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28 Jul, 2008 02:55

Light shines on small business as key to economic revival of Chechnya

The Russian government plans to spend millions of dollars developing the Chechen republic. Government, international organisations and entrepreneurs met on Sunday in Piategorsk to give a futher boost to micro business projects.

Small and mid-sized businesses are the key to creating much-needed jobs in the Caucasus region.

The core problem within the Chechen Republic remains the high level of unemployment. Almost 20 per cent of all, unemployed Russians live in this region, totalling 320 thousand citizens.

The International Medical started providing medical help back in 2000, but now its focus is business. Zurab Koberidze, Head of the IMC, says it will help families start micro businesses, particularly in the agricultural sector.

We help people within the region to launch their own micro business projects. The projects can involve up to five families. They centre on the agricultural sector including milk production, raising cows or sheep or even launching small bakeries.

Within the past two years almost 136 projects were launched in four regions of Chechnya. And the result is that almost is that almost 300 families are running businesses of this kind.  Shirvan Aliev, now the3 owner of a furniture shop says it has helped turn his life around.

After the war I has no job, but this year I was able to launch a small furniture workshop, we are working quite successfully producing doors, windows and other furniture with the help of only three workers. It’s certainly enough to keep me busy.

As demand for such projects grows, participants at this conference say the government and development organisations should work more closely together. But a representative from the Economic Development and Trade Ministry says more needs to be done.

Since 2001 more than 40 thousand jobs were created in the region. But it is not enough. We are rebuilding this sector from scratch. The core problems are the lack of a regulatory base and the difficulties that people face getting bank loans.

Indeed, only several banks within the region are ready to lend and the application process is complicated. For the past two years only 3 thousand loans were issued to individuals.

While Chechnya is getting ready for bigger projects such as hydro electricity stations and car assembly plants – people at this conference believe only mutual promotion of both small and big business will help to develop the economy.