Private business still afloat

Deprived of access to foreign currency resources, today private businesses are hit the hardes by the crisis. However given the circumstances, the most popular adaptation to this environment is withdrawal rather than protest.

Chairman of Kunyavsky Business Union of Entrepreneurs and Employers (BUEE) Georgy Badei says, for the majority of businessmen in the country the devaluation of the Belarusian ruble against the US Dollar was not 56%, rather 250-300%, given very few have access to currency at the official exchange rate.

Individual entrepreneurs, most of them are engaged in trade and service providers, have insurmountable problems with the access to foreign currency needed to purchase goods and supplies. Prices for fuels and lubricants and spare car parts have increased significantly. The problems the entrepreneurs face force them to close down operations and close their businesses.

Ever since March Business unions invariably addressed the central authorities with requests and demands to stabilize the currency market and to ensure equal access to the currency for all economic entities. However there were no protests that followed such demands, unlike in the past, when business unions organized strikes and which sometimes resulted in half-measures by the government, facilitating business activities.

Entrepreneurs have not responded to the campaign „Social Netwroks Revolution” organized every Wednesday, regardless of the fact that many of them were forced to curtail their economic activity.

Minsk region

In Minsk oblast SMEs account for up to 30% of revenues. In some regions this figure is even higher. For instance, Deputy Chairman of the Borisov Executive Committe for Economics and Finance, Sergei Lagno said that SMEs generated 40% of the district budget.

In general, the SME situation in the Minsk region is satisfactory, with most problems occuring in the housing construciton industry and service providers.

In general, the SME situation in the Minsk region is satisfactory, with most problems occuring in the housing construciton industry and service providers.

For instance, driving schools repot a sharp decline in the number of those seeking to learn to drive and get a driving licnese in recent months. Housing constuction companies, including state owned ones, also complain about the reduction of the volume of construction.

The devaluation of the Belarusian ruble, rising prices and inflation increased families expences on food and other essential goods thereby reducing possibilities of spending on reparis, construction and real estate.

Gomel region

For the first time in the last 5 years the number of entrepreneurs in the Gomel region has ceased to grow. As of 1 July 2010, their number in the Gomel oblast has exceeded 30 thousand (30 022), and in the first half of 2011 according to the tax authorities only 28 320 of them provided contributions to the Gomel regional budget.

In January – June 2010 SMEs of the Gomel region accounted for about 2.4% of the total revenues, while in the first half of 2011 only 2.2%.

The issue of currency sources is accompanied by a heavy competitive pressure from the major retailers, expanding their activities in the area. In Gomel City only opened 3 hypermarkets and a few supermakets in the course of the year.

The reduced number of SMEs and their reduced activity resulted in decreased budget revenues. In January – June 2010 SMEs of the Gomel region accounted for about 2.4% of the total revenues, while in the first half of 2011 only 2.2%.

Mogilev region

Against the backdrop of the restrictions and failures by the government to regulate trade, Mogilev SMEs are in a stand-by position. About one third of small shops are closed. Most often it implies a so-called „forced vacation”, which is primarily associated with the ongoing financial crisis.

Grodno region

Grodno carriers have closed the most unpopular and unprofitable routs. Almost one third of firms and individual entrepreneurs were forced to leave for an undefinite summer break. Companies say they barely cover the maintenance costs: cost of spare parts, tires and repairs have increased by 3 times. Higher fuel prices also contributed to the increased costs as it accounts for 60% of the total cost.

Almost one third of firms and individual entrepreneurs were forced to leave for an undefinite summer break.

About 150 entrepreneurs have suspended their activities at the Grodno market “Korona” in July. It is about 20% of the total number of subtenants. Market management announced that they will not let entrepreneurs to go on ‘vacation’ any longer, as in May-June-July the number of entrepreneurs on ‘vacations’ doubled. As a result, 10% of the subtenants were forced to cancel their lease agreements. Today only 68% of the trading space of the market „Korona” is filled.