BUSINESS OPINION SURVEY REGIONAL COOPERATION COUNCIL PRESENTS: PUBLIC OPINION SURVEY BUSINESS OPINION SURVEY REGIONAL COOPERATION COUNCIL PRESENTS: Balkan Barometer 2017 BRUSSELS, 9th OCTOBER 2017.

Balkan Barometer 2017 Vladimir Gligorov PUBLIC OPINION SURVEY BUSINESS OPINION SURVEY Vladimir Gligorov October 2017, Presentation of the results

P B Introduction RESEARCH AIM: The main objective of the assignment is to design, with RCC’s input, and execute a public opinion and business sentiment survey and produce another Balkan Barometer report. The Balkan Barometer report is envisioned to become an integral part of the SEE 2020 monitoring system. TARGET GROUPS - SAMPLES: Balkan Barometer Public Opinion Survey: n=8000 (1000 per each economy: Albania, Bosnia and Herzegovina, Croatia, Kosovo*, Montenegro, Serbia, The Former Yugoslav Republic of Macedonia and Turkey; 18+, nationally representative, two-stage stratified). Balkan Barometer Business Opinion Survey: n=1600 (200 per each economy: Albania, Bosnia and Herzegovina, Croatia, Kosovo*, Montenegro, Serbia, The Former Yugoslav Republic of Macedonia and Turkey; nationally representative for companies that are not state owned (in business more than two years and employ more than 3 employees); respondent: member of company management team. TIMING: November – December 2016 P B *This designation is without prejudice to positions on status, and is in line with UNSCR 1244 and the ICJ Opinion on the Kosovo declaration of independence.

Summary Steady rise of expectations, though satisfaction still low Not much of nationalism detectable, while rising importance of the EU market Regional integration favoured, though CEFTA and other regional initiatives not well known Infrastructure not an obstacle, need for better roads Social life relatively satisfactory, politics a burden The latter more as source of instability than because of widespread corruption Expectations are running against reality in 2017 and possibly in the next few years

Expectations ahead of reality B

Increased demand has not resulted in business expansion, the unemployment is still the biggest concern How has demand for your company’s products/services changed over the past 12 months? Has it deteriorated, remained unchanged or improved? (All respondents - N=1430, share of total, %) What do you think are the most important problems facing the entire SEE region at the moment? (All respondents - N=7026, share of total, %) P B Significantly higher than 2015 Significantly lower than 2015

Rising importance of the EU; however, there is more pessimism when it comes to the prospects of EU accession in the near-term Do you think that EU membership would be/is a good thing, a bad thing, or neither good nor bad? (All respondents - N=7026, share of total, %) P In general, when do you expect the accession to EU to happen? (All respondents - N=6021, share of total, %) P Significantly higher than 2015 Significantly lower than 2015

Consistent with growing outward migration, improved relations with the EU are favored for reasons of access to education and jobs P What would EU membership mean to you personally? (All respondents - N=7026, maximum two answers, share of total, %) Significantly higher than 2015 Significantly lower than 2015

EU integration has fewer supporters in the larger economies than in the smaller ones; regional integration favored Do you think that EU membership would be/is a good thing, a bad thing, or neither good nor bad for your company? (All respondents - N=1430, share of total, %) How important is the quality of regional cooperation in the SEE to your business? (All respondents - N=1430, share of total, %) B B

B B Still, CEFTA and other regional initiatives are not well known What percentage of your company’s sales are made domestically, exported to the SEE region, to the EU or to the third countries? (All respondents - N=1430, share of total, %) To what extent do you think that you are informed about the regional free trade agreement (CEFTA 2006)? (All respondents - N=1430, share of total, %) B B SEE

Roads are used the most, infrastructure still less than satisfactory Which mode of transport did you most often use when travelling outside of your place of residence in the past 12 months? (All respondents - N=7026, share of total, %) How do you estimate the quality of transport infrastructure and connections within your economy? (All respondents - N=7026, share of total, %, mean) P P

B B Infrastructure not much of an obstacle, need for better roads In what way the infrastructure in general (transportation and communication means, supply) impacts your business? (All respondents - N=1430, share of total, %, mean) Do you think that EU membership would be/is a good thing, a bad thing, or neither good nor bad for your company? (All respondents - N=1430, share of total, %) B B

Critical prerequisite for securing employment is knowing the right people In your opinion which two assets are most important for finding a job today? (All respondents - N=7026, share of total, %) What do you think is most important for getting ahead in life? (Comparison 2014/2015/2016, all respondents, share of total, %) P P   2014 2015 2016 Working hard 25 Having a good education 23 22 19 Knowing the right people 28 31 Significantly higher than 2015 Significantly lower than 2015

Social life relatively satisfactory, politics a burden, more as source of instability than because of widespread corruption To what extent do you agree or not agree that the following categories in your economy are affected by corruption? (All respondents - N=7026, share of total, %) How satisfied are you with each of the following in your place of living? (All respondents - N=7026, share of total, %, mean) P P SEE Significantly higher than 2015 Significantly lower than 2015

Political uncertainty and policy instability are the main obstacles to better economic performance. Can you tell how problematic are these different factors for the operation and growth of your business? Can you please rate each? (All respondents - N=1430, scores are on a scale of 1 to 4 where 1 means major obstacle, 2 moderate obstacle, 3 minor obstacle and 4 no obstacle, mean) B Major obstacles

Going forward 2017 turned out to be worse than expected Growth has slowed down in Serbia and even more in The Former Yugoslav Republic of Macedonia and also in Montenegro Political stability has remained elusive in most countries and regionally So, expectations, which were surging ahead of satisfaction, are bound to be corrected in the next survey

THANK YOU TO THE ATTENTION!