Исследовательский Центр ИПМ
Kasrtyčnicki Ekanamičny Forum

New legal acts package on encouraging private sector development vs needs of Belarusian business: Results of the small and medium enterprises surveys

The paper compares the assessment of the business environment drawn from SME surveys with progress in the Doing Business ranking and the measures envisaged by the new package of the normative legal acts on encouraging the development of the private sector in Belarus. The analysis revealed that the surveyed small and medium sized enterprises as a whole positively assessed the changes in the conditions of business registration, obtaining permits, and the implementation of administrative procedures. This corresponds to the results of the Doing business study, which finds that there was a significant reduction in administrative costs for business in Belarus. However, in other aspects of regulatory environment, there are differences in the estimates were done by surveyed SMEs and Doing Business reports. Thus, the business rather negatively assessed changes in the level of taxation, credit availability, and trade across the border, while the World Bank records certain improvements. Perhaps this is due to the fact that these improvements did not lead to a reduction in the tax burden for SMEs and did not making it easier to obtain loans. In addition, the negative perception by SME of business environment in the surveys was due to the deterioration in estimates of the such parameters as "lease terms", "tax burden" and "protection of property rights." They are not covered by the Doing Business ranking, but they have a significant impact on enterprises’ sustainability. The comparison of barriers that should be removed by the package of normative legal acts on encourage the development of entrepreneurship, with those indicated by SMEs in surveys, revealed that some barriers identified by business will be further reduced (i.e. administrative barriers). However, very sensitive obstacles related to lease of property, tax burden, poorly functioning institutes and restriction of competition would not be affected by the package of normative legal acts on encouraging the development of the private sector in Belarus.

The publication is prepared under the support of the British Embassy in Minsk.