This page contains a Flash digital edition of a book.
www.russiatoday.ru/business BOOKMARKS
RUSSIA INDIA REPORT
Business
03
"Russia Today" TV channel, business news from Russia
www.kommersant.com
IN ASSOCIATION WITH ROSSIYSKAYA GAZETA
"Kommersant" business daily English edition
THE ECONOMIC TIMES SATURDAY, JULY 5, 2008
www.rcsme.ru/eng
Russian SME Resource Centre
The facts
Opinion The quote
1
There are 1.033 million he number of SME
How would you evaluate your family’s current financial status?
small businesses and loan requests went up
‘Small business should submit tax reporting docu-
2.9 million private op- 3
T
from 25pc to 40pc the 5
There are about four mil-
lion SMEs per 145 mil-
lion Russian citizens, in-
ments not more than once a year… Small business
erators in Russia; they pro- past five years. cluding approximately one mil-
vide jobs for as many as 10 lion legal entities with a staff of
is sensitive to the quality of tax administration. We
million people. less than 100 and about three
need to take further steps to improve it. We have to
million private operators.
OM.RU open up new opportunities for private entrepre-
2
SMEs provide 22pc 4
The number of shadow
operators in the
SME sector went
C
I
of jobs in industry, down from 50pc to 30pc over .W
which is a modest fig- the past four years, with more
ure. The growth of SME jobs, than 800,000 companies 6
Russian SMEs’ share in
neurs, small business and agricultural producers so
investments in manufac-
turing is 3.5pc, which is
that they could use simplified tax procedures.’
from 17pc in 2000 to 23pc in and operators becoming fully only slightly more than the sta-
Vladimir Putin
2003, has stopped. legal. tistical margin of error.
Prime Minister
SOURCE: WWW
Real life New rules mean that in enterprise, size may no longer matter, though
one entrepreneur says he’s yet to see any proof of significant change
Small companies wait
for the bonanza
If the government delivers tax-paying record and the red tape, bizarre rules and ar- jelly made from seaweed “However, a Russian busi-
on its pledge to create a quality of your goods or serv- tificial barriers that most found off the Sakhalin coast. nessman cannot devote him-
friendly environment for ices. The system of fines and overcame by paying bribes. He had to use all his ingenuity self to creativity alone,” Shein
small business, Russia may penalties is tough, but fair,” Yury Shein, being opposed to procure the ingredients. He says, adding that over the
have 12-15 million small Mr Shein says. to bribes, used strictly legal was only able to buy agar- past 20 years he has spent
companies and individual He thinks it unlikely that methods to overcome these agar weeds on condition that more time fighting off inspec-
entrepreneurs within a few the system of business regis- barriers, displaying great in- his firm built a pastry shop tors and supervisors than do-
years, experts predict, tration in Russia will become genuity in the process. True, for a café in Sakhalin. The ing business.
three or four times more “like in America” any time he admits that many times it shop is still in business. “Still, I am an optimist and
than today. soon. So far Russian small would have been easier to pay All in all, Shein built 25 I think that litigation against
business has heard nothing - fighting bureaucracy legally sweet shops in 25 regions. aggressive bureaucrats is the
but words and promises from is time-consuming and debili- Shein’s pies were popular in first sign of a businessman’s
TATYANA ZYKOVA the government. Not until it tating. Russia because of their excel- inner freedom,” he stresses.
ROSSIYSKAYA GAZETA begins to do something will lent quality, and the company “Inspections were introduced
MOSCOW we be able to judge, says Mr
‘In the 1980s, then
flourished. In the early with the noble aim of secur-
Shein. 1990s, he launched a parallel ing order. But my business ex-
“If, as the authorities promise, “Small business is like a
and now, the main
business by financing a pri- perience tells me that in Rus-
small enterprises will be lawn,” he says. “You can wa-
problems facing
vate laboratory where sever- sia any inspection is like hunt-
spared unwarranted checks, ter it copiously. You can treat
al scientists worked on a hy- ing a hare. In this game, the
unnecessary approval proce- every blade of grass. But one
small businesses
pothesis of so-called self-sup- bureaucrats are the hunters
dures and crippling taxes, the thing the lawn certainly
were red tape,
porting malignancies. They and the businessmen are the
country may indeed see quick needs is not to be trampled
came up with a universal test hares.”
returns, especially in the so- upon.”
bizarre rules and
which can diagnose cancer An illegal administrative
cial sphere,” says Yury Shein, Shein has had to fight to
artificial barriers
from a droplet of blood. That act can, however, be
who was one of the first cre- protect his lawn. He went into
process has been patented. challenged in a court of law.
ators of a cooperative in Rus- the sweets business in 1987,
that you overcame “There are no equivalents in Litigation resolves the con-
sia before becoming the own- when Russia was still under
by paying bribes’
the world,” Shein claims. The flict and brings a kind of
er of a small pastry company. the Soviets. That year,
diagnostic technique has been peace. It is very useful in con-
From the lean 1980s until re- Moscow saw the creation of
successfully tested in many flicts with regulatory bodies
cently, his inexpensive Bird’s more than 5,000 coopera- “In the late 1980s, the So-
Moscow clinics. However, it and other businesses. Shein
Milk pies, made according to a tives. Russian businessmen viet Union was in the midst of
proved too much of a burden reckons that he has spent at
unique recipe, were snapped have never since enjoyed such a food crisis,” Shein recalls.
for a small enterprise. Loans, least 10 years in litigation.
up. a quick registration proce- “So cooperatives were
whether private or public, He has always won his
“In America in the mid-
T
O FROM PERSONAL ARCHIVES
dure: you went to the special banned from using condensed were practically impossible to disputes.
’90s, I saw that all you have to commission at the local gov- milk and chocolates. But any
come by in Russia at the time. “If a real breakthrough
PHO
do to open a business was to erning body, showed your ban forces you to be creative
There was not enough money happens in the relations be-
Yury Shein currently specialises in designing and building exhibition centres
buy an envelope, fill in a form passport, got a permit for and look for new solutions.”
to fund full-scale research, so tween the state and small
and drop it in the postbox. No registration and you were To sidestep the bans, his
the work had to be curtailed. business,” Shein says, “if they
inspections in the first two ready to go. But problems be- team had to think of a new
Shein is still trying to raise the untie our hands and rid us
FURTHER READING…
years. If you fail to survive for gan with protection racket- technology for making the
money. He says that to him of bureaucratic pressure,
ALEXEI TSCHUKIN/STAFF WRITER, MOSCOW/TO THE RESCUE OF THE MIDDLE CLASS/EXPERT
two years, nobody will bother. eers fleecing the new cooper- filling for pies. They used
business is not so much about and help us, small business in
MAGAZINE, N22, JUNE 2, 2008/ENG.EXPERT.RU
If you do survive, the govern- atives. Then, as now, the main blackcurrants and other
making money as about fulfil- Russia will enter a golden ALEXANDER ARKHANGELSKY/WRITER, JOURNALIST, MOSCOW/THE WILL OF THE SMALL/RUSSIA
ment will look closely at your problems were bureaucratic berries with the agar-agar
ing your creative potential. age.”

PROFILE/POLITICS, APRIL 7, 2008/WWW.RUSSIAPROFILE.ORG
Shadow companies are distorting the figures Breaking down the barriers that are hindering development
Officially, small businesses account for 13pc terms increased by more than 70pc. because most of them are bogus. Russian President Dmitry Medvedev has unscheduled inspections of small and be tightened, and they will no longer
of Russia’s GDP. Will this figure grow? The main obstacle to the development of “Every private operator has at least four signed a decree “on urgent measures to medium companies should be permitted have the right to write protocols on
Experts are divided on the issue. Analysts SMEs is lack of funds, and therefore the companies for risk hedging, three of which eliminate administrative barriers to only to reveal direct threats to life or administrative transgressions in
from the Aton investment company believe banking reform planned by the Russian exist only on paper. If tax agencies put business”, intended primarily to help health, and only with the approval of the business.
that the share of SMEs in Russia’s GDP will government, which provides for setting up pressure on such a businessman and close small and medium-size companies. regional Prosecutor’s Office. Registering To streamline the activities of federal
double within four to five years. They hope independent credit bureaus, should spur his account, he will quickly transfer the The government has been given a a business will become primarily a and regional agencies in this sphere,
that the simplification of regulation SMEs. money to the account of another of his two-month deadline to submit to the notification-based procedure; the plenipotentiary presidential envoys in
mechanisms will encourage SMEs to However, not all experts share the firms,” the expert said. State Duma draft federal laws number of permits needed to conduct the federal districts have been
increasingly operate according to rules. optimism of Aton analysts. “The situation in the SME sector will enhancing the protection given to business is to be reduced, and instructed to establish regional councils
Over the past year, SMEs’ contribution to Andrei Kolesnikov, director of the SME improve only when the state creates companies and individual businessmen compulsory certification should be to promote small and medium business,
GDP went up from 9pc to 13pc. But they centre at the Higher School of International conditions that encourage legal operation. during inspections; government agencies replaced in most cases by a which will include members of the
can do more, Aton analysts say, because a Business under the Russian government, So far, corruption has been rampant in will only be able to conduct scheduled manufacturer’s declaration of the quality business community.
considerable part of Russian companies are said as much as 50pc of SMEs are Russia. inspections, including various types of of the goods produced. Federal executive bodies will also set
still in the shadows. operating semi-officially, just as in the past. “Although the tax burden has been license control, of a company or The decree provides for mandatory up consultative and coordination
The number of SMEs had grown to “According to data, the number of alleviated, outlays are still high, with individual businessman once every three liability insurance, or provision of committees, including businesspeople
892,000 by September 2007, from small companies is not growing,” spending on accounting eating up half of a years. The limit does not apply to tax financial guarantees instead of licensing and their public associations, to address
843,000 two years ago. In the first nine Kolesnikov said. “Citing the number of small business’s profits. Who would become inspections. separate activities; control over the questions which affect the interests of
months of 2007, their turnover in dollar registered companies is not convincing, legal in this situation?” The President’s decree says that work of Interior Ministry employees will small and medium companies.
Global Russia
International Specialised Show of Aerospace The main themes of the fair are: foodstuffs; agricultural tech- from all of Russia’s regions and more than 20 other countries
Technologies and Services “Aerospace 2008” nology, equipment and processes for production and harvest- will attend MIAS-2008.
business calendar
August 20-24, 2008, Moscow ing of grain crops, vegetables, fruits, milk, meat, poultry and eng.mas-expo.ru
The show will feature: design and analysis of operation of space- flowers; farmers everyday life.
craft and systems; composite and construction materials; modern agrorus.lenexpo.ru/en/about/index.php Fifth Baikal Economic Forum
technologies for the design, servicing and operating of aviation September 8 – 11, 2008, Irkutsk, Russia
Advanced Technologies from Russia and rocket engines; ground equipment for test rigs and ranges, Moscow International Automobile Salon The forum’s main theme will be a development strategy for
August 6-16, 2008, Bangkok, Thailand airports and airfields, launch sites and space centres; security and ‘MIAS-2008’ Siberia and the Far East. A general meeting, three discussions
Main objectives: to showcase examples of advanced equipment environmental issues. August 26-September 7, 2008, Moscow and about ten round tables and other events will be held as
and up-to-date technologies; to establish and promote mutual- www.roscosmos.ru The show will feature light cars from the new world and Eu- part of the forum, the press service of the governor of the
ly beneficial contacts between scientific institutions and indus- rope, as well as the latest models of the Russian motor indus- Irkutsk Region said in a release.
trial enterprises in Russia and innovation companies and firms International Agro-Industrial Exhibition try. The exhibition will cover an area of 63,000 sq m. Another www.govirk.ru
in South East Asia; to develop trade and economic cooperation; and Fair Agrorus 2008 50,000 sq m will be set aside for the 4th International Inter-
and to promote Russian hi-tech products and technologies on August 22-31, 2008, St Petersburg avto Exhibition of car parts, accessories, motor chemicals and
Find more in “Global Calendar”
world markets. Agrorus is the biggest, most publicised and popular agricultur- cosmetics, equipment for the manufacture and maintenance of
www.rd-mnts.ru al fair in Russia, the CIS and Eastern Europe. vehicles, and commercial transport. More than 600 companies
at www.rbth.rg.ru
Economic news
Aeroflot goes online
It also became the first Russ-
ian airline to be listed in the
IOSA Registry under the
IATA Operational Safety Au-
Aeroflot, Russia’s largest website, making it easier to will become increasingly pop- also control up to 17pc of
dit (IOSA), the benchmark
airline, has started an over- buy tickets and making on- ular.” the domestic market.
for global safety manage-
haul of its client service sys- line payments more secure. Click on www.aeroflot.aero As a member of the
ment in airlines.
tem to bring it in line with Aeroflot deputy CEO to buy Aeroflot tickets. SkyTeam global airline al-
In 2007, Aeroflot received
modern standards. Aeroflot, Sergei Kiryushin, head of the Aeroflot operates sched- liance, Aeroflot flies to 841
a new IOSA Registry certifi-
which carries 10 million pas- company’s IT department, uled services to 96 airports destinations in 162 countries.
cate stipulating tougher safe-
sengers a year, and the retail said: “On June 1, the corpo- in 49 countries, controlling (See www.skyteam.com.) Un-
ty regulations, as well as an
bank VTB 24 have launched rate network started selling more than 45pc of Russian der code-sharing agreements,
ISO 9001:2000 quality man- O
T
an online credit card pay- electronic tickets, and we international airtraffic. Aeroflot cooperates with 33
agement systems certificate
ment system via the Aeroflot hope that online payments Aeroflot and its subsidiaries national and foreign carriers.
in March 2008.
AEROFL
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8
Produced with Yudu - www.yudu.com