SERBIA Country Profile

Licences, Infrastructure and Public Utilities

Individual Corruption

In many regions, the practice of making 'extra payments' in the form of gifts to obtain services from municipal administrators persists.

According to the Transparency International Global Corruption Barometer 2009, only a few of the households surveyed report to have paid a bribe to the utilities services within the precedent year.

Business Corruption

Companies doing business in Serbia report that corruption is common in the processes of obtaining necessary business licences and permits. According to CMI Corruption in Serbia 2007, despite intended improvements, SMEs still experience irregularities and corruption when dealing with public officials. Problems are worse for those companies operating in smaller municipalities where public administration capacity is even lower and less developed than in the major cities. Of the business executives surveyed in the World Bank & IFC Enterprise Surveys 2009 almost a third expect to bribe in order to get an electricity connection while the numbers for those who expect to give bribes to get access to water and telephone connections are lower.

According to the Centre for Economic Reform and Transformation 2005, private companies in Serbia reportedly face greater constraints in obtaining business licences than state-owned companies do.

Political Corruption

A major corruption scandal occurred in 2006 when the prominent businessman, Bogoljub Karic, was charged with embezzling EUR 115 million in state funds while he was the head of the country's largest mobile telephone company, Mobtel. Ownership of Mobtel had been in dispute since 2000, with both Karic and the Serbian state claiming majority shares (see 'Tax Administration' in the Corruption Levels section).

According to Global Integrity 2008, regulators are commonly offered bribes in exchange for changing the regulatory plans for all kinds of projects, including industrial and residential. Bribes can account for up to 30% of the commercial price for the new flats, which are selling in Belgrade at prices ranging from EUR 1,500 to 4,000 per square metre.

Frequency

The World Bank & IFC: Doing Business 2010:
- It takes an average of 20 procedures and 279 days at a cost of 1,907.5% of income per capita to build a warehouse.

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives give government administrative requirements (permits, regulations, reporting) in Serbia a score of 2.2 on a 7-point scale (1 being 'extremely burdensome' and 7 'not burdensome at all').

The World Bank & IFC: Enterprise Surveys 2009:
- 18% of the companies surveyed expect to make informal payments to public officials in order to get things done.

- 12.7% of companies identify business licensing and permits as a major business constraint.

- Almost 18% of companies expect to make informal payment to public officials to get things done.

- More than 17% of companies expect to give gifts to obtain a construction permit.

- More than 11% of companies expect to give gifts in order to obtain a telephone connection, 29% for an electrical connection and 14% for a water connection.

Transparency International: Global Corruption Barometer 2009:
- 5% of households who had contact with registry and permit services in 2008 report to have paid a bribe.

- 2% of households who had contact with the utilities services in 2008 report to have paid a bribe.

- 12% of households who had contact with medical services in 2008 report to have paid a bribe.

EBRD & World Bank: BEEPS Serbia 2005:
- 16% of companies surveyed consider transportation to be a problem for doing business in the country.