Shuvalov: Tatarstan’s practice of aiding small and medium business important for Russia

The Prime Minister of Tatarstan Roustam Minnikhanov delivered a report at a government’s commission on supporting small and medium business meeting. The commission is chaired by the Deputy Prime Minister of Russia Igor Shuvalov. The meeting was held in a video conference format and attended by representatives from all Russian regions.

The meeting reviewed issues related to the regional systems of supporting small and medium businesses, devising department-specific target programmes for small and medium businesses by the federal authorities, establishing related consultative and coordination councils, as well as fulfilling the government’s instructions issued after the Russian Forum on Small and Medium Business.

The Tatar Prime Minister reported of the local small and medium business’s current condition and a strategy aimed to stimulate business undertaking. As of the beginning of 2009, Tatarstan had over 200 thousand active small and medium business entities that contributed 26 percent of the gross regional product. The average monthly salary at the enterprises is 16 percent bigger than the Tatarstan’s average.

The Premier went on to note the government was running some large projects and programmes to support small and medium business, including with the participation of the federal centre.

The prime minister spoke of a business-incubator and a technology-park network, built in Tatarstan to help solve the small and medium business’s major problem, lack of an infrastructure. Tatarstan operates 5 business parks, technoparks and an industrial park called KIP Master. Roustam Minnikhanov pointed out that industrial parks’s success largely depended on larger enterprises’s willingness to cooperate with smaller and medium ones. In Tatarstan, the KIP Master works in close cooperation with Kamaz.

The prime minister informed the meeting of the coming completion of an IT technology park construction, drawing Igor Shuvalov’s attention to the fact that the Russian Ministry of Telecommunication and Mass Communications did not comply with the financing obligations it had assumed within the project, that is implemented on an equal-contribution basis. Tatarstan has fulfilled its obligations to the full extent, he noted.

A leasing company operating in Tatarstan, Roustam Minnikhanov continued, greatly contributes to developing small and medium enterprise. As an anti-crisis measure, Tatarstan has launched a programme aimed to support small and medium business based on the “leasing grant” system. The programme’s uniqueness, remarked the premier, is in the fact that it strongly involves municipalities. They nominate candidatures of businessmen for obtaining aid funds to build production facilities. An undertaker leases out production equipment, while the grant is used to make the first leasing payment. According to the data presented by the Tatarstan head of government, the programme’s grant pool is 178 million roubles; 95 businessmen, whose projects have been approved by the commission, have received allowances within the first stage.

To stabilise the situation on the job market, Tatarstan has adopted a regional programme of pre-emptive measures on eliminating the negative after-effects of the global financial crisis. Implementing additional measures, designed to reduce tensions on the job market, should allow provide jobs, including as private enterprise, for 4.5 thousand people.

Tatarstan has adopted a law on decreasing taxes for taxpayers applying the simplified taxation system. A tax rate reduction from 15 to 5 percent is offered to organisations and private business operators engaged in the industrial production and construction branches. The other taxpayers, entitled for special tax treatment, use a tax rate reduced from 15 to 10 percent.

Roustam Minnikhanov raised the subject of small and medium business’s access to state and municipal orders. According to the Premier, it has largely been the reason Tatarstan has launched an electronic commerce and information system, ECIS. The system to a maximum allows engage local goods manufacturers in supplying products for internal needs, industrial cooperation and sub-contracts within corporate purchasing.

“I can see that the approaches in your republic are similar to those applied nationwide,” First Vice-Premier told Roustam Minnikhanov after the report. “I think the federation’s constituents should use more the leading regions’s practices in the field of supporting small and medium business, and we on our part should facilitate it.”

The official praised the electronic auction system, designed for municipal and state contracts, emphasising the importance of such systems for the other regions. “What you are doing for small and medium business in this respect is very important for the country,” emphasised Igor Shuvalov. “People, entrepreneurs see that healthy competition is possible in the field of state purchasing.”

Igor Shuvalov enhanced that providing access to budget sources and competition for small and medium business was a priority within the federal and regional authorities’s joint effort.

The Russian Economic Development Ministry chief Elvira Nabiullina said that some customers were reluctant to divide lots, so that smaller and medium firms could not take part in auctions. The minister pledged that violation of the standard would be penalised.

Igor Shuvalov, addressing the regional governors present, emphasised that the government would clamp down on attempts to restrict small and medium business’s access to government orders.