The Express claims a triple hit for Russsia’s SMEs and an economic meltdown.
The Express’ source is only one retired Ukrainian central banker who makes the claim of a Russian economic meltdown. This is fake news:
Russians’ daily life is about small companies – a consequence of the liberation from Soviet Collectivization. SMEs have been the moral and economic backbone of the Russian economy in the daily life, like Russia’s large resources export sector provided convenient foreign currency resources to fuel the Government.
The EBRD and other Western and some Russian institutions have reviewed the Small Business Sector of Russia and have seen a steady growth in the past, even though the economic and financial framework was not favorable.
This unfavorable economic and financial framework eg. did not allow SMEs to obtain loans as the Russian interest rates were always too high. Russian SMEs were generally not able to obtain easy debt financing and had to find finance alternatively, a fact that made them somehow more resistant to a crisis like Covid or the Ukrainian war. This resistance was increased by the fact that Russian SMEs are generally disconnected from the outside World – and therefore would not suffer so much under foreign shocks, as the Covid crisis and the sanctions have shown well.
Small businesses are found mainly in Russia’s urban centers and larger cities. As such, in Moscow or St. Petersburg and in most larger cities there are seldom empty shops or business premises and the demand for smaller commercial premises remains still on a high level. It is noteworthy that the real estate demand in Russian urban centers remains allover on a high level.
With a view on the rapidly dying SME sector in Western Europe, there are not really alarm bells ringing in Russia.
Also there are ideological movements in the West to hammer on SMEs, with The Telegraph`s summarizing call to “End The Cult of Small Businesses” and to start a collectivization as earlier experienced in the Soviet Union (https://www.telegraph.co.uk/business/2024/12/19/big-businesses-are-britains-most-persecuted-minority/ ).
As the West`s left and mainstream media call for a communist collectivization of SMEs, Russia promotes the Cult of Economic Freedom for Small Business with new policies, programs and bank products. A strange new World.
