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02
Economy
RUSSIA INDIA REPORT
BOOKMARKS oporaeurope.com/en/index.php
IN ASSOCIATION WITH ROSSIYSKAYA GAZETA
Russian association of SME "Opora" European representation
www.ruvr.ru
THE ECONOMIC TIMES SATURDAY, JULY 5, 2008
Radio "Voice of Russia", news and analysis
http://en.rian.ru
News from Russia and the world
Opinion
The quotes
‘A working group had been created in May that will deal with
What do Russians
‘The place of Russia on global
see as the key
markets and the stability of the
questions pertaining to small and medium-sized business.
problems hampering
entire social and economic system in
The group plans to focus on legislative work to facilitate the
entrepreneurship in the country depend on the
development of entrepreneurship in Russia. Eighteen industry
their country?
C
I
OM.RU
development of entrepreneurship, in-
agreements are expected to be signed. Each will contain five
.W
cluding small and medium-sized
proposals on how to solve the most acute problems in their
business…’
respective industries…’
Vladimir Golovnev
Vladimir Gruzdev
Deputy head of the State Duma (parliament) Committee First deputy head of the Duma Committee on Civil, Criminal, Arbitration
SOURCE: WWW on Economic Policy and Entrepreneurship and Procedural Legislation
SMEs President of the association of small and medium-sized businesses, ‘Opora’ Sergei Borisov,
thinks its time to develop human capital promoting enterprise and innovation-driven companies
Red tape is still strangling
the budding entrepreneur
lowed to rise by the end of your request cannot be regulation, with businesses lating relations between the Russia needs clearly formu- and medium-sized businesses.
the year. processed for 30 days. controlling their sector and authorities and business; we lated state programmes for Statistics show that small
The authorities are coming I view this as a war be- setting quality standards. should use them instead of SME assistance, such as in businesses started growing in
to see that raw materials are tween bureaucrats and busi- Businessmen who violate trying to invent the wheel. the US or Britain. In the Unit- the past few years, by 5pc an-
not inexhaustible, and oil and ness, with traps and pitfalls standards and quality decla- ed States, the Small Business nually, which is good for
gas production cannot be in- everywhere, so that you have rations should be punished. Would you cite the examples Administration was set up in starters. But they can grow
creased endlessly. Besides, to pay everyone at each step. But we must be free from the of the United States and 1953, and Britain intends to faster.
the market situation can We spend about 10pc of rev- daily bureaucratic yoke and Britain, where SMEs have facilitate the opening of at We now have a govern-
change overnight, and alter- enues on these barriers, arbitrariness. been developing for cen- least 2,000 small businesses ment commission on SMEs,
native energy sources are ap- turies, and had enough time each day. They don’t mind whose decisions are binding
pearing. There are more than 10 mil- to form the required rela-
‘We are surrounded
that a comparable number of on all sides. It held its first
In this situation, they lion officials of different lev- tions with the authorities? SMEs close down at the same meeting to outline emergency
should rely on human capital,
by a spiked fence of
els in Russia. Should they Of course, I would like Russia time.
promoting enterprise and in-
red tape.To open a
have no contact with busi- to emulate their examples. The main thing for them is
novation-driven companies. ness at all? The United States is a classi- the speed of opening new
restaurant in
Officials should work to en- cal venture country, with the businesses, which adds an el-
‘The U.S. is a
Some propose replacing per-
Moscow, you need
sure the end result, the same American industry rising on ement of competition and
classical venture
mits to set up small busi- as business is trying to do. I venture investment. Small hence efficiency. Small busi-
nesses with a notification
to collect 254
was once part of a large busi- businesses greatly con- nesses employ 36pc of
country. The share
procedure. How can this
signatures from
ness delegation in China. We tributed to the development Britain’s workforce.
of SMEs in the
benefit SMEs? visited different enterprises of science-intensive and hi- Russia needs more than an
This is a good proposal, but I
officials, including
and discussed cooperation, administrative reform to at-
value of US
don’t think we should start
repeat signatures.’
while Chinese officials fol-
‘I view this as a
tain a comparable result. The
enterprises is
with it. In the past, one had lowed our every step and authorities and business
to get a state licence to set move.
war between
should also join forces to set
assessed at 42.4pc,
up a company, which soon de- I asked if they were watch-
bureaucrats and
up an effective mechanism
and they produce
veloped into a major stum- which the Economic Develop- ing us so that we would not for SME support and protec-
bling block. We thought we ment and Trade Ministry has damage China. They replied
business, with traps tion, just as in many other
60pc of the
would be more comfortable assessed at as much as 1.4 that they wanted everything
and pitfalls
countries, not all of which are country’s GDP’
without licences, but now we trillion roubles, or more than to go well, because they are industrialised.
have to collect many other $59bn, a year. commended for ensuring the everywhere… you Small businesses in India
documents. creation of new jobs and
have to pay
work according to the rules
We are surrounded by a But we cannot live without growth of gross regional of fair competition, without measures, notably the proce-
spiked fence of red tape. To inspections. Otherwise who product thanks to coopera- everyone at each privileges and shadow agree- dure for inspecting SMEs, the
open a restaurant in Moscow, would guarantee that a cafe, tion with Russian companies.
step’
ments, which is most likely financial parameters of
you need to collect 254 sig- restaurant, or grocery would In other words, their work is why there are so many small SMEs, and the procedure for
SS natures from officials, includ- not poison us? Or that assessed according to results businesses there. Local ex- making decisions on business-
-
T
A
ing many repeat signatures. garage mechanics would re- of business and economic de- tech sectors and introduction perts don’t think there are es.
AR It takes up to 18 months to pair our cars properly, and velopment in the region. of innovations, which urged many of them, and Indian I think these crucial bills
get approval from 15 com- we wouldn’t have traffic ac- Moreover, their salary and technological progress. state policy is focused on can be coordinated and ap-
missions for the construction cidents? very job depend on this. The share of SMEs in the SME support and assistance. proved within six months,
CHEV_IT
documents and another 55 Quite so, but inspections We must do the same, in- value of American enterpris- Small businesses enjoy state and we will enjoy the first re-
OMI documents for state accept- should be different; they volving officials in creation es is assessed at 42.4pc, and support since the day of their sults in a year.
ance of the finished project. should involve civil society in- and production, or they will they produce 60pc of the registration. In two or three years, we
stitutions and business. Profes- continue to invent more de- country’s GDP. There are 23 will see the delayed effect of
CHAIL F
Do you mean you do not sionals will easily determine partmental rules, changing million SMEs and private op- Has anything improved the changes.
MI
have problems with bureau- who is the black sheep in their colour to survive innovations. erators per 240 million in Russia?
crats after that? sector and deal with him. Other countries have devel- Americans, or five times I wouldn’t say that every- Interview by
I wish that were the case. No, We should develop self- oped many methods for regu- more than in Russia. thing is bad for Russia’s small Svetlana Nugumanova
after that you will be subject-
RIR dossier
ed to numerous inspections
and need a large number of
permits and certificates.
Sergei Borisov MA (econom- and president and chairman of
More than 30 inspection
ics), PhD. Born 1953 in Ser- the board at Hermes-Moscow.
agencies monitor SMEs. One
The system is in place to help growth
pukhov near Moscow, gradu- In 1997 he was elected
of my colleagues has to re-
ated from Moscow Bauman president of the Moscow Fuel
quest thousands of quaran-
Technical University, had on- Association and in 1998,
tine certificates for farm Russian businessmen are bureaucratic, tax and financial he said, adding that Russia, were enough and should be ernment’s SME strategy was
site training at Oxford Univer- president of the Russian Fuel
products within a month, for convinced that the burden on them. which has vast farming areas, applied in everyday practice. quite realistic. Under the
sity, and worked at the Soviet Union. Since 2002 he has been
each batch of products to be development of small The problems facing SMEs in would only be able to help if it One possibility is to set up strategy SMEs should in-
Ministry of Higher Education. president of the Opora
shipped to another region. businesses could greatly Russia were also discussed at boosted its own agriculture. technology parks for small crease contribution to GDP
In 1991 became a business- Rossii association of small and
To compile the requests, accelerate the growth of the recent 12th International So far, the national agricul- businesses near giant indus- from the current 13pc to
man, holding the posts of chief medium-sized businesses.
you must submit about investment. Economic Forum in St Peters- ture strategy has focused on trial estates, so that large 50pc by 2020 and employ
manager at the research and He is married with two
50,000 pages of documents burg. After debates that some- large agri-businesses. companies would give con- 60-70pc of the economically
production association Analit, children.
to a territorial branch of the
Alexei Morozov
times became quite fierce, the Russian businessmen also tracts to SMEs. It is not clear, active population. To do so,
agricultural authority, ROSSIYSKAYA GAZETA delegates agreed that injustices think SMEs could encourage though, why this perfectly their number should increase
Rosselkhoznadzor, stand in a MOSCOW hindering SME development innovation, but only if given logical and practical scheme considerably. They should ac-
queue for two days, and re- must be remedied. broader access to projects is not working in Russia. celerate their annual growth
member that they accept Sergei Borisov, head of the and loan funds. Participants However, the general situa- rate from 5pc to at least
After the dissolution of the 1990s, Russia had oligarchic documents only twice a The potential of small businesses, Opora union of Russian SMEs, in the round-table discussion tion in the country seems to be 15pc.
Soviet Union in 1991, Russian capitalism, and then it went to week. which contribute as much as who chaired the round-table said proper SME develop- improving. Borisov said he met The round table also dis-
authorities did not help, and another extreme – state capi- There are 100,000 small 60pc of GDP in the United discussion, talked about ment would encourage an ex- Leonid Melamed, chairman of cussed international coopera-
sometimes even hindered, the talism. The country now has a firms in Russia working in States, had been overlooked in acute problems affecting the ponential growth of invest- the state-owned Nanotech- tion, pointing out that if the
development of SMEs. The lot of money and galloping in- this sector. So you may be too Russia until several months ago, Russian economy and the ment. nologies Corporation, and they SME development plans were
situation has improved only flation; prices went up 4.8pc late in getting a certificate when top-level decisions were world, including the global They have not proposed had shaken hands on a deal af- applied, Russia’s small busi-
recently. Why? in the first three months of for perishable products made to provide state assistance food crisis. new formulas for developing ter discussing the problem be- nesses would become the
The authorities had it nice and 2008, which makes me won- whose expiry date is only to small and medium-size enter- The rise in global food the required environment, fore the round table. most attractive partners for
easy without SMEs. In the der how high they will be al- three days away because prises (SME), and to lessen the prices is becoming alarming, saying that available methods Businessmen said the gov- international cooperation.
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