Harbachou: 52 thousand entrepreneurs have left Belarus for 7 years

European Radio for Belarus: Has the state's attitude towards individual entrepreneurs changed for the recent year? Has it become more liberal?

Viktar Harbachou: The attitude of the television has changed. 2-3 years before the state media spoke about entrepreneurs critically, we often heard negative things and humiliation, like, entrepreneurs-grabbers etc...Now, frankly speaking, the media have changed the tactics with regard to entrepreneurs, within a year and a half or two years - they started praising us, saying that we are one of the categories of the population capable of overcoming the economic crisis, of unloading the storages…

This is why we are now more often addressed with such problems as unloading the storages, rendering of support - starting from charity ending in extension of someone's business outside the country.

So, the rhetoric became more pleasant for the ear, but has anything really changed in fact?

In fact everything remained more or less the same, apart from the only positive moment - introduction of the Decree No. 510 "On control activity", which helped to form a milder attitude of the control bodies during inspections, lessened the quantity of such inspections, made them more aimed, with big fines. 

This means, control activity decreased, but its quality increased, incomes to the state budget grew. The business is as much strangled as before, but more covertly... The court system remained the same as 2 years ago. At present moment, 98% of the economic court trials against entrepreneurs are hopeless for them.

Business continues to transfer its amounts abroad - there is even an increase in this respect. In the first place, our entrepreneurs transfer their businesses to Russia (80%), Ukraine, and Lithuania. They close the business here, or leave just a part of it, and transfer the main amounts to Russia. It has been like that before and the situation is still the same. 

Have the Belarusian entrepreneurs managed to adapt to the decree which allows them to hire only close relatives? If so, how exactly?

After the entrepreneurs were deprived from their employees, part of them went into hiding and started working in the shade. Approximately 15-20% of entrepreneurs, registered all over the country, conduct shade business, which is absolutely hidden and gives no income to the state budget. And it could have operated openly, could have been useful if there had been other conditions...

Thus, people have not lost their business; they are still working, aren't they?

Partly those who had no fear organized private unitary enterprises entered the big business. The point is, those who had many registered employees simply registered them as smaller individual entrepreneurs, authorizing them to be responsible for one part of the whole business or another.

The authorities claim they register 3-5 thousand entrepreneurs per year. But they are the same people who used to be employees and got fired. The entrepreneurs organized private unitary enterprises and returned 80% of the former employees. They registered them as individual entrepreneurs, so now they continue doing what they used to do before. However, it looks like a very optimistic number for the authorities - they can state, everyone is happy to become an entrepreneur. But let's not forget that people want to become entrepreneurs only in order to overcome the Decree No. 760.

Recently you have conducted a conference "Entrepreneur and the State. Reality and prospects", invited entrepreneurs and representatives of the authorities. Have you managed to agree on something? Has anything changed after the conference?

In the first place, a series of entrepreneur unifications and associations, unregistered and official, which failed to cooperate with each other before, came to understanding and established contacts. We work on legal acts, documents, suggestions to the authorities, together, and we are no longer afraid to negotiate.

We will organize appeal to the authorities and collection of signatures under the petition for economic amnesty of those entrepreneurs who are now in prison; there are 11-14 thousand of such people in our country at the moment. These are people who could be really useful, and some of them have terms bigger than the murderers.

We have a suggestion to organize collection of signatures to the president so he would not sign the law "On small and middle business", which was adopted by the Parliament in May. We claim it's not finished in all our messages. It states about the respect to an entrepreneur only formally, there's nothing concrete in this law.

Do we need such a law?

Definitely. We surely need this law, but not in such a format. There hasn't been any law of this kind for 15 years. For us, it is better to wait yet another year, but to involve real practical specialists-entrepreneurs.

Has there become more entrepreneurs this year? Last year the quantity of officially registered entrepreneurs reached 220 thousand. What about now? 

Today there are 226 thousand. The quantity of entrepreneurs has increased by 6 thousand. These 6 thousand, as I said before, are mostly those employees who got back. However, a part of the entrepreneurs are young people who have just graduated from universities and couldn’t find their place. They do not go to work somewhere but try to launch their own business, which is primarily connected with services – hairdressers, touristic companies, computer clubs etc.

Young people try to realize themselves in more simple spheres, which could be required in the West, in case they have a wish to go abroad. I know a guy who graduated from the university, worked in the touristic private company for a year, opened his own small company, saw there were not many opportunities to work here…And now he left for Czech Republic and works at one of the biggest Czech touristic companies. In 2-3 years he plans to open his own company in Czech Republic.

People got trained here – it is a good training, as the whole entrepreneurship is oppressed to such extent that we do our best to find the way out of hopeless situations, as a snake or an ant. So when a person comes to Russia, Poland or Czech Republic, where everything is transparent and free, where the legislation is clear – he becomes a leader.

Are there many people who go abroad and organize their business there?

 
Since the year 2003 52 thousand of entrepreneurs who had their own business hereleft Belarus. They haven’t just transferred their business to another country – they changed their living place, they went to the countries where they opened new businesses. And this situation goes on – people go away, wherever they can.

Statements that there is liberalization with regard to entrepreneurs are just statements. However, it’s not a secret that officials in the regions start more regular communication with entrepreneurs and associations. The authorities are becoming easier to contact.

What is the approximate number of potential entrepreneurs in Belarus today? How bigger could it be if there was more advantageous legislation and attitude in this respect?

Today we have 226 thousand officially registered entrepreneurs. Let us add to that illegal business, which works and could have registered if there was better legislation and climate. 50-80 thousand work illegally. So, we have in total 300 thousand, by now.

Nearly 800 thousand are so-called “guest workers”, in the first place, in the sphere of construction and building – they go to Ukraine, to Russia. Some are engaged intotransport services. A very big amount of our people is recorded in Lithuania, in Poland. Theoretically, we could bring these people back, with good attitude.

Would there be a million of entrepreneurs if there was advantageous business-climate? 

In case there are good conditions for business-climate within a year, we would be able to manage that another 300 thousand people become entrepreneurs. Thus, we would have 600 thousand in a year. If the authorities really kept their promises we would have a million entrepreneurs in 2 years, by the year 2012. It would have been a great impact and a whole economic boom, which would make any country jealous.

Taking into consideration the fact that we are used to brutal business operation, it would be a huge jump forward if the conditions are good.

This million of people who would be engaged in the sphere of entrepreneurship in 2-3 years would give a great push forward, attracting investments, as our entrepreneurs have plenty of contacts with businessmen abroad, but they do not invest here as they know how our officials treat entrepreneurs and how imperfect our legislation is.

At present moment I know people who are ready to invest in rural tourism. It’s a wonderful business which could provide much money. Tourists would go here – our nature is beautiful, we have wonderful lakes… Just don’t build electric power stations on the banks.

We can survive without them. If we invest the money we spent on atomic power stations into rural tourism, it will give more income than the whole atomic station. And then we will be able to buy electricity from Russia for the money earned on tourism.


Entrepreneurs keep complaining they are being oppressed… But, nevertheless, if we take their salaries, they are not that small – they are actually bigger than an average salary in Belarus.

Definitely, we shouldn’t keep it in secret. Those who tried the flavor of a successful life, who know how to earn money and where to invest, who count every rouble, are highly unlikely to return to the category of workers. The way of an entrepreneur gives more money, but we do work 24 hours a day, spending every minute thinking how to avoid bankruptcy.

Enterprises are supposed to fulfill the plan – 5-year, annual or quarter – to produce a certain quantity of details. And you must do that.

I have a worker, she says – listen, I’ve got amazing innovations which I could bring into manufacturing. So I ask – what prevents you from that? She says, the innovation should be registered and it takes 3-4 years, until it goes though the whole official circle. If you work for an entrepreneur, you don’t need to register an innovation – he can implement it on the next day.

Sooner or later, officials should understand that no state could possibly develop economically without entrepreneurs. Theoretically, there should be at least 40-60% of the population engaged into entrepreneurship. We have 10-15 % in this sectortoday.

Have the entrepreneurs started earning more during this year? 

No. Since the economic crisis started, the incomes of the entrepreneurs went down, not just by 2-3%, the incomes decreased several times. Now the entrepreneurs are trying to adapt to the world’s economic conditions, as well as to the needs and demands of consumers, who have what they have.

If a worker now has less money, I wouldn’t suggest him a Gucci shirt for 100 dollars – I will bring him a Chinese one for 3-5 dollars, and he is okay with that. Communal payments increased, as well as communication expenses, transport, and petrol. It affects us economically, so our incomes also decreased several times. However, at present moment the entrepreneurs adapted to the consumers’ needs, with, of course, lower incomes than 2-3 years ago.

However, we are still alive, and have our 500 dollars a month, as promised by the President. I am convinced that every entrepreneur earns at least 500 dollars a month and there’s nothing to hide. Not from the state – from yourself. While the President only promises the salary will soon reach 500 dollars, we do it. So all we need to do is stop talking and start earning.