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1 Aug, 2008 04:49

President Medvedev calls for easier administration for small business

President Dmitry Medvedev has called on bureaucrats and law enforcement officials to stop bothering small business.

The Kostrovi family were professional sportsmen until they set up a small trading business in 1992. Two years ago they started making baby clothes, employing over 30 people in the small city of Gagarin.

Like small businessmen everywhere in Russia, they face a raft of problems. The local authorities only give them a one-year rental contract, making their tenure uncertain. They find it hard to get loan funding to expand production, and they want tax-breaks for small business. Andrey Gaiduk, a businessman in Gagarin in the Smolensk region, says credit problems are the most pressing.

We're facing credit problems. I have land that I rent in the city. I want to built a cafe on that land, but I dont have enough money. So I borrow the money , but the bank would only give me 6-7 months delay before the payback period starts. It is definitely not enough. I need at lest 5 years!

Medvedev says the banking problem is the hardest to solve, as it requires more than a simple legal resolution.  But even after laws have been read in the Duma, small businesses continue to face harassment by police and authorities.

The problem is that the time lag between a political decision is made and its realization is often measured in years. Some programmes never start working. Our main task is to make sure political signals do not get lost.

Medvedev approved some new laws on small businesses immediately after becoming president. But his goal of increasing the proportion of the population working in small business to 50% by 2020 is a hard one.

Small and medium business faces the same problems as companies all over Russia. numerous inspections, difficult access to gas and electricity as well as bank loans. The government has already passed several laws supporting enterprises however its just the first step in bringing strong private business.