EBRD plans further support for SMEs in Belarus
The European Bank for Reconstruction and Development is planning to implement five new projects in support of small and medium businesses in Belarus. Yet, the possibilities of bilateral cooperation between Belarus and the EBRD are limited because the Bank has refused to participate in public sector projects after the dissolution of the opposition protest in December 19, 2010. The implementation of political and economic reforms in Belarus is the key condition for increasing the Bank’s volume of operations in the country.
On 11 July, EBRD Director for Belarus, Moldova and the Caucasus Paul-Henri Forestier announced that the Bank is planning to implement five new projects under the program to support small and medium businesses in Belarus. This year projects in the field of information technologies, agriculture and services (network of shoe repair shops \"Yalina\") have already been implemented.
As of April 2012, the EBRD has invested 844.5 million euros while implementing 43 investment projects in the private sector of Belarus. The total value of projects, implemented with the support of the Bank, amounted to 1.175 billion euros. In 2011, the volume of EBRD investments in Belarus reached a record 194 million euros (see Figure 1).
Figure 1. Number of projects and the volume of EBRD investments in Belarus in 2001-2011.
In 2012 the EBRD will continue to support private sector development of the Belarusian economy. The bank is currently involved in negotiations with regard to the provision of debt financing and participation in share capital of private companies.
In the second half of 2012 the Bank will prepare a new three-year country strategy for Belarus, which will be adopted by the Board of Directors of the Bank at the end of this year. The current strategy of the Bank was adopted on December 10, 2009. Originally, the document provided for the possibility of cooperating of the EBRD with the authorities of Belarus in the sphere of privatization of state assets.
However, after the dissolution of the opposition protest on December 19, 2010, the Bank \"calibrated\" the existing strategy and refused to cooperate with the Belarusian authorities (including participation in government projects and cooperation with the state-owned banks).
Carrying out political and economic reforms in Belarus would allow to return to the previous plans of bilateral cooperation, and thereby significantly increase the volume of operations of the Bank in the country.
The Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.