Heroes of difficult days: entrepreneurs lead the Russian economy out of the crisis

More than 80% of company owners in Russia have adapted to work under sanctions or intend to do so. Only 3% want to close their business. These are the results of a study of the mood of businessmen, published on August 2 by Boris Titov, authorized under the President of the Russian Federation for the protection of the rights of entrepreneurs.

The numbers show that at the first stage, most businessmen decided on a strategy: to fight and continue to survive. So it was in the covid year. Despite the crisis, the economic development of the country continues, however, in order not only to maintain old, but also to open new enterprises, the authorities should provide maximum assistance to business. What does the ideal public-private partnership (PPP) look like today? P.A. Stolypin.

The economic recession in our country will be more extended in time, but most likely less deep, the Bank of Russia said on July 22. These expectations were one of the main reasons for reducing the key rate that day by 1.5% at once, to 8%. During this period, Russian business cannot do without the help of the state. It can act as a guarantor of new investments in conditions of increased risk. There are two main contours of cooperation within the framework of PPP: the first one concerns domestic policy, the second – external. The first includes the provision of financing, the possibility of business participation in infrastructure projects, the reduction of taxes and administrative barriers. PPP in the field of foreign policy is associated with the regulation of foreign economic activity (FEA), the organization of international cooperation with Russia’s partner countries and ensuring sanctions stability.

inner strength

According to the director of the Institute for Economics of Growth. Stolypin Anton Sviridenko, in Russia there is a fairly wide practice of PPP projects related to infrastructure projects: ports, airports, highways, etc. “So far, these projects have the fewest foreign companies that have left,” the expert noted. At the moment, PPP is becoming even more important. The need for large investments for the restructuring of businesses and high risks stimulate the emergence of the state as a certain guarantor of new investments. And the range of projects can be significantly expanded – from infrastructure to production – in the highest priority sectors or those affected by sanctions pressure.

The status of state participation should also be changed. “While the state usually grants facilities for concession in infrastructure projects, now private business most of all needs co-financing, including participation in the capital of special project companies,” Sviridenko says. This system should be able to generate new solutions in response to the imposed external restrictions and promptly coordinate the work of all interested participants. “When we talk about government investment in business, these are, first of all, infrastructure projects,” Mikhail Kuznetsov, deputy from the Party of Growth in the Kazan City Duma, business ombudsman of Tatarstan, general director of the Tolstoywear garment production, continues the topic. – The business does not have time to wait for the construction of the plant for 2-3 years, it is ready to start today. Now we need a site connected to gas, to electricity of a certain level of safety, without breaks, with sewerage, a railway line, boxes of factories, that is, ready-made workshops, and even with a training college.” The investor will only have to enter the site with money and technology and immediately start working, the expert pointed out.

Megaregulator to help

However, the partnership between business and the state should not be limited to local support. In modern conditions, strategic export promotion is very important. It is necessary to form a new system for organizing trade relations under the leadership of a specially created mega-regulator of foreign economic activity. “The core of this system should be the creation within the structure of the government of a specialized Ministry of Foreign Economic Relations and Counteracting External Restrictions, which will be a mega-regulator of foreign economic activity, including a “brain” and coordinating center as part of the work to form a response to the challenges that Russia faces in this area” , – says Sviridenko. The new department will pursue a unified state policy, coordinate and regulate foreign economic activity, monitor restrictive measures imposed against Russia by unfriendly countries, develop and implement measures to reduce their negative impact, including on the development of exports of domestic products, the creation of settlement centers and necessary transport and logistics infrastructure.

In the new conditions, the Russian business will receive tangible assistance from the state to provide co-financing for large projects of exporting companies to create and organize full-cycle production facilities in the key countries consuming Russian products. The mega-regulator of foreign economic activity will be able to act as a guarantor of such agreements, perhaps even a partial participant in them as part of the provision of legal support and financial resources. A working model already exists. “Co-financing of large projects of exporters could be carried out according to the following scheme: to participate in the project, a special project company is created, in which the state, through development institutions, enters 50% of the capital,” says Sviridenko. – This project company issues special issues of bonds that are redeemed by banks on special refinancing lines of the Central Bank, while it is desirable to include such bonds in the pawn list.

The state withdraws from the project after its targets have been achieved.” This principle is needed only for certain especially important export projects, because, of course, the widespread participation of the state is not necessary. His participation in this option is, first of all, a guarantee that the project will be supported in case of any risks. In addition, for exporters of promising products, the state can finance the costs of research and development and preparation of production for the release of new products, the director of the Stolypin Institute emphasized.

high embassy

Separately, it should be noted that all of the above is impossible without the provision of diplomatic support and the provision of guarantees of international cooperation.

With the participation of the Russian Foreign Ministry, it is necessary to conclude agreements with at least 15 partner countries on free trade zones – with Turkey, Egypt, Iran and other states friendly to Russia. “Several types of agreements are needed,” Anton Sviridenko believes. Firstly, for the implementation of joint projects to create special zones like bonded ones, where activities will be carried out without customs duties, and products manufactured there will be freely circulated in the markets of partner countries. Second, agreements are needed to reduce tariff barriers to trade. “Recently, the President of Russia was in Iran and initiated such an agreement with this state,” recalls the director of the Stolypin Institute. – These agreements provide for a preferential import regime for a certain list of goods. We reduce our duties on the goods of partner countries where it is beneficial for them, and they reduce their duties on our goods.”

All of the above steps will bring public-private partnerships to a new, previously unattainable level and will ensure sanctions stability, as well as Russia’s economic growth. A more detailed set of necessary measures is detailed in the recent works of the Stolypin Institute – “Growth for All” and “The Great Reset”, which are part of the more global program “NEP 2.0”. “PPP is what the economy of the USSR grew to a large extent during the NEP period and before the Great Patriotic War, and in our time the Chinese economy has risen,” recalled Nikolai Palchenko, chairman of the Murmansk regional branch of the Party of Growth, owner of the Capital company. – In both cases, private partners were foreigners. And today it would be much easier for the Russian economy to attract investments from outside through PPPs with foreigners.” The set of these measures is sufficient to significantly increase the growth of the domestic economy, but it is also the minimum necessary for growth to exist at all, the expert emphasized.