Advancing Kosovo Together
Total Page:16
File Type:pdf, Size:1020Kb
ADVANCING KOSOVO TOGETHER BUSINESS ATTITUDE AND LINKAGES SURVEY Potential for improvements of inter-ethnic businesses relations MARCH 2015 This report was produced for review by the United States Agency for International Development. It was prepared by USAID Advancing Kosovo Together implemented by prime contractor Chemonics International with input from the Berman Group. 1 2 Table of contents: I. INTRODUCTION 3 II. METHODOLOGY 4 III. POTENTIAL FOR IMPROVEMENTS OF INTER-ETHNIC BUSINESS RELATIONS 5 IV. SURVEY OF NON-MAJORITY BUSINESSES 7 1. Status of business 7 2. Barriers to growth 8 3. Customers and business linkages 9 4. Labor and employment 10 5. Business facility information 11 6. Public sector services 12 7. Overall impression 14 V. OVERVIEW OF KEY FINDINGS 15 VI. INTERVIEWS OF MAJORITY OWNED BUSINESSES 16 VII. ANNEXES: . Overview of presented investment project ideas . Business Attitude Survey form 3 I. INTRODUCTION In the course of December 2014 and January 2015 the Advancing Kosovo Together (AKT) Program completed a Business Attitude Survey in ten Kosovo municipalities with Kosovo Serb non-majority population. The structured interviews of owners and/or managers of (mostly) micro and small family owned businesses took place in Gračanica/Graçanicë, Novo Brdo/Novobërdë, Parteš/Partesh, Ranilug/Ranillug, Štrpce/Shtërpcë; Vushtrri/Vučitrn, North Mitrovica/Mitrovica e Veriut, Zubin Potok/Zubin Potok, and Zvečan/Zveçan. The objective of the survey was to provide the team of the Advancing Kosovo Together (AKT) Program with analytical information on the status, performance and future plans of target businesses. Survey items included the history and current status of the company, the nature of its business, labor and employee relations, business facility information, government services, and overall impressions of the individual municipalities as a place to do business. The aggregated results report includes answers of forty-eight owners and/or mangers of businesses that provide earning opportunities to almost two hundred people. Although a survey of forty-eight firms located in ten municipalities cannot definitively reflect the attitudes of the entire Kosovo Serb business community, these firms provided valuable information on current business environment, key trends and challenges. Additional interviews were conducted in February 2015 with several larger Kosovo Albanian- owned businesses focused on market linkages. The purpose of these surveys was to complement the findings from the Business Attitude Survey and identify the opportunities for linkages between Kosovo Serb and Kosovo Albanian enterprises. This Business Attitude and Linkages Survey is one of a number of the Kosovo business environment and SME sector analyses completed over the past several years. We have taken into account the focus, methodologies and contents of four similar studies when designing our survey and processing its results to benefit from already existent knowledge / analysis while still keeping the specific focus of the AKT Program: An inquiry into economic situation of north Kosovo businesses / AKTIV (British Embassy in Pristina, German International Development Cooperation (GIZ), 2013). The study maps up the specific environment and situation of businesses located in four north Kosovo municipalities. It is based on interviews in 331 businesses and it does include larger companies. Report on SME in Kosovo 2014 / KOSME (Austrian Development Agency, Swiss Agency for Development and Cooperation and Ministry of Trade and Industry). The report is based on analysis of micro-data provided by Kosovo tax authorities and interviews in 743 businesses. The study covers all regions of Kosovo and provides analysis of 7 (sub) sectors of the national economy. Business Climate in Kosovo 2014 / EU Office in Kosovo and Association of Regional Development Agencies (ARDA). Comprehensive analysis of country’s overall business climate. The study is based on analysis of statistical data, survey of businesses (1000) and inputs from five focus groups. It provides thorough description of main barriers to doing business for each of the regions including legal & regulatory and infrastructure issues. Kosovo Sector Assessment & Selection Report / USAID EMPOWER, 2014. Sector selection study based on the macro-level analysis, site visits to selected businesses with standardized interviews and a dialogue with the key stakeholders. The report provides the 4 assessment of six high potential sectors of Kosovo economy and of the particular territorial environment of the four north Kosovo municipalities. Additionally, the Empower Private Sector Program focuses on supporting the following sectors: Wood processing, apparel and leather, ICT, Tourism, and Renewable Energy. The AKT Program’s Business Attitude Survey has focused on very small businesses in municipalities / communities with Kosovo Serb non-majority population to understand the specifics of business practice, performance and environment of (mainly) Kosovo Serb owned micro-enterprise. The knowledge built through this survey is to help identify possible interventions / assistance programs to the target group of very small businesses in municipalities / communities with Kosovo Serb non-majority population with a special ambition to encourage and facilitate the inter-ethnic business linkages. Larger-scale majority businesses were interviewed as identified by non-majority businesses or as potential businesses to create business linkages with non-majority businesses. II. METHODOLOGY The firms invited to participate in the survey were selected from the list of businesses located in AKT partner municipalities provided by the Project. The survey’s primary focus were Kosovo Serb owned micro and small businesses and a special attention has been paid to firms in northern part of the country. This is reflected in the geographic distribution of interviewed firms: Zvečan/Zveçan.– 11, North Mitrovica/Mitrovica e Veriut – 9, Gračanica/Graçanicë – 8, Štrpce/Shtërpcë – 7, Parteš/Partesh – 4, Ranilug/Ranillug – 3, Mitrovicë/a – 2, Novo Brdo/Novobërdë – 2, Vushtrri/Vučitrn – 1 and Zubin Potok/Zubin Potok – 1. The survey also included several Kosovo Albanian owned businesses as the inter-ethnic cooperation is critical for the dynamics of SME development in Kosovo. The owners or managers of surveyed businesses (those who make decisions) were asked to answer a set of 23 questions. The interviews were conducted by trained consultants of AKT subcontractor Berman Group, who used the same guidelines and surveys forms in all businesses. To encourage complete and frank responses from businesses, those interviewed were assured that the BAS report would not include references to specific firms and the survey forms would remain confidential. The completed survey forms were processed and data analyzed by AKT consultants. The forty-eight businesses interviewed have a combined total of 189 employees. Only two businesses have more than 10 employees and the remaining 46 fall into the category of micro- enterprises. Remarkable differences were found among responses of businesses in different sectors of the economy: primary (farming), secondary (food processing, wood processing, construction materials) and tertiary (variety of trade and services). We have analyzed much of our data using those sectoral distinctions. A group of 21 businesses with 67 employees located in northern part of Kosovo was also studied separately to see whether there are significant differences compared to the entire sample. In addition to the survey of the Kosovo Serb owned micro and small businesses mentioned above, we have completed interviews in owners or managers of 8 Kosovo Albanian owned companies that either had functioning business relations with their Kosovo Serb counterparts 5 or were mentioned as desired to do business with. The additional interviews were focused specifically on the existing and potential inter-ethnic business linkages of the firms surveyed to complement the Business Attitude Survey. Key findings of these interviews are incorporated in this analysis while the detailed results are available in a separate chapter of this report. 6 III. POTENTIAL FOR IMPROVEMENTS OF INTER-ETHNIC BUSINESS RELATIONS (CONCLUSIONS AND RECOMMENDATIONS) Micro-businesses play very important role providing employment opportunities to non- majority communities in Kosovo. Significant part of the surveyed businesses represents in fact self-employment and/or agricultural family households with very limited output traded on the market. In the harsh daily life reality, the basic function of these very small businesses is more social rather than economic and this fact is reflected in their strategy (if at all any), business practice and growth aspirations. Consequently, the segment of very small businesses can’t be realistically seen as a driver of the economic development and we do not expect these businesses to be active in creating and/or expanding inter-ethnic linkages beyond the existing, ad-hoc transactions. The very small businesses still deserve attention for their social function as well as a level of assistance designed to (1) help them perform the (self) employment role and (2) identify and support start-ups with potential and aspiration to grow. The Business Attitude Survey has also identified a group of “larger SMEs”. These businesses usually have five and more employees and supply significant part of their produce to the entire Kosovo markets (outside their municipalities).