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. Last Updated: 07/27/2016

Medvedev Blasts State Shakedowns

Ria-Novosti / ReutersMedvedev meeting with residents of Zvenigorod, Moscow region, on Wednesday after touring a bread factory.
President Dmitry Medvedev on Wednesday blasted red tape and official extortion of small businesses, a sector he wants to prop up in the economic downturn.

“The situation is practically unchanged. The majority of these [government] services not only require a fee, but they’re expensive and monopolistic. There’s virtually no way around these structures,” Medvedev said during a meeting on the development of small and medium-sized businesses.

“There’s also a tendency to split these services into several parts, with each part requiring a separate payment. It’s starting to look like every movement by a civil servant must be compensated,” he said. “And I’d like to note that our companies aren’t so rich that they can pay for the government’s every sneeze.”

Promoting small and medium-sized businesses and reinforcing the rule of law are major parts of Medvedev’s plans to modernize the country’s economy.

“Experts say money spent by businessmen on overcoming red tape comprises a considerable part of [businesses’] annual revenues,” Medvedev told officials gathered to discuss the issue in the town of Zvenigorod, outside Moscow.

“Straightforward extortion of money [by officials] also exists, and that is simply disgusting,” he said.

Small businesses currently account for less than 20 percent of gross domestic product, compared with Medvedev’s target of at least 50 percent.

But Medvedev also said there were fewer arbitrary inspections by agencies.

“I met the prosecutor general, and he gave me good news that the number of arbitrary inspections of small businesses is going down,” he said.

As a typically absurd example, an official at the discussion recalled that inspectors once claimed a blue cheese was illegal because it had mold on it.

“Well, they don’t seem to like French cheese,” Medvedev replied, Itar-Tass reported.

In another effort to stem corruption, various government agencies have opened so-called state enterprises to handle services that were formerly dealt with by unofficial middlemen, who would guarantee faster processing for money. The middlemen typically used connections at the government agencies to rush paperwork through.

Earlier this year, the Federal Migration Service announced plans to set up an enterprise that would fast track the issuing of passports and work permits. A trial operation is set to start in Moscow next month, Vedomosti reported Tuesday.

A migration service official had said in the spring that the enterprise could start working in July.

(MT, Reuters)