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Small Businessmen Burdened by Petty Bureaucracy

Published: September 18, 2013 (Issue # 1778)



  • For dentist Emelyanov, Russias economy is being held back by its rules and regulations.
    Photo: Alexander Zemlianichenko / AP

MOSCOW (AP) Dentist Sergei Emelyanov is being smothered in Russias red tape.

Every day, Emelyanov and his staff have to take time out from tending patients to fill out official logbooks on health and hygiene. Its repetitive and pointless work but required by law and vital if Emelyanov, who has co-owned his Moscow clinic since 1992, wants to avoid a hefty arbitrary fine from inspectors.

Along with many of the small struggling businesses in Russia, Emelyanov knows this comes with the territory.

Regulatory authorities, armed with current rules and regulations, are free to do whatever they want with us, he said. Every inspecting body is tailored to levy fines from businesses. Even if you abide by all the rules, they will always find something to fine you for.

There are growing concerns that Russias burdensome bureaucracy and corruption are holding back the countrys economy, which has become increasingly reliant on massive oil and mining companies.

According to the International Monetary Fund, Russia is the worlds eighth-largest economy just behind Brazil with an annual gross domestic product of some $2 trillion. While it exports a large part of Europes and Asias energy needs, it also helps fill in the order books of companies across the globe.

However, the countrys economic growth has been on a downward path since the start of last year. The Economic Development ministry estimates it will only be 1.8 percent this year the slowest rate since 1999. Economic Development Minister Alexei Ulyukayev has also warned of the risk of recession.

With Russian oil and gas exports slowing, the best hope lies with small and medium-sized businesses, Ulyukayev said in an interview with the Kommersant business daily last month. Russian exports can no longer be the key driver of economic growth, he said.

But businessmen like Emelyanov claim the government isnt backing its words with action.

When President Vladimir Putin was campaigning to win his third term as president in 2012, one of his promises was to increase the pay and benefits of state employees who make up to 40 percent of Russias total workforce. Soldiers saw their pay more than double last year, while teachers got a 14 percent raise. While this lavish spending has improved the lives of millions of Russians, it has put a strain on the countrys budget.

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ALL ABOUT TOWN

Tuesday, Oct. 21


The Environment, Health and Safety Committee of AmCham convenes this morning at 9 a.m. in the organizations office.


Take the opportunity to pick the brains of Dmitry V. Krivenok, the deputy director of the Economic Development Agency of the Leningrad region, and Mikhail D. Sergeev, the head of the Investment Projects Department, during the meeting with them this morning hosted by SPIBA. RSVP for the event by emailing office@spiba.ru before Oct. 17 if you wish to attend.


Improve your English at Interactive English, the British Book Centers series of lessons on vocabulary and grammar in an informal atmosphere. Starting at 6 p.m., each month draws attention to different topics in English, with the topic for this months lessons being visual arts.



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