By Dragana Peric

After the recent and probably not the last approval of the state help package for three more banks on the brink of disaster, the British Prime Minister Gordon Brown "has asked" these recapitalised financial institutions for just one change in their business policy. He wanted the small and medium companies to be their lending priority during the coming difficult year. Why? Not because the giant companies need less support than the dwarf ones but because small and medium enterprises have greater flexibility, possibility to reorient their activities if needed and bigger chance to find the small amount of money they need to become profitable again. In Serbia, on the other hand, small businesses, except good plans, have still not managed to have administrative obstacles removed by the authorities.

Similar to the American model according to which small and medium companies are one of the economic policy priorities, European Union countries also insist on their development. European entrepreneurship network consists of more than 500 organisations from all over Europe that enable future and already established entrepreneurs to get all the information on economic policy, funds, and possibilities for business founding.

The European Commission has founded this support service and last June Document on Small Companies has been adopted as a result of need for the small companies to be in the centre of the EU and member countries` economic policy.

Therefore, small British companies do not get all the aid packages directly from the state government. On the contrary. The aid usually goes through the EU institutions and its implementation is under the supervision of the state and European institutions. Priorities set by the EU are adjusted according to the member states` needs. Therefore, within each member state exceptionally important is the activity adaptability to the business climate.

Although grant can also imply partial tax exemption, the British Government limits workers` wages mainly to 5,000 pounds and in some cases earnings are allowed to be double if, say, pharmaceutical business is in question. At the annual level, European programmes include some 700,000 small companies and around 2.8 million of their employees. However, as an enormous problem the Europeans name impossibility of business recommencing, some 47 percent of the Europeans are interested to take part in.

New beginning is complicated thanks to bureaucracy and long period of bankruptcy declaration that can last for even nine years. Out of some 500 small companies` representatives who have taken part in the last Commission research, even 86.8 percent believe bureaucracy and administrative obstacles harm business. They also maintain education for business is inadequate.

In its recent research, The National Alliance for Local Economic Development (NALED) has found the same problems are well known also to the citizens willing to start business in Serbia. The World Bank has estimated that the medium company needs exactly 279 hours (52 percent more than in the OECD countries) to complete all needed for tax liabilities.

In order to obtain civic license for storehouse construction in Serbia, one needs 204 days, while in the EU countries this can be completed in 153 days. For completing all the necessary registrations for property rights one has to spend 111 days - four times more time than in developed countries.

The problem is even bigger thanks to too much money spent on administrative dealings instead of using it for those companies` productivity increase and therefore economy improvement of the country. Every year, through loans and subsidies, Serbia helps entrepreneurs with 20 billion dinars and more than ten percent of this amount is spent on just three out of many administrative liabilities - registration or withdrawal of employees, company headquarters change and tax payments confirmations.

According to the Centre for Advanced Economic Studies research registration or withdrawal of employees consumes 4.5 working days, i.e., averagely 11,791 dinars, meaning 1,434,000,000 dinars at the whole economy level. In order to fulfil all the needed administrative liabilities in the case of the company headquarters change six days are needed, 3,791 dinars, i.e., 69 million dinars at the country level. Finally, tax payments confirmations can be done in 2.5 days, 676 dinars or totally 336 million dinars.

Violeta Jovanovic, NALED Executive Director, says this organisation has received even 250 constructive citizens` suggestions for the procedures change. Ten among them have been singled out as the most urgent solutions.

"It is necessary to solve the problems entrepreneurs have regarding employees registration. We support founding of unique window at, say, National Employment Service where everything could be done during one visit and, certainly, electronic availability of all forms. It is also important for financial report to be submitted to one and not three institutions," suggests Violeta Jovanovic adding the National Bank of Serbia could further distribute the reports.

One of these suggestions has already been adopted in the Serbian Government and should be implemented in July. All the procedure regarding economic entities registration - probably the most important job - will be completed in one place - in the Economic Registry Agency. However, in NALED they think there are still many also important problems and unnecessary tasks to be coordinated.

"The biggest absurd is when the authority issuing certain document requests the same one during some other procedure. Not to mention agencies or branches of the same institution not being coordinated during arbitration or interpretation of the same facts. Therefore, the problem is reduced to the fact that citizens and businessmen service institutions," says Jovanovic.

In Serbian Agency for the Development of Small and Medium-sized Enterprises and Entrepreneurship, however, say that they are in direct contact with more then 10.000 enterprises, through financial support, such as non-refundable funds for advancement of business, and non-financial support - consulting, mentoring and info.

Despite the Agency`s staff underline that SME and entrepreneurs have available multiple help, in NALED it is considered that bureaucratic exemptions have to make priority since the whole country`s development depends on this. If Serbian Government finds no problem in financing economy and creating budget for businessmen aid, why would then administrative obstacles make the use of those resources impossible? Gordon Brown has realised in time many European citizens will be forced to self-employment in the year ahead of us. Those world conditions will not get around Serbia and paperwork slowdown could even contribute and make the unemployment bigger.