Transmenu powered by JoomlArt.com - Mambo Joomla Professional Templates Club

says Vladimir Koryagin, head of the Minsk Union of Entrepreneurs and Employers. Here, he shares his views.

12/17/2007

Although Belarusian businesses are coming under heavier official pressure than their counterparts in neighboring countries, continued constructive dialogue with the authorities is possible. This is not an attempt to further selfish interests but to shape a self-sufficient business sector capable of staking a worthy claim both in Belarus and worldwide. 

- Business in Belarus is risky - a situation exacerbated by growing internal and external competition. New risks keep emerging. Criminal groups have mastered information technology and are driving up the incidence of unfair competition. Global problems, including environmental difficulties caused by climate change, are also taking their toll. A poor harvest somewhere can affect our domestic prices.

Official pressure on business is also growing, as the authorities seek to solve emerging problems at the expense of economic entities.

We have adopted a National Business Platform setting forth these challenges. 
For example, the absence of a functioning stock market forces Belarusian businesses to work with cash, whereas most Western companies use investment profits.
Another serious problem is the high cost of doing business. Belarusian companies bear an overly high tax burden of 52%; taxes should not exceed 30% if a business is to function normally.

Rents are unjustifiably high, up to 15 or 20 times the residual value of rented premises. Companies exhaust the working capital which should be invested in their development.
This leads to a lack of flexibility and makes production pricey. Belarusian businesses are losing their competitiveness and their assets. There is very little money in business right now; if privatization begins, there won’t be many Belarusian businessmen with sufficient funds to take part. We might suffer the fate of Hungary, where local business people own just 4% of property as privatization in this country began before Hungarian business got on its feet. 

The risks borne by company directors are so grave that companies often find it exceedingly difficult to fill these positions with suitably qualified people.

- The authorities and society are seeking to resolve many problems at the expense of business. Currently, about 50% of GDP is distributed through the budget, which stokes unrealistic expectations on the part of the population.
It should be noted that the country has not invested anything in developing business. Although there are business incubators and business support centers in Belarus, they can only accommodate hundreds rather than thousands of companies and individual entrepreneurs.

The authorities need to take systemic decisions to provide businesses with certain guarantees. Back in 2006, we offered to conduct open parliamentary hearings on private enterprise development in Belarus. However, our initiative went nowhere.

- Such a law is needed. Our union has contributed to the development of Russia's Law On Private Enterprise Development. 

It is an excellent document which comprises all our proposals; it identifies the role of business, with clear-cut criteria for small and medium-sized companies, and sets forth state support measures. It mandates that decisions to grant state support should be adopted in a transparent fashion to avoid ‘an old boy network’.

- In 2007, we did take an active part in the proceedings of the Council for the Development of Private Enterprise and our representatives were included in the working groups. We did not miss a single session and put forward more than 300 proposals. Although not all our initiatives were adopted, I believe this was a historic step. I am confident of it.
 
The authorities realized that business is capable of more than just furthering its own interests; it can also further those of the state. We managed to remove many obstacles and improve civil servants' attitudes to administrative reform. It was a revelation to them that these procedures were treated differently throughout Belarus’ various regions.
 
Unfortunately, we have yet to make headway with a number of issues, including the reduction of the tax load. Some ministries are immovable.

- We are currently working on the national platform for 2008 - a document which contains many proposals. Specifically, we intend to raise the issue of a tax reporting period. There are very few countries where taxpayers have to submit monthly reports to taxation authorities. We hope to see quarterly reporting periods.
We have also put together a licensing bloc. In 2007, we agreed to leave licensing issues aside but we can no longer ignore them, as they are causing too many problems. All ministry legislation and cabinet edicts dealing with licensing need to be streamlined to remove problem areas.

Another key issue is the need for the business community to be involved in drafting legislation. We need to introduce a mechanism allowing business people to familiarize themselves with legal drafts and put forward their proposals in a timely manner.
We certainly need to do more to overcome the divide in the business community. Although we have taken several steps in this direction, many entrepreneurs remain outside business associations.

- It should be noted that, in the future, profits will be the ultimate objective of business. Self-realization will come to the fore, which will be the foundation of a knowledge-based economy.

Globalization is king and the 21st century is the century of netocracy. We need to choose between integrating our business into the global network or creating our own. Otherwise, we’ll be swallowed up by others. Those who can accumulate sufficient capital will enjoy more freedom when it comes to selecting fields for their business endeavors.

Source: http://www.zautra.by/