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East-Central Europe: Small Businesses Touted As Way Forward For Roma

Setting up a small business is never easy. But for many of Central and Eastern Europe's Roma, poverty, lack of education, and discrimination make it all that much harder. Still, there are some success stories -- and experts at a forum in Prague this week were discussing how to promote Romany entrepreneurship further.

Prague, 4 June 2004 (RFE/RL) -- Milan Horvat got his first building contract a year after the fall of communism in Czechoslovakia.

"My brother gave me 20,000 crowns ($730 at the time), and I bought shovels and picks, and the rest I borrowed from the firm that hired me, Vojenske stavby," Horvat recalls. "Then I realized I would need my own tools and things, so I started to buy stuff. That was at the end of 1990, beginning of 1991. Then the head of the firm saw that he could depend on me and he began to give me [contracts for] more specialized work."

Horvat now owns a construction firm outside Prague employing some 35 people -- most of them, like him, Czech Roma.

Success stories like Horvat's are still relatively rare in Central and Eastern Europe, where Roma are one of the most disadvantaged groups.

Typically, they are poorer, more likely to be unemployed, and have lower education levels than the broader population.

Nicolae Gheorghe is an expert on Romany issues for the Organization for Security and Cooperation in Europe.

Gheorghe believes setting up businesses would be one way for Roma to help themselves -- and others in their community.

But he says Roma face obstacles to success. One is poverty -- few have property to put up as collateral for loans. Even those used to buying and selling goods lack the skills for long-term business planning.

And then there's discrimination: "Trying to do correct, clean business is difficult, because people [in this region] don't have the trust, they don't have the confidence that these are trustworthy persons with whom you can do business. [People think that when they] enter into [shady] deals, a Roma might be good. But [as for being] a partner for a contract, [Roma] are confronted with this [prejudice]: that it's easier for them to be attracted and involved in gray-market operations than to be involved in clean, transparent, open business affairs."

Gheorghe was among experts who gathered at an OSCE forum in Prague this week to discuss how to promote Romany entrepreneurship.

The meeting is part of an OSCE action plan adopted in 2003 to improve the situation of Roma in the group's area.

It has a whole range of recommendations for governments to improve education, housing, and employment, including training programs for would-be entrepreneurs.

Judit Bari is from the Pakiv European Roma Fund, which works with Roma in Slovakia, Bulgaria, Romania, and Hungary.

She says there are some success stories from the region: "In southwest Hungary, there is a wood factory run by Roma. They created a limited company. This area was already [known] for the wood industry. In the transition period [work at the factory] stopped, but the market still existed from abroad. The [Roma] decided to use this and work on the site and run the wood factory. But for this they didn't have access to credit, so it was a lucky situation that NGOs started to think in [terms of] economic development, and they provided them with funding."

Other projects are typically more modest. They're businesses like growing and selling vegetables, setting up wood workshops, or breeding sheep or pigs.

But experts say even the smallest enterprise can bring wider benefits. It can give a sense of pride and self-respect to people who are now largely sidelined on the margins of society. And it can breathe life and confidence into the poorest of communities.

One man involved in a brick-production project in Romania told an NGO "through this project our community got back its soul."

So what can be done to promote entrepreneurship further?

The OSCE says training schemes for Romany would-be entrepreneurs are one way. These could then be made a requirement for any loan application.

NGOs and local governments can also help by linking up to provide start-up capital and defer loan payments.

Horvat suggests initial tax breaks for firms run by Romany entrepreneurs that hire a certain number of unemployed people.

Gheorghe says action is needed now not just to encourage entrepreneurship -- but also to improve the overall employment prospects for Roma in the region.

He points to the unrest earlier this year in eastern Slovakia, where Roma looted shops in protest at welfare cuts.

That could be repeated elsewhere, he says, unless governments take action to find alternatives to dependency on social welfare.

But improving employment prospects for Roma will remain difficult. Roma even face discrimination from within their own communities, as Milan Horvat attests: "These days the successful Romany businessmen are really careful about who they employ. They would rather take on a normal person than a Rom. They know Roma don't work as well. It's not that Roma don't want to work, but they don't know how and the Romany businessmen don't give them the chance to learn. That's bad. We have to give all Roma who want to work the chance to go to work and learn the right skills."