Time to take action: in the fight for the growth of the country’s GDP, business is at the forefront

Who ensures the antifragility of the economy in the face of sanctions and how to support this process, experts said

Russian business faced the severe consequences of the restrictions from the first days of the special operation in Ukraine. According to the May survey of the Institute for the Economics of Growth. P.A. Stolypin, more than 80% of companies were affected by sanctions. It was difficult to adapt to the new conditions: the authorities were engaged in saving the financial system, and the interests of business were relegated to the background. The Bank of Russia raised the rate at the end of February to 20%, and only in June did it become single digit. The ruble jumped like a hare. The Ministry of Economy predicted a fall in GDP by 8.8% by the end of the year. The future seemed bleak, but Russian business managed to change that. How to support those who are at the forefront of the economic war today defending the interests of Russia, “MK” discussed with experts.

Domestic business turned out to be the most persistent and mobile element of the economy, which made it possible to achieve a relatively moderate – only 0.5% – fall in the first half of this year. The first time the role of private enterprise became clearly visible in our society during the pandemic, and now it is again at the forefront of the struggle for economic development. State support works well, but this is no longer enough for force majeure conditions. For example, the guarantees of the SME Corporation helped businesses to raise a record amount of loans in the first half of 2022 – over 210 billion rubles, which is 2 times more than in the same period last year. However, according to Russian business ombudsman Boris Titov, even this record amount is only 7-8% of the entire portfolio of loans to small and medium-sized businesses. The rest accounted for other types of lending, including those without state support and at inflated rates. Although in the first half of the year they were critical even on preferential loans, Titov recalls, however, loans were also taken on them in order to close cash gaps. How much business needs funding can be understood from the fact that within the framework of the described program, micro and small businesses accounted for 97% of all recipients of state support.

Without access to finance for businesses, ideally on favorable terms, the fight for GDP could be lost, as the country faces the daunting task of implementing five- and ten-year import substitution plans in three years. In a number of positions, Russia will have to work out its competencies very seriously and productively. According to the director of the Institute for Economics of Growth. P.A. Stolypin Anton Sviridenko, we are talking about the aircraft industry, electronics, shipbuilding. Over the past 10 years, the economy of our country has grown very slowly, in fact, was in an inertial state. “There cannot and should not be another scenario, except for the struggle for growth, since in other options it will no longer be inertia, but a fall,” he stressed. Proactivity in economic policy is important: the availability of capital, taxation that stimulates the deepening of processing and investment, guarantees for private business, indicative development planning.

The second task that needs to be implemented is the rejection of excessive administrative regulation. “Freedom for business! – Valentina Matviyenko, Speaker of the Federation Council, called back in April. – Give people freedom, do not touch anyone now. And then the economy will trample at such a pace that forecasts will not be needed.” At that moment, this phrase encouraged many. But now it is clear that the problems are not solved. “For the business community, a sense of security is important: an entrepreneur should not be afraid that tomorrow a criminal case will be opened against him and the business will be closed or transferred to other hands,” says Alexander Goncharov, Commissioner for the Protection of Entrepreneurs’ Rights in the Chelyabinsk Region. “Quite often this happens at the slander of competitors.” And as experts have calculated, the arrest of the head or owner of the company can lead to the loss of up to 300 jobs.

The decrease in administrative regulation is a positive moment, taking into account the “overregulation” of certain industries, the expert emphasized. “I am of the opinion that not only in a crisis situation, but in principle, it is always more important not to interfere than to help,” continues the theme of the founder of the Meat & Fish restaurants, Ombudsman in the Moscow restaurant business Sergey Mironov. “Our main problem is connected with the constant introduction of new norms, rules, requirements, of which there are so many that businesses are often unable to even study them, let alone comply with them.” The adoption of any norm must be verified by experts from the industry in which this norm will operate, otherwise a situation may arise when the new requirements are simply unnecessary or not feasible at all, the expert warned.

The third task is to support initiative entrepreneurs. It is they who are able to respond quickly to crises and create new opportunities for economic development. Here, according to Goncharov, the state should give a clear message to business that it will not “leave” it and will not use it as a cash cow. Now, unfortunately, it turns out that benefits and support go to businesses that are among the most affected industries according to OKVED, although everyone sees that many more industries are in a crisis situation associated with a drop in consumer demand.

The fourth task of the policy towards private traders is to ensure the stable growth of citizens’ incomes on the part of the state based on the creation of highly productive jobs in the private sector. Entrepreneurs are people who create added value and feed themselves, their families, their employees, thereby reducing the burden on the social sphere of the state. Accordingly, by creating conditions for the emergence of high-performance jobs in the private sector, the state will ensure a stable growth in citizens’ incomes, which is one of the key goals of domestic policy.

Thus, in order for the state strategy for business to be consistent and truly support it during the period of sanctions, four main tasks should be solved – to ensure access to financing, reduce administrative barriers, support enterprising entrepreneurs and ensure a stable growth of citizens’ incomes based on the creation of high-performance jobs in the private sector. Details on how to solve each of them are described in the program of the Stolypin Institute “NEP 2.0”. It can be found on the organization’s website. Private traders are the driving force of the economy, but today it will be very difficult for them to survive without a well-thought-out and consistent state policy.