OREANDA-NEWS. December 16, 2013. Alexander Brechalov, President of the OPORA Russia, Co-Chairman of the Central Headquarters of the All-Russia People’s Front, President of VBO Consulting, and Member of Uniastrum Bank’s Board of Directors, was asked about the program.

Mr. Brechalov, what are the problems facing the country’s SME sector and how can the Community Business for Community Life program help to overcome them?

The biggest problem that SME have is the government’s attitude to private enterprise as an economic unit. Specifically, the government has yet to regard the private sector as playing a major role in achieving economic and social objectives. More often than not, the present attitude is to view entrepreneurs as unscrupulous self-starters determined to make a profit whatever the cost. Hence, then, the business community’s ongoing litany of woes: high taxes, excessive control, and a myriad of administrative and bureaucratic hoops.

OPORA Russia has worked tirelessly to champion the interests of private businesses in their relations with the government, mostly with a view to resolving important, often localized, problems. That said, we’ve never lost sight of the big picture, and that’s how we came up with the Community Business for Community Life program as a way of addressing the main problem, namely the government’s misguided conception of private enterprise.

What was the initial incentive behind the program?

Two factors were instrumental. The first was the fallout from the hike in the amount of insurance payable by private businesses, which saw more than half a million sole proprietors go to the wall. Who gained? Absolutely nobody. Who lost out? Everyone, including the government. The second factor concerned entire communities. It’s common knowledge that Russia has numerous localities that are either deserted or are on the brink of extinction. Meanwhile, there are also localities where new businesses are up and running and where social problems are being tackled successfully. Such developments are of benefit to the government, communities, and business owners themselves. After all, private enterprise creates jobs and develops infrastructure. In other words, were the government to begin treating entrepreneurs as bona fide social entities acting for the good of society, this would completely change the way relations are structured. A key aspect of our Community Business for Community Life program is geared toward ensuring that the government, local authorities, administrators, etc. help to create private enterprise zones, so that everyone wishing to start a business is encouraged to do so by having somewhere they can begin work. This feature of the program is something that needs to be actively promoted.

What else does the program propose?

Another important part of the program is its call for changes in fiscal policy. It’s our belief that the government should do all it can to promote private business. Today, small companies and sole proprietors enjoy a fair amount of government support and incentives, have access to various programs, and so on. However, if a business expands to a certain level, those incentives are discontinued, which means that entrepreneurs are not sufficiently motivated to turn a small business into a mid-sized one. For this reason, we want to see tax, financial and other structures put in place that encourage unincorporated businesses to evolve into small, medium and even big companies. The government only stands to gain, given that the bigger the business the more it pays in taxes, the more jobs it provides, the more opportunities it offers, etc. The Community Business for Community Life program is focused on creating such opportunities and showing the benefits to be gained.

What other important initiatives does the program include?

Our program has two crucial proposals. The first concerns relationships with municipalities. Quite simply, the knowledge of local administrators needs to be improved. One way could be to run training courses. People ought to know what they can do and how to go about it. We firmly believe that municipalities should be given wider powers enabling them to promote local business development. Our second proposal is that new financial mechanisms be devised and implemented, and in this area the part played by the government and banks is understandably of considerable importance.