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. Last Updated: 07/27/2016

High interest rates squeeze Businessmen

As Russian interest rates soar, the : country's fledgling small businesses say they are being squeezed out of existence.

At a conference that began Wednesday, these Russian entrepreneurs lashed out at the Central Bank, contending that they could no longer work in a creditle's economy.

The bank recently raised its discount rate to 80 percent, prompting fears in the business community that a trickle-down affect will raise commercial bank lending rates as high as 150 percent at a time when investment and private initiative are most needed.

"We are being killed, how can entrepreneurs function in these conditions? It's a new way to nip businessmen in the bud", said Yuri Volkov, President of the Russian Business Agency, a local association created to boost entrepreneurship.

"It's now not a question of supporting business, but saving it", he added.

The International Congress On Small and Medium Scale Enterprise in Russia, which runs through Saturday, has lured more than 1, 000 participants from Russia, eight other former Soviet republics, and abroad to tackle roadblocks which are stifling entrepreneurship. "Without small-scale enterprises here it will be impossible to transform to a market economy", said Vyacheslav Azeri, vice president of a private small business support fund. International Fund for Russian Reforms.

If Azeri is correct, Russia is in trouble. So far privatization has been limited by government stalling, and, just as important, the absence of credit for small businesses. Inflation has slowed to the point that high interest rates make it virtually impossible" for small businesses to operate profitably and follow the law.

"Over the past few months our government hasn't come up with coherent legislation", said Svyateslav Fyodorov, an eye surgeon and millionaire.

Speakers at the conference charged that government policies, such as reliance on a $24 billion fund under the auspices of the International Monetary Fund, look at macro solutions at the top, but ignore small businesses.

"I have never seen a more ugly and abhorrent system of privatization than there is here", said Vladimir Tikhonov, a Moscow academician.