Businesses perceive themselves as partners

Enterprises need self-sufficiency to influence market and ensure harmony

By Vasily Velikhanov

It’s no secret that public business organisations remain weak in the country, including from a financial point of view. Most can only afford a modest office, the telephone bill and small salary for 2-3 full-time employees. However, business associations are finding ways to survive, elaborating wise proposals to improve business climate in the Republic. However, such work is being conducted on a voluntary basis, in free time. Meanwhile, branch regulations require daily strict analysis and control, with a staff of professional inspectors, offices, necessary equipment and allocated funds. At present, businesses cannot afford such expenses. Moreover, the branch authorities still prefer to keep market leaders in their ‘administrative hands’.

An interesting question recently arose at a session of the Entrepreneurship Development Council under the President: how much does one famous Belarusian sewing enterprise pay in membership fees to Bellegprom Concern? A set percentage of its products’ prime costs was the answer: it may seem small but totalled around 150,000 Euros last year. The figure is impressive so it seems inappropriate to question the benefits of a private firm’s membership of a large concern. Really, is it possible for a self-sufficient and successful enterprise to leave? From a juridical and technical point of view, there is no problem; however, everything is quite different in practice. Many manufacturers don’t dare to take such a step.

Many entrepreneurs understand that it’s vital to establish powerful public organisations, which can elaborate proper rules to aid the development of various businesses. However, few are in a hurry to finance such business unions. Professional business circles want to clearly understand the ideas, services and developments offered by a public organisation. At this stage, some contradictions arise: unions need funds for their normal functioning but businesses are only prepared to invest where they see a certainty of return. There are few risk takers in Belarus.

We always find some leaders distinguishing themselves in a particular sphere, with private capital taking an active part. These are surrounded by hundreds of medium-sized and smaller companies. For example, Milavitsa and Conte and some others are unrivalled in the light industry. Only 2,000 firms are involved in the manufacture of clothes and footwear. When branch associations are set up, some contradictions might arise between large firms and small companies. The latter can face problems in joining as equals, since they cannot contribute the same funds. This makes them fear that their ‘older brothers’ are promoting their own corporate interests exclusively under the veil of branch development.

At present, only one branch public association is successfully and efficiently functioning in the Republic: the Belarusian Association of International Road Carriers (BAMAP). Other similar organisations are either too weak or suffer from lack of funds or are under the influence of one major company, so only act as a voice for that firm, inspiring other enterprises to leave the association.

Really, the problem of business self-regulation could only be solved with the help of administrative resources at the highest level. Such organisations are natural rivals for branch ministries and departments; at best, they refrain from promoting each other — at worst, they can actually hamper. For example, the Chairman of the Entrepreneurship Development Council under the President, Vladimir Zinovsky, believes the ‘disassembling’ of some branch state structures is not a problem. “The Local Industry Concern was abolished and the industry as a whole was unaffected,” he notes. “Some enterprises have disappeared but many new manufactures have been set up in Belarus which are self-sufficient and effective; they could work better if constraining factors were eradicated.”

Clearly, political will is needed to activate public proccesses in the business sphere; this allows the re-distribution of some market regulations.

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