Since then, SME have been pumped with subsidies – as a result, their number grew by 20 per cent. In 2009, there were 127,600 people in Russia who started their own business, having received a year unemployment benefit of 58,800 rubles each. About 127,000 new enterprises were registered, creating at least the same number of jobs.

Then the crisis hit and the bubble burst.

However, vice president of the National Institute of Business Research, Vladimir Buev, was quoted as saying by the Vedomosti newspaper that it was not only crisis that affected the situation with SME.

“The government programmes are not working,” Buev said. “State subsidies breed dependency. People are more concerned with filling in all the necessary forms and red tape than with developing their business and searching for new markets.”

Adding fuel to the fire is the recent arrest of a Moscow official, suspected in receiving a 90,000 bribe from an entrepreneur who was trying to bypass the lengthy procedures and register his company as quickly as possible.

The officials say that their figures do not confirm the sad conclusions. According to the data presented by Yury Gertsy, head of State Labour Service, only 5 per cent of the companies set up in 2009 actually went bankrupt.

Vladimir Demidov, head of Business Department in one of Russia’s south cities, believes that the data obtained by the National Institute of Business Research are incorrect because the study did not take into account micro business.

“The number of small enterprises in our region has declined by 2,067 companies, but the number of micro enterprises has grown by more than 4,000 units,” Demidov said. “Evidently, the first just turned into the latter.”

Deputy PM Aleksandr Zhukov said that the government would continue to allocate money for SME. This year, the Ministry of Social Development has already granted 14 million rubles to 242,000 people. Another 11 million have been reserved to be paid in 2011 to 120,000 entrepreneurs.

The officials say that among the main reason for such measures is a lack of jobs, but economists do not view the programme that optimistically.

“In the US, to create 9 jobs you have to support 43 start-ups,” Aleksandr Chepurenko from the Higher School of Economics, told RT. “A renowned economist, Scott Shane, said that supporting small business is a bad policy by itself. Sadly, Russian officials don't like to read. They prefer mechanisms the West gave up 30 years ago.”

Chris Gilbert, director of the Russo-British Chamber of Commerce, believes that state help makes the companies lose their own initiative.

“If company starts to exist on state money, once these hand-outs are withdrawn, they find themselves in trouble. The best way to help the small companies is just to leave them alone,” Gilbert told RT.