Self-employed people and private entrepreneurs in Belarus are not noveau riches but rather the people who struggle for existence. Once deprived of the opportunity to run their businesses, they are left by the state without means of existence. They are banned from opening a new business, and given the tight job market and the arbitrariness of the authorities, they do have a little chance to get employed in public sector. Hundreds of thousands of workplaces were destroyed by the Lukashenko's repressive policies, which left nearly half-a million persons without means to existence.

Lukashenko started a frontal attack on the private business in Belarus in February, 1996, when his telephone call to the Cabinet suspended registration of private enterprises until he issued correpsonding regulations. The Decree No. 208 of 24 May, 1996 ordered re-registration of all private businesses in Belarus. This decree was part of the ‘battery’ of decrees signed on that day (the others regulated banking sector and advertisement industry), which effectively halted the economic reform process in Belarus. Decree No. 208 placed severe restrictions on private business: for example, the firms that had experienced losses for the preceding year were, or were not located according to the ‘legal address’, or have not presented corresponding financial accounting, ordered to be closed. The owners of closed firms were deprived the right to start new businesses. The decree also raised the statutory fund requirements for private companies, which extremely complicated re-registration for many already cash-stripped private entrepreneurs. The immediate consequences of the decree were the following: first, the companies that stood in the open political opposition to Lukashenko were destroyed. Second, though new payments and charges, the state developed predatory capabilities of rent-extraction from the private sector. Each time when private companies are ordered to re-registered, they are required to pay fees, penamlties, etc. to the state.This multiplies the corruption opportunities for the state bureaucracy, as the survival of firms became a commodity on sale. Yet another re-registration was announced in March, 1999.

The list of companies closed down and private entrepreneurs whose licenses were revoked according to the Decree No. 208 was published in state press, apparently in an attempt to stigmatize the private entrepreneurs and discredit them in the eyes of the population. In accordance to the decree, 54% of private entrepreneurs and 62% of private companies were closed down by an arbitrary decision of "president’s vertical" rather than by order of the court of law. Because of inconsistencies of the Belarusian law, or requirements that could not possibly be fulfilled (such as to pay more than 100% in taxes), it happened that almost every legal entity or private entrepreneur "had blatantly and systematically violated the law." Needless to say, the liquidation has not touched the loss-making state sector, which is continuously bailed out by the government.

Presidential edicts force companies to raise their share capital to the amount that deprives them of liquid assets and drives them out of business. Share capitals are deposited to state-owned banks, in other words, this is yet another way to subsidize the bankrupt government.

The new Civil Code (dictated by Lukashenko to the handpicked parliament) de-facto eliminated the institution of limited liabilities companies, forcing founders of companies to be liable with their own wealth for companies’ losses.

The practice of imposing heavy fines on insufficiently loyal companies than closing them down for losses or bringing to jail for failure to repay loans is widespread.

Each year, a presidential decree or order suspend registration of commercial firms for 3-4 months, after which a new set of restrictive laws is introduce and new wave of ‘cleaning up’ the private business from disloyal companies and entrepreneurs starts.

Under the current legislation, individuals whose economic activities have been banned incur criminal liability for "speculation" and "violation of entrepreneurial activity realization procedures," which allows for up to 7 years of imprisonment. Currently hundreds of people are incarcerated according to these laws, thousands more are blackmailed by state bureaucrats.

Across the whole country, there goes a fight against speculators and violators of economic activity. Punitive bodies, citing the "world practice", impose retroactive penalties and fine private entrepreneurs in the amount exceeding their earnings tens of times. There is an oral directive not to allow people accuse of administrative violations to go abroad. Neither they are allowed to run for a public office, according to the recent Law on Local Elections.

According to the new presidential edict signed on 16 March 1999, private companies may be closed down for a wide variety of reasons, which include but are not limited to:

location of a legal entity in a private housing without permission of the authorities (commercial office space is nearly monopolized by the Presidential administration, which charges rates that are unrealistic for most businesses);

share capital is not formed

a founder of company was prosecuted (i.e it is enough to prosecute on false accusations in order to close down the firm);

founder of a company has debts or unpaid wage or tax arrears (hence, retroactive taxes can be slapped to close down the company);

founder of a company is an owner of a liquidated company (i.e. if one firm is closed down, all companies of which a given person is founder or co-founder, regardless of their financial condition and compliance with the law, are to be closed down).

a company has declared certain kinds of activities (it is actually oblidged which kind of business it intends to pursue at the moment of registration), but did not pursue at least one of them for half a year.

Re-registration will entail reapplication for all licenses (there are 800 licensed kinds of activities), renewal of rent contracts, etc., all of which may be discontinued and companies may be closed down. (BDG 22 March 1999).

In May 1999 a large number of traders at commodity and food markets in Minsk and Minsk region were fined for failing to obtain licenses for hygienic certification of their workplaces. Meanwhile, these certifications are impossible to obtain as the authorities deliberately postpone issuing them in order to have a pretext to close down private firms or to cancel licenses (thus in 1998 only 10 such licenses were issued in Minsk, for tens of thousands of private entrepreneurs and artisans). (BDG 7 May 1999)

The state employs dozens of different means to eliminate private business in Belarus. Thus, in January 1999, the administration of Dinamo retail market in violation of the law on leasing raised the rent charges for private traders by about 2.5 times, making them pay more than they could earn per day (BDG 25 January 1999).

Entrepreneurs who trade on the "Dynamo" city market were subject on April 15 to total unexpected inspection by tax police. The tax officers appeared in the morning accompanied by special police units. They checked all the sellers whether they have necessary certificates. Those who could not, for some reason, produce them were fired without the right to appeal this decision. In protest, the entrepreneurs decided to go on strike on April 16. They also expressed their decisive protest to the Minsk tax bodies and the city authorities.

On May 1, retail traders are expected to go on strike in Grodno under the slogan: "NOT A KOPECK TO CRIMINAL REGIME!"

Similar protests sporadically erupted on major markets in Minsk and regional centrer in Summer 1996, February 1998, December 1998, January, February, and March 1999. They were led by independent trade unions "Belarusian Free Trade Union", "Solidarity," and "Community (Sadruzhnas'c'). Leaders of these unions were repressed and prosecuted. Thus, Vladimir Levonevsky, chairman of the "Community" trade union, was seitenced to 13-day administrative arrest on April 25 in Grodno, as he was convicted of organizing large unsanctioned rally of retail traders.