East Invest 2 brings European know-how to the budding business support sector in Belarus

A group of people sitting and standing around an oval desk

The distinctive feature of Belarus from other post-Soviet countries, united by the Eastern Partnership, is the dominant role of the state in almost all spheres, including the national economy.

The basis of the national economy is controlled by state companies, and for a long time the private sector was given a secondary role. Zhanna Tarasevich, a co-chairman of one of the national business associations - the Business Union of Entrepreneurs and Employers named after M.Kunyavsky (BUEE), recalls, how 20 years ago, Belarus had even stopped the registration of commercial companies for a year and a half.

Although, Belarus still has some way to go, there has been an improvement of the business climate in the country over recent years. The first steps are beginning to be made, and East Invest 2 is part of this important transition. BUEE became a member of one of East Invest 2’s BSO Twinning projects, which provided the organisation with the opportunity to get acquainted with the experience of EU colleagues from Malta (Malta Chamber of SMEs-GRTU), and Estonia (Estonian Association of SMEs-EVEA). 

The history of BUEE began after independence and the transition of the Belarusian economy. The basis of the Union was state-owned companies that passed through a specific stage of privatization – known as ‘rental enterprises’, which is when the staff of the company and top management took over the assets by renting them and independently managing them. After that the enterprises were redeemed from the state and company shares were distributed among employees.

It's been a long time since BUEE has been limited to recruiting new members. And although there are not so many members, with about 150, these companies, which are both SMEs and large companies, provide jobs to more than 50 000 Belarusians.

All business unions put together only represent around 10% of the 30 000 SMEs in Belarus, according to Ms. Tarasevich. "There's still room for growth", says the representative of BUEE, explaining why one of the BSO Twinning goals was "strengthening the relations of business support organisations from the EU and the Eastern Partnership through the sharing of the best practices and capacity development". It was essential for BUEE to get more acquainted with the experience of European colleagues in membership development and apply these practices back in Belarus. BUEE has already achieved some success in this direction. The main source of funding of the association is through membership fees.

"At a certain point, we found that the Union was getting pretty stale in terms of membership. Yes, we are doing a great job, we are creating a "good product", but we do not have a good wrapper", said Ms. Tarasevich. "There was a period of time when we were a semi-closed structure that ensured the interests of its members, but did not advertise its activities. However, we see that today, this is not enough. And we began to look for additional experience. Recently, we have been looking not only at Russia, but also at the experience of our European colleagues."

Participation in the BSO Twinning has positively affected the image of BUEE within the country, which is essential for any lobbying organisation. For example, now in Belarus, the Union can partake in a formal process to assess the regulatory impact of new legal acts on the economy and business. Therefore, the knowledge of similar European experiences in this type of activity has strengthened BUEE’s capacities to engage in this process.

Estonia's experience in building a state with zero bureaucracy is also of much interest to BUEE. At the beginning of the year, the movement in this direction was announced in Belarus, with a working group created by the President on the topic. "Keeping in mind the experience of Estonia, we took the initiative, obtained views and business proposals, and prepared a lengthy document with suggestions to make changes and additions to about one hundred legal acts that will radically reduce administrative barriers", explained Zhanna Tarasevich. Thus, the European experience has provided us with a real tool to improve the business environment in Belarus.

New ideas, strategies and approaches that appeared in BUEE thanks to the BSO Twinning initiative, will be reflected in the new work programme of the Union, to be approved by the end of the year (2017). A long-term cooperation agreement signed between the three partners has been signed recently in Minsk, to continue cooperation beyond the lifetime of the project and ensure the sustainability of their work.

In order to bring the cooperation agreement to life, a Business Internet Portal, has been created, to facilitate interaction and exchanges. The Internet Portal will become an online platform for establishing business ties between Belarusian companies and companies from the EU. This is a concrete example of how the activities of East Invest 2 are growing into a sustainable, long-term, support system to SMEs.

"Thus, the effect of the BSO Twinning project will be felt not only by those who have directly participated in it, but also by all members of our business unions," remarked Zhanna Tarasevich, proudly.