Small, Big Businesses Petition Government

Despite the billions of rubles the government has earmarked to support private businesses, Russian entrepreneurs said Tuesday that they were still unsatisfied.

While the owners of small enterprises were picketing outside the Economic Development Ministry to mark national Entrepreneur Day, their colleagues from big business were complaining to President Dmitry Medvedev at his residence in Barvikha, in the Moscow region, about the inaccessibility of credit.

"Freedom for small businesses!" said a poster held by Natalya Degtyaryova, a protester and owner of a small store in Lipetsk.

The crowd chanted, "Stop lying about the support of small business," while picketers held up signs reading, "My business was killed by a bureaucrat" and "No to raider attacks."

"My business was all but destroyed when I refused to pay a bribe two months ago," Degtyaryova said. "The consumer market control department said they found 'low-quality' wine in my shop and took several bottles with them."

"They told me through one of my suppliers that we could settle the problem in a friendly way if I pay 5,000 rubles," she said. "When I refused to pay it, they fined me 100,000 rubles." The minimum fine for such a violation is 3,000 rubles.

There were hopes, though, that fewer people will have Degtyaryova's problem in the future, as all unscheduled inspections of small and middle-sized businesses were banned starting May 1.

Dmitry Astakhov / RIA-Novosti / AP Medvedev walking with businessmen at his Barvikha residence Tuesday.

Other picketers complained that government measures to aid small businesses didn't work. "My rent rose 700 percent in January," said Olga Mikhaylenko, the owner of a Moscow hat maker. "And this is despite the fact that we are renting from the city."

Mayor Yury Luzhkov said lease payments for office space rented from the city should not exceed 1,000 rubles a square meter -- about 8 percent of the average rate last year, before rental prices plummeted.

Medvedev admitted Tuesday that some measures adopted by the government did not work properly. He was speaking at a meeting with 30 businessmen, including Troika Dialog chairman Ruben Vardanyan and MDM-Bank chairman Igor Kim, as well as producers of bread, wine, car components and software.

"Not all forms of support have passed the test of time, not all of them have been realized as quickly as we wanted them to," Medvedev said.

The participants agreed with Medvedev. "All those who came, from mineral resources extractors to a meat-processing factory owner, complained about the inaccessibility of bank loans," said a source present at the meeting, who asked not to be identified because of the sensitivity of the situation.

But businessmen raised other issues, as well.

The chief executive of Kirov-based Vesna toy factory, Olga Dorotyuk, complained that there was no federal body to deal with the toy industry's problems, the source said. The complaint prompted Medvedev to appoint Deputy Prime Minister Igor Shuvalov to oversee the country's toy industry.

Dorotyuk was unavailable for comment late Tuesday.

"The conversation was very informal and relaxed," said the chairman of the ABBYY, a document-recognition software company, David Yang, who was present at the meeting. "I was afraid that the president would be telling us what to do." Medvedev promised that the role of the state in the economy would shrink while the importance of private businesses would grow, Yang said.