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MOSCOW, May 24 (RIA Novosti) - The number of small businesses set up in Russian should at least triple to 50,000-70,000 a year, the economics minister said Wednesday.
"I believe we must ensure conditions for creating 50,000-70,000 small businesses a year," German Gref told a government meeting. "Such dynamics would suit us given the current state of our economy."
The minister said 25,000 new enterprises were being set up every year in the country, but this was well below the 80,000 in Poland and the 440,000 in France.
The government has been seeking to encourage small businesses in the last few years and Gref said they had doubled output in the past four years and could also double the current figure by 2010.
"From 2001 to 2004, small businesses expanded their output by 230% or seven times more than the growth in the number of jobs," the minister said.
"Therefore, small business has doubled its GDP in four years," he said. "Given the right policy, we can double this figure again by 2010."
Gref, a champion of liberal economics who attacked imitation of reform Tuesday as "karaoke capitalism", said the number of small businesses in the country had increased by 100,000 from 1999 to 2005 to 979,000 as of January 1, 2006.
The minister said the share of small business in Russia's GDP was expected to increase to 40% and it would employ 50% of the workforce if the government implemented its plans to support small business.
In March, he said efforts to ensure VAT refunds were paid on time would help small and medium-sized business and suggested last year that the tax burden should be reduced and administrative expenditures cut.
Currently small businesses employ about 17 million people or more than 22% of the economically active population in Russia compared with 50-55% in Europe and 80% in Japan.
Gref also said the requirement of small business for loans was worth about 1,000 billion rubles (about $37 billion), but added that loans issued to entrepreneurs accounted for only 6% of the total volume of small business financing.
The minister said small businesses did not apply for loans to banks because of insufficient liquidity, the Central Bank's tough requirements and the high cost of loans.
