This paper is intended to investigate the current status and prospects of the development of an innovative environment for a knowledge-driven economy in Belarus. The estimation of the innovative environment is based on Belarusian official statistical indicators and state program documents. The results indicate the need to further improve the environment for the development of innovations in Belarus on the basis of the institutional framework formation for stimulating innovations. The new innovation coordination model in consideration of the “innovation council” is put forward with regard to Belarus. The authors take into consideration the accomplishment of the EU concept towards innovations driving a knowledge-driven economy. The substantial benefits for various Belarusian actors that could be ensured by the open innovative development are determined.

SMEs battling with financial volatility require financial and business ambidexterity. To them working capital optimization is one partial solution to improve performance. Examined concepts will not develop a spectacular model but rather quantitatively - qualitatively upgrade existing theories. The treatise will demonstrate that in stochastic working capital decisions important are varieties of alternatives. A structural model of working capital optimization is developed with practical examples for financial decision making under uncertainty. Emphasis will be placed on structuring management problems with the analysis of preferences using probability tools. Additional light is shed on coupling static and dynamic indicators, systemically approaching inventory and cash management, sales and purchasing, costs and profitability. Working capital optimization can contribute to management of financial risk and have an overall impact in medium sized enterprises. Conclusions and recommendations will aim to contribute to the overall body of knowledge on optimized financial decision making.

A major problem for medium enterprises is ensuring that their financial management exercises prudence in the attraction of alternative sources of financing in transition into middle tier, larger enterprise status and towards stock exchange. Difficulties in attracting capital, the high cost of bank credit, absence of robust financial and business information reporting capacities may represent obstacles. One partial solution is capacity development for access to stock exchanges and having these institutions with a strong allocation capacity to efficiently finance these businesses. Though underdeveloped in transition economies, they are potentially important institutions in successful financial performance of businesses. In a review of conditions for handling risk and uncertainty, developing capacity for access to stock exchanges through working capital combinations, this treatise demonstrates that medium enterprises could benefit from this approach. Regulatory reforms to facilitate the use of stock exchange financing and well-designed financial management models are recommended.

After reintegration with the world market and convergence towards the European Union which followed, the Serbian economy is no longer facing huge balance of payments deficits as earlier, which required improving the terms of trade, growth of exports and foreign direct investment. Furthermore, according to major international financial organizations, because of foreign trade and foreign exchange policies Serbian balance of payments nevertheless offers prospects for sustained economic growth and development in spite of the Covid-19 crisis. The general purpose in this paper is to review pre-pandemic and pandemic balance of payments experiences from Serbia with special emphasis on deficit mitigation performance as there is still a lingering balance of payments deficit. After classifying the internal and external factors of deficit, the specific purpose of this paper approaches research of the Covid-19 pandemic impact on the Serbian balance of payments at the end of the performance-rating period (2016-2020). Methodology of research of Serbian balance of payments is presented in the second section. It relied dominantly on IMF data sources, specifically IMF yearly data in million $ (2016-2020) and comparatively on Serbian statistical office (2019-2020). Eurostat GDP data (2020) was consulted for other countries, which are main trading partners of Serbia. Research included four main aspects: 1) Classification of Balance of Payments and International Investment Position according to the IMF Manual (BPM6); 2) Elaboration of Serbian balance of payments statistics and macroeconomic data for the period 2016–2019 (pre-pandemic); 3) Analysis and presentation of the evolution of the selected annual balance of payments statistics during the pandemic period (2020-2021); 4) Analysis and presentation of the rate of coverage of main balance of payments categories (2016-2020). The research results presented in third section reveal that deficits on major categories such as current and capital accounts still remain significant. In this regard, specific comparisons were made with 2019, the year before Covid-19 crisis, and a presentation of major Serbian trading partners is discussed briefly. At the end of July 2021, the future pattern of changes to the flows of the discussed categories based on the analysis of information from the pre-pandemic and pandemic period will significantly depend on pandemic developments in the second half of 2021 and in 2022. The pandemic is still underway and it is premature to draw any conclusions for any country. However, this research discovers and we conclude that the impact of the pandemic on Serbian balance of payments, at least through the end of 2020, was not as severe as in some other European and non-European countries. The main recommendation of the paper is therefore to maintain relative resilience of the observed Serbian balance of payments flows against potential new shocks from the ongoing pandemic. At the same time, economic policy should continue to attract foreign direct investment and gradually balance the current and capital accounts which are in fact still in deficit. Achievement of equilibrium between major Serbian balance of payments categories is possible by resolving specific internal and external factors of deficit explained in the introductory section of the paper. In a subsequent paper, we shall suggest new possible developments in the interpretation of these factors as additional data becomes available.

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