Updated at 14:13,22-06-2018

Before early spring Belarusian authorities will renegotiate contract with entrepreneurs in exchange for their political passivity

Belarus in focus

Before the parliamentary elections, the Belarusian authorities hope to seize growing discontent among entrepreneurs and their politicization through negotiations with mutual concessions on both sides. Yet the authorities have not offered the full package of concessions it will be prepared by the spring and will depend on SME protest activity. The opposition has once again failed to take advantage of tension between the authorities and the SMEs in order to build its human and financial capacity before the parliamentary campaign.

According to the estimates of the organisers, the anti-crisis Business Forum has attracted more than 1 500 people. The regular Business Forum serves as a mechanism for coordinating interests within business environment and elaborating mutual concessions acceptable for the state and SMEs. The most recent Forum was also attended by Trade and Economy ministry representatives.

The SMEs main requirements vis-à-vis the state include: enabling selling imported light industry goods without supporting documents, abolishing mandatory payment terminals, introducing a five-year moratorium on inspections and seizures, reducing rent fees, tax and penalty rates amid reductions in welfare and others. According to SME representatives, if the state does not reduce the financial pressure on SMEs, 120,000-140,000 jobs may be lost.

In recent years, tension between entrepreneurs and the state was often on the rise so as the state was tightening operating conditions for SMEs each year. The authorities often seized SMEs protest activity by delaying the introduction of restrictive measures. Nevertheless, the state consistently introduced new mechanisms of raising additional budgetary proceeds from SMEs.

This time, the authorities seem to be taking the SMEs basic requirement quite seriously to abolish the requirement of supporting documents for the sale of imported light industry goods. President Lukashenka said that the requirement would not be abolished: their honeymoon years will be over as of January 1st, they will have to work on equal terms and with supporting documents. That said, last March, when tension between the authorities and the SMEs was high, President Lukashenka visited one of the Minsk markets. Back then, after the meeting with entrepreneurs the president allowed to extend the terms of trade without documents until the end of 2015.

Meanwhile, amid the overall restrictive policy against consumer imports, the authorities may be less sensitive to the needs of SMEs importing light industry goods. According to Trade Ministry specialists, only about 13,000 entrepreneurs have not yet sold the remnants of the goods lacking supporting documents.

It is worth noting that the level of solidarity among entrepreneurs is quite low and their interests differ a lot. The state has learned to use such contradictions quite successfully when implementing its long-term SME strategies and disabling unnecessary politicization of their demands. In recent years, especially since the politicized street protests of entrepreneurs in the winter of 2007-2008, the state has concluded an informal contract with SMEs, according to which the parties committed to dispute resolution through dialogue and without street activity.

In recent years, the opposition parties and leaders have repeatedly attempted to use the SMEs discontent with the authorities actions and prompt them to closer cooperation. However, small business is not willing to join efforts with the opposition in order to defend its interests and prefers direct negotiations with the authorities and adapting to the new environment.

By early spring 2016, the authorities are likely to conclude a new short-term contract with SMEs, the terms of which will be developed through negotiations and will exclude political demands. The state, however, is likely to continue to introduce new mechanisms of milking the SMEs.