Regional advocacy groups are playing a role in helping small and medium enterprises (SME) navigate the rough waters of the country's business environment.
ers of the country’s business environment. That’s good news for the country’s growth since SMEs are traditionally the backbone of flourishing economies.
“These groups are really on the front line in terms of ensuring tangible reforms,” said Paige Snider, a policy adviser at Bizpro, a project funded by the U.S. Agency for International Development.
Advocacy associations assist businesses with lobbying, public relations and marketing. Over the past three years, membership in small advocacy groups based in the regions has more than doubled, Snider said.
Take Lviv’s Association of Employers, for example. Launched in 1997 by a handful of entrepreneurs, today the group has 700 members, said Zinovy Bermes, the association’s president.
Raisa Volik, president of the Ismail-based Prydunavia’s Association of Farmers, said her group, which represents farmers in the southwestern corner of Odessa oblast, has signed up more than 150 members since its inception three years ago.
Snider said that about half of the active advocacy groups in Ukraine were established in the last five years. Bizpro works with 195 advocacy groups nationwide.
Few groups focus exclusively on advocacy. They also provide members with information on legislative issues, training in public relations and marketing, and help SMEs network with one another. These services help many SMEs defend their rights and lobby for change, Snider said.
Volik said her association is helping local farmers privatize their land against the opposition of local authorities, who fear they will lose control over what once were state-owned cooperatives.
The association lobbies both regional and national government officials, and also increases public awareness by raising issues in newsletters and in the local media, she added.
“Reforms at the very outskirts, far from Kyiv, are very difficult to implement,” Volik said. “Such associations can help a lot.”
The association also provides the Odessa region’s farmers with newsletters and access to information about new laws that affect their businesses, Volik said.
“Our region’s small businesses are no longer closed off from the world and under the dictatorship of regional authorities,” she said.
Bermes said his Lviv association has helped prevent several attempts by the city to increase local taxes.
“We demonstrated in front of city hall and lobbied local officials,” he said.
Lvivkholod, a food-manufacturing and trading firm in Lviv that employs 700, is a member of Bermes’s Lviv-based association. The company’s chairman Roman Kozak said the association helped fend off questionable inspections by local authorities. Its hotline and consulting services also have helped by arming local businesses with information, he said.
Annual membership fees at many of these non-profit, non-governmental organizations can run between Hr 50 to Hr 100 or higher. That is enough to cover about 70 percent of their expenses, Bizpro’s Snider said. The rest of the costs are covered by grants and donors like Bizpro, which funds many of the groups in addition to providing free consulting and training services.
SMEs are finding the price of membership worthwhile, Lviv’s Bermes said.
“Lviv’s entrepreneurs are beginning to realize that if we unite, we can protect our common interest,” Bermes said.
Such associations are effective in helping regional SMEs deal with Ukraine’s complex tax and licensing procedures, Snider said. Advocacy groups can play a big role in ensuring that new reforms are implemented in the regions after they are passed in Kyiv.
“They can act as watchdogs and tell the government, when appropriate, that they can’t do this or that. And they can inform their members about their rights and responsibilities,” Snider said.
Advocacy groups have allowed SMEs to lobby more successfully.
The relationship between larger advocacy groups based in Kyiv, which tend to lobby the interests of industrial powerhouses, and regional advocacy groups is often mutually beneficial, Snider said. Regional groups often turn to larger advocacy groups in Kyiv to lobby at the national level.
“Most smaller advocacy groups tend to focus their lobbying efforts on local government officials. But when the need arises to lobby their interests at the national level, they will sometimes do it through larger associations,” Snider said. “In fact, many larger lobbying organizations have their own political patron.”
Prime Minster Anatoly Kinakh’s Ukrainian League of Industrialists and Entrepreneurs and former deputy Prime Minister Yury Yekhanurov’s Union of Small and Medium Privatized Enterprises are two such examples.
