The Minsk Union of Entrepreneurs and Employers celebrates its 20th anniversary these days. Back in 1986 the Soviet authorities faced an economic crisis and decided to allow individuals to set up cooperatives. The Communist Party obviously underestimated the potential of the first entrepreneurs. Not only did they make a lot of money but also seriously weakened the totalitarian empire.
However, the fate of Belarusian business has been mostly sad and full of contradictions. After a short gulp of freedom in the early 1990s, it had to return to the conditions of aggressive socialism. Still, its situation today is not hopeless, as one could see at a presentation of the National Business Platform recently.
The first Assembly of Businesses was held in Belarus in February 1992. Vyachaslaw Kebich, the country's prime minister at that time, attended the forum and was welcomed by a round of strong applause when he announced that the government was going to change the tax system and create conditions for a market economy.
The Supreme Soviet (parliament) blocked market reforms at that time and defended advantages of a planned economy. Entrepreneurs did not want to be involved in politics and preferred to build relations with the cabinet of ministers. They were not ready to become a force that could become a catalyst of reforms in Belarus.
Two years later when the country got its first president, businesses had to pay for their indecisiveness, lack of consolidation and poor links with civil society. An era of stagnatory private entrepreneurship and flourishing nomenklatura-led business started. Belarus was quick to build oligarchic socialism. Screws were tightened stronger form year to year.
The main reason for the business community's defeat was that it chose a wrong strategy for achieving its objectives. Instead of presenting and defending common interests and working out common rules of the play in the market, different business associations got engaged into primitive lobbying. The promotion and protection of interests of all business was actually blocked. Businessmen who were close to the government took the place of lobbyists of 1992-1994 and did not need participation in business associations. Why would they need common rules if their success depended on their privileged position?
Interestingly enough, the idea of developing a National Business Platform comes from Uladzimir Karyahin, a veteran of Belarusian business movement and head of the Minsk City Union of Entrepreneurs and Employers. His association was the first to denounce the policy of lobbying and offer to the business community consolidation around specific demands intended to reach the government on behalf of all businesses.
For the first time in its history the Minsk Union of Entrepreneurs and Employers joined efforts with independent experts. The Stratehiya think-tank and the Research Center of the Institute of Privatization and Management were ready to offer their assistance. As a result of joint work, polls among more than 1,000 entrepreneurs and consultations with lawyers and economists, a National Business Platform was born. Its motto is "Business for Partnership and Responsibility."
The platform consists of six blocks, and each of them contains specific proposals from the business community to the government. The proposals are not about sectoral or individual benefits or privileges. The business community is now mature enough for having a common position.
The first group of proposals concerns the protection of ownership rights. The business body believes that it would be important for the country's development to abolish the so-called golden share, ban extrajudicial confiscation of property, introduce punishments for enforcing regulations retroactively and revise the existing system of fines and penalties.
The second part is about taxes. Business people suggest switching over to a one fixed VAT rate and 15-percent income tax for legal entities. They believe special tax treatment should be abolished for all sectors and enterprises, an electronic system of tax reporting should be introduced and principles of giving patents for microbusinesses and sole proprietors should be revised.
The third block deals with licenses and licensing procedures. From the viewpoint of the Platform, the partnership between business and government is possible only if licenses for retail trade and other types of commercial activities which are generally safe for the life and health of citizens and for environment are abolished. Business insists that the silence is consent principle should be used while issuing various licenses and permits. Businessmen also want to get rid of the requirement for notarial authorization of documents submitted for licenses. A shorter list of documents needed to get a license or permit, as well as longer licenses, is also an important component of a favorable business climate.
The Platform's fourth block is about inspections, fines and penalties. The business community would like to have the amount of fines from one company or sole proprietor to be limited: maximum 10 percent of the amount established to have been unpaid to public budget or maximum 10 percent of payroll. The Platform suggests reorganizing the State Control Committee, abolishing some powers of inspecting authorities, particularly connected with confiscation and extrajudicial seizure of assets. Moreover, business people would like to have a clear legal procedure of estimating and reimbursing the damage caused by inspecting authorities.
The fifth block raises the need for reforming the procedure of registering and closing down economic entities. Businessmen want to have simpler registration rules (in fact, notification of relevant authorities instead of registration). Finally, the business community wants from the government access to information and transparency. All laws, regulations and administrative decisions should be available in the Internet. Furthermore, the Platform suggests introducing a legal provision under which all government agencies should publish their balances and undergo annual audits.
There is a peculiar situation in Belarus after the recent presidential election. Alyaksandr Lukashenka calls for partnership between business and government. Belarusian business shows its vision of such partnership. For the first time in many years Belarus' business community has a chance for a dialogue with the authorities.
There is of course risk to miss it. Sectoral and individual lobbyists are not going to give up easily. The more business associations get together around the National Business Platform the more chances Belarus has for going from socialist planned economy to civilized market with minimal social and economic costs.