Will European Business and Institutions Bolster the New Trends That Have Appeared in Belarus?

emerging europe belarus outlook ebrd

Read the Outlook on Belarus special report

SMEs in Belarus
Facts & figures

In 2013, micro-enterprises represented 83% of all business units, small enterprises, 12%; and medium enterprises, 3%.

The number of micro-enterprises increased — from 62,000 in 2010 to 79,000 in 2013. Meanwhile, the number of medium-size enterprises fell from 2,800 to 2,400, respectively. This suggests that Belarusian SMEs face significant obstacles to growth.

In 2013, the share of SMEs in GDP amounted to 22.3%, a 2.5 percentage point increase over 2010.

Most SMEs operate in rather low productivity sectors: trade and retail, 39%; followed by manufacturing, 14%; real estate and business services, 13%; and transport and communication, 12%.

The report concludes that the SME sector remains underdeveloped, Belarus lacks a singe SME development strategy and that the sector needs robust monitoring and evaluation mechanisms.

source: SME Policy Index Eastern Partner Countries 2016

Marina Borovko

About Marina Borovko

Marina Borovko is Deputy Chairwoman of the European Business Association in Minsk and an Associate Professor at the Belarusian State University. So far, she has written more than 20 scientific works, co-authored a monograph and co-developed more than 10 methodological guidelines and manuals. In 2006 she became a Laureate of the President of the Republic of Belarus Award for PhD candidates of full-time tuition.

It’ll take at least a $1.5 worth of net foreign direct investment (FDI) to stimulate economic growth in Belarus in 2016. These words were said by Belarusian President Alexander Lukashenko, in his annual Address to the Belarusian Nation and National Assembly. A statement of this calibre would seem to be targeting European investors, given the EU Foreign Affairs Council’s decision to lift the bulk of the restrictive measures against Belarus. 

The Russian economic crisis has limited Belarus’ ability to tap into its traditional funding sources. China only gives tied loans and meeting the International Monetary Fund’s requirements is becoming more of a challenge. A new thaw between the EU and Belarus has set the stage for Belarus to make the quest for the EU and European Free Trade Association’s (EFTA) FDI a priority.

However, it is not just the thinning might of Belarus’ traditional financial patrons that is guiding this country towards EU investment. Belarus’ upper economic echelons are now welcoming a fresh batch of managers with foreign experience, who want to follow the path of reform and are determined to stand their ground. This trend’s future relies, among other factors, upon European business and institutions who are willing to bolster the aspirations of the ambitious, intelligent and hardworking Belarusians.

The last twenty-six years of independent Belarusian history has built an unusual system. It is a country in a “manual operation,” where the government has a more than eighty per cent share in the economy. However, at the same time Belarus boasts a range of cutting-edge productions and unique information technologies (EPAM, Wargaming, Viber, MSQRD) nestled in the Free Economic Areas and the High-Tech Park where private investors, foreign as well as domestic, enjoy a preferential status.

As an investment destination, Belarus’ key selling arguments are the workforce which is more skillful and cheaper than its Russian or Kazakhstani counterparts, as well as a viable productive capacity, a quality infrastructure, privileges for responsible foreign business, a developed banking system, political stability and low corruption. Now that the country’s president has made his unequivocal statement about the need to invest in Belarus, the moment for European investors to step forward has never been better.

Investments to diversify Belarusian export, to create 100 per cent private companies and joint ventures would be a win-win deal because such projects will receive guaranteed support from all authorities. State-owned enterprises are also desperately seeking potent European partners with the ability to transform backbone industrial enterprises into international type holdings whilst staying focused on the social priorities. Some of the items on the European investors’ potential to-do list are marketing Belarusian goods and improving the manufacturing quality of the high added value goods and services.

European investors are still likely to face some post-Soviet bureaucratic red tape which has developed new defensive mechanisms, however the situation is changing. The modern legal system in Belarus is helping to eliminate excessive paperwork. An emerging dialogue between the government, society and the private sector is proving instrumental in removing barriers for businesses and is building an environment that enables investment.

To be a success in Belarus, European investors would largely need to unite and vigorously promote their interests through a joint national platform — the European Business Association — as well as through other branch NGO’s.

_______________

The views expressed in this opinion editorial are the author’s own and do not necessarily reflect Emerging Europe’s editorial policy.

RELATED ARTICLES

A New Modern Mall Hopes to Draw Belarusians Back to the Home Market

RRY Capital

The Belarusian Banking Sector Moving Towards Modernisation Despite Some Challenges

Belarus Is Where the New Silk Road Heads For Europe

Belarusian Tech Companies Lead a Global Technological Advance in Outsourcing and Product Development

Innovation Brings Great Opportunities to the Belarusian Economy

OECD: Belarus Has to Find Its Own Belarusian Model to Emerge

Emerging Europe and the EBRD host the Outlook on Belarus conference in London

One Belt One Road: a Big Task for Europe

Falling Student Numbers and Declining R&D Result From Lack of Funds

The EU’s Benign Neglect of Eastern Europe

EBRD Emerging Europe Outlook on Belarus 2016

Belarus is Bringing Opportunities for European Companies

Great Stone

Using Words to Paint a Picture – Belarus’ Nobel Prize Winning Novelist

Brexit Is a Great Opportunity to Attract Foreign Investors to Belarus

The EU’s Benign Neglect Of Eastern Europe

The EU Is Encouraging Belarus to Join the World Trade Organisation

Brexit Makes Waves Across the European Union and Beyond

The Country Shows Promise but Needs Some Reforms

Belarus: The Importance Of Diversification

Emerging Europe Live: Life in Belarus As Seen by Foreigners

High-Tech Park in Minsk is growing rapidly

Outsourcing in Germany: Stop Talking at and Start Talking to

Belarus’s Election Tests the EU’s Global Strategy

Not All Quiet on the Eastern Front

The Next Four Months Crucial For the Belarus-EU Relations

Under Promise, Over Deliver: Prospects for the EU’s Eastern Partnership in 2018

Eastern partnership

The Deep Roots of Currency Crises in the Former Soviet Union

Office Space Vacancy is Currently Low but Building Standards Cause Concern

Minsk Belarus - March 23 2017 modern architecture business center Pokrovsky on Pobediteley Avenue editorial

New investors interested in Belarus’ Great Stone Industrial Park

IMF Believes State-Owned Enterprises Must Be Reformed

Image of the banknotes of new Belarusian banknotes five rubles put into circulation July 1 2016

Belarus Has To Make an Extra Effort To Change Investors’ Perceptions

More EU Help for Belarus SMEs

GRODNO BELARUS - DECEMBER 13 2013: Seamstress in textile factory sewing with a industrial sewing machine .

Business Mentors Helping to Solve Business Development Problems First

Portrait of confident business people interacting in the office

UK Shores: the New Frontier, a View on a Series of Fortunate Events

Belarus: MOST Builds a Bridge to the Future

Central And Eastern Europe At the World Property Market

Belarus: Changing Old Ideas And Mixing With the New in Belarus’ Export Market

Encouraging SME’s Development Will Help Build Belarusian Economy

Feel the Vibe of the City of Minsk

Trinity suburb in Minsk (Nemiga) Belarus on 20 May 2017

Breaking trade barriers with CIS has never been easier

Belarus is the most creative EEU country

The Reality Is More Interesting Than the Misconceptions

Young Well-Paid IT Specialists Are Making Belarus Known Internationally

A Strategic Asset for Regional Growth and Development in the EU

Pier bridge crane and cargo handling cargo trains transported away.

The Belarusian real estate market is on the up

The Belarusian Financial Sector: An Industry in the Process of Restructuring

The Proof of a Country’s Readiness to Attract Foreign Investors Lies in the Development of the Insurance Market

Putin Urges Belarus to End Oil Transit Through Lithuania

Athens Greece - May 27 2016: Russian President Vladimir Putin delivers

Belarus Is Ready to Begin With Venture Capital Investments

Belarus Has Set an Example for Others to Follow

The Belarusian Economy: The Challenges of Stalled Reforms

PandaDoc — Rolling Sales Procedures Together So Everyone Succeeds

Belarus and Singapore Share the Same Factors for Economic Success

Winds of Change for Belarus’ Reinsurance Industry?

The Great Stone Industrial Park — Making Doing Business Easy in Minsk

Foreigners choose Minsk and Gomel as Belarus’ most attractive FDI destinations

Long-time Neighbours Need to Share Awareness, Plus Trade & Investment

Belarus-Turkey Investment Forum to increase investment and trade between the two countries

Belarus: On the Way to a Market Economy?

Smart, reliable and promising

Belarus: Navigating the geopolitical storm

Belarusian Journalists Still Face Huge Problems

Germany and Belarus: Thinking Globally Acting Locally

Why Is Belarus Tech Booming?

‘No’ To a Monetary Union With Russia

Are Labour Shortages Driving Economic Growth?

Belarus’ Economy Is Slowly Recovering From Past Declines

Business Opportunities in Belarus Encourage Outside Interest

Will the New Five-day Visa-free Regime Encourage More Visitors to Belarus?

Lukashenka seeks to avoid commitment to Russia’s geostrategic goals

FocusEconomics: Belarusian Economy to Grow in Q4 2016 and Onwards

Foreign Investors: Belarus Offers Opportunities But Further Improvements Are Needed

Bringing Belarus’ Cultural Past to Life for Belarusians and the World

Belarusian Economic Recovery May Downgrade Intended Reforms for Competitiveness

Serbia, Belarus and Ukraine Ranked Lowly by Wharton Business School

Kyiv Ukraine - April 172017: The postal square in Kiev on Podol the Dnipro river. view of the square from the river panorama

EY: Belarus’ IT Scene Is Thriving

High tech park minsk

Is the CEE Region About to Steal the Outsourcing Crown From India?

Amazing view on the Taj Mahal in sunset light with reflection in water. The Taj Mahal is an ivory-white marble mausoleum on the south bank of the Yamuna river. Agra Uttar Pradesh India.

Belarus Is One of the Top Outsourcing Destinations of 2016

Rolling Sales Procedures Together so Everyone Succeeds

Coworkers

While the EU Makes Plans for CEE China Makes Investments

Nuclear Security Summit In Washington, 2016

HTP: Belarus’ Engineers Are Leading a Cool Revolution

Invest in Belarus: looking beyond politics to the future

The Shopping Experience Is Set To Go Global in Belarus from 2017 Onwards

Italy and Belarus: A Relationship Based on Complementarities and History

The UK and Belarus: A Partnership to Introduce the Real Belarus to Europe

Belarus Serves up Some Recipes for Success

Business in Belarus Recipe Book

Veni, Vidi, Vici, Or My Personal Experience of Doing Business in Belarus

Belarus and the EBRD:
Working to Expand the Country’s Strengths and Success

Germany Is Not Letting Belarus’ Small Downturns Put it off Looking for Investment Opportunities

Belarusian Economy on a Diet to Change its Financial Outlook

Belarus US Business Relations Thrive as Conditions Improve

From Denmark to Belarus — A Personal Experience of Business

Minsk International Airport Widens its International Reach

Belavia

21st century Manufacturing Arrives at Great Stone

Great stone

Cautious Upturn in Emerging Europe Haunted by the Spectre of Uncertainty

Donald Trump

Belarus 2020: Turning the Vicious Circle Into an Upward Spiral

The Eurasian Economic Union Fails to Bring Belarus Closer to Big Brother

Emerging Europe Live: CEE — The Outsourcing Destination

World Bank’s Doing Business Report 2016 Resume For Emerging Europe

The essence of the Customs Union is protectionism

Belarus Is Making the First Steps onto the International Finance Floor

“e-Belarus”: Embracing the Internet and its Possibilities

Leave a Reply

Your email address will not be published. Required fields are marked *