MOSCOW, January 25, 2008 Russian Public Opinion Research Center (VCIOM) presents information on how Russian entrepreneurs estimate the state of business environment in Russia.

According to the estimations of the majority of entrepreneurs, the business environment in their region does not fulfil its stimulating function and is rather an obstacle for the formation of new enterprises. Thus, 63% of respondents answer the question of whether it is easy or hard to start a business from scratch in their region with a negative tone (their score was lower than 4 out of 7), this includes 21% who gave the unambiguous answer of "very hard". Only 13% provide positive estimations on the issue.

The unfavourable character of the business environment for "null cycle" enterprises can be especially clearly observed when considering what possibilities companies from other regions have when entering the market of a new region. Even though the average score here is a little lower than the median value, it is still quite close to it (3.74), and though negative estimations do prevail over the positive ones, they do not prevail manifold (+28%, -39%). I.e. the competitive factor, the willingness of local enterprises to keep the "strangers" away from their market turns out to be a considerably smaller obstacle than the necessity of passing through all the procedures associated with starting a business "from scratch".

Among the different business environment factors the most balanced amongst the regions are relations inside the business community itself and the level of security and protection the business has against crime. The most common answer that entrepreneurs provided for this question was "The conditions are everywhere the same" (55% and 49% of respondents respectively adhere to this opinion), at the same time the response "It is better in our region" was more often given to this question than "It is better in other regions" (+22%, -8% и +28%, -8%).

Heterogeneity of the business environment on such indexes as the attitude that the authorities have towards business and resource availability (space, skilled workers, etc.) was considerably higher: when estimating these factors, respondents provided a considerable share of answers as "it is better in other regions", namely 22-23% of respondents answered that way.

Lastly, market size, the index of consumer demand turned out to be the most ambiguous component of the business environment: one third of entrepreneurs assume that the market in their region is worse than that of the other regions of Russia as far as this factor is concerned. Another third of respondents (31%) identifies that "the conditions are everywhere the same", whereas 27% specify that the situation is better in their region in this respect than in the majority of other regions of the country.

As for the most acute problems that Russian entrepreneurs have to face, the first place in this rating is occupied by insufficiency of skilled workers with all the rest of the problems lagging far behind (52% of respondents mentioned it, whereas 57% of entrepreneurs from large-scale business, industry and construction did).

The issue of relations between business and the state occupies the second place in the problems list. Problems of this type primarily have to do with the taxation policy (taxation rates that the respondents consider to be too high or ineffective tax administration as a whole); corruption being wide spread at all levels of power and nearly insurmountable administrative barriers. 42-45% of respondents mentioned these among the major obstacles standing in the way of any business. The disagreements voiced against the state mostly touch upon the interaction technology between the business and the state. They are joined by negative observations made by 16-24% of respondents and dealing with insufficient protection of private property and entrepreneurs' contract rights, inefficient public administration and legal system. At the same time, issues that have to do with the ideology of relations between the business and the state, i.e. political (un)certainty, presence/absence of clear goals and guiding lines of the country's development, cause much less concern in the business community.

The survey of 1200 Russian businessmen (owners and top-managers of private companies) was carried out in September - October 2007 in 40 constituent entities of the Russian Federation. The selection represents the enterprise community according to branch affiliation (based on three macro branches, i.e. the industry and construction; transport and communication; service and trade) and is proportional to their share in the national economy and the size of the enterprises (according to the number people employed).