Komsomolskaya Pravda: "Mr Putin Decides to Make Life Easier for Small Businesses"
Entrepreneurs will enjoy preferential loans and be inspected less often.
"I remind you: stop scaring business"
Entrepreneurs from across Russia gathered in Moscow yesterday to discuss ways to survive the financial crisis. Although the authorities claim that during a crisis, small business should be the engine that drives the economy, thus far there has been no light at the end of the tunnel. The forum's attendees included important Government officials such as Prime Minister Vladimir Putin, his First Deputy Igor Shuvalov, Economic Development Minister Elvira Nabiullina, and Presidential Aide Arkady Dvorkovich.
"Last year, the President asked that life for small business not be turned into a nightmare," said Mr Dvorkovich. "The call was heeded, but not for long. Apparently a reminder is in order. Stop scaring business. If necessary, the President will repeat it."
According to Mr Dvorkovich, Dmitry Medvedev had already told the Prosecutor General's Office to determine whether the government agencies that monitor business and the organisations that cater to business, for example by carrying out examinations, have any criminal connections. The Prosecutor General's Office is sure to make a lot of new discoveries. According to Alexander Buksman, First Deputy Prosecutor General, "evidence of wastefulness" has come to light during inspections of Rosprirodnadzor, Rospotrebnadzor, the Federal Taxation Service and other agencies.
"Government officials claim compensation for the cost of dry cleaning, visits to bars, etc.," fumed Mr Buksman.
Entrepreneurs listened to the Prosecutor with bemused smiles on their faces. Hardly a day passes when they do not have to pay bribes to inspectors.
300,000 to open a case
Vladimir Putin told the audience of entrepreneurs how the Government planned to support small business. Banks issue loans against collateral, but as a rule small companies have nothing to pledge. Therefore, at present there are special funds that guarantee loan repayment. The Government, Mr Putin said, would allocate an additional 15 billion roubles to these funds to enable the "little guys" to obtain loans.
This year, 30 billion roubles will be made available on easy terms. Three hundred thousand rouble grants will be issued to start-up companies. Fifteen thousand entrepreneurs will receive start-up capital this year alone.
According to Mr Putin, the Government intended to link assistance to banks to how they issue loans to small businesses. The state was handing out money to bankers so that said money would be injected into the real economy and not put into currency accounts.
Moscow Mayor Yury Luzhkov also spoke at the forum.
"I am pleasantly surprised by the decisions Vladimir Putin has announced. Very useful and appropriate decisions," the capital's Mayor said. Mr Luzhkov said that Moscow has declared 2009 to be "the year with absolutely no inspections of small business" by municipal authorities.
As usual, Mr Luzhkov attacked the power industry: "The charges for connecting small business owners to the power grid are so high that they have to sell their last pair of pants."
Entrepreneurs were probably glad to hear the official promises. However, as they left the conference, they said that tomorrow they would have to face reality, which is different from what the Government promises in conferences and at meetings, at least for now. Many believe that even if all the proposals are enacted, there is no guarantee that local authorities will obey them.
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Verbatim
Vladimir Putin held a meeting with Government ministers at which he discussed the problems facing small businesses. Here is some of what the Prime Minister said:
On interest rates
"In recent weeks, we have witnessed a gradual slowdown of inflation. We can attribute this to a cut of the Central Bank refinancing rate."
"...I am instructing the Finance Ministry, along with the Bank of Russia, to revise how Government guarantees are issued: the process should be made more convenient and attractive for commercial banks, so that granting guarantees really diminishes credit risks and therefore, hopefully, interest rates on loans. One option could be as follows: at the time when the debt is due to be repaid, if an enterprise turns out to be insolvent, the bank immediately gets money from the government guarantees and only then starts to claim the collateral".
On banks
"A bank should ensure it lends out the same amount of money it receives in the form of government aid to the real sector and households. I repeat, no less than the government assistance received. And at the interest rate - which is very important for the real sector - no higher than the Central Bank's refinancing rate plus 3 percentage points. Today it stands at 13 plus 3, or 16%.
"... Banks will be obliged to publicly disclose the volume of loans issued and, besides that, the remuneration received by top executives".
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An economist's commentary
Pavel Medvedev, member of the Duma Committee for Financial Markets:
"What matters is a balance of interests"
Of course a decrease in the refinancing rate will have a positive impact on our economy. But Mr Putin, as a person well versed in economics, added an important caveat: it will be done as inflation goes down.
I read the announcements by banks, which have raised interest rates one after another. How can one cut the refinancing rate if people are not putting their money in banks? If people cannot get good interest rates, they won't save their money but will go shopping. And that means a new spiral of inflation.
As for lending to the real sector: this is a very delicate issue, and it is not for nothing that the Prime Minister stressed the need for striking a balance. A person with Soviet-era mentality sees no problem: if a bank has been given money, let it issue loans right and left. In reality things are much more complicated: a plant manager comes to a bank and the bank begins to question him: what do you do, what is your product, what is its demand, who are your competitors, is there perhaps a plant that produces the same goods, but faster and at a higher quality? To issue a loan just like that is a crime against the bank and the plant, so it is good that Mr Putin discusses this issue precisely as the need to balance interests.
By Nigina Beroyeva
