Russian business dissatisfied with state support

RUSSIA / FSU POLITICS - In Brief 05 Jul 2020 by Alex Teddy

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On July 1 Russia's main business newspaper Kommersant revealed that some of Russia's largest firms have lamented inadequate financial support from the government in the wake of coronavirus. Claiming financial aid is unduly onerous due to excessive form filling. The government listed 1 300 companies as systematically important to the economy. Some companies want to get off this list. The administrative burden of informing the government of reams of data is not worth the meagre financial support offered in return. Low interest loans, a tax moratorium and cash injections are what the state is granting them. Only 10% of the companies on the list have received the promised aid. The government backed loans totaling USD 1.85 billion have been given with an interest rate of 3% on average. Companies are loathe to furnish the state with the data that is required. This would be a treasure trove for competitors engaged in industrial espionage. Companies are also worried that if they accept state support the state will later make unreasonable demands of them. SMEs are left to fend for themselves. This smacks of cronyism. Russia does not have a furlough program to allow companies to put staff on gardening leave. Companies can get salary support loans worth USD 172 per month person. That is only 25% of the average wage. For companies paying high salaries this is risible. The salary support loan will be forgiven if the company employs 90%+ of its employees till the end of the crisis.