Best Practice in the Development of Entrepreneurship and Smes in Countries in Transition: The Belarusian Experience

Best Practice in the Development of Entrepreneurship and Smes in Countries in Transition: The Belarusian Experience

Best Practice in the Development of Entrepreneurship and Smes in Countries in Transition: The Belarusian Experience

Best Practice in the Development of Entrepreneurship and Smes in Countries in Transition: The Belarusian Experience

Synopsis

This publication is adopted from the Forum on Best Practice in the Development of Enterpreneurship and Small and Medium-sized Enterprises (SMEs) in Countries in Transition: The Belarusian Experience. The meeting was held at the United Nations Economic Commission for Europe (UNECE) headquarters in Geneva, in October 2001. It includes the agenda, the papers that were presented, issues that were discussed, and a list of participants with their full contact information.

Excerpt

Mr. A. Kobiakov Deputy Prime Minister of the Republic of Belarus

During ten years of its independent existence, Belarus went through a difficult and sometimes contradicting economic transition. Basically, it can be divided into three periods. The fundamental features of the economic system and peculiarities of the current processes can be determined by the social and economic policy:

(i) The I period (1991 – 1994) the beginning of the market transformations under the
conditions of breaking the order and administrative system, centralised planning, breakdown of
the USSR and the liberal market euphoria.

(ii) The II period (1995 – 2000) surmounting the system crisis started, economic
transformation took place.

(iii) The III period (2001 onwards) overcoming the economic crisis, stabilization, and the
beginning of a stable growth.

Let us consider these periods and respective models of the social and economic policy.

The Attempt to Carry Out “Shock Therapy”

Being a member of the former USSR, Belarus was one of the most industrially developed union republics. The industry reached 40% in the GDP sectoral structure. In addition, the republic was mainly specialising in technologically advance and scientifically made products such as building machineries, metal works, chemical industry and oil chemical industry, electrical industry, etc. Belarus enjoyed guaranteed centralised fuel-energy deliveries and has great raw material resources as well as markets for its products in the former USSR. At the same time, the inherited economy structures as for example the industrial complex. It was created, mainly, for external deliveries of raw materials and highly delicate materials (coming first of all, from the Russian Federation). Thus, Belarus provides about 10–13% of its total needs in fuel-energy resources. In a number of leading branches (especially, in the machinery production complex) Belarus greatly depended on the deliveries of component items from the republics of the former USSR. Besides, the native production potential differed by technology gap, which resulted in high costs and non-compliance of the output products with the modern requirements. It is enough to point out that the depreciation ratio of the active part of fixed assets by 1992 made up 50% in industry, and 39% in national economy as a whole. Subsequently, all the above predetermined the first group of problems related to the transition of Belarus to the market economy.

The second group of problems is connected with the fact that the republic’s economy had for a long time been developed under the planned system of management that brought–in comparison to the Central European countries-to the complete absence of market mechanisms . . .

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