Infrastructural challenges are the most critical for entrepreneurs of the Odesa region

07/ 10/ 2022

To assess the conditions of doing business in wartime, the European Business Association conducted a survey among businesses in the Odesa region. The overall assessment of entrepreneurs slightly decreased – from 2.25 points out of 5 possible last year to 2.15 points this year. The vast majority of our surveyed entrepreneurs, namely 71% consider the current conditions difficult, and 14% of them – very difficult. Also, 29% refer to conditions for doing business as satisfactory (last year it was 44%). As in the previous wave of the survey, no entrepreneur said that it was easy to work. At the same time, 27% believe that the conditions have worsened compared to last year, and 14% - that they have not changed. The most pressing problems identified by entrepreneurs were difficulties with logistics and a decrease in the purchasing power of the population, as well as the outflow of staff abroad. Despite the difficulties, most companies, namely 71%, did not resort to relocating their business to other regions. Of these, 46% reported that they do not have such a need and 25% – that they do not have the possibility to relocate. Another 21% were forced to relocate their business abroad or to the western regions of the country. All companies report that they have suffered losses as a result of hostilities. At the same time, the results are divided in half, one half of the businesses estimate losses of up to 50% of income, and the other – more than 50%. None of the companies we surveyed made a profit. At the same time, 14% of businesses have branches, offices, or assets situated in temporarily occupied territories. How has the interaction of business with government agencies changed during martial law? We are pleased to see an improvement in the interaction between businesses and local authorities, which is reflected in higher assessments of their work compared to last year. Particularly, we are talking about interaction with the State Tax Service, city council, regional military administration, courts, National Police, recruitment and social support territorial centers, and regional customs. The majority, namely 71%, consider the level of development of e-services as satisfactory, and another 18% as good. Only 11% of respondents are dissatisfied with the quantity and quality of services, as well as the volume of administrative services and permits that can be obtained in wartime. Interestingly, this years data is better than last years figures. The companies plan to focus on maintaining operations under martial law, entering new markets, and optimizing the companys staff by the end of the year. To improve the business environment in the region, according to the survey participants, it is necessary to restore and preserve infrastructure, ensure transparency of legislation and equal rules of the game and introduce grant programs to support business. Among the most expected infrastructure changes are the restoration of the entire operation of seaports and the opening of borders. According to the business representatives, for the post-war development of the region, it is necessary to restore the production and creation of new jobs, attract investors to the region, and grant or credit support for businesses. Companies also expect the reconstruction and demining of infrastructure, unblocking of ports, and restoration of trade turnover. For reference: The survey was conducted among the member companies of the EBA South Ukrainian Office from August 15 to September 21, 2022. The general news is available at the link.

The vast majority of our surveyed entrepreneurs, namely 71% consider the current conditions difficult, and 14% of them – very difficult. Also, 29% refer to conditions for doing business as satisfactory (last year it was 44%). As in the previous wave of the survey, no entrepreneur said that it was easy to work. At the same time, 27% believe that the conditions have worsened compared to last year, and 14% – that they have not changed.

The most pressing problems identified by entrepreneurs were difficulties with logistics and a decrease in the purchasing power of the population, as well as the outflow of staff abroad. Despite the difficulties, most companies, namely 71%, did not resort to relocating their business to other regions. Of these, 46% reported that they do not have such a need and 25% – that they do not have the possibility to relocate. Another 21% were forced to relocate their business abroad or to the western regions of the country.

All companies report that they have suffered losses as a result of hostilities. At the same time, the results are divided in half, one half of the businesses estimate losses of up to 50% of income, and the other – more than 50%. None of the companies we surveyed made a profit. At the same time, 14% of businesses have branches, offices, or assets situated in temporarily occupied territories.

How has the interaction of business with government agencies changed during martial law? We are pleased to see an improvement in the interaction between businesses and local authorities, which is reflected in higher assessments of their work compared to last year. Particularly, we are talking about interaction with the State Tax Service, city council, regional military administration, courts, National Police, recruitment and social support territorial centers, and regional customs.

The majority, namely 71%, consider the level of development of e-services as satisfactory, and another 18% as good. Only 11% of respondents are dissatisfied with the quantity and quality of services, as well as the volume of administrative services and permits that can be obtained in wartime. Interestingly, this year’s data is better than last year’s figures.

The companies plan to focus on maintaining operations under martial law, entering new markets, and optimizing the company’s staff by the end of the year. To improve the business environment in the region, according to the survey participants, it is necessary to restore and preserve infrastructure, ensure transparency of legislation and equal “rules of the game” and introduce grant programs to support business. Among the most expected infrastructure changes are the restoration of the entire operation of seaports and the opening of borders.

According to the business representatives, for the post-war development of the region, it is necessary to restore the production and creation of new jobs, attract investors to the region, and grant or credit support for businesses. Companies also expect the reconstruction and demining of infrastructure, unblocking of ports, and restoration of trade turnover.

For reference:

The survey was conducted among the member companies of the EBA South Ukrainian Office from August 15 to September 21, 2022. The general news is available at the link.