Contents -- Acknowledgments -- Acronyms and Abbreviations -- Executive Summary -- 1. Overview -- Introduction -- Main Issues Reflected in the Report -- Data and Methodology -- The Structure of This Report -- 2. Access to Finance -- Financial Sector Developments in the Eastern Europe and Central Asia Region -- Data and Methodology -- Financial Constraints -- Firm Survival -- Understanding Foreign Bank Presence -- Conclusions -- 3. Infrastructure Bottlenecks -- Infrastructure in the Eastern Europe and Central Asia Region -- Data and Methodology -- Electricity: A Growing Concern -- Telecommunications Usage on the Rise, but Access and Reliability Remain Issues -- The Role of Regulation and Governance -- Conclusion -- 4. Labor: Challenges Ahead of the Crisis -- Recent Labor Market Developments in the Eastern Europe and Central Asia Region -- Data and Methodology -- Labor Constraints in ECA -- Responding to the Rising Skills Constraints -- Effects of the Crisis on Labor -- Conclusion -- References -- Appendixes -- Appendix 1. Technical Notes and Data Tables -- Appendix 2. Notes on Sampling and the Survey Methodology -- Appendix 3. Summary of Obstacles Doing Business -- Boxes -- Box 2.1. Effects of Easy Money -- Box 2.2. Fixed vs. Floating-Example of Bulgaria and Poland -- Box 3.1. Cost of Power Outages in Kosovo -- Box 3.2. Progress in Armenia's Telecom Sector -- Box 3.3. Weak Governance and Infrastructure Services: Getting Electricity in Ukraine -- Box 3.4. Transport Constraints Tighten Across ECA -- Box 4.1. Strides in Labor Regulations -- Box 4.2. Are the Trends Emerging from the BEEPS Data Consistent with Other Sources? -- Box 4.3. Wages and Productivity Increases: Do They Reflect Rising Skills and Labor Shortages? -- Box 4.4. Emigration and Brain Drain in ECA -- Box 4.5. Information Technology Use and Skills.

Box 4.6. Early Effects of the Financial Crisis -- Figures -- Figure 2.1. Liquid Liabilities as a Share of GDP -- Figure 2.2. Foreign Controlled Banking Sector Assets -- Figure 2.3. Access to Credit -- Figure 2.4. Foreign Claims as a Share of GDP -- Figure B2.1.1. Private Credit/GDP Change (2004-2007) vs. 2009 GDP Growth -- Figure B2.1.2. Change in Foreign Bank Claims to GDP Ratio (2004-2007) vs. 2009 GDP Growth -- Figure 2.5. Firm Perceptions of Access to Finance -- Figure 2.6. Demand for External Funding -- Figure 2.7. Predicted Probability of Access to Finance Being No Obstacle -- Figure 2.8. Predicted Probability of Applying for a Loan -- Figure 2.9. Predicted Probability of Access to Finance Not Being an Obstacle, by Current Account Deficit (Fixed Exchange Rate Regime) -- Figure 2.10. Predicted Probability of Access to Finance Not Being an Obstacle, by Current Account Deficit (Crawling Exchange Rate Regime) -- Figure 2.11. Predicted Probability of Applying for a Loan by Current Account Deficit and Exchange Rate Regime -- Figure 2.12. Predicted Probability of Firm Exit Based on Firm Size -- Figure 2.13. Predicted Probability of Firm Exit Based on Firm Age -- Figure 3.1. Electricity as No Obstacle, 2005 and 2008 -- Figure 3.2. Electricity as No Obstacle by Region -- Figure 3.3. Power Outages vs. GDP Per Capita -- Figure 3.4. Breadth of Power Outages -- Figure 3.5. Losses Due to Power Outages -- Figure 3.6. Losses Due to Power Outages by Income Classification -- Figure 3.7. Generator Use -- Figure 3.8. Telecommunications as No Obstacle, 2005 and 2008 -- Figure 3.9. Email Use vs. GDP Per Capita -- Figure 3.10. Email Use vs. Labor Productivity -- Figure B3.3.1. Duration of Procedures for Getting an Electricity Connection in Ukraine -- Figure 3.11. Outage Costs and Government Effectiveness -- Figure 3.12. Outage Costs and Control of Corruption.

Figure 3.13. Internet Access and Government Effectiveness -- Figure 3.14. Internet Access and Control of Corruption -- Figure B3.4.1. Transport as No Obstacle, 2005 and 2008 -- Figure B4.1.1. Labor Regulations vs. GDP Per Capita -- Figure B4.1.2. EPL Rigidity vs. Innovation -- Figure 4.1. Skills and Education of Labor as No Obstacle, 2005 and 2008 -- Figure 4.2. Skills and Education of Labor as No Obstacle by Income Classification -- Figure 4.3. Skills and Education of Labor as an Obstacle vs. Labor Productivity -- Figure B4.3.1. Productivity and Wage Growth in Poland 2004-2008 -- Figure B4.3.2. Productivity and Wage Growth in Ukraine 2004-2008 -- Figure B4.4.1. Workers' Remittances (% of GDP), 2008 -- Figure B4.4.2. Skills and Education of Labor as No Obstacle vs. Remittances -- Figure B4.4.3. Skills and Education of Labor as No Obstacle and Emigration of the Tertiary Educated -- Figure 4.4. Skills and Education of Labor as an Obstacle vs. Unemployment -- Figure 4.5. Skills and Education of Labor as an Obstacle vs. Unemployment of Tertiary Educated -- Figure 4.6. Skills and Education of Labor as an Obstacle vs. Unemployment of Secondary Educated -- Figure 4.7. Provision of Training by Region -- Figure 4.8. Provision of Training by Income Classification -- Figure 4.9. Skills and Education of Labor as an Obstacle vs. Provision of Training -- Figure B4.6.1. Firms Planning to Downsize -- Figure B4.6.2. Skills and Education of Labor as No Obstacle and Plans to Downsize -- Tables -- Table 2.1. Foreign Banks in ECA Countries during the First 10 Years of Transition -- Table 4.1. Employment Elasticity of Growth 2004-2008 -- Table 4.2. Cross-Regional Comparison: Labor Regulations and Skills and Education of Labor as a Major or Very Severe Obstacle, 2008 (percentage of respondents).

Table 4.3. Skills and Education of Labor as an Obstacle to Doing Business (relative ranking among 14 obstacles) -- Table A1.1. Regression Controls: Summary of BEEPS-Based Control Variables -- Table A1.2. Results from Probit Regression of Firm Exit on Enterprise Characteristics -- Table A1.3. Probit Models, Financial Constraints Analysis -- Table A1.4. Comparison of Balanced BEEPS Panel and Full Sample, BEEPS 2002, 2005, and 2008 -- Table A1.5. Regressions on the Effects of Power Outage Costs on Labor Productivity Based on Varying Firm Characteristics -- Table A1.6. Regressions on the Effects of Power Outage Costs on Productivity by Firm Productivity Quintile -- Table A1.7. Regressions on the Effects of High-Speed Internet Access on Firm Productivity Based on Varying Firm Characteristics -- Table A1.8. Regressions on the Effects of Email Use on Productivity by Firm Productivity Quintile -- Table A1.9. Regressions on the Effects of High-Speed Internet Access on Productivity by Firm Productivity Quintile -- Table A1.10. Regressions on the Effects of Power Outage Costs in Countries with Good Governance, Good Control of Corruption, and Good Government Regulation on Labor Productivity -- Table A1.11. Regressions on the Effects of High-Speed Internet Access in Countries with Good Governance, Good Control of Corruption, and Good Government Regulation on Labor Productivity -- Table A1.12. Marginal Effects of Generalized Ordered Logit Models of the Effects of Various Firm Characteristics on Electricity Perceptions -- Table A1.13. Regression Results for World Governance Indicators on Power Outage Costs and Access to High-Speed Internet -- Table A1.14. Estimated Power Outage Costs and Access to High-Speed Internet -- Table A1.15. Marginal Effects of Primary Variables on Labor Regulations as No Obstacle and Major Obstacle (General Ordered Logit Models).

Table A1.16. Marginal Effects of Primary Variables on Skills and Education of Labor as No Obstacle and Major Obstacle (General Ordered Logit Models) -- Table A1.17. Results of the Innovation and ICT Use Logit Models -- Table A1.18. Regression Results of the Training Logit Models -- Table A1.19. Regression Results of Labor Productivity Models -- Table A1.20. Regression Results of the Professionalism of Labor Model -- Table A2.1. Sample Summary 2005 and 2008 -- Table A3.1. Problems Doing Business: Ranking of Problems 2008 -- Table A3.2. Problems Doing Business: Ranking of Problems 2005 -- Table A3.3. Factors that are Not a Problem Doing Business, Percentage Point Changes and Statistical Significance.