Doing Business in the Balkans, 2006, www.seetv-exchanges.com

FULL TRANSCRIPT OF THE INTERVIEW WITH SIMEON DJANKOV, MANAGER AND CO-AUTHOR OF THE WORLD BANK ANNUAL REPORT: “DOING BUSINESS: HOW TO REFORM?”

00:00 On the business environment in the Western Balkans

“Well, the business environment around the world has improved substantially last year and some of the Central and Eastern European countries and the Balkans are among the best improvers. So Croatia, e.g. is among the top ten reformers in the world. Serbiaactually in the terms of positive jumps was the second largest reformer. It jumped by 27 points in the ranking. A country that is just outside the top ten reformers but has tremendous reforms is Macedonia. Overall the region is reforming faster than the world and some countries in it, Serbia, Macedoniaat this point are reforming faster than the others.”

00:40 What is the cause of the improvement?

“I think the pull towards the European Union, if you see the discussions both in Serbiaand Macedonia, and actually Croatiaas well, a lot of reforms are basically made in the name of over time joining the EU and that program seems to work quite well because these are the countries where you do see very significant reforms.”

01:01 On Bosnia and Herzegovina’s slowing down

“Bosniawas reforming quite a bit in the last 2-3 years but somehow in the last years some of the reforms didn’t quite stall but they’re much slower than they were in the 2or 3 years. I’m not sure what the reason is, you saw exactly the opposite happening in Macedonia. Macedoniafor a while in the last 2-3 years was slow and this year it started jumping and I think next year, we’ll see it probably in the top ten reformers, very tremendous improvement.”

01:27 On the effect of the slowing down of Stabilisation and Association process on the reform climate in BH?

“I think it could yes, because we’ve seen not only in the Balkans, but first in Central Europe, now in Eastern, with Bulgariaand Romania, basically being on time with the European Union, the various accession agreements have been really the single most mechanism to ensure that reform happens. And if there is some slow down, or doubts, I think it has an unfavourable not only political but also reform effect.”

01:56 On corruption in Southeast Europe

“It’s still the case but rapidly changing so I think we will stop talking about corruption or at least broad scale corruption in this region in the next 2-3 years. There are studies done by the World Bank recently that show very dramatic reduction in the perception of local business on corruption. And what’s interesting is that it’s in the same countries that are reforming very fast in business regulation. So, Serbiafor example, the corruption perceptions of local and foreign businesses dropped very dramatically, Macedoniawas number 2, meaning that there are rapid improvements there as well. So, basically, one of the good things about these kinds of business reforms is that it also reduces the opportunity to take bribes and give bribes. So, reformers rarely talk about this much, so it is the case that it is good for business but it is also good for the image of the country worldwide in terms of reducing corruption.”

02:52 On Macedonian government’s initiative to bring foreign experts

“I think we are going to see some tremendous improvement in Macedonia in the area of business environment over the next one or two years, I should note that even last year there were very significant improvements, and that there is a good reform program in place to continue and I think it is the right way to bring some people around the world and say what happened in the other countries that are successful and how can we do it there, so I think actually that it’s a great move.”

03:19 On Serbia

“Serbia even though it jumped in the rankings over the last year, this was mostly due to reforms that were done 2-2,5 years ago and now continue to have good effects. There is one very significant reform over the last year, which was the passing of the new customs code, which was the best reform in the world we say in that particular area. But I think other than that the reform has considerably slowed down there partly because of the elections and so on. And it’s yet to see whether it will quickly pick up again or whether it will be a bit like Bosniaover the last year: that next year we don’t see much happening.”

04:00 On Bosnia and Herzegovina

“Bosnia, I hope that this kind of let’s say quiet business reform changes very quickly next year. Again the government there had very ambitious agenda for reforms and managed to push it for the last 3-4 years so I hope that they go back to that reform agenda. Certainly it was not the case over the last year. The good news is that they do know. In terms of priorities, the government clearly acknowledges where they need to do more work. Now they actually have to do the work.”

04:34 On the interaction between political stability and business climate: which one should come first?

“It’s actually one interesting aspect of the Balkan region, which is, unlike most other areas in Europe and in the world, business associations or organized business is much less of a player in making easier regulations than it is elsewhere. I don’t know why that it is but if you look at some of the top reformers, Georgia, Romania, France, China, business associations are very active in working with the government, making proposals for reforms etc. In Bosniathat doesn’t seem to be the case, it’s not much the case in Serbia, in Macedonia, basically business is not that organized and certainly is not lobbying as much as we can see in other countries.”

05:16 Should business people be more included in politics?

“It’s certainly helpful and we did see it in other countries that have done successful reforms. I mentioned Serbiaand the new customs code, well the trade minister is a former business person who knows very well the paying of export and import. Georgia, number one reformer in the world: several of the key ministers: finance, economy are former business people. It certainly helps to basically move from business to government because you know in some sense how difficult it was to do business before. If you only have sort of bureaucrats, politicians who have traditionally been politicians, they can talk about reform but it’s unclear whether they actually know what reform will bring them. Generally, I think it is a good phenomenon, it happens a lot in central and eastern Europe and the Former Soviet Union that some businesses go to the government, at least for a period of time, they know best what’s necessary.”

06:12 Cutaways of Mr Simeon Djankov

06:40 Cutaways of fabricating euro coins

06:44 Cutaways of notes and coins (euros)

07:17 Cutaways of making of banknotes (50 euros)

07:25 Cutaways of 5euros

07:29 Cutaways of 10 euros

07:33 Cutaways of 20 euros

07:37 Cutaways of 50 euros

07:41 Cutaways of 100 euros

07:45 Cutaways of 200 euros

07:50 END OF TRANSMISSION