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. Last Updated: 07/27/2016

Kremlin Outsider Picked To Boost Small Business

The newest member of the Kremlin's economic-reform team said Tuesday she expects to have no problem fitting in and producing results in the male-dominated upper echelons of government.


Irina Khakamada, 42, was appointed last week to head the State Committee on Small Businesses, an area she said is long overdue for government attention.


"The state has to turn its face to small enterprises," she said at a news conference called to lay out her plans.


She is one of only five women to head a state committee or ministry. Once a self-proclaimed outsider who often criticized the government, she is now regarded by some Kremlin watchers as a potential rising star in President Boris Yeltsin's resurgent economic reform program.


She fits the mold. She was educated as an economist and gained prominence in the business community in the early 1990s. She also knows her way around the State Duma, having served there since 1993. That experience could prove valuable in the government's struggle to push its programs through the opposition-dominated chamber.


She has been active in political movements, and last year founded her own liberal movement Common Cause.


She said she was careful to seek assurances of support from top officials -- including Prime Minister Viktor Chernomyrdin and First Deputy Prime Ministers Anatoly Chubais and Boris Nemtsov -- before leaving the Duma, the lower house of parliament, to accept a new job as head of the State Committee on Support and Development of Small Enterprises.


She reportedly declined at least one previous offer to join the government.


Khakamada said that she left the Communist-led Duma because, as an independent, she found her attempts to lobby largely pointless in the day-to-day political infighting.


"To succeed in the Duma, a deputy has to belong to a faction that holds the majority of the votes," she said.


"Now I will speak to the Duma on behalf of the government," she said.


At her news conference, Khakamada said that she has three goals for her government job: simplifying the taxation regime for small businesses, easing registration procedures for new enterprises, and reinstating an element of the federal budget allocating low-interest loans and other help for small enterprises.


The chapter was removed from the government's proposed 1998 budget, which currently is before the Duma.


Khakamada said restoration of that chapter would be a clear demonstration of state support for small businesses.


She said the current cumbersome tax code all but forces many small businesses to cheat on taxes. That situation, she argued, inevitably drives businesses into a so-called gray economy, which leaves them vulnerable to organized crime and further deprives the government of tax revenue.


"My goal is to increase the input [of small businesses] to the gross domestic product to something like 40 percent," Khakamada said. According to official statistics, small enterprises currently account for only about 7 percent of GDP.


Khakamada joked that she is not afraid of failing at her new post.


"If it happens, I will most probably set up a small business and this is why I'm rushing here to help small enterprises," Khakamada said.