Kateryna Bornukova, Academic Director at BEROC (Belarus)
In mid-September, the European Commission published its annual report on the EU4Business initiative, covering all EU support to SMEs in the six Eastern Partnership countries. The 2021 report provides detailed information on EU assistance across the program’s three priority areas: access to finance, business development services and the business-enabling environment. In 2020, the EU provided support to nearly 72,000 SMEs, a third of which are owned by women. This has resulted in over 50,000 new jobs and €1 billion in extra income generated by EU-supported SMEs in Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.
StrategEast has interviewed leading EaP experts to hear their thoughts on factors for SMEs’ growth in their countries. Here are the answers from the expert on Belarus.
According to the latest BEEPS survey, Belarusian companies consider access to finance the leading barrier to development. Indeed, Belarusian banks are only developing skills of working with non-state companies and SMEs, and the financial markets are underdeveloped. At the same time, the business development services and business enabling environment are also underdeveloped, and as the World Bank studies show, seriously hinder the development of innovative SMEs. While there is a network of Centers for Entrepreneurship Support (including in the regions), most of them do not provide any services beyond rent.
The most important structural barrier for SMEs development in Belarus is the lack of competitive neutrality. The dominance of state-owned enterprises in many sectors and their regulatory preferences hinder the development of SMEs and push them out to the sectors with few state-owned enterprises like IT. The successful growth of SMEs in Belarus requires not only further liberalization and better access to finance but structural reforms that would guarantee a level playing field for all the economic actors.
