While Russia has experienced sustained growth for years now, much of its economic success can be attributed to its energy resources. Sustained and equitable growth in the long run will depend on the development of other sectors of the economy - and Putin has decided to throw his support behind reforms to improve the business environment for small and medium enterprises. According to the Moscow Times:
The government spends nearly $7 billion per year investigating companies for procedural infractions, Prime Minister Vladimir Putin said Monday, calling on the government to change fundamentally its approach toward regulating business...
The comments came as Putin was discussing a package of bills aimed at protecting the rights of small and medium-sized businesses. The proposed legislation would simplify business registration, eliminate insurance on certain goods and limit government intrusion by criminalizing extra-procedural investigations conducted by police and Interior Ministry agents, the news agency said.
Despite the current economic boom, small and medium-sized businesses have failed to develop apace. The problem is not so much finding labor or the high cost of real estate but the time and manpower wasted dealing with an unruly and corrupt bureaucracy, said Katya Malofeyeva, chief economist at Renaissance Capital.
In the 2008 rankings on the ease of doing business, Russia ranked 106, well behind neighboring Poland, which ranked 74. These measures should go a long way in helping Russia catch up.
Join the Conversation