Medvedev Vows Aid for Small Business

APFrom left, Zhukov, Shuvalov, Medvedev and presidential aide Arkady Dvorkovich meeting Wednesday in the Kremlin.
President Dmitry Medvedev told his new government on Wednesday to step up efforts to help small and medium-sized businesses choked by red tape and corruption.

Medvedev promised during his election campaign to free the sector from the arbitrary checks officials use to extort bribes and said he would provide solid state support for he has called "a cradle of the middle class."

Elected in March with the strong backing of his popular predecessor, Vladimir Putin, Medvedev has said creating a strong middle class interested in political and economic stability Medvedev is a top priority.

"You will receive a special order concerning the so-called 'extrajudicial' rights of police to check businesses," Medvedev told a Kremlin meeting of top government officials summoned just two days after a Cabinet headed by Putin was formed.

"This should be done in accordance with the general order banning arbitrary visits by law enforcement bodies to small businesses," Medvedev added, Itar-Tass reported.

The country's transition to a market economy accelerated under Putin, who presided over eight years of uninterrupted economic growth fueled by high energy prices. But critics say that in large part only big firms, especially those with close ties to the Kremlin and well-protected against a swelling state bureaucracy, benefited from the boom.

Small and medium-sized companies, harassed by the mafia in the 1990s and bureaucrats this decade, have failed to flourish. They produce less than 20 percent of the country's gross domestic product, compared with Medvedev's target of at least 50 percent.

Medvedev told officials, including First Deputy Prime Minister Igor Shuvalov and Deputy Prime Minister Alexander Zhukov, to offer small firms financial support, especially with rising energy costs.

"You will receive orders concerning ... the procedure of giving small companies access to power networks and minimizing their expenses when switching to these networks," he said. "We should consider subsidizing these expenses through [state] budgets."