Index of Business Optimism: ‘Moderate Skepticism’

In May, 506 managers of private enterprises and individual entrepreneurs were interviewed about the state of the economy and business climate in Belarus. Based on the results, there was calculated the index of business optimism (IBO), Telegraf.by reports.

A bit above zero

The IBO equaled 0.14 (ranges within -1 to +1), which corresponds to the position of “moderate skepticism and a wait-it-out strategy,” which the Belarusian business is adhering to today.

Belarusian entrepreneurs today are more optimistic than pessimistic. This was stated by the initiator of the study, the Republican chairman of the Presidium of the Confederation of Business, Uladzimir Karahin at the presentation of the IBO on June 19. The survey was promised to be held twice a year. The second stage of the poll is scheduled for September, 2011.

No good expectations

According to the calculated IBO, today the Belarusian entrepreneurs do not have much joy from the perspective of the economy. Yet there is no strong disappointment in the sustainability of business in its market segment. There’s an increase in new orders, stable levels of physical volume of production and sales in certain sectors and market segments. However, small and medium business rarely plans to expand into new markets.

A wait-it-out strategy is prevailing and entrepreneurs tend not to dismiss workers, not to increase the debt liabilities, but tighten the work with their clients.

Trade’s feeling good, construction — bad

The survey showed that business feels more confident and optimistic in the field of trade and services today, while entrepreneurs in the construction and manufacturing sphere tend to take a more pessimistic position - primarily because of the limited access to credit and outflow of personnel. However, the shortage of professional staff is observed in all enterprises.

The analysis was based on answers to 10 questions, designed on the basis of the American and European experience.

The poll was carried out by regional business associations, while the analysis and calculations were prepared by the Center for Sociological and Political Studies, as well as employees of Mizes Scientific Research Center ‘Strategy.’

The study was supported by the Ministry of Economy, the National Statistics Committee and other bodies and organizations, said Uladzimir Karahin.

$700 per month is not the best idea

Uladzimir Karahin — together with Jaraslau Ramanchuk — also commented on the statement by Aliaksandr Lukashenka’s stating that the average salaries must be increased up to $500 in state sector and $700 in private sector.

The experts shared the opinion that Lukashenka’s remark was rather a suggestion than an order, noting that many businesses would have to close down, if required to comply with it.

At present, private businesses in Belarus struggle to survive as the government’s support is insufficient, said Mr. Karahin, BelaPAN reports.

It is easier for the government-sector to secure an increase in average monthly pay to $500 as ordered by Mr. Lukashenka, said the expert. Small businesses engaged in the private sector just do not have the springboard for any pay increases, the expert noted. Mr. Karahin said that private businesses are “barefooted today.”

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