Working Group Meeting on Small and Medium Entrepreneurship Was Held in Minsk

A working group meeting on the small and medium entrepreneurship was held in Minsk on 20 July 2012. The meeting was organized as a part of a series of thematic meetings in the frames of the “Clearing House” project and aimed at the discussion of problems and prospects for the development of small and medium-sized enterprises (hereinafter SMEs) in Belarus in line with European trends and standards of business conduct.

The participants of the meeting were representatives of organizations working in different areas of small and medium-sized business - large business associations (Business Union of Entrepreneurs and Employers named after Professor M.S.Kunyavskiy, Republican Confederation of Entrepreneurship), research centers (Belarusian Economic Research and Education Center), centers and platforms supporting youth and women's entrepreneurship.

It should be noted that the US Agency for International Development expressed its interest in the meeting, and used the opportunity to present to the participants current and future programmes aimed at business support and development in Belarus.

The diversity of organizations represented at the meeting ensured a productive discussion about the current state of entrepreneurship in the country and the future prospects of its development.
Director of the Business Union of Entrepreneurs and Employers named after Professor M.S.Kunyavskiy Zhanna Tarasevich noted the achievements in the development of small and medium-sized business in the past 5 years:
- The share of small business in GDP has increased from 7.9% in 2005 to 15.7% in 2011, including medium-sized enterprises - 22.9% in 2011;
- The share of small enterprises in the investment in fixed capital reached 26.5% in 2011, and including medium-sized enterprises, is approximately 1/3;
- In the export of goods, the share of small enterprises increased to 34.2% in 2011, and including medium-sized enterprises - about 40% of the total export volume.
From the expert’s point of view, on the one hand, these trends demonstrate the potential of SMEs, on the other - the positive impact of liberalization policies and the development of entrepreneurial initiatives, as well as the effectiveness of organizational work done by local and regional executive committees.
However, there are a number of problematic issues in the development of SMEs, primarily related to the unwillingness of the state apparatus to foster liberalization, existence of outdated departmental management structures, as well as the lack of a comprehensive targeted approach towards the sector’s development.
Another speaker, adviser at the International Finance Corporation, invited as an expert, added a range of problems in the sphere of legal regulation, pointing out the instability of legislation and inconsistency of adopted legal acts in the sphere of small and medium entrepreneurship.
At the same time, the expert mentioned a number of already adopted decrees and directives that have allowed carrying out a number of necessary reforms and significantly improved the business climate in the country.
“At this stage, a targeted economic policy towards entrepreneurship, in our view, is consolidated and formulated in the provisions and requirements of the Presidential Directive № 4 “On the Development of Entrepreneurship Initiative and Stimulation of Business Activity in the Republic of Belarus”. However, in the course of implementation of the Directive, many of the prepared legislation acts and regulations have not been adopted and put into effect. Another problem is linked to the difficulty to identify which provisions of the Directive have already been implemented and which have not”, said Mrs. Tarasevich.
According to the experts, to effectively implement the provisions and requirements of the Directive it is necessary to use a targeted programme approach and focus on creating a competitive environment, protection and development of private property. In this case, the experience of the European countries and countries in the Common Economic Space, which have replaced support programmes for SMEs by the programmes supporting the creation of equal and fair conditions for all business entities and reduced tax burden, which contributes to the increase of competition and investment flows into the SME sector.
Experts’ presentations were followed by a lively discussion, during which the attendees of the meeting made a number of constructive suggestions for the development of the sector:
- To improve the legislation in terms of practical implementation of the adopted legislative acts;
- To specify the procedures for the application of administrative sanctions, making them more comprehensible;
- To strengthen the interaction between the government and business entities (public-private partnership in the development of programmes);
- To create pilot projects to strengthen business initiatives;
- To introduce European standards in the work of the business sector, making it more civilized;
- To create industry clusters and consortia;
- To attract international expertise in the field of investment;
- To train local authorities on the basics of business and entrepreneurship for them to acquire better understanding of the importance of SMEs and the benefits that business can bring for a particular area or region;
- To contribute to changing the public opinion about entrepreneurs;
- To train entrepreneurs in project development and proposal writing;
- To develop support programmes business-to-business.
The added value of the meeting has been in the exchange of information, initiation of new potential partnerships among the attendees and the invitation to participate in business projects and initiatives of each other. The participants were grateful for the opportunity to discuss the burning issues in their sector, discuss the prospective direction of the sector’s development, and to increase the network of contacts, which in future could create broad partnerships and contribute to the exchange of resources.