your company? workers from the region in your company?
100 3 3
28 25
80
60
33 41
40
20 27
25
4 2
0 4 4
From abroad From the Western Balkans
region
Not likely at all Not likely Neither likely nor unlikely Likely Very likely DK/refuse to answer
(Exporters only - N=333, single answer, share of total, %) (Exporters only - N=333, single answer, share of total, %)
According to Figure 199, exporters could be experiencing higher productivity levels than non-ex-
porters, evidenced by the fact that 33% of them invested in training of their staff, as compared to
27% of non-exporters.
Figure 199: Over the past 12 months, has your business funded or arranged any training and
development for staff in the organisation, including any informal on-the-job training, except for
training required by the law?
100 3 2
80
63 71
60
40
20
33
27
0
Yes No DK/refuse

FOCUS ON EXPORTERS
Exporters' perspectives on involving women as workers are similar to those of the overall sample
(Figure 200): 38% see equitable pay as a way to increase their labour market involvement; the
169
highest share of respondents consider that combining a job with household and care responsi-
bilities would be the most effective (49%), while 38% choose same earnings for men and women,
and 35% mention childcare infrastructure as more effective.
Figure 200: In your opinion, what are the most effective ways to increase the number of women
in the labour market?
Making sure women earn the same as men for the same work 38
Making child care more accessible(e.g. without waiting list in kindergartens,
35
increasing the number of nurseries and kindrgartens, etc.)
33
Making it easier for women to combine a job with household and care responsibilities 49
Making sure that recruitment procedures do not discriminate against women 25
Improving access for women to better quality jobs 29
21
Improving access for women to traditionally “male jobs” 15

17
(e.g. their openness and accessibility in communication, responsibility, emphaty, sense for details, etc.
DK/refuse 9
(Exporters only- N=333, single answer, share of total, %)
170
CONCLUSIONS
Following the severe deterioration of the business sentiment in the Western Balkans during the
pandemic of Covid-19 over 2020, the situation significantly improved over 2021. Although the
losses in the business perceptions were as large to turn the situation back to 2014, they were
almost recuperated in 2021, still not fully reaching the pre-pandemic level. This situation is a re-
flection of the overall conditions of the Western Balkan economies, whereby solid growth rates,
although with apparent heterogeneity, made a return of the economies to normalcy, as well as
the working hours and jobs, but the economies at the end of 2021 have not yet operated at the
pre-pandemic level and a fuller return was expected for the first half of 2022.
Yet, the 2022 Barometer analysis corroborates the earlier trend that businesspersons in the West-
ern Balkans consider the regional cooperation to be an important push driver of improved living
standard of the citizens, a tool to accelerate growth and make Western Balkans a better place to
live and work.
The picture of what businesspersons think about a palette of aspects of business life, govern-
ment services, structural drivers and obstacles of growth largely remains unchanged compared
to the last year. If a pattern needs to be established intra-regionally, then Kosovars stand out by
being most optimistic and favouring their own business environment, followed by Albania. On the
other side of the spectrum, the Republic of North Macedonia exhibited most of the pessimism
in the same regard, preceded by Serbia. Bosnia and Herzegovina largely stayed in the middle,
although the wide set of issues treated in the barometer implies that the patterns vastly vary de-
pending on the thematic area of investigation.
When being asked about their governments’ conduct, ethics, transparency, accountability or will-
ingness to include them in the decision-making process, they tend to express dissatisfaction, yet
shrinking over time and particularly over the last two years. Businesses across the region rec-
ognised governments’ efforts to digitalise public services, advance technological and innovation
capabilities, and enhance physical infrastructure, although the attitude towards such structural
issues has been maintained rather constant or at best improving sluggishly. The perception of
corruption is still high, and in some cases growing. Hence, upholding the rule of law should re-
main a prime concern of policymakers.
When it comes to trade and investment, Western Balkan businesses revealed a slight improve-
ment in their attitude to trade with and invest in the EU, as well as within the CEFTA region, despite
majority of companies – predominantly small and medium-sized remained stuck on the domestic
market. The latter reflects their low technological and innovation levels, which then determine
the low competitiveness for the global marketplace, even when seen through their inclusion into
the chains of the multinational companies operating in the Western Balkans. Yet, most of them
expressed confidence that their products were highly competitive on the European markets. Both
businesses and governments may reap the fruits of such confidence, if structural reforms are put
on an accelerated track to support the enabling environment for inclusion of domestic companies
into the global value chains.
CONCLUSIONS
On the structural front, the 2022 Barometer concludes that government-supported push is re-
quired in two other critical areas: innovation and labour markets. As mentioned, particularly SMEs
171
should be targeted with support to elevate their innovation capacities to be able to compete re-
gionally and globally. The labour market more intensively faced the problem of lack of adequately
qualified labour force, amid eased containment measures, which could be addressed only over
the medium haul through robust investment in education, training and activation programmes.
Related problems like gender gaps, stereotypes against Roma etc. will likewise benefit from such
measures.
172
NOTE ON METHODOLOGY
The Business Opinion Survey was conducted as quantitative research and data was collected by
using CAPI (Computer-Assisted Personal Interviewing) data collection method. The interviews
were carried out via direct, face-to-face interviews by trained interviewers from Indago-led con-
sortium of research companies between mid-February to mid-March 2022 in Albania, Bosnia and
Herzegovina, Kosovo*, North Macedonia, Montenegro and Serbia.
As a part of project set-up phase, some preparations and adjustments were undertaken as nec-
essary for the successful implementation of the survey:
Questionnaire
The survey questionnaire was provided by the RCC.
The Business Opinion Survey questionnaire was composed of 109 questions, including those on
business demographic.
The questionnaire was originally written in English and subsequently translated into the local lan-
guages. Since the CAPI methodology was used in the research, all questionnaires were converted
to a digital form and installed on interviewers’ laptops/tablets. The programmed questionnaires
were reviewed by a responsible person/national team leader in each economy.
Interviewers
The survey was conducted by experienced interviewers in all 6 (six) economies. All interviewers
were given written instructions containing general description of the questionnaire, method of
selecting a company and respondent selection method. In addition to the written instructions, all
interviewers were trained to understand research goals, interviewing method and eligible respon-
dent selection (a member of a company’s management board/team). Moreover, project coordina-
tors/national team leaders reviewed the entire digital questionnaire jointly with the interviewers
and emphasised some important elements (especially the need to read individual answers where
one or more answers were possible, etc.).
Sample
Business Opinion Survey was conducted among a minimum of N=200 respondents – business
owners, managers and senior executives, in each economy, with a total of 1,203 respondents for
Note on Methodology
the entire Western Balkans region. Companies in majority state ownership were not included in
the sample.
173
The survey encompassed:
companies of various sizes – micro (4 – 9 employees), small (10 - 49 employees), medium

(50 - 249 employees) and large (more than 250 employees),
various business areas (21 business areas according to NACE classification),
companies which are not majority publicly owned or by government,
companies established earlier than 2019.
Before the main part of the fieldwork, i.e., interviews with business respondents, Indago conduct-
ed two preparatory phases: company selection and telephone recruitment.
a. Company selection
The selection of the companies was performed randomly within various regions, sectors, sizes
and ownerships. Official data provided by national statistical offices of 6 (six) economies were
used as data source. The selection was completed before the first phase of fieldwork, enabling
interviewers to receive lists of companies to be contacted. The lists contained the company’s
name, address and telephone number and, in some cases, the name of contact person.
b. Telephone recruitment
The target group in the Business Opinion Survey were members of the companies’ managing
boards/teams. Considering the fact that persons in leadership positions have a lot of responsi-
bility and are probably very busy, telephone recruitment was organised. This was the first step of
fieldwork which increased the response rate and therefore led to a successful implementation of
the interviewing process. In telephone conversations, the interviewer presented the idea and the
objectives of the survey to the respondent and then attempted to arrange a face-to-face interview.
The interviewer needed to be very familiar with the project, but also to be eloquent, persuasive,
polite and persistent. Every telephone interviewer was obliged to contact a potential respondent
at least three times and arrange an appointment (except in cases when a person categorically
refused to participate in the survey). They needed to note down the scheduled date and time
clearly. Thus, the contact lists contained only relevant information; they were filtered and ready
for face-to-face interviews.
174
Sample Structure
Figure 201: Sample structure by respondent’s position
Albania 3 5 2 25 1 5 12 7 43
Bosnia and Herzegovina 3 01 19 3 17 2 53 2
Kosovo* 2 3 5 70 7 2 9 0
North Macedonia 2 0 50 5 5 8 26 2
Montenegro 13 01 41 3 6 35 2
Serbia 4 11 31 1 18 6 31 5
Western Balkans 4 11 33 3 13 7 29 9
0 20 40 60 80 100
Chief Executive Vice president Partner General Manager Finance Officer

President Owner/proprietor Director Manager
Figure 202: Sample structure by number of employees
Albania 26 58 15 2
Kosovo* 21 77 0,5 0,5
Serbia 41 30 24 5
0 20 40 60 80 100
Between 4 and 9 employees Between 50 and 249 employees

Between 10 and 49 employees 250 and more employees
Note on Methodology
175
Figure 203: Sample structure by largest shareholder
Albania 13 3 78 6 00
Bosnia and Herzegovina 47 31 11 3 6 2
Kosovo* 7 12 81
North Macedonia 22 13 62 1 0,5
Serbia 70 15 7 5 1 0,5
Western Balkans 48 16 29 4 0,4 2 0,5
0 20 40 60 80 100
Individual Foreign company Managers of the firm

Family Bank Employees of the firm
Domestic company Investment fund Other
Figure 204: Sample structure by business area
Albania 2 16 76 6
Kosovo* 1 16 78 4
Serbia 3 46 42 8
0 20 40 60 80 100
Agriculture, hunting, fishing and forestry

Industry, mining, construction
Transport, trade, tourism, catering industry, crafts, banking, public utilities
Education, science, culture, information, health and social protection
176
Figure 205: Sample structure by ownership
Albania 94 7
Kosovo* 99,5 0,5
North Macedonia 99 1
Montenegro 95 6
Serbia 93 7
0 20 40 60 80 100
Private foreign individual(s)/ company(s)/organization(s)

Private domestic individual(s)/ company(s)/organization(s)
Note on Methodology
177
Regional Cooperation Council Secretariat
Trg Bosne I Hercegovine 1/V
71000 Sarajevo, Bosnia and Herzegovina
T: + 387 33 561 700
www.rcc.int/balkanbarometer

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Publisher: Regional Cooperation Council

Tel: +387 33 561 700; Fax: +387 33 561 701

Authors: ACIT Centre & Finance Think

Editor: Bojana Zoric, Senior Policy Analyst RCC

Design: Samir Dedić

BALKAN BUSINESS SENTIMENT INDEX................................................................................29

PERCEPTIONS OF THE BUSINESS ENVIRONMENT AND ECONOMIC TRENDS.......................33

BUSINESS TRENDS IN THE WESTERN BALKANS..................................................................39

BUSINESS ENVIRONMENT IN THE WESTERN BALKANS.......................................................44

LEGAL AND REGULATORY FRAMEWORK..............................................................................76

TRADE AND INVESTMENT..................................................................................................103

INNOVATION AND TECHNOLOGY.......................................................................................122

FINANCIAL AND OPERATIONAL PERFORMANCE................................................................152

FOCUS ON LARGE COMPANIES..........................................................................................154

HOW MUCH OF AN OBSTACLE WERE THE FOLLOWING FACTORS?.................. 53

FIGURE 30 IN THE PROCESS OF OBTAINING LICENCES FOR YOUR BUSINESS,

FIGURE 54 DID YOU SWITCH TO MORE ONLINE/DIGITAL SERVICES DURING

FIGURE 55 THE REASON FOR SWITCHING TO ONLINE/DIGITAL SERVICES......................... 72

FIGURE 82 THINKING ABOUT OFFICIALS, TO WHAT EXTENT WOULD YOU AGREE

FIGURE 102 WHICH OF THE FOLLOWING REASONS BEST DESCRIBES YOUR

FIGURE 162 IN YOUR OPINION, DO COMPANIES LIKE YOURS HAVE A GENDER

Figure 1: Real GDP Growth in the Western Balkans 2008-2023

0 5.9 4.3 4.1

Albania Montenegro Western Balkan

Figure 2: Unemployment rates in the Western Balkans, 2010-2021

Albania Montenegro Western Balkans Average

Source: RCC ESAP 2 Observatory (https://www.esap.online/observatory/)

Figure 3: Balkan Business Sentiment Index (BBSI) - 2022

(Scores are on a scale from 0 to 100)

Figure 4: Balkan Business Sentiment index (BBSI) over time

2014 BBSI 2016 BBSI 2018 BBSI 2020/21 BBSI

a) BBSI – Present Situation Index

Figure 5: Balkan Business Sentiment Index (BBSI) – Present Situation Index

Figure 6: Balkan Business Sentiment Index (BBSI) – Expectation Index

Deteriorated Remained unchanged Improved DK/refuse

(All respondents - N=1203, share of total, %)

1 The figures might not add to 100% due to rounding.

Deteriorated Remained unchanged Improved DK/refuse

(All respondents - N=1203, share of total, %)

Decrease Remained unchanged Increase DK/refuse

(All respondents - N=1203, share of total, %)

(All respondents - N=1203, share of total, %)

Deteriorated Remained unchanged Improved DK/refuse

(All respondents - N=1203, share of total, %)

Bosnia and Herzegovina 3 17 45 30 4

Republic of North Macedonia 18 24 40 17 0

(All respondents - N=1203, share of total, %)

PERCEPTIONS OF THE BUSINESS ENVIRONMENT AND ECONOMIC TRENDS

Bad thing Neither good nor bad Good thing DK/refuse

(All respondents - N=1203, share of total, %)

Herzegovina North Macedonia Balkans

Decrease Mostly unchanged Increase DK/refuse

(All respondents - N=1203, share of total, %)

Decreased Mostly unchanged Increased DK/refuse

(All respondents - N=1203, share of total, %)

Bosnia and Herzegovina 10 50 38 2

Republic of North Macedonia 19 27 51 2

Yes - a lot Yes - a little No DK/refuse

(All respondents - N=1203, share of total, %)

Bosnia and Herzegovina 12 24 28 14 21

Republic of North Macedonia 15 38 24 19 5

Yes Not sure It is difficult but could be achieved with proper