2021 Entrepreneurial Activity Review

The last time Belarus participated in a GEM survey was 2019. Since then, the country has undergone significant challenges, stemming both from COVID-19 and from political unrest. While it is difficult to calculate the cost of political conflict, COVID-19 has certainly contributed to economic hardship, as 55.6% of Belarusians reported their household lost income this year as a result of the pandemic. These factors may help explain the expansion of Belarusian early-stage entrepreneurial activity, which increased to 13.5% in 2021, up from 5.8% in 2019. Lost income and general economic uncertainty can drive some to entrepreneurship out of necessity. However, EBO also increased to 5.5% in 2021 (from 2.7% in 2019), which is a generally encouraging sign that at least some new businesses are surviving to maturity.

The expansion of Belarus’s entrepreneurial activity is somewhat paradoxical, as the general population does not appear to be enthusiastic about the available opportunities to start a business. This supports the idea that many early-stage entrepreneurs started their own company out of necessity. Only 25% of Belarusians said there were good opportunities to start a business where they live, lowest among GEM Level B economies. Of those respondents who did say they saw good opportunities, 56% said they feared the business would fail, highest among GEM Level B economies. These responses indicate strong pessimism around starting a new business in Belarus.

Entrepreneurs themselves were also fairly pessimistic in 2021. Among TEA respondents, 66.1% said it was more difficult to start a business than in the previous year. This was the third-highest rate of all GEM Level B economies. Similarly, only 30.4% of those TEA respondents agreed they saw new opportunities as a result of the pandemic, one of the lowest rates among GEM Level B economies. EBO respondents also had a fairly low assessment of pandemic-related opportunities, with only 19.6% agreeing with this statement. These responses indicate that current Belarusian entrepreneurs are not very confident about their future. This negative sentiment, in addition to the low opportunity perception among the general population, means the quality of entrepreneurship in Belarus will continue to degrade unless conditions improve in the form of policy and social confidence.

2021 Framework Conditions Review

Experts assessing Belarus’s framework conditions echoed the same sentiment as entrepreneurs and the general population. Most conditions were scored poorly, with a couple of exceptions. Critically, both financial and governance-related conditions were scored near the bottom of each condition compared to peers. Both Finance (2.6) and Ease of Access to Finance (2.8) received the lowest scores among GEM Level B economies. Similarly, the conditions Government policies: priority and support (1.7), and Government Entrepreneurship Programmes (2.2) were also the lowest scores among GEM Level 1 economies. Educational conditions received low scores as well. Cumulatively, these scores reflect a low investment and general lack of involvement in promoting high-quality entrepreneurship by Belarusian institutions.

Belarus’s highest-ranking condition was Commercial and Professional Infrastructure, which received a score of 5.6, placing it fifth amon GEM Level B economies. This indicates there is a relatively strong professional class within Belarus, and obtaining their services is affordable compared to other peer economies. This is fortunate, as many new businesses must turn to the professional class in the absence of government support for entrepreneurship.