Entrepreneurial strike: benefits and risks for the government
On June 27th, a nationwide strike of entrepreneurs against pre-certification of goods’ sales in the Custom Union space was held in Belarus.
Entrepreneurs’ strike against the Customs Union rules provides the authorities with an additional argument in bargaining with Russia on economic preferences within the Eurasian integration. Simultaneously, independent and pro-active behaviour of entrepreneurs create a threat to the authorities, entailing harsh retaliatory sanctions against the protests’ organizers.
Belarusian entrepreneurs believe that the new quality certificate procedure for light industry goods sold in the Customs Union space is too expensive and unnecessarily increases their costs. In response, the Belarusian authorities have promised to delay by one year the introduction of certification, but they failed in settling the issue entirely. Following the strike, the protesters applied for a permission to hold a rally on July 15th in Minsk against the certification procedure.
In the authorities’ view, the situation has both positive and negative sides. The protest against the Customs Union rules and threats to exit the CU (entrepreneurs have already announced that they had started collecting signatures for Belarus’ exit from the CU) will definitely be used by the authorities in couloirs negotiations with Russia on broader economic and trade preferences for Belarus in the Eurasian integration (energy, industrial goods).
However, overly independent entrepreneurial activity - especially the street protests - is a threat to the authorities. In addition, the ruling group is not interested in additional players interfering with the negotiations with the Kremlin (entrepreneurs have already addressed the Eurasian Economic Commission to resolve the certification issue).
Potentially, the authorities will use the protesters’ arguments, and especially the threat to quit the CU while Moscow negotiations. However, public solidarity between authorities and entrepreneurs should not be anticipated because of the ruling group desire to maintain bargaining monopoly in the Eurasian Economic Commission.
Therefore, during the strike the authorities acted quite typical. After the protests they detained a number of independent media journalists who covered the event, as well as the strike’s organizer business association "Perspective" Chairman Anatoly Shumchanka, who was sentenced to five days in jail for holding an unsanctioned event.
The Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.