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December 21, 2004, Minsk, Belarus
—The International Finance Corporation, the private sector arm of the World Bank Group, has launched a two-year technical assistance project in Belarus to reduce the regulatory burden on local small and medium enterprises (SMEs), with support from the Swedish International Development Agency (Sida).
SMEs in Belarus suffer from unstable and contradictory business laws and regulations. In this environment, the number of SMEs has stagnated in the last decade. Today, there are only three SMEs per 1,000 residents in Belarus, half the level of Russia and Ukraine and a third the level of Uzbekistan. According to a survey conducted by IFC in March 2004, 90 percent of Belarusian entrepreneurs believe that their business environment continues to deteriorate.
IFC’s Business Enabling Environment project will work to reduce the regulatory burden on the country’s SMEs and improve their access to information and business support services. The project will conduct annual surveys of regulatory and administrative barriers to SME development. IFC will draw on the findings to develop specific recommendations to the government on improving the business environment for SMEs.
To improve SMEs’ access to information, the project will set up an Internet-based platform, the Belarus SME Toolkit. The toolkit will provide entrepreneurs with the legal and regulatory information to help them comply with changing regulations, advise on ways to improve their business efficiency, and help them access financing to expand their businesses. The Internet portal will be modeled on a toolkit IFC developed in Ukraine in 2003 (
www.Vlasnasprava.inf
).
Speaking at the launch of the project, Jan Shadek, Swedish representative in Minsk, stressed that “economic changes are a priority in the Swedish government’s strategy for cooperation with Belarus. Sweden’s previous cooperation with IFC to support Belarusian SMEs was very successful and we are happy to have IFC as a partner in this new program as well.”
Christian Grossman, director of IFC’s Private Enterprise Partnership, the technical assistance program implementing the project, underlined that “IFC tries to leverage the work of individual projects by applying lessons learned in various countries. To date, IFC has implemented a range of similar projects in Russia, Tajikistan, Ukraine, and Uzbekistan. This experience will help ensure the success of the project in Belarus.“
Andrey Tur, Belarus’s deputy minister of Economy, said, “The government is interested in cooperating with solid partners who have qualified staff and who are capable of developing specific recommendations to modify legal institutions, improve the business environment, and boost the competitiveness of Belarusian companies. We see IFC as such a partner.”
The mission of IFC (
www.ifc.org)
is to promote sustainable private sector investment in emerging markets, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in transition and developing countries, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
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