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. Last Updated: 07/27/2016

City Hall Lends Hand To Its Small Businesses

The Moscow city government is set to create a city-wide network of consulting centers devoted to aiding the development of small businesses by providing legal advice and information.

Mayor Yury Luzhkov approved the resolution, which was prepared by the city's small business development department and the Moscow Small Business Support Fund, at a City Hall meeting Tuesday.

The city already has 39 such centers, but City Hall officials say that is not enough and that they are poorly organized. The city has not yet decided how many new centers to build, but is planning to make them accessible to everyone in Moscow.

"There should be a unified system of centers that share a database and supply the same quality of consulting throughout the city," said Yelena Yemilyanova, first vice president of the Moscow Small Business Support Fund.

"These centers will be a 'one-stop shop' for entrepreneurs: They will be able to come in and get quality consultation on the registration process, what government agencies they need to visit, licensing and viability studies," she said.

Yevgeny Yegorov, director of the small-business development department, said the centers will not only benefit small business, but the city as well.

"This program will help increase the city's gross product, tax revenues and create jobs," Yegorov said.

The value of goods and services attributed to small businesses in Moscow for the first half of 2001 was 67.66 billion rubles ($2.29 billion), said Ivan Nikitin, a consultant at the small-business development department. The figure for all of 2000 was 82.77 billion rubles.

He also said the number of small businesses in Moscow grew by 1,898 to reach 181,898 in the first half of 2001.

The department is asking City Hall to build at least one center in each municipal district.

"If we can get sites that are not being used or buildings where construction has been interrupted, then the construction of these centers won't be expensive," said Yegorov.

Each district in Moscow will have to provide a location of 2,000 square meters or more by the end of the year, he said.

The department, however, would not say how much the project will cost, citing its early stage of development.

The center's consulting services will not be free, Yegorov said.

"We researched the market price for the kind of services we plan to provide through our centers, and cut them by 40 percent," Yegorov said. "The first basic consulting service will cost four minimum wage units [100 rubles]."

Some independent small business leaders are skeptical of the program.

"Government organizations create organs for the support of small businesses, but in reality, they support structures that are close to the government, and use small business as an excuse for additional budget expenditures," said Vladlen Maximov of the Liga Svobody inter-regional union, which includes more than 1,000 small businesses in Moscow and the Moscow region.

"The Moscow government is not supporting small business when it replaces entire market places with a supermarket," he said. "The best thing the government could do to support small businesses is leave them alone."

Dina Krylova, director of the Delovaya Perspektiva social organization, which defends the rights of entrepreneurs, took a moderate stance.

"Two or three years ago, I would have said they're wasting money, but today the government has made its position on small business clear, and if they will really work with entrepreneurs and organizations like ours, the support centers will help."