Leisure
‘Singing’ the praises
of Catherine
The musical on the great
empress’ life is spectacular!
P.8
A new conundrum Women of Think investment,
A Business Associate Report from The Economic Times
of global politics
In Association with Rossiyskaya Gazeta
substance
think Russia
Find out the role of the US Developing countries are Russia is third most
in the inter-state relations in tapping the talent of non- attractive destination,
● BANGALORE ● MUMBAI ● NEW DELHI
SATURDAY, JULY 5, 2008
the Asia-Pacific region working women according to a latest survey
P.5
P.6 P.7
Business The rise of the SMEs will reach bigger heights
When small is big
Until recently, the very concept also takes sufficient toughness cal officials, many of whom treat
of a small or medium-sized busi- to survive competition with large their jurisdictions as private fief-
ness was practically absent enterprises. doms. One letter I received as a
from the Russian law. It was None of these conditions can member of parliament described
not until two years ago that the be fully met in Russia today, in- how a regional governor openly
government began working on cluding the legal conditions. Var- demanded that a small company
filling the gap. ious bureaucratic barriers make manufacturing garden tools pay
it almost impossible to lease him $10,000 a month. “I don’t
land. Borrowed capital is ex- care how you manage it, but I
YELENA PANINA tremely expensive (18pc-22pc need the money on my table
MOSCOW interest) and short (credit is sel- every month,” the official told
dom extended for longer than a them. That governor is clearly
A basic SME law was adopted in year). Few manage to obtain not the only one. They are legion.
2006. But to make it work, ap- Corruption impairs SMEs’ op-
propriate amendments to the tax eration and growth. Serious re-
code and the laws on financial
leasing and credit cooperation
SME
form is needed in the judicial and
law-enforcement spheres.
are needed. We also need rele- development is In the longer run, all these
vant regional laws and govern-
ment support for small business-
becoming one
legislative initiatives and re-
forms should lead to the forma-
es at all levels. of the tion of a middle class, with
However, importantly, SME
development is becoming one of
government’s
small entrepreneurs as its basis.
It should also include doctors,
the government’s priorities. That priorities. That teachers, engineers and man-
seems to be the message behind
the latest decisions made by the
seems to be the
agers: that is, all those who
have stable incomes ensuring
President and government. It is message behind them a middle-class standard
encouraging that after so many
the latest
of living. There should be mil-
years of neglect, the government
has finally realised the impor-
decisions made
lions who own property and
have stable incomes that spark
tance of supporting SMEs. Now
by the President
socio-political motivation.
HO, AFP
the public too should be involved,
because the desired effect can-
and government
These people should be the
most interested in democratic
Emerging economies:
not be achieved by decrees and processes and the country’s
resolutions alone. stable development.
Meanwhile, the difficulties of loans from the government, be- However, this kind of middle
running a small business deter cause the funds available are class will take years to emerge.
many would-be Russian entre- scarce and the bureaucratic bar- Russia will not have a fully-
preneurs. The number of SMEs in riers too high. fledged democratic society un-
Tectonic shift
Russia today is a quarter, or even These are not the only factors til it is in place.
one-fifth of economically devel- inhibiting SME development. But Yelena Panina is deputy head
oped countries. This is only natu- administrative barriers are prob- of the parliamentary commit-
ral because starting up a busi- ably the most serious, especially tee on industry, vice president
ness requires renting appropri- as far as local officials are con- of Russia’s Union of Industrial-
We live in an age of accelerating and the world's most influential busi- Seven nations, while today there are formation? It is private businesses in-
ate premises connected to all the cerned. ists and Entrepreneurs.
economic convergence. The world's nesspeople will be Russian, Chinese, 5 billion people benefiting from this vesting private capital to meet the de-
important utilities, considerable The emergence of a healthy
new economies - with Russia Indian and African. New world in- convergence. mand of private-sector consumers. And
start-up capital, and modern SME community inevitably en- CONTINUED ON
among the leaders - will drive glob- vestment funds will dwarf their The speed of the economic changes is increasingly, the world's most dynamic
equipment and technologies. It tails cutting the authority of lo- PAGES 2 AND 3
al growth and value creation in the Western counterparts. The dollar will unparalleled. At the beginning of the companies are coming out of Russia and
early decades of this new century. become only one of many reserve cur- 20th century, what are now the G7 na- the world's other most dynamic
rencies. Moscow, Singapore, Shang- tions controlled roughly 60pc of world economies. Navy Russia starts building new 'stealth' frigate for
hai and Dubai, will, alongside London, output. By 1980, according to the Inter- Cross-border mergers and acquisi-
STEPHEN JENNINGS be where the majority of wealth is national Monetary Fund, their share had tions are another indicator. According to
India. For the complete story, TURN TO PAGE 6
THE MOSCOW TIMES managed and traded. fallen to 51.5pc. Today, it is just 42pc. In Thomson Reuters, emerging-market
The world's "emerging economies" the next 20 years, there will be a bigger mergers and acquisitions this year are up
This tectonic shift is now firmly under have, in fact, emerged. The sheer shakeup in the global economy than we 17 pc, while they are down 43pc in the
way, but few have taken on board the scale of the economic changes is saw in the previous century of economic rest of the world.
far-reaching implications. For exam- breathtaking. In 1980, 2.8 billion change, which itself was the fastest pe-
ple, the world's largest businesses people lived in countries that were riod of global growth in history. CONTINUED ON PAGE 7
will be from new world economies growing faster than the Group of What is driving this economic trans-
President’s way A global player presents his vision
SS
First person
-
T
A
AR
A conservative approach
Shell CEO
Jeroen van der
to liberal values
Veer
I
GOR ZAREMBO, IT
The new Russian Question one: will Dmitry Germany. The perception of treaty to which Euro-Atlantic
CEOs tout the
Political stability is in place
for the foreseeable future, and
the current power system will
President’s political debut Medvedev acquire a political Medvedev’s first visit to the organisations would be parties.
in Berlin and the St face of his own, and a politi- West was coloured by old be- Yet he is really talking of a
financial climate
be effective.
The survey was
Petersburg International cal weight that matches the liefs: he was expected to take regional pact based on the
commissioned by the Foreign
Economic Forum shed light post of Russian President, a more “liberal” stand, to principles of the UN Charter. Despite corruption, excessive According to the survey of
Investment Advisory Council, a
on two of the most considering that he was elect- make conciliatory gestures to The aim of such an agree- bureaucracy, etc., Russia is the more than 50 chief executives
body chaired by the Prime
frequently asked ed with massive support from the West and distance him- ment would be to determine “There are no easy most promising market for and board members at
Minister and established in 1994
questions in Russian his predecessor, Vladimir self from Putin’s policies. the significance of military countries… everybody would foreign investment, surpassing companies doing or considering
by the Russian government and
politics. Putin, who remains in power Medvedev surprised them force as a factor in relations go there. We work in Russia India and China. So says a doing business in Russia, the
businesses to improve the
as Prime Minister? Question all: he confirmed Russia’s Euro- within the Euro-Atlantic because we can work within survey of foreign companies overall situation in the country
country’s investment climate.
two: is Russia changing its pean and democratic identity community. our business principles.” released on the eve of the St will improve over the years to
ALEXEI ZUDIN political course? and proposed to conclude a Petersburg International come, with a positive impact on
MOSCOW It all started with a visit to binding European security CONTINUED ON PAGE 5 CONTINUED ON PAGE 4 Economic Forum. foreign direct investment (FDI). CONTINUED ON PAGE 4
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