Regional Authorities are in a Position to Create Favorable Conditions for Development of the Small and Mid-Sized Business

In his words, for most small and mid-sized companies the business climate begins at municipal and other local government agencies where the required permits and licenses are issued and ownership rights are to be ensured.

The investment climate depends to a great extent on the federal authorities as regards macroeconomic stability and general rules of the game. However, many issues related to the small and mid-sized business can be dealt with by regional and local authorities.

In particular, it concerns the issues related to the specifics of the regional legislation which determines the privileges and the procedure for registration of new business and conditions of its development, as well as the issues related to connection to local power mains, deadlines for issuing of licenses and permits and establishment of a favorable infrastructure for business.

It is to be noted that renewal of economic growth will depend too on development of the small and mid-sized business.

Even if federal authorities do not carry out institutional reforms, regional authorities are able at least by way of adjusting different barriers for establishment of new business to create favorable conditions for development of the small and mid-sized business which situation will undoubtedly have an effect on the economic growth rates of the Russian Federation.

Examples of the Kaluga Region, the Leningrad Region and the Ulyanov Region explicitly demonstrate that. The above regions became the leaders in attraction of foreign and domestic investments though they operated in terms of the federal legislation in the same conditions as their neighbor-regions.

S.М. Drobyshevsky, Doctor of Science (Economy), Director for Scientific Work of the Gaidar Institute