Public Private Dialogue – Action Plan

Recommendations for the Improvement of PPD in Belarus

The Business community of Belarus wants to highlight the importance of the ongoing transformative process in Belarus into full-fledged market economies, which entails / generates both challenges and opportunities. The Business Community wants to work together with the public sector to improve conditions for growth and a more favourable business climate.

This transformation process and the implementation of necessary reforms can best be done by involving the private sector in the policy making process. We, the Business support and private sector organisations call upon the political decision makers to consider us as partners for the design and implementation of reform processes, strategies for economic development and regional cooperation.

Background Information

The content of state program documents and sectoral policy documents, as well as speeches of representatives of state administration, show that the development of the business climate in Belarus is one of the main topics of the economic agenda. So, since January 2017, a working group created under the Presidential Administration has prepared packages of documents designed to significantly improve the conditions for doing business in the country. This is not an innovation in the relationship between business and government.

For example, the Presidential Directive of the Republic of Belarus No. 4 of December 31, 2010 "On the development of entrepreneurial initiative and the stimulation of business activity in the Republic of Belarus". In addition, the program of social and economic development of the Republic of Belarus for 2016-2020 provides for the emancipation of the business initiative, simplification of administrative procedures and liberalization of supervisory and supervisory activities. Such norms are also contained in the National Strategy for Sustainable Development of the Republic of Belarus until 2020.

Formally in Belarus there are several types of instruments of interaction state and business:

- appeals;

- public consultative councils;

- business unions and associations;

- public discussion of draft laws.

For a real emancipation of the business initiative, it is necessary that these tools be effective, the subjects of management used them to interact with state bodies. After all, only if there is a feedback mechanism, the decisions made will correspond to the interests and expectations of the business, that is, they will be effective.

Legislation on Public Private Dialogue, Advocacy and Lobbying

The main document that defines formalized tools for interaction between the state and business is the Law of the Republic of Belarus of July 18, 2011 "On applications of citizens and legal entities." This document regulates in detail the rules of communication with state bodies and officials. The legal and regulatory framework contains the following mechanisms for communicating business with state bodies: Application (individual or collective application, proposal, complaint, stated in written, electronic or oral form); Personal reception; Direct and hot telephone lines of state bodies.

In addition, there are:

- public consultative councils;

- Associations and business unions;

- public discussion of draft laws.

Public- consultative councils allow directly or through representatives of business associations to receive or communicate information about the conditions of doing business. The legislation provides that the representation of SMEs and BMOs in the public- consultative councils should be at least 50%.

Channels of interaction between business unions and associations with state structures have not yet been determined. In addition, such organizations do not have the right to engage in entrepreneurial activities on their own behalf. Also, many large unions are associations of employers. However, there is no legislative act regulating the activities of such associations.

The Belarusian legislation provides for a procedure for public discussion of draft laws. According to the decision of the normative body (official), the draft regulatory legal act may be submitted for public (public, public or professional) discussion and posted on the website.

Existing PPD Platforms in Belarus.

The main stakeholders and providers of PPD are as follows:

In public sector:

State bodies. Two main state bodies are responsible for overall policy making in the area of SME support- at the national level, the Entrepreneurship Department of the Ministry of Economy and the sub- national level, the Regional Executive Committees.

Some other ministries, such as the Ministry of Foreign Affairs or the Ministry of Anti-Monopoly Regulation and Trade offer general information for entrepreneurs.

Certified business support providers. As of July 1, 2017, 94 Centers for supporting entrepreneurship and 23 small business incubators operated in all regions of the republic.

Technology parks and transfer centres.

Belarusian Innovation Fund.

Belarusian Fund for Financial Support of Entrepreneurs.

Development Bank of the Republic of Belarus.

In private sector:

SME. 107 thousand legal entities and 236 thousand individual entrepreneurs.

Private non-certified business development services providers.

NGOs and business associations. However, business unions represent no more than 7% of potential members.

Universities, research institutes and business schools. There are 52 higher education institutions.

International organisations. EBRD, IFC, WB, UNDP

Infrastructure for supporting SMEs:

35 public-consultative (expert) councils were created in the state administration bodies

33 units such as expert-advisory, coordination councils, working groups, which also include about 50% representatives of the business community.

Since 2011 (the year of the formation of the councils), 534 meetings of councils were held, 128 of them in 2016. (http://www.economy.gov.by/ru/small_business)

National Business Platform of Belarus.

For 10 years, 420 offers of the National Business Platform of Belarus have been accepted.

Of 87 items of the Platform-2016: accepted for consideration - 26 proposals, under consideration - 18 offers. The final version is given to the highest officials of all ministries and departments, the Council of Ministers, the President.

The draft of the Platform 2017 include 6 priority areas in improving the business climate in Belarus :

Fair competition,

Effective de-bureaucratization,

Regulatory optimization,

Institutes of inclusive development and growth,

Increased access to the property, assets and investments,

Responsible Partnering.

Total project NBP-2017 contains 86 comprehensive proposals aimed at improving the business climate in Belarus.

Situation of the Evaluation and Monitoring of PPD Processes

We can state the existence of a formed system of basic tools for interaction between business and the state in Belarus. These include public consultative councils, the institute of appeals, the activities of business associations and associations, and so on. Nevertheless, the situation in the sphere of public-private partnership does not promote the development of interaction and the formation of a full-fledged bilateral dialogue between business and the state for the following reasons:

1) These tools are relatively effective only as a supplement to non-formalized tools: calls, meetings, events, etc. Even the public consultative councils, which experts recognized as the most effective tool, are used, in most cases, to establish contacts and exchange information about the upcoming innovations.

2) Existing tools are not fully a feedback mechanism. Business can only convey its position (and not always successfully) on certain issues, but not be sure that this position will be included in the agenda.

3) Taking into account the previous two points, as well as due to limited organizational possibilities for using informal tools and the weakness of business associations, SMEs are de facto limited in their interaction with the state and representation of their interests.

4) There is a high level of dependence of the effectiveness of interaction between business entities and government agencies on the personal factor, which indicates that there is no single state policy on this issue

5) The low activity of the business in using the instruments of interaction is probably due to the poor performance of the Public Advisory Councils, appeals, public discussions, etc.

Within the framework of the survey conducted in the Republic of Belarus, the level of development of the dialogue between business and the state is 5.6 points (participants were asked to answer 11 open questions, and also to assess on a ten-point scale) http://liberalclub.biz/wp-content/uploads/2017/05/2017-05-06_LC_Research_Business-State.pdf

- BSOs/ BMOs :

There is no vertical and horizontal cooperation of business associations in the EU

Peculiarities of national legislation hampering development - prohibition of commercial activity; Mandatory registration of international technical assistance

No lobbing/advocasy institute, no change generation

About 7% SME involve in BMOs, membership base is reduced

Recommendations/Actions to be taken to improve PPD

· Improvement of the institutional framework for creating an enabling business environment and effective public-private dialogue, through refinement of existing, or the adoption of new regulatory acts.

-To organize a dialogue between business and government, it is advisable to develop a normative legal document on public-private dialogue;

- To determine the criteria for assessing the interaction between state- BSOs/BMOs - SMEs;

- To create incentive mechanisms for business entities to expand membership and / or support BSOs/BMOs, including sponsorship.

- To provide business organizations with the opportunity to engage in entrepreneurial activities in the framework of the implementation of statutory goals and objectives;

- To simplify the procedure for attracting international technical and foreign grant aid.

· Creation/further development of strong Business Associations (Business Membership Organisations)

· Create/Further develop/Support Sectoral association

· Create/Further develop Support Regional associations

· Enhance cooperation between Think Tanks, Academia and Business Association and the creation of valuable knowledge within the Business Associations

· Create a positive image of entrepreneurship, SME and SME Associations

· Support Business Association according to Quality Criteria, Potential and Sustainability

· Create an open discussion/dialogue climate towards Business Associations (SME Associations)

· Establish regular dialogue/consultation channels

· Establish dialogue/consultations channels on all levels of the public sector (region level, oblast level, national level, ministries, President)

· Implement confidence building measures and activities to enable open dialogue

· Enhance and ensure public-private dialogue for the equal participation of all relevant stakeholders, including the private sector organisations in the policy making process.

· Guarantee the revision of existing state regulations of economic activities based on the principals of effectiveness, limited intervention and focus on economic growth (smart regulation).

· Carry out regular SME needs assessments, facilitate SME access to business development services, support entrepreneurship.

· Install a system of impact assessment for draft laws (including laws concerning SMEs).

Create an independent expert group which assesses the impact of draft laws on SMEs (The SME test system/body could be an option)

· Establishment of a business ombudsman

· Improve public-private dialogue between fiscal and customs authorities and the business community for improving fiscal and customs administration, establishing uniform enforcement practices, and reducing the number of administrative procedures.

· Set rules for a quality PPD between BSOs/BMOs and the Public sector (organization of monitoring of SMEs' satisfaction with institutional conditions for doing business in the Republic of Belarus and assessing the quality of work of the BSOs/BMOs from the perspective of SMEs on the one hand, and from the position of the state on the other hand, as well as the effectiveness of public-private dialogue)

· Elaborate and implement a universally applicable tool for the measurement and assessment of the effectiveness and quality of public-private dialogue.

It is necessary to continue a series of events for representatives of BSOs/BMOs and government bodies in order to improve the level of training of specialists in public-private dialogue. It is also necessary to establish international cooperation in the field of public-private dialogue for obtaining up-to-date information on development trends, exchange of experience.

· Develop and implement a wide range of technical assistance programs targeted at BSOs, both private and public, to improve their capacity to provide regulatory, technical, consulting, and information services

· Reinforce the capacity building of both private and public sectors through training, exchange of experience and implementation of best European practices. E-learning could be a cost-effective variant.

· Donors and International Financial Institutions should bind financing to the quality of the decision making process (PPD) for projects.