Minsk, May 31, 2005—The International
Finance Corporation, the private sector arm of the World Bank Group, released
the results of a survey entitled “Business Environment in Belarus” at
a presentation attended by high-level state officials.
The survey polled owners and top managers of 1,200 enterprises in six regions
of Belarus and the capital city of Minsk on a number of core issues regarding
the business enabling environment. The survey participants commented on
such points as business registration, permits, licensing, certification,
and government inspections of businesses.
Belarusian entrepreneurs had identified several positive changes that occurred
in 2004: the average number of licenses held by a company dropped from
three to two, the share of enterprises obliged to secure licenses declined
from 88 percent to 73 percent, and the portion of companies subjected to
inspections fell from 90 percent to 66 percent in the course of the year.
More than half of the survey participants stated that the business environment
considerably deteriorated in 2004. About 70 percent of the sampled
small and medium enterprises (SMEs) encountered difficulties while going
through administrative procedures.
Top obstacles entrepreneurs faced to register a business included that
the large number of state agencies involved in the process, a large amount
of mandatory paperwork, and a slow processing time. It took an average
entrepreneur 66 days and $746 to finalize a business registration in Belarus
during 2004. The procedure for securing permits also proved to be time-consuming
and costly. An average company among those sampled held about six permits
and spent 52 days and $230 to obtain one of them.
In the course of the discussion, the government invited IFC to develop
recommendations and provide assistance in improving the business environment.
A.Y. Likhachevskiy, director of the Private Entrepreneurship Department
of the Belarusian Ministry of Economy, said, “The survey results are of
interest to our ministry and the government, and they will be incorporated
in the development of a state policy on development of entrepreneurship.”
Ivan Ivanov, a manager of IFC’s Business Enabling Environment Project,
stressed that current Belarusian legislation contains a great number of
provisions hindering the development of SMEs. “We realize that all these
problems cannot be resolved overnight. IFC is prepared to contribute its
experience and knowledge to support the government’s efforts aimed at
improving the business environment,” he said.
The survey is a key component of IFC’s efforts to improve the climate
for SME development climate in Belarus. The project conducts annual surveys
of regulatory and administrative barriers to SME development and offers
recommendations on ways to ease the business settings for SMEs in Belarus.
The results of the yearly studies are presented to the government
to spur a constructive discussion of the factors inhibiting development
of small business in the country.
The International Finance Corporation (www.ifc.org)
is a member of the World Bank Group. IFC’s mission is to promote sustainable
private sector investment in transition economies helping to reduce poverty
and improve people's lives. IFC finances private sector investments in
the emerging markets, mobilizes capital in the international financial
markets, helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and businesses.
From its founding in 1956 through FY04, IFC has committed more than $44
billion of its own funds and arranged $23 billion in syndications for 3,143
companies in 140 developing countries. IFC’s worldwide committed portfolio
as of FY04 was $17.9 billion for its own account and $5.5 billion held
for participants in loan syndications.