What is the project about?

Main development challenges of small and medium-sized towns in Belarus are low living standards and lack of decent jobs due to low competitiveness of the local economy and high proportion of loss-making enterprises; increasing need to upgrade and reconstruct social and engineering infrastructure paired with the local budget deficit; challenged demographic situation, outflow of young and working age population to capital cities; disparity in male/female employment.

The project focuses on the promotion of employment/self-employment of the population in small and medium-sized towns through strengthening the external economic integration within the Eurasian Economic Union (EAEU) and promoting the socially-responsible approach in development of small businesses in small and medium towns of Belarus.  

Small business, which has the potential to create efficient jobs and absorb the excessive number of city-forming enterprises, is not sufficiently developed in the regions. In addition, a limited number of small businesses are able to integrate into the value chains at the national and international levels.

3 components of the project:

1. Introduction, development and promotion of socially responsible approach when creating and developing small enterprises in small and medium-sized cities of Belarus.

2. Establishing business incubators and providing support to their residents, including through the credit line of the Development Bank of the Republic of Belarus.

3. Creating favorable conditions for the development of production cooperation in small and medium-sized cities.

Main project activities:

1. Information and training activities on entrepreneurship and production cooperation to promote development of small businesses in small and medium-sized cities of the Viciebsk and Mahilieu regions, including:

• trainings on the basics of entrepreneurship (end of 2017 - 2018);
• educational visits to the Russian Federation to facilitate experience exchange;
• other educational activities (possibly in cooperation with business associations and interested enterprises).

2. Business incubators will be created in 5 pilot small towns in Viciebsk and Mahilieu regions (pilot areas will be determined).

3. The National Center for Subcontracting will be established on the basis of the Belarusian Fund of Financial Support to Entrepreneurs to organize business matchmaking sessions for small and large businesses. In particular, in 2017-2019 it is planned:

• to visit business matchmaking sessions in the Russian Federation for representatives of small and medium-sized businesses;
• conducting business matchmaking sessions in the Minsk, Viciebsk and Mahilieu voblasćs, with the participation of partners from Russia, Kazakhstan, etc.

Thus, the project will be implemented at three levels:

1.    The central (national) level ensures:

• coordination of the State authorities in charge of particular functions (social care, services to the unemployed, entrepreneurship development, provision of financial and credit resources, attraction of investments, etc.) as well as their cooperation with local government agencies and institutions, which support businesses in solving issues and developing small and medium-sized towns;
• necessary conditions to introduce innovative approaches and to implement experimental measures at the oblast/local level; improvement of legal and economic conditions for entrepreneurship development in oblasts;
• wide replication of the project results;
• data exchange, consolidation of efforts and coordination of activities with the Eurasian Economic Union (EAEU) bodies.

2.    Information level - a number of research, information and education activities focusing on entrepreneurship development training, introduction of different types of production cooperation and building into technological and trade chains (within the EAEU among other things) will be held to create favourable conditions for developing entrepreneurship in small and medium-sized towns. Selected small enterprises in small and medium-sized towns will be provided assistance in creating the development plans.

Small and medium-sized enterprises will be actively involved in cooperation processes by expanding the possibilities of outsourcing, subcontracting and franchising. The national subcontracting system in Belarus will be restored and integrated with those of the Russian Federation and other EAEU member states.

3.    At the pilot level,  in five selected towns in the Viciebsk and Mahilieu voblasćs shortlisted based on the results of the Regional Competitiveness Index of the Republic of Belarus in 2015[1] the project will assist to “match” the potential opportunities of small towns with the interests of large businesses and foreign investors as well as contribute to cooperation between small and large enterprises, domestic and foreign businesses, entrepreneurs, government and public structures.

The project envisages the use of the premises of the SOEs that undergo restructuring to establish production and service platforms / incubators for small businesses set up by the released employees.

[1] UNDP National Human Development Report 2015, “Regional Competitiveness in the Republic of Belarus”.