Small Businesses in the Urban Economy of the Far East
2 September 2021
Small business expects the government to provide infrastructural solutions and a comfortable environment
I would like transport corridors Primorye 1 and Primorye 2 to get launched in 2024. Business is wondering when the transport corridor through Bolshoy Ussuriysky Island will be put into operation? It is important for export. I would like to avoid a gap between what is being declared and what is being done. We need to practice what we preach — Alexander Kalinin, President, All-Russian Non-Governmental Organization of Small and Medium-Sized Businesses OPORA RUSSIA.
Cities is where small businesses develop. We can talk about developing farms and traditional crafts as much as we want. They are important, however there are more small businesses in big cities. Over 40 thousand entrepreneurs out of over 300 thousand registered in the Far East are based in Vladivostok. The first steps our team is taking target two areas – ensuring comfortable living conditions and a good environment for small business through an adequate demand and dialogue with the government — Konstantin Shestakov, Head of the City of Vladivostok.
Small business is very important socially, though their share in the GRP is small
60% of small and medium businesses in cities are commerce and services. According to the Federal Statistics Service, in 2019 small and medium businesses accounted for 19.8% in the gross territorial product of the Far East. The regions are very different. The ones that have more mining facilities have fewer small businesses. At the same time, SMEs have an employment rate of 30% or more, which means they are really important for the society — Alexander Kalinin, President, All-Russian Non-Governmental Organization of Small and Medium-Sized Businesses OPORA RUSSIA.
No dialogue between government and business in some of the regions
There is a call for dialogue under the coronavirus restrictions. Some restrictions are imposed without being discussed with the business community. It is easy to see how such decisions impact the region’s economy. Heads of 15 regions worked with us to make those restrictions clearer and gave a chance to impose the gradually — Aleksandr Isayevich, Member of the Board of Directors, General Director - Chairman of the Management Board, Russian Small and Medium Business Corporation.
High transport costs
The main problem both in the cities and beyond them is the so called ‘northern price hike’ and high transportation costs. Tomatoes and cucumbers cost RUB 700–800 here. In Murmansk, we bought yoghurt for RUB 50 and thought it was expensive, while here it costs RUB 150. A rise in railway and waterway tariffs is a low blow. It is tough on SMEs here, in the Far East — Oleg Kostenko, Acting Minister of Investment, Industry and Enterprise of Kamchatskiy Krai.
Digitalizing small businesses and creating new support programmes
Small business is in the perpetual cash deficiency situation. This year, small businesses will receive RUB 1 billion as a reimbursement for what they spent on Russian software. The budget has funds for that. Next year, the budget will have RUB 2 bln. for these purposes. We count on small and medium businesses actively using those opportunities — Maxim Parshin, Deputy Minister of Digital Development, Communications and Mass Media of the Russian Federation.
We have created 100 new places for selling farm produce. Together with businesses, we are creating projects for modern commercial areas. Everybody was looking for clear and predictable conditions for their work with the government. We have suggested it, so the city’s key transport areas will have markets and modern commercial areas — Konstantin Shestakov, Head of the City of Vladivostok.
Developing exchange trade
Over the last three years, we have had 35 exchange transactions, 93 new customers, including small businesses. We have completed transactions worth RUB 500 mln. total. Electronic exchange offers guarantees and sets specific delivery dates. It is impossible to plan the company’s operation, if there is no raw stock and if you do not know when you will be able to send your product. There is no point in transit along the Northern Sea Route unless it is already sold. We are prepared to sign deals before the catch. Our exchange trade experiment has lasted 7 years. I suggest we launch an exchange platform and create an infrastructure for it in federal districts — Sergey Lelyukhin, Director General, Far East Auction Fish House.
The material was prepared by the Russian news agency TASS