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27 Mar, 2008 06:20

Small business gets Medvedev support

Red tape and excessive control of small business is stopping Russians from starting their own enterprise, according to Russia's President-elect Dmitry Medvedev. He’s chaired a meeting in Siberia aimed at tackling the problems facing small business.

It's the first state Council session to be chaired by Dmitry Medvedev, who said the issue is a key to the country's development.

“Small business has not only an economic but also a social significance. It is the basis for the development of entrepreneurial activity, and for the expansion of the middle class. You know the tasks we set ourselves, and which Vladimir Putin spoke about not long ago, that by 2020, 60 to 70% of the population should be involved in small business,” he noted.

As for the businessmen themselves they say the main obstacle for them in the underdeveloped infrastructure, namely when it comes to obtaining electricity supplies.

Among other major problems, according to Vladislav Korochkin, Vice-President of the Opora company, are human resources and the tax system, “which is still not adequate, simple and innovative enough to support the existing enterprises and create new ones”.

Analysts estimate that small businesses in Russia account for 13 to 15% of the country’s GDP, while in many Western countries this figure stands at 50 to 70%.

Dmitry Medvedev is said to be among the initiators of Wednesday’s meeting, which leaves some industry insiders hopeful that under his administration small businesses would gain greater prominence.
But some experts like Dmitry Butrin, a journalist for a leading business daily Kommersant, doubt the government’s attention to this issue will be long-lived.

“As far as I can recall, we have had seven of such meetings over the past decade. So the problems of small businesses are discussed quite regularly but this brings little result,” Dmitry Butrin said.