Moscow News
http://www.mnweekly.ru/
May 30, 2008
Russia Celebrates Day of the Entrepreneur
By Ed Bentley
Russia's businessmen have now been given their own national day in honor of their fledgling profession. The Day of the Entrepreneur was recognized for the first time on Monday, marking 20 years since the law on cooperatives.
Throughout Russia, conferences and forums were held to discuss the future of small and medium-sized businesses. In the Moscow region there were concerts, along with awards and prizes for the top local businesses.
Small- and medium-sized industries form the basis for most modern economies, but in Russia only 20 percent of people work in these businesses. In the U.S., for example, small businesses contribute 60-80 percent of new job growth and 51 percent of total employment. By contrast, the Russian economy is currently dominated by large, industrial monopolies. However, Medvedev recently stated that 60-70 percent of people will work in small businesses by 2020.
The Moscow Chamber of Commerce also organized forums to celebrate the day, primarily discussing the role of enterprises in society. Suren Vardanyan of the Chamber commented that it is important to "create a positive image of businessmen in the community."
Vardanyan also noted that entrepeneurs contribute 40 percent of regional tax payments and promote stability. Although entrepreneurs are now playing a more active role supporting charities, he feels there is still more they can do.
He was also optimistic about meeting Medvedev's target of 60 percent employment in small businesses, although he warned that they would have to "work very hard to get this result."
To achieve this some significant changes in business regulations would be necessary.Complex bureaucratic procedures make conditions for small or new businesses tough.
In 2005, then President Vladimir Putin declared that anyone who opened a business deserved a medal for bravery.
"I'm not talking about taxation now; we know that efforts are being made to simplify the system. But registering a company is impossible," he added. These problems remain.
Last month, Deputy Primer Minister Alexander Zhukov announced that the first meeting of the Government Commission for the Development of Small and Medium Business. According to Zhukov, the assembled guests discussed "a series measures to support and develop these kinds of businesses."
Vardanyan has noticed that the bureaucracy for new businesses has become lighter in recent years. He told The Moscow News that companies only have to file tax reports annually, rather than quarterly, and that registering companies is easier now.
He added that the main problem is that companies still have problems getting government contracts. "We need to move from government to business" he stated, saying that this would improve efficiency and help new companies develop.
Others were less optimistic about the impact of the Day of the Entrepreneur. Yevgeny Gontmaher, director of the Center for Social Policy Institute of Economics at the Russian Academy of Sciences told Svobodanews that the day "is all bows." Rather than simple decorations, "it is necessary to solve the underlying social, political and economic problems" he said.
Although the Day of the Entrepreneur may not seem glamorous compared to other holidays, it has highlighted some of the fundamental challenges needed in the Russian economy. These discussions now need to be transformed into support that would allow small businesses to thrive.