Individuals able to manage their own businesses

One in five able-bodied Belarusians involved in small business activity countrywide

By Alexander Timofeev

All over the globe, few people risk running their own business. In Belarus, the share of those relying on business success is no smaller or larger than in other developed states, although opinion polls show that 40 percent of Belarusians are potentially ready to launch their own business. Of course, it’s no surprise that the actual number of people who realise their dream is smaller. Our countrymen have a strong desire to work for themselves and, once they become entrepreneurs, are not easily deterred; if one business fails, entrepreneurs prefer to launch something new.

Apparently, developed countries do their best to ensure that small businesses account for 60-70 percent of GDP, since smaller firms are more flexible, able to react to changing trends and pursue niche markets. Their advantage became truly apparent during the crisis years. Emphasis on larger businesses is probably best only in times of war.

Today’s industrial Belarusian economy is inherited from Soviet times, when large enterprises and monopoly niches reigned. Not long ago, the National Statistical Committee released its report: On Small Business Development in the Republic of Belarus. It notes that, by late 2010, the number of small enterprises had risen by 9 percent, reaching 84,000. However, the number of registered companies was about 12 percent more than those actually operational last year.

Fortunately, these ‘dead souls’ do not significantly influence the general situation, as the total number of workers employed by small businesses approaches 785,000 — around 20 percent of all able-bodied Belarusians. Interestingly, over the past year, the figure has risen by almost 12,000. The National Statistical Committee notes that 43 percent of small companies operate in trade, and in the repair of cars, household appliances and personal use goods. The processing industry accounts for 15 percent while about 11 percent of all small enterprises work in the sphere of property. Nine percent are involved in construction while another 9 percent render transport and communication services.

At present, small businesses account for almost 12.4 percent of Belarus’ GDP, playing the major role in retail trade — almost a third of all products sold countrywide are overseen by entrepreneurs. Their share in the total volume of investments into the basic capital rose to 27 percent in 2010 (from 24 percent in 2009) while contributing 34 percent of the total foreign trade balance (up 3 percent on 2009).

The state’s reliance on small businesses to occupy an active position in foreign trade has been mostly justified. However, there is room for improvement via increased sales. In 2010, small businesses exported $9820m of Belarusian products (against $7298m in 2009). However, they also began to purchase more from abroad.

The top trading partner for Belarusian entrepreneurs is the Netherlands, followed by Ukraine, with Belarus’ major partner — Russia — in third position. The UK, Brazil, Poland and India also buy Belarusian products, owing to entrepreneurs’ efforts. Small businesses are becoming highly profitable in Belarus, with most turning profits of 15.8 percent. Last year, the most profitable were those dealing in property (33.9 percent profitability), while those rendering financial services made 19.2 percent profits.

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