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MODERN ECONOMY AS VIEWED BY THE YOUTH

1. Free market economy as a pre-condition of civil society

We believe that one of the most important characteristics of civil society is high economic freedom of the population. In other words, the existence of opportunities for anybody to be economically active and realize their abilities, knowledge, preferences and wishes, limited only by a clear-cut legislative, is an important indicator of what we call civil society.

At the same time, the characteristic in question can arrive only under certain political and economic conditions that guarantee the realization of the above. The most important condition is a developed institute of private ownership, little state interference in the economy, especially on the micro-economic level. Normally, state participation in the economy is limited to macro-economic activities and tax regulation. In our opinion, liberal open economies of most developed countries satisfy this definition the best.

The most important data that can help evaluate a country’s progress toward building an economy of this kind are statistics on the proportion of the self-employed or employed in small or medium-size business. Unfortunately, official statistics do not contain full and accurate data on this matter. In particular, data on private business in terms of demography, regional and field distribution are not available at all. Therefore, available opinion poll results are used.

The results of the most recent national opinion poll conducted by the IISEPS last March (1.666 people were polled, and the margin of error is no more than 3%) have demonstrated that only 9.3% of the respondents are employed in private business, of which only 4% are self-employed that is founders or co-founders of companies or sole businessmen (see Table 1).

Table 1. The respondents’ participation in the non-state sector of the economy (as percentage to the number of people in the relevant group)

Employed:

09’98

03’99

Entire population

Young people under 30

Entire population

Young people under 30

In the non-state sector of the economy

9.1

12.8

9.3

15.4

Including self-employed

3.5

4.1

4.0

6.7

At the same time, 51.6% of the respondents are employed in state-run companies, agencies, or organizations. This ratio says that this country still has a long way to go towards civil society. However, there has been a tendency of moving from the state sector to the non-state sector, which is a positive development.

This tendency is especially characteristic of Minsk. As the data in Table 2 shows, the proportion of those employed in the non-state sector has been slowly, but constantly, increasing.

Table 2. Distribution of employees among Minsk’s enterprises with various types of ownership, %

Figure

1994

1995

1996

1997

All employees

100.0

100.0

100.0

100.0

In the state-sector

66.9

64.8

61.0

57.7

In the non-state sector

33.1

35.2

39.0

42.3

Collective ownership,
including:

25.0

25.3

28.1

32.2

– joint stock companies

7.7

9.1

10.3

13.0

– contractor-run enterprises

8.5

7.8

6.8

6.0

– public associations

1.0

1.0

1.0

1.3

– consumer cooperatives

0.5

0.5

0.4

0.4

– cooperatives

0.3

0.2

0.2

0.2

– industrial associations

0.1

3.3

4.6

7.4

– collective enterprises

6.9

3.4

4.8

3.8

Mixed and foreign capital,
including:

1.7

2.1

3.4

3.2

– mixed capital

0.6

0.6

0.6

0.2

– joint ventures

1.0

1.3

2.4

2.5

– foreign enterprises

0.1

0.2

0.4

0.5

Individual businessmen and private businesses

6.4

7.8

7.5

7.0

In 1994, 564.900 people that is 66.9% were employed in the state sector. By 1997, this figure decreased by 79.600 people to 485.300 people or 57.7%. The ratio of those employed in the state sector to those employed in the non-state sector changed from 2 to 1 in 1994 to 1.36 to 1 in 1997.

The gain of the non-state sector was 76.100 people, or 27.2%. The growth was reached mainly in joint-stock companies, economic associations, limited companies and companies with mixed or foreign ownership. At the same time, the number of employees at poorly managed contractor-run enterprises, cooperatives and collective enterprises decreased. As for individual and private business, a considerable fall by 3.100 people in 1996 and 1997 followed an 8.000 people growth in 1994 and 1995. This sector would develop better, if the state actively supported it. Still, there has been a strong tendency of labor migration from the state sector to the non-state sector in Minsk, which illustrates the above conclusions.

The increase in the number and proportion of young people employed in the non-state sector of the economy is an especially positive factor. Table 1 show that in six month the proportion of young people in the non-state sector of the economy increased from 12.8 to 15.4 per cent. At the same time, the proportion of self employed young people increased much greater, by almost two thirds.

Therefore, even basic analysis shows that, despite all difficulties, the development of the non-state sector of the economy as an element of civil society is progressing. The participation of young people in this process is increasing, which gives us a hope that this tendency will continue in the future.

2. Youth as an indicator of future development of the economy

As we already noticed in the bulletin (IISEPS News, #10, pp. 17-19), economic views of young people largely determine the tendencies of the country’s future economic development. Certainly, this is only a possibility, the realization of which will depend on a number of factors, including the activities of authorities, political parties and the third sector. At the same time, practical activities and day-to-day concerns have a significant impact on young people’s views. The dynamics of the latter helps to figure out tendencies of the society’s development more or less objectively. In this respect, the comparison of views of young people and, especially, young businessmen, to those of the entire sample, seems meaningful.

As Table 3 shows, economic preferences of young people differ substantially from those of the entire sample. If only two thirds of all the pollsters stand up for market economy, for young people the proportion is almost four fifth. At the same time, the youth prefers a liberal version of market economy with little interference of the state (about 50%). Young business owners, co-owners and self-employed entrepreneurs are even more supportive of the above type of the economy. Only slightly more than one fourth of young businessmen chose an economy with substantial state involvement. These data testify to the fact that practical participation in economic activities has a much more significant impact on people’s mentality than day-to-day efforts of the state propaganda.

Table 3. The respondents’ preferences concerning the type of the economy, % (from the 1999 survey)

Young businessmen demonstrate a more adequate understanding of the reality, which they learn through practice. If about one half of the pollsters in all groups stated the Russian economic crisis as a reason for economic problems of late 1998, 54.3% of young businessmen stated the policy of the Belarusian authorities as a reason, while among all the sample only 30.8% gave this answer (Table 4).

Table 4. The distribution of the respondents’ preferences depending on their age, %

Variant of answer

Entire population

Youth group (16-29)

Businessmen under 30

The reasons for economic difficulties of late 1998
– Belarusian authorities’ policies

30.8

39.3

54.3

– The economic crisis in Russia

50.0

50.1

54.3

– The world economic crisis

9.0

10.1

2.2

– Subversive activities by the Belarusian opposition

3.6

2.5

2.2

The changes in the respondents’ personal finances in 1998
– It improved

3.5

5.7

4.3

– It worsened

76.1

71.3

67.4

Preferences:
– A wide choice of goods of good quality at free prices

83.4

95.7

95.7

– Constant shortages and a narrow choice of goods at fixed prices

14.2

3.5

2.2

The state should regulate prices:
– Yes

69.3

57.9

32.6

– No

12.7

20.9

47.8

How have the conditions for private business changed in the last few years:
– The conditions improved

7.1

5.7

4.3

– The state regulation has become stricter

34.4

48.4

41.3

– Arbitrary actions by state agencies have become more often

24.7

31.3

52.2

– Responsibility and honesty by business partners decreased

7.5

6.5

8.7

– The purchasing power of the population decreased

38.2

37.9

43.5

What kind of company would you prefer to wok at:
– A state-run enterprise

58.7

37.1

6.5

– A private enterprise

30.0

52.4

78.3

Unlike the entire population, the proportion of young businessmen whose economic situation worsened in 1998 is relatively low, which testifies to the fact that this group of the population, despite all problems they face, adapts better to the economic conditions and will not give up their struggle for better wellbeing, thereby developing market relations.

Stands of young businessmen on other problems also differ from those of the entire sample. While the majority of the pollsters share the opinion that the state can and should control prices (69.3%), only 32.6% of young businessmen think so. Unlike the majority of the population, they clearly understand a contradiction that the majority ignores, and consciously prefer a wide choice of quality products at free-set prices (95.7%) to constant shortages and a small range of goods at fixed prices set by the state, which is normal for a Socialist economy. Therefore, in the area of price formation, business interests are more important for young businessmen than their consumer interests.

Despite the problems, created by authorities, young businessmen prefer to work in the private sector of the economy (78.3%), while the majority of the entire sample want to be employed by the state (58.7%). Only 10.9% of young businessmen are not satisfied with their work and want to quit it. One can assume that those businessmen has face insurmountable barriers for their business. This is confirmed by the answers to the question on the change of the conditions for private business over the last two to three years. 52.2% say that the pressure on the part of state agencies has increased, 41.3% complain of a stricter legislation on private business. Businessmen know what they are talking about, while the majority of the population base their opinion on rumors and assumptions.

Summing up the above, we can say that young businessmen are stronger than young people at large and have moved further toward market economy. They are aimed at market changes in the country, at greater economic freedom. They are real opponents of the official policy aimed at curbing opportunities for private business and increasing pressure on it.