About Small and Medium Business (SMB) in Belarus

Small and medium business in Belarus represents the sector of economy which gradually increase its contribution to the general economic growth. It exists in two forms: legal persons (small enterprises) and entrepreneurs without legal person formation (individual entrepreneurs). Small enterprises are enterprises with the average number of workers: in industry and transport - up to 100 persons; in agriculture and research-and-production sphere - up to 60 persons; in construction and wholesale trade - up to 50 persons; in other branches of industrial sphere, public catering, consumer services of the population and retail trade - up to 30 persons; in other branches of non-productive sphere - up to 25 persons.
Specific weight of the Gross Domestic Product (GDP) made by representatives of SMB in 2006 was 8.8 % (in 2005 – 8.1 %) in total amount of GDP. 8.1 % (7.6 %) of the goods and services of the total quantity; 7.5 % of total amount of production (works, industrial services); 10.2 % (10.1 %) of total amount of retail commodity circulation, including public catering; 23.9 % of total amount of the foreign trade turnover were made by representatives of small business. The part of small business in total amount of gain from realization of the goods, products, works and services in the national economy in 2006 has made 22.8% (in 2005 – 21.2%)
Small enterprises provide 22.8% of the total revenue from realization of the goods, works and services. 9.2% of the total number of the occupied population (taking into account holding of more than one office – 11.0%) work in this sphere of economy.
The quantity of small enterprises of all patterns of ownership for January, 1, 2007 has made 36217 enterprises, including 2022 country farms.
The enterprises of the private pattern of ownership making 91.8% of in the total ...

Small and medium business in Belarus represents the sector of economy which gradually increase its contribution to the general economic growth. It exists in two forms: legal persons (small enterprises) and entrepreneurs without legal person formation (individual entrepreneurs). Small enterprises are enterprises with the average number of workers: in industry and transport - up to 100 persons; in agriculture and research-and-production sphere - up to 60 persons; in construction and wholesale trade - up to 50 persons; in other branches of industrial sphere, public catering, consumer services of the population and retail trade - up to 30 persons; in other branches of non-productive sphere - up to 25 persons.
Specific weight of the Gross Domestic Product (GDP) made by representatives of SMB in 2006 was 8.8 % (in 2005 – 8.1 %) in total amount of GDP. 8.1 % (7.6 %) of the goods and services of the total quantity; 7.5 % of total amount of production (works, industrial services); 10.2 % (10.1 %) of total amount of retail commodity circulation, including public catering; 23.9 % of total amount of the foreign trade turnover were made by representatives of small business. The part of small business in total amount of gain from realization of the goods, products, works and services in the national economy in 2006 has made 22.8% (in 2005 – 21.2%)
Small enterprises provide 22.8% of the total revenue from realization of the goods, works and services. 9.2% of the total number of the occupied population (taking into account holding of more than one office – 11.0%) work in this sphere of economy.
The quantity of small enterprises of all patterns of ownership for January, 1, 2007 has made 36217 enterprises, including 2022 country farms.
The enterprises of the private pattern of ownership making 91.8% of in the total quantity of small enterprises.
According to the Ministry of Taxes and Tax Collection of Belarus, the quantity of the individual entrepreneurs who are registered in the rating authorities, on 01.01.2007 has made 191815, including 112961 payers of the single tax. In 2006 the quantity of individual entrepreneurs has increased on 13866 persons (8 %), and payers of the single tax - on 5210 persons (5 %).
For July, 1, 2007 the number of individual entrepreneurs in Belarus was 200.4 thousand persons.
The sum of tax revenues from individual entrepreneurs in January - June has made 340.5 billion BLR.
In comparison with 2005 it has increased by 119.5 billion BLR or on 22.6% also has made 646.8 billion BLR, including 232.9 billion BLR sum of the paid single tax.
The branch structure of small business is plural. On results of 2006 the greatest quantity of small enterprises is occupied in trade and public catering – 39.1%. 22.3% are concentrated in the industry, 11.7% in construction, 6.1% in an agriculture (including farms), 5.1% in transport from total of small enterprises.
The analysis of parameters of last years shows gradual changes in branch structure of enterprise sector. The quantity of small and average enterprises occupied in the industry has increased (from 5860 in 2001 to 8409 in 2006).
The industrial enterprises are the leaders of quantity of employed workers (37.1%) among total quantity of employed workers on small enterprises, on trading enterprises and public catering (25.1%), in construction (16.3%).

The industry
In 2006, small enterprises made production (works, services of industrial character) in total 5197.5 billion BLR or 7.5% from total amount of production.
Third of volume of the industrial output (made by small enterprises) is production of mechanical engineering metal working (31.3%), 14.3% - the chemical and petrochemical industry, 13.1% - the food-processing industry, 12.8% - wood, woodworking and a pulp and paper industry, 6.0% - light industry.
The highest rates of growth of volume of manufacture in the industrial output were observed in the industry of building materials (135.1%), chemical and petrochemical (129.1%), in mechanical engineering and metal working (124.4%).
The volume of manufacture of consumer goods in 2006 has made 1736.7 billion BLR and has increased in comparison with 2005 on 25.6% in SMB (in Republic - on 10.5%). Manufacture of articles of food by small enterprises in 2006 in comparison with 2005 has increased for 19.1% (in Republic – 11.3%), not food - on 32.5% (in Republic - on 9.8%).

Construction

The foreign enterprises most effectively work. The investments into a fixed capital on one small foreign enterprise in 2006 were 109.5 million BLR, on one small state enterprise – 60.8 million BLR, and on one private small enterprise – 33.2 million BLR.
More than 84% of budgetary investments fall at the small state enterprises, this is 71.2% from all volume of investments into a fixed capital on such enterprises. Own capitals is about 16.4%, credits of banks – 5.9%. Funds from foreign sources were not involved in these enterprises. On private small enterprises from all volume of investments into a fixed capital: 42% - own capitals, credits of banks – 17.8%, borrowing costs from other organizations - 17%, budgetary funds - 1%.

Trade and consumer services of the population

The volume of retail commodity circulation of the organizations of a trading network and the public catering, concerning to a category of small enterprises, has made in 2006 – 2087.8 billion BLR and has increased in comparison with 2005 on 33.9% (in Republic – 17.7%). 53.6% of articles of food and 46.4% of not food articles making a structure of retail trade. Part of small enterprises in total amount of retail commodity circulation has made 10.2%.

The volume of the paid services rendered to the population by small enterprises, has made 465.8 billion BLR (growth in the comparable prices for 21.1%, in Republic growth on 11.3%), including volume of household services in the comparable prices has made 118.4% (202.6 billion BLR).

The basic characteristics of the small and average enterprises

The most widespread forms of the organization of small and medium business in Belarus are unitary enterprise, or a society with limited liability that is connected to features of registration and formation of the authorized capital. The great bulk of the enterprises (45.6%) have quantity of employees not more than 50 persons. Only 1.2% of enterprises have quantity of employees less than 200. The largest enterprises (including with quantity of workers from 51 to 100 – 15.6% and from 101 to 200 – 4.9%) are represented in the commerce, industry, on transport and in sector of communication.
The greatest quantity of the small and medium enterprises in Belarus (63.7%) was made after 1996. Average age of employees in this domain is about 39.5 years. Experience of business activity of managers is about 9-10 years. 66.5% of founder- directors are men. As a rule leaders of Belarus small and medium business have the higher technical (34.4%), the higher economic (30%), and the higher commercial (6.3%) educations. More than 4% of them have two higher educations.
The state independence among heads of small and medium enterprises (SME) is beyond any doubt. 65% among them consider that Belarus should remain sovereign and build partner relations with Russia, 32% are sure, that Belarus and Russia should form the union of independent states, which are connected by political and economic relations. Only 3% of respondents insist that Belarus should become a part of the Russian Federation.
Even more Belarusian entrepreneurs support the idea of eurointegration: 69% of respondents consider that Belarus should aspire to become a member of the European Union while 31% have an opposite opinion. There are certain regional distinctions: 88% of heads of SME in Minsk area act for membership in EU, 81% - in Mogilev area, 74% - in Grodno area, 74% - Vitebsk area and 67% from Minsk.
In Belarus only 30% of population share values of a private property and necessity of realization for Belarus basic reforms of transition period (privatizations, liberalizations of the prices and foreign trade, opening of bank sector and sector of an infrastructure, etc.). 60% of employees from private sector share the same values. They trust in the proEuropean future of Belarus.

Source: the Ministry of Economics of Belarus www.economy.gov.by