The crisis impact on the development of SME’s in Russia and antirecessionary support measures Dina Krylova Executive director OPORA RUSSIA Kiev, 17 June 2009

Small business in Russia (Criteria set by the Federal law) Number of workers Micro – till 15 employees Small – till 100 employees Medium – till 250 employees Turnover Micro – till 60 mil. rubles Small – till 400 mil. rubles Medium – till 1 billion rubles

Small business in Russia 1 million 137 thous. – small enterprises 3 million 400 thous. – individual entrepreneurs Number of employees in SE – 16,7 million people or 25% of total number of employees ~ 17% in structure of GDP

Sectoral structure of small entrepreneurship Small Enterprises (SE)*SE +Private Entrepreneurs *Number of small enterprises (legal persons) in sectors of economy according to the Federal service of the State statistics 50% 11% 12%12% 3% 1.5% 2% 20.5%

5 OPORA RUSSIA today OPORA RUSSIA All-Russian Public Organization of Small and Medium-Sized EntrepreneurshipOPORA Association of entrepreneurial organizations of Russia (created in September 2001) Commissions & Committees Coordinators in 7 Federal Districts Entrepreneurialregional associations and unions Entrepreneurial sectoral associations and unions (125) Entrepreneurs About regional divisions Entrepreneurs Approx. 4.9 million jobs

Regional dimension ■ ■ OPORA RUSSIA has its divisions in 80 of 83 regions of the country Regions where OPORA RUSSIA divisions have been set up

OPORA RUSSIA Active participant in small and medium business development policy Priority activities are: Improvement of business climate Independent monitoring and research conducting Decrease of the administrative barriers Own programs of entrepreneurial support Diversification of the small business structure and development of the support infrastructure

Crisis impact on SMEs Changes of business environment in the sphere of credit, personnel and premises accessibility. The changes in the business environment influence on internal processes of companies: –sales volume is decreasing, –number of employees is decreasing, –cuts of salaries, –size of indebtedness is increasing.

Crisis impact on SMEs

The half of the respondents noted the aggravation of the situation for the last 2 months Availability of loans (February- March 2009 ) For the last 2 month to get a loan has became… To get a loan today is … For the last 2 months credit interest rate has changed the following way… Copyright © 2009 OPORA RUSSIA together with Baumann Innovation

The main problems for business today * Percent of respondents who marked the problem as one of the three most important for business *

Antirecessionary measures, which can be the most effective for SME * Percent of respondents indicating this measure as one of the three that can most effectively help their business *

*Percent of respondents indicating this position as one of the three priorities for their companies to the next month Copyright © 2009 OPORA RUSSIA together with Baumann Innovation The main priorities of businesses for the nearest month *

Effect of the Governmental antirecessionary measures and efforts

Governmental antirecessionary measures Total financial support of SME – 100 billions rubles Increase of the crediting of SMEs through Russian Bank of Development (30 billions rubles ) Increase of the federal budget resources foreseen for the SMEs development (10,5 billions rubles) Guarantee of the access of SMEs to the government order through government corporations and natural monopoly entities

OPORA antirecessionary measures for SMEs support Increase of the demand by stimulating big companies to relay part of the government and corporate order to subcontracting for SMEs 2. Freezing of the tariffs of the natural monopolies 3. Moratorium on tax inspections of losers 4. Three times decrease of the tax rate for those using simplified tax system or unified tax on imputed income 5. Moratorium on liquidation of all forms of market trade 6. Introduction of the mechanisms of cooperation for the development of social sphere and entrepreneurship 7. Export promotion 8. Simplification and cheapening of SMEs connections to the electricity 9. The support of import substitution and export orientated companies

View to 2020 The main principals of state regulation of SME : presumption of superfluity of state functions presumption of taxpayer fairness, etc. serious increase of the SME ratio in GDP (not less than 40%) increase of SMEs up to 10 mln. decrease of SME ration in trade, while fivefold increase of ration in the following spheres: social services and healthcare, science and IT, housing and utilities infrastructure, education. Building up to 700 business-incubators and about 200 technological clusters.

Thank you!