Youth at the Crossroads

Statistically, no more than 5% of all people can become successful businessmen. However, all other entrepreneurs, who are essentially unable to market a new product or service and generate a demand for them, also figure among the self-employed. Luckily, this does not significantly affect their chances of making a profit, says Oleksandra Kuzhel, president of Academia Analytical Center. What affects their chances more is their inability to establish a dialog with the government and negotiate better laws. Yet, as Ms. Kuzhel told a youth workshop entitled “Ways to Involve Young People in Business,” these problems can be resolved.

It is not difficult to form a business elite from an active generation. To this end, Ms. Kuzhel and Serhiy Tihipko plan to begin forming a dynamic youth organization one week after the elections: “We want it to have its own team of experts and its own educational centers where we will be training future leaders needed by society.” Wouldn’t those less fortunate than the lucky 5% of successful businessmen like to change from being potential losers to masters of the situation, who are ready for serious dialog with the authorities, no matter how corrupt they may be?

Incidentally, experts are convinced that corruption should be eradicated through knowledge of laws, in particular the Law “On the Fundamentals of the State Regulatory Policy in the Sphere of Economic Activity.” Of course, this business constitution of sorts does not provide a failsafe guarantee, but significantly increases the chances of success within official institutions.

Of course, this method is only good for solving individual problems. To all appearances, the necessary laws will not be passed until there is a force in Ukraine’s parliament that would effectively lobby the interests of small and medium businesses and create favorable rules of the game for them. According to Yury Miroshnychenko, president of the nationwide civic organization New Generation, there are two crucial elements to lobbying business interests: first, their consolidation, for example, by forming a public collegium at the State Committee for Entrepreneurship; and, second, the involvement of political parties in this process. “I am urging politicians to involve associations of businessmen in the decision-making process, but not only in the capacity of advisory bodies,” Miroshnychenko said in an obvious attempt to convince people’s deputies to take a more active part in addressing individual social problems. In any case, participants of the youth business conference are convinced that unless there is mutual interest, this process will not get underway.

Ms. Kuzhel believes that dialog could become such a motivating force. Apparently, determined young businessmen are ready for such a dialog, proof of which is the fact that even at this time of political confrontations the Association of Young Entrepreneurs of Ukraine has discussed and begun drafting a petition to the government and the new leadership with proposals to amend individual laws on entrepreneurship and youth policy.

This petition will probably contain a request not to increase the minimum wage to 483 hryvnias, as this will force many businessmen back into the shadows. After all, according to Ms. Kuzhel, such an increase in the minimum wage will mean that the minimum mandatory disbursement to the pension fund will come to 159 hryvnias, while the maximum flat tax for individual entrepreneurs is 200 hryvnias. “Such an increase in the minimum wage is an economically unwise decision. The minimum wage should be raised in such a way so as not to increase all the fines,” Ms. Kuzhel is convinced. As a result of the increase in the minimum wage, fines and penalties, which under the law amount to two, three, five, or seven times the minimum wage, can reach exorbitant sums. In this case it will make no sense for businessmen to work in the open. On the other hand, young businessmen believe that first and foremost lower social disbursements to the wage fund, which currently amount to 37% of salaries, can encourage them to leave the shadows.

Still, even those young and enterprising future businessmen, who are among those fortunate five percent and feel an untapped reserve of energy and talent, are facing the difficult decision of whether they should begin bringing their ideas to life immediately or wait until parliament amends the laws and realizes the importance of small businesses for the nation’s economy. Furthermore, the bill on the first place of employment, recently passed in the second reading (“On Providing Young People with a Higher or Technical Education with a First Place of Employment with Subsidies for Employers”) may dampen the entrepreneurial spirit, because it may solve the problem of jobs for young people in the immediate future.