Weekly Business (Ukraine)
Author: Dmitry Grinkov
MONEY. THE BANKER OF THE WEEK
Vladimir Dmitriev, Chairman of State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’:
“Generating Profits is not Vnesheconombank’s Main Objective”
Vnesheconombank, one of the largest Russian state banks, completed the transaction to purchase Ukraine’s Prominvestbank in early March 2009. We’d like to remind you that having faced a massive outflow of deposits in October 2008, the bank was on the verge of bankruptcy and was placed under the National Bank of Ukraine (the NBU) receivership. The bank’s principal former co-owner Vladimir Matvienko is sure that his brainchild was subjected to a pre-planned raider attack. The bank’s appeal was that the largest domestic enterprises’ assets were pledged as collateral against the bank’s credits. The names of ill-doers are still shrouded in secrecy. Although we know that several Russian banks were interested in purchasing a half-dead bank including Alfa-Bank. But in early November, the National Bank suddenly announced that Austria’s company Slav AG won the tender. Slav AG is controlled by people’s deputies from the Party of Regions Andrei and Sergei Klyuev. Nevertheless, for almost half a year, a new investor failed to find more than $ 1 billion required to rescue the bank. At a time when the National Bank already prepared a recommendation for the Finance Ministry, Slav AG announced that it would buy out the bank in consortium with Vnesheconombank, Russia’s state corporation (the agent for the Government) whose Supervisory Board is headed by Russian Prime Minister Vladimir Putin. Vnesheconombank Chairman Vladimir Dmitriev told about the transaction’s details, relations with politicians and oligarchs and real reasons for getting into Ukraine’s market in his exclusive interview to BUSINESS.
ON THE CRISIS
-Ukraine and Russia faced almost the same challenges of the global financial crisis. Nevertheless, the Russian banking system succeeded in avoiding a massive outflow of deposits and the devaluation of the ruble against the US dollar since last summer up until now has not exceeded 40% while the grivna lost 70% of its value at the peak of depreciation. How can you explain this difference?
Using our Finance Minister’s words we can say that we simply had a softer safety cushion in the form of the Reserve Fund, the National Wealth Fund and gold and foreign currency reserves of the Central Bank which accounted for 25% of the GDP as of the beginning of the crisis whereas in Ukraine this indicator was about 17%. On top of that, the political situation in your country was far from favorable for pursuing an adequate monetary and fiscal policy. Politicians’ recriminations and poorly coordinated actions do not help stabilize the economy. In this respect, the Russian authorities made appropriate decisions timely and faster than in good times. Specifically, it was decided in Russia to refinance domestic companies’ foreign debts, increase banks’ capital through extending state subordinated loans and use financial resources of the National Wealth Fund to support the stock market. Targeted assistance was provided to certain industries, credits were extended to system-forming enterprises and etc.
-In fact, Vnesheconombank is responsible for distributing funds intended to support Russian banks. For example, subordinated loans worth about $14 billion will be extended through your Bank and the largest corporations’ foreign debts will be refinanced through VEB for an amount of about $50 billon. Do you personally take decisions on supporting specific corporations or is this a responsibility of VEB’s Supervisory Board headed now by Prime Minister Vladimir Putin.
-Factually, Vnesheconombank accounts for 62% of the total amount of funds earmarked for financial stabilization. Despite that Vnesheconombank is not a classical corporate entity; all decisions are made within corporate regulations. Criteria for the state’s support were approved by the Bank’s Supervisory Board, banks submit their applications to us and we consider them subject to a clear-cut procedure. But individual decisions on specific banks are to be made by the Supervisory Board. One of criteria is a bank’s participation in lending to the economy. And here I mean not only production facilities but also population.
-What’s a principal difference between Vnesheconombank’s activity from that of other Russian state banks, for example, Sberbank, VTB?
-The most principal difference is that generating profits is not our Bank’s main objective. Hence, we work with those borrowers which are not comfortable for commercial banks or with those to which commercial banks can’t extend long-term, major credit resources. We finance projects worth at least 2 billion rubles (about $63 million). And the Bank’s participation share is not to be less than 1 billion rubles. We have also identified priority sectoral lending targets. For example, we are not entitled to provide lending to ordinary construction companies. But if we deal with infrastructure projects we finance such companies too. Lately, the Bank has started to perform functions unusual for it; it is implementing crisis management measures. The state’s financial aid goes through the Bank’s balance. So we have to build reserves against subordinated loans extended by the Bank and refinancing provided to the companies. None of commercial banks would have dared to do the job because they would have risked failing to meet the Central Bank’s financial regulations.
-How would you assess the demand for a new program of recapitalizing Russian banks through the use of federal bonds?
-I believe that this program would be appealing to banks, the more so, the Central Bank intends to increase this instrument’s share in banks’ capital to 50%. Of course some banks wouldn’t be very enthusiastic to see commissioners from the Central Bank in their governance bodies including their management.
-So, basically, we are talking here about nationalization – money is invested in capital in exchange for establishing control of a bank. There are more than 1000 banks in Russia now. How many banks in your opinion are likely to be nationalized?
The state is not guided by its egoistical self-interest. The state’s goal is to secure the banking system’s sustainable operation. Implementing these measures, the state is trying to avoid a massive outflow of resources from banks. We should not forget about the state’s guarantees for deposits. If customers make runs on the banks the state will wish it had never happened. To my best knowledge, for the most part, support will be provided to system banks because the economy depends on their support and the lion’s share of people’s deposits is concentrated in them.
-Russian capital (including that of the state’s origin) has become one of the leaders on Ukraine’s banking market. It accounts for 25% of all foreign capital in our country’s banking sector. What’s the reason for such an active expansion?
-Despite this cumulative indicator, objectively speaking, Russia’s capital is far from being the leader on the Ukraine’s banking sector. The largest of banks with Russian capital ranks only 8th by the amount of assets and is not a state-owned bank (the case in point is Alfa-Bank). The reason for the expansion is evident. Ukraine is Russia’s important foreign trade partner, many companies work in the context of cooperation between our countries.
ON A DECISION TO PURCHASE
-Is that true that Vnesheconombank explored Ukraine’s banking market in order to purchase Prominvestbank (PIB) long ago? According to mass media reports you were holding negotiations on purchasing Brockbusinessbank. Were there any other banks under consideration?
-I don’t know who entertained this sort of ideas but I certainly didn’t for. We didn’t consider purchasing a bank in Ukraine at all. We were too busy reforming Vnesheconombank and establishing a bank for development on its basis. So we were too preoccupied with our own problems to think of expanding to the CIS countries. At the same time, we were considering the possibility of opening our representative office in Ukraine in order to start tapping the Ukrainian market but we did no more than that.
-But in spite of being busy with reforming your Bank you purchased Belvnesheconombank in 2007.
-The situation was somewhat different in Belarus. Historically, we had a less than 10% stake in Belvnesheconombank’s capital. This was our subsidiary as early as in the times of the Soviet Union. We increased our stake to synergize our relations.
-By the way, how did you dare to buy a problem Prominvestbank and the more so, invest $1 billion in the thick of the crisis. Is this a typical course of action for Vnesheconombank?
In this case, proletarian internationalism prevailed, our intention was to support not only the bank but also Ukraine as a whole. The fact is that the bank was a system financial institution. I can’t say that we monitored the market on a regular basis and took advantage of Prominvestbank’s difficulties at an appropriate time. By the way, Russian commercial banks set their sights on this bank.
-What banks besides Alfa-Bank do you mean?
-Specifically, banks with the state’s participation. But having assessed the scale of the disaster, they decided that it was better for them to strengthen their subsidiary banks in Ukraine rather than purchase something new with a huge number of skeletons in the closet. We focused on the bank’s role in lending to Ukraine’s industrial sector. The fact is that Prominvestbank services customers representing as much as half of Ukraine’s industrial potential. Most of these customers maintain close corporate ties with Russian enterprises. This is what we are telling our country’s leadership about. Moreover, up until now there hasn’t been a financial institution which was capable of dissolving a clot in mutual payments between some enterprises of our countries. Now we are in a position to do it. We believe that it is worthwhile moving to mutual payments in national currencies. Our interests are quite pragmatic - we want the ruble to become a regional reserve currency. We have gained a valuable business experience in cooperating with Belarus and why don’t we use it in Russian-Ukrainian relations.
-But Russian state banks have been operating on the Ukrainian market for a long time and you’ve mentioned some problems in mutual payments. Couldn’t these banks perform this function?
You should put this question to them rather than to us. Moreover, one of our priorities is to support Russian industrial exports. Undoubtedly, we are interested in restoring the potential that was built in the Soviet era when Russia supplied equipment to Ukrainian enterprises and vice versa.
-Who in particular offered you to purchase Prominvestbank?
-Our future partners did, namely, Slav AG Company. They explored the possibility of purchasing Prominvestbank thoroughly but they didn’t have enough resources to rescue the bank. They appear to have decided that in that situation a major Russian bank could be an ideal partner. And we have worked with them side by side since last October.
-Could you say when representatives of Slav AG turned to you? The fact is that an announcement about Vnesheconombank’s participation in the transaction to purchase Prominvestbank came only in the second decade of December.
-You are quite right. We were not in a position to make any official statements before all formalities were agreed upon. If my memory serves right, Slav AG representatives turned to us for the first time at the end of last October. We’ve got a list of visitors and I can tell you exactly when the Klyuev last name appeared in the visitor list.
-Which of the Klyuev brothers visited you?
Sergei did. At the time, Andrei was engaged in politics.
How did Vladimir Putin react to such a proposal?
Vladimir Putin’s reaction was quite adequate as he is following the situation in Ukraine very closely; he maintains contacts with Ukraine’s leadership and political leaders. While taking a decision on examining the issue of purchasing PIB thoroughly we, as I’ve already mentioned, considered such factors as integration and cooperation And the Bank’s Management Board was positive on the issue.
-We know that in order to purchase Belvnesheconombank you had to enlist Belarusian President Alexander Lukashenko’s personal support. What Ukrainian politicians did you have talks with?
-I met with Alexander Grigoryevich but I didn’t try to enlist his support for increasing our stake in Belvnesheconombank. The fact is that a President should be in the know who is entering his country’s market. I also wanted to look into his eyes. But he didn’t specially sign any directives. There was a decision of the National Bank of Belarus. At the stage of discussing the transaction in Ukraine, I talked a lot with National Bank of Ukraine (NBU) Deputy Chairman Vladimir Krotyuk and I also had several meetings with NBU Chairman Vladimir Stelmakh. I also had a meeting with Prime Minister Yulia Timoshenko.
-What did you talk about?
-I was very frank, as I’m now with you, in expressing my opinion about the future of Prominvestbank. Yulia Timoshenko favored all our plans including an idea of transferring to mutual payments in national currencies. She favored the coming of a major system bank into the Ukrainian market and promised her full support.
-Did you discuss an issue of settling former Vnesheconombank of the USSR’s debts to Ukrainian companies? You must admit, this issue poses a substantial political risk to Vnesheconombank’s operation in Ukraine.
-No, we didn’t discuss this issue.
-Why did you decide to meet with the Prime Minister rather than with the President?
-My decision was based on the competence of the country’s leadership. The President is responsible for supreme goals and the Government is responsible for managing the economy.
-The sale of PIB to Vnesheconombank coincided in a remarkable manner with gas talks between Russia and Ukraine. Was this transaction a part of more global arrangements, a subject of concessions and compromises? Until the last moment they were considering the possibility of nationalizing PIB.
-In the course of our negotiations we have never been inclined to discuss the gas theme. With the exception that Naftogaz Ukraine is an attractive customer for us and we find it interesting to cooperate with it. There were no more linkages with the gas theme, at least, as far as my talks are concerned.
-According to PIB’s former owner Vladimir Matvienko, the bank was subjected to a meaningful raider attack. At your last press conference in Kiev you acknowledged this fact.
-Not exactly, I said what had happened to the bank; it looked like the beginning of a raider attack. Don’t tell me that one can send SMS messages to tens of thousands of customers warning them that the bank is on the verge of bankruptcy and telling them to withdraw their balances. Of course this couldn’t have happened by chance. Somebody just wanted to crush the bank. If stars are lit it means – there is someone who needs it.
-Half a year ago Mr. Matvienko could have sold his bank for $1.5-2 billion but he would not do it of his own free will. It is safe to assume that those who initiated this attack wanted to benefit from the situation, otherwise it would have made no sense for them to launch such a campaign. Did Vnesheconombank conduct an internal inquiry into the matter?
-Fortunately, I am not an investigator, we conducted no internal inquiries. We only generalized information from open sources including electronic mass media. Moreover, I can’t even suggest any theories on this matter. It is Ukrainian authorities that should inquire into the situation. They should try to explain why such situations emerge. Of course if you wish you can find wrongdoers but nothing is being done. It is not difficult to prove ill-will in this situation.
-It’s strange that you didn’t sort out this matter. Without it, you can’t prevent evil-doers from attacking the bank once more. The more so, it’s a lot easier to cause panic under the conditions of the crisis.
-Nevertheless, I rely on the prevailing common sense of our customers who do not succumb to panic in the current situation, given that Vnesheconombank is a majority shareholder. Panic breaks out when confidence vanishes. And confidence vanishes when shareholders behave inadequately. In my opinion our behavior is quite adequate.
-Do you think that Mr. Matvienko’s behavior was inadequate?
-I’m talking about the situation as a whole. As to the above-mentioned situation, unfortunately, it is quite complicated; if you pull thread you can see things you wouldn’t like to see. I would not like to elaborate on this matter further.
ON STAKES AND SHAREHOLDERS
-Slav AG has a small stake (about 15%) which in actual practice does not give any rights. Do you have any arrangements with this major minority shareholder? What influence does it have on managing the bank?
-We have worked in close contact with this shareholder since last October. It has a considerable political and economic potential. So, despite the fact that it does not have a blocking stake its opinion is taken into consideration in making decisions concerning the bank’s core activities. Moreover this shareholder is to participate in drawing customers (business) into the bank.
-What’s their practical interest?
-I think they see themselves as a portfolio investor which provides support to the bank to withdraw from investments with a premium later on.
-But a potential purchaser might not be interested in buying such a small stake. Moreover, Vnesheconombank can dilute Slav AG’s stake at any moment.
-So far, we don’t think we should do it. The fact is that Vnesheconombank could have bought out the whole additional issue on its own thus diluting stakes of all other shareholders
-Did Vnesheconombank purchase shares of PIB’s former shareholders or did it purchase only shares of the additional issue?
-No, we did not do business with Mr. Matvienko in his capacity of shareholder. We were buying out the additional issue and a part of shares owned by Slav AG. I don’t know anything about how Slav AG got them.
-Vnesheconombank’s Supervisory Board appointed Mr. Matvienko as PIB’s Honorary President. What’s his role in the bank?
-His role is statutory, it is a sign of respect for a man who established the bank and strengthened its positions in the country.
-The shareholders meeting decided to transform PIB into a public joint stock company and it also made Vyacheslav Boguslaev, Motor Sich Company Honorary President and one of the bank’s largest customers, a member of PIB’s Supervisory Board. Do you want to become a shareholder of the bank’s other largest companies?
-I didn’t hint that we would like to see our customers among the bank’s shareholders. We don’t have any plans to strengthen our customer base through selling stakes in the future to our borrower customers. Moreover, Motor Sich is not among our largest customers. Incorporating such respected persons as Evgeny Marchuk and Vyacheslav Boguslaev in PIB’s Supervisory Board is a recognition of their services and role in the politico-economic establishment. For example, Mr. Boguslaev is a respected person both in Ukraine and in Russia. He is an economic executive who is in favor of promoting bilateral relations and integration.
- They say that once PIB has been rescued it will be transferred to Russia’s Sberbank. Is this really the case?
- And why don’t we transfer it to VTB or, for example, to Alfa-Bank? Perhaps, there are people who entertain such ideas but nobody has discussed them with me. The thing is who is interested in them.
WEEKLY BUSINESS DOSSIER
VLADIMIR DMITRIEV – Chairman of State Corporation ‘Bank for Development Foreign Economic Affairs (Vnesheconombank)’
BORN: August 25, 1953, in Moscow
EDUCATION: the Moscow Finance Institute (1975), specialty – “International Economic Relations”; Doctor of Economics
CARRIER: Corresponding member, Russian Academy of Natural Sciences
1975-1979 – engineer, State Committee of USSR Council of Ministers for Foreign Economic Relations; 1979-1986 – attachй, third secretary, USSR Foreign Ministry Department; 1986-1987 - research worker, Institute of World Economics and International Relations, USSR Academy of Sciences, 1987-1993 - USSR Embassy of USSR Ministry for Foreign Affairs, Russian Embassy of Russian Ministry for Foreign Affairs, 1993-1997 – Deputy Chief Executive Officer, Russian Finance Ministry Department; 1997-2002 - First Deputy Chairman, Bank for Foreign Economic Affairs of the USSR, 2002-2004 - Deputy President - Chairman of the Board, Bank for Foreign Trade of the USSR (OJSC), 2004-2007 - Chairman of Bank for Foreign Economic Affairs of the USSR, from June 2007 – Chairman of State Corporation “ Bank for Development and Foreign Economic Affairs (Vnesheconombank)”.
MARITAL STATUS: married
Check out.Premier allowed small traders not to use cash registers
Central issue № 4895 dated April 23, 2009
Elena Kukol, Pierre Sidibe
Before arriving at the All-Russian Forum on Small and Medium-sized Enterprises organized by the Russian Economic development Ministry, VEB and OPORA RUSSIA, Vladimir Putin approved measures for supporting business at a closed session. The next day the Premier had good news to share with the Forum’s participants.
But at first he explained the meaning of this variety of business for the state - “flexible, mobile, capable of adapting rapidly to changing market demands and being a large part of the Russian economy”. But most importantly, it is individual businessmen who, in the Premier’s opinion, form Russia’s massive and sustainable middle class. “It is obvious that in order to retain and boost this substantial potential we must provide you with substantial support, the Prime Minister was in no hurry to announce new measures. Before revealing all his anti-crisis cards, Putin reminded of increasing financial support for small enterprises – 30 billion rubles will be committed through Vnesheconombank and another 10.5 billion rubles - from the federal budget. Internal affairs agencies’ excessive powers were abolished and legislators also passed a law on the protection of legal entities’ and individual businessmen’s rights upon exercising state control which is to be put into effect not from July 1 as it was planned but from May 1 as This initiative, by the way, was launched by Putin himself as he was delivering his report before the State Duma.
The first and one of the most effective measures that won the audience’s applause was a decision to grant a right to use a simplified taxation system to enterprises with incomes up to 60 million rubles. Now this simplified system is applicable only to an income of 30 million rubles. “There is no doubt that this measure is associated with certain budgetary losses of about 100 billion rubles. Moreover, there is a threat of business fragmentation. Nevertheless, we have to take this step”, said Vladimir Putin. The increased threshold, in his opinion, would compensate business for costs, which will arise since 2011 as a result of transferring from the uniform social tax to insurance premiums, with the rate to be increased to 34 percent from the current one of 26 percent.
Moreover, businessmen paying imputed tax will be allowed not to use cash registers. “Because in our country sometimes a cash register costs more than a product on sale”, believes Putin adding that we can defend consumers’ rights by using simpler equipment or writing a cheque by hand. The government and the State Duma will finish working on this draft law till July 1.
The Prime Minister called on speeding up work to place state auctions into electronic auctions and on reducing requirements for securing applications for small enterprises’ participation in them. Natural monopolies’ and state corporations’ standards for procurement activities would be reviewed substantially, with preferences being given to suppliers of Russian products”, the Premier sad.
At the same time, the Government will lease out premises that are not efficiently used by state unitary enterprises to companies at affordable rates. Having moved to new premises, businessmen will obtain preferential tariffs on having their equipment connected to electrical power lines. Under the regulation Putin signed a day before upon connecting a capacity of up to100kW businessmen are allowed to make only advance payment in the amount of 5% of the service value with a right to interest-free deferment for a period of 3 years. And connection is to be made within half a year.
By the way, this is not the last problem in the problem list. Perhaps, the main obstacle to the advancement of small enterprises remains to be poor availability of credit resources. The reason for this state of affairs from Mr. Putin’s point of view is the lack of the collateral base. That is why the govern- ment decided to commit 15 billion rubles in addition to 3.5 billion rubles committed before to replenish regional guarantee funds. In addition to the said funds 1.5 billion rubles will be committed to subsidize interest rates on credits to be extended to small enterprises. As a whole 20 thousand enterprises will be able to obtain credits up to 1 million rubles per each if they are covered by the microfinancing program. On top of all this, the authorities intend for the first time to extend grants or in Putin’s words – gratuitous subsidies to 15 thousand businessmen starting their own businesses – 300 thousand rubles per each businessman.
Vladimir Putin also stressed that high interest lending rates make small enterprises default on their debt payments. While there are no problems in the banking sector that can’t be addressed, the number of bad credits is sure to grow. So, the government would insist that interest rates should be reduced, especially by the banks that receive state support. And interest rates of 25% should be ruled out altogether. “In the long run we must create an integrated system of providing financial support for businessmen –from grants to bank credits”, Putin said promising to explore possibilities of introducing new tax reliefs for small enterprises in three years’ time. The audience applauded.
Some measures for supporting small enterprises would be launched even earlier than planned. As early as on May 1 rather than on July 1 the law providing for inspecting small enterprises will be factually put into effect, promised First Deputy Premier Igor Shuvalov.
Almost all member of the government responsible for economic policies joined a dialogue with business yesterday at the All-Russian Forum on Small and Medium-Sized Enterprises. Many issues were addressed straight off. For example, representatives of small and medium-sized enterprises will be able now to be members of tender committees responsible for awarding state and municipal orders. Economic Development Minister Elvira Nabiullina and Federal Antimonopoly Service Head Igor Artemjev favored this proposal made by businessmen.
Such cooperation between business and authorities would reduce corruptibility and secretiveness in the operation of tender committees and increase businessmen’s chances to win orders. And a lot of money is at stake. By Nabiullina’s estimate, thanks to access to state and municipal orders small enterprises will be able to earn up to 1 trillion rubles.
The Law stipulates that small enterprises are to account for 20 percent of state and municipal orders.
And by Artemjev’s estimate small enterprises will be able to win 80 percent of such contracts. It is not improbable that as early as this year another regulation will be approved which will give small enterprises access to orders. Tenders for natural monopolies’ orders will be held like the ones for government procurements. The Economic Development Ministry’s Economic State Regulation Department Head Andrei Sharov believes that small enterprises would be able to earn another trillion rubles on these orders.
As far as inspections are concerned, under the Law inspectors are to visit small enterprises not more than once in three years and out of schedule inspections are to be carried out only with the prosecutor’s authorization. Business is looking forward to seeing this law become effective and it has overloaded the Prosecutor’s General Office with complaints about the excessive number of inspectors. So, the Prosecutor’s General Office decided on getting down to performing its functions on authorizing inspections as early as in May. Special working groups responsible for tracking down the situation have already been formed in the regions said First Deputy Prosecutor-General Alexandr Buxman. And he added that the Prosecutor’s Office would maintain a register of inspections starting next year.
We are bound to receive signals that the situation has improved for small enterprises in the coming months, Igor Shuvalov hopes.
And there is disciplinary punishment for negligent bureaucrats whose actions or inaction are detrimental to business. Officials will be simply disqualified and prohibition for a public office may be imposed for a period of several years, warned Mr. Shuvalov.
But the situation is not so bright. “Everybody wants to support small enterprises. But the situation is not developing the way we would like it to. Our wishes fail to transform into rapid development of small and medium-sized business” said Andrei Sharonov,a addressing these words to Presidential Aide Arkady Dvorkovich. In his turn, Mr. Dvorkovich singled out three obstacles that hinder the development of small enterprises
The first problem is that there are a lot of so called reference rules in applicable legislation. This means that there are laws, they are good laws but there are a great number of regulations, instructions which prevent laws from being put into effect to the full. The second problem is a response to signals sent by authorities. After the President had called on regulators not to give business nightmares the situation improved for a certain period of time. But after some time they appear to have forgotten this signal. Thirdly, we should create incentives for business to be motivated to grow and expand. At present, as soon as an enterprise grows to a certain level its tax base increases immediately. By the way the President has already ordered to work out a transition period and compensation measures for small enterprises operating under simplified taxation schemes, given that the uniform social tax is replaced with insurance payments, said Mr. Dvorkovich. And finally we have to exercise control over the implementation of decisions made. Here, we are already correcting mistakes. Just recently the President ordered to inspect executive authorities responsible for exercising control over business for corrupt links. Dvorkovich added that in the most immediate future proposals for optimizing regulatory authorities’ functions will be made so that they do not duplicate each other and hinder business.
But in any case if small enterprises are to develop they need money, businessmen said. This year the amount of support provided to small enterprises through Vnesheconombank has been increased threefold from the previous year to 30 billion rubles. So far, Vnesheconombank hasn’t received this money. But Vnesheconombank Chairman said that they were preparing a decision that would help businessmen. According to him, without waiting for this money to be transferred from the federal budget, VEB will turn for this money to the Central Bank. Mr. Dmitriev believes that businessmen will be able to obtain credits from these funds at a rate of 16-17 percent per annum. In total, the amount of support for small and medium-sized enterprises with VEB’s participation could be 100 billion rubles.
First Vice Premier Igor Shuvalov summed up the results of the Forum’s discussions. Recently, strenuous efforts have been made to support small and medium-sized enterprises and we shouldn’t lose the momentum. The government would exercise control over the implementation of the decisions made. And by tracking down the situation on a regular basis the government would identify next steps that have to be made to support business, Shuvalov promised.
We are going to carry on discussing taxes. But Shuvalov didn’t try to reassure businessmen with plans to reduce fiscal burden. In this respect our objective is on the one hand to create a more transparent and universal fiscal systeml and on the other to expand the list of activities to work on a patent basis. According to Mr. Shuvalov, in the long run we’ll have to move to such generally accepted in the world forms of supporting small business as subsidizing interest rates on credits and extending grants.