Internationalization of Firms from Economies in Transition The Effects of a Politico-Economic Paradigm Shift
The Effects of a Politico-Economic Paradigm Shift
- New Horizons in International Business series
Edited by Mai Thi Thanh Thai and Ekaterina Turkina
Chapter 13: Enterprising families in a cross-border context: the example of Belarus
Friederike Welter, David Smallbone, Anton Slonimski, Olga Linchevskaya, Anna Pobol and Marina Slonimska
This chapter explores the nature of simple entrepreneurial cross-border activity in one of the harshest environments for entrepreneurship in the world, namely Belarus, where private business activity is tolerated rather than encouraged. As in other post-Soviet countries, following legislative changes in the late 1980s making it legally possible for non-state enterprises to exist, the early 1990s saw an explosion of entrepreneurial activity in Belarus, albeit in the absence of a comprehensive legal and institutional framework. Over the past decades, Belarus has made extremely slow progress towards a market economy because its government is not committed to supporting private entrepreneurship. The government has kept productive resources under heavy state control, and administrative regulations abound. Entrepreneurs face over-regulation as well as an expensive and complex system of controls and state inspections covering all aspects of business life. Moreover, regulations and laws governing business activities change frequently and implementation gaps exist, all of which increase the uncertainty business owners and managers face. Conditions for private enterprise worsened considerably after 1996, when the introduction of stricter state controls led to a decline in the number of private firms. The very slow pace of privatization, combined with an increase in and tightening of the regulation of small enterprise activity, forced many Belarusian enterprises into liquidation and others into operating abroad, mainly in neighbouring countries such as Poland, Russia, Latvia and Ukraine.
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