News & Events in Belarus

Why Lukashenko saved Belkoopsoyuz and whether it copes with its tasks

Aleksandr Lukashenko constantly emphasizes that villagers are the backbone of our nation. A lot is indeed being done in Belarus to support villagers, because the country depends on their labor. The previous episodes explained how the president made agro-towns a Belarusian calling card and why the head of state urges to buy vacant houses in villages. Today we will talk about bread and butter. In this episode you will learn how consumer cooperation came to be in Belarus and why our country turned out to be the only post-Soviet country to keep it going. What does Aleksandr Lukashenko demand from rural trade and who, according to him, is responsible for the village? We will also visit outback villages, find out what Belarusian mobile retail store trucks look like and what the locals think about all this. Let's get started.

History

The history of consumer cooperative societies goes back almost 200 years. The idea was born in Russia thanks to the Decembrists. “Deep in Siberia’s mines”, as the great poet and their close friend Alexander Pushkin wrote, they established the ‘Big Artel’ in 1831. However, it is a small town near Manchester in Great Britain that is officially considered the cradle of world consumer cooperation. The world's first consumer cooperative business opened here in 1844.

What about Belarus? According to archival records, the first cooperative society on the territory of our country was the Polotsk consumer society Yakor, the charter of which was submitted to St. Petersburg in 1869 and was approved by the Ministry of Internal Affairs in December of the same year. In 1894, the consumer society of workers and employees of the Libava-Romny railroad started its trading operations in Minsk.

In the years of the Russian Empire, the authorities were suspicious of such associations and would not give them the green light. Everything changed in 1917, when after the February Revolution the provisional government adopted the “Law on Cooperative Associations”. Over the years consumer cooperative societies gained strength. As a result, at the end of 1924 cooperative organizations of the BSSR decided to get under the umbrella of a single economic system. It was called the Belarusian Union of Cooperative Associations or Belkoopsoyuz.

What difficulties did the consumer cooperatives face in the 1990s and why did Belarus decide to preserve them?

It is probably needless to say that consumer cooperative societies played a great role in the Soviet time, especially during the war and post-war years. The disintegration of the USSR and the ensuing economic collapse, the beginning of market reforms, the privatization of state property and the introduction of free pricing hit consumer cooperatives hard and it began to give up its positions.

In 1991 cooperatives accounted for more than a third of retail turnover. By the mid-1990s their share plummeted to 13%. The situation was reversed only in 1996, thanks to increased government support and economic development as a whole. Aleksandr Lukashenko said that “in no case he would allow anyone to put a stranglehold on consumer cooperation”. The government would provide support. In exchange Belkoopsoyuz would be expected to improve its operations. Since the state managed to preserve the sector, now it has the right to demand an adequate return.

“This multi-sectoral structure has been preserved thanks to our head of state,. This was exclusively thanks to his position. 30 years ago in 1994, when he was an MP, he underlined the need to preserve this structure that was seen as an essential element of) a welfare policy in our state. Because people are the priority for the state,” said Inessa Korotkevich, Chairwoman of the Board of the Belarusian Republican Union of Consumer Societies Belkoopsoyuz.

Belkoopsoyuz today

 It is a diversified commercial structure with a social mission. It unites trade and catering, procurement enterprises, fur farms, industrial, transport and construction organizations, and educational institutions.

Consumer cooperative structure incorporates more than 4,500 brick and mortar stores, most of which are located in rural communities. 500 mobile stores serve almost 14,000 communities. A third of them have a population of under 10 people. In 2023, mobile stores of consumer cooperative societies have traveled 14 million kilometers. It is like 36 times the distance from the Earth to the Moon.

“I have a special attitude towards your organization. It so happened historically that in Belarus the village and consumer cooperatives have been developing in close association for almost 107 years helping each other along the way. And today you provide services to every third resident of the country, mostly rural residents. I have a reason to believe that if rural communities wither away, so will the country. Our people living in the village deserve better. The country has its roots in the countryside. We all have our origins in the village. So why do we treat our parents like this? We don't want the same treatment for us when we will grow old,” Aleksandr Lukashenko said at the general meeting of Belkoopsoyuz.

Why is trade in rural communities one of key functions of Belkoopsoyuz?

Trade, especially in the countryside, is the most important area of work for Belkoopsoyuz. Yet, delivering goods to remote and dying villages is not the most lucrative business. Let's face it, sometimes consumer cooperatives incur big losses because of this. Nevertheless, Belkoopsoyuz tries to take care of all rural residents no matter how small their settlements are. The losses are offset by effective work in other lines of business.

How many private businesses do you know who will trade on such terms? Despite their stated commitment to serving local communities they will hardly do it even if they can afford it.

“The ultimate goal of any business is to make money. We have responsibility to cater to the needs of rural residents and we are proud of doing it. But it is also a very costly thing. We are fully aware that it is not the kind of business that can generate profits, because our spending on delivering products, on operating shops-on-wheels is not covered by the revenue made by these shops,” said Inessa Korotkevich.

Therefore, Belkoopsoyuz is trying to make up for these losses. The country's largest state-run retailer is also engaged in procurement, production of industrial goods, and export. These lines of business help the company to compensate for losses associated with trade in rural areas. “There is no way it will drop this area of activity. I will say it again: people are the top priority for our state. No one should be left behind and everyone deserves decent living conditions,” the head of Belkoopsoyuz said.

Can mobile shops become a successful business project?

Today, Belkoopsoyuz, together with the government, is negotiating the purchase of new mobile shops. The costs will be shared by Belkoopsoyuz and to a lesser extent regional executive committees. Assembled on the basis of the MAZ chassis, these will be mobile shops worth the name.

To find out how things are on the ground and what rural residents think about the work of mobile shops, we decided to visit one of the most remote regions of the country - Kostyukovichy District of Mogilev Oblast.

Five mobile shops of the Kostyukovichy District Consumer Society serve more than 100 settlements in two districts. Around 545,000 goods were sold by the mobile shops over the past six months, and 515,000 over the same period last year. This is not a loss-making business, but there is no high profitability, either, said Igor Soroka, Chairman of the Board of the Kostyukovichy District Consumer Society.

“This is a social matter. Now as people are getting older, not everyone is able to walk to a store (especially those over 80 years old). Today, we sell goods not only in one place, there are settlements where we make five or six stops. We can drive up to almost every house,” Igor Soroka said.

In addition, villagers can pre-order some products from the vendor of the mobile shop or by phone the day before its arrival - from food to building materials. When making purchases, people can study information about prices at which we purchase fruits and vegetables, secondary raw materials, and so on.

One more important point. Trade in rural areas is not only about the delivery of goods, assortment and sales. A mobile shop seller often becomes a good friend for villagers. Thus, no entrepreneurs can replace consumer cooperatives in the village.

We saw this as we visited several villages on the fringes of the country, almost 400 kilometers from Minsk.

“Things were different in the past: you would come to any village and people would buy goods, take what they need, sit down and share some stories from the past, they could even sing songs. There used to be tables near mobile shops. The countryside was a beautiful place. But villages are withering, depopulating little by little. I come to any village and I see people waiting for me as if I were their family,” said Lyudmila Krisanova, seller of the Kostyukovichy mobile shop.

She has been working as a seller at a mobile shop for several decades and, perhaps, knows the Belarusian countryside and its residents like no one else.

“I met the president at this mobile shop. Of course, I was very anxious, after all, he is our president. However, this nervousness faded away, everything was fine, just great. We met, talked. But when I made rounds to my villages after that, all the people would say: “Wow!” They kept talking about it for a month. They were glad that our president visited our shop. He called me Lyuda. Our kin! This is our man, our president. In all the villages, people would say: “We want no one else by our Lukashenko, our president. We don't need anyone else except for our president. No one!” Lyudmila Krisanova said.

What do locals say?

Aleksandr Lukashenko emphasizes that Belkoopsoyuz carries both economic and political importance. Belarus is a state that prioritizes the wellbeing of ordinary people, and the country's government has always supported rural communities in every possible way.

“The social role of consumer cooperative societies lies in providing services to villages and small communities. People assess the entire vertical of power by the quality of your work, as well. Your work should contribute to people's positive assessment,” the head of state said.

Judging by the feedback from villagers, the consumer cooperative system is doing the job well.

There are only two people still permanently living in the village of Gorbachevka, Kostyukovichi District. Valentina bought a house in the village in 1997. “It was a large village. There were no vacant houses. People kept cows, cattle. It was a good village, good people. When I moved here, there was neither a store nor a shop on wheels,” she recalls.

Today she often gets help from her children. Valentina sometimes travels to the city as well. She believes, however, that it would be much more difficult without the shop on wheels. “We are absolutely happy with the assortment. The shop on wheels has everything one may need,” the resident of the village said.

Opposite there is a house of Nadezhda, the other resident of the village. The woman comes from Ukraine, but has been living in Belarus for many years already.

“I don't want to live in a city. I am alone here. I am 83... I have my pension delivered. A shop on wheels comes here. The roads are regularly cleaned. A very good road has been built here. My only wish is peace, as it matters the most. Old people say: “We live as long as Lukashenko is president,” the villager said.

She is also happy with the assortment of the shop of wheels? Nadezhda is already too weak to go to the stationary store in the nearest village. If the store on wheels didn't did not come, she would have to send a social worker for shopping. Of course, this is an unnecessary inconvenience.

“I have money to buy food. I pray to God I stay healthy, that’s the most important thing,” she added

Unfortunately, not all villages have perfect access roads. Somewhere they need to be restored, and somewhere they need to be built anew. Snow cleaning machinery cannot reach all the houses in winter. Problems are gradually solved, and shops on wheels try to reach every villager.

Why does Lukashenko criticize Belkoopsouyz?

Aleksandr Lukashenko sometimes criticizes Belkoopsoyuz, but this happens not because the situation with the organization is critical. The head of state wants it to do even better and to achieve higher quality. The president has always asked consumer cooperative organizations to take into account modern trends in supply and demand, to promote their best services. 

“We used to live on a very simple diet. It was good healthy food. Perhaps it didn't look as attractive as the one in the West. When the Soviet Union collapsed, our people were so eager to try that food. This is natural. I think it is normal. They tried it. Any restaurant can offer you something extravagant. Some dishes are a piece of art. Today people want simpler food, like smazhenka, draniki. There is a new period in life. It is like a pendulum going back and forth. This is the moment we cannot miss. People want organic food. Use it to your advantage. If you improve your operations, I'll always support you. I'll always lend you a helping hand,” Belarusian President Aleksandr Lukashenko said at the general meeting of Belkoopsoyuz in 2021.

In early 2024 the president said that the time had come to develop a nationwide concept of services for rural communities. “People who live in villages deserve the best,” he emphasized, demanding that all economic entities should be interested in serving rural communities and all necessary conditions should be created for this. Such a giant as Belkoopsoyuz will play a special role here.

“The draft nationwide concept of servicing rural population has been submitted to the Council of Ministers. We were one of the developers of this concept. Taking into account that we are probably the most important operator in serving the rural population, we made proposals, the ultimate goal of which is to improve this entire mechanism and us as a business entity. This includes inventory of existing stationary facilities, revision of traffic routes, issues related to pricing, assortment, and work with suppliers,” the chairwoman of the Board of the Belarusian Republican Union of Consumer Societies Belkoopsoyuz said.

What makes the consumer cooperative system unique? Belkoopsoyuz has been created by people and for people. Today this system has a huge potential. Indeed, competition is tough in the market. But in this very case it should be used as an incentive to move forward. The main thing is to keep moving, to be proactive, to apply the most modern approaches and business ideas.

“Here is my advice to you: start with discipline and order, improve the structure of your organization. Start with yourself. If you need help with something, you will get it. But you need to get your act together. Start working together with the authorities. The vice premier will be your point man, we will help. The prime minister will personally get involved. You are responsible for the village. We all come from the countryside. I repeat once again: this is where our nation began; thus, we must support villagers. We will make you work. Understand me any way you want. You can do it. If you couldn’t, I would discuss the ways how we get rid of Belkoopsoyuz and create something new instead. But I still have hopes for you,” Belarusian President Aleksandr Lukashenko said at the general meeting of Belkoopsoyuz in February 2024.