Russian Prime Minister Kasyanov Doesn't Want Russian Division of General Motors - 1 October, 2002

Mikhail Kasyanov, the chairman of the Russian government, stated last week that he was not happy about the status of Russian exports. Three-fourths of the exports are raw materials. Without this income, Russia would not be able to pay for its imports, which will eventually lead to a very hard financial crisis. The income from raw material sales is likely to become zero if oil prices drop. The share of exports of the Russian manufacturing industry is very small. Premier Kasyanov strongly feels that this situation must be improved.

However, the premier was not in a rush. Twelve years of liberal reforms have passed by. This is the time that Mikhail Kasyanov apparently needed to realize simple things. Kasyanov’s solution to settle the problem was a very surprising one. According to the premier, the development of small business is supposed to be the best way out.

We do not have to say a lot about small business in Russia. This business is represented by tiny firms in the field of commerce, catering, service centers, construction. However, an owner of a small coffee shop or of a window repairing company is not likely to enter European or American markets with their products. Their products are absolutely not competitive.

As world experience shows, large, high-tech corporations with hundreds and thousands of employees play a key role in foreign markets achievements. Here are good examples: General Motors, General Electric, Microsoft, and Intel. This means that the Kirov Tractor Factory, Uralmash, Elektrosila, and Kaluga Turbine Factory should be Russian versions of such companies.

However, those companies became privatized. The company Uralmash was sold to a well-known Russian businessman for the price of a good Moscow apartment. Other companies became the property of foreign businessmen, and then they were plundered. One can understand the chairman of the Russian government. The status of Russian exports should be changed, and he knows it. However, he also knows that there are practically no high-tech corporations in Russia’s manufacturing industry. Liberal reformers basically destroyed them all, so the prime minister had to make such a funny statement about small business.

It is funny, but "democratic" newspapers did not criticize the statement from the premier. They are always happy to criticize the president and make fun of him, but they never do such things with the prime minister. It is not ruled out that the prime minister will run for the presidency during the next presidential election.

The role of small business has actually been growing lately in developed countries. However, small business in these counrties is absolutely different from what we have in Russia. They basically have joint venture enterprises that deal with the development of up-to-date technologies.

Everyone knows the story of how two young American men assembled the first ever personal computer in their garage. Later, they became millionaires. They even opened a new page in the development of the world civilization. Who can imagine a modern world without a personal computer and the Internet? People say that there was a time when they had absolutely no money, so they had to pay their personnel with the stocks of their company. A year passed by, and their secretaries managed to save millions of dollars. These small businesses are currently prospering in developed countries as well. For example, a small group of mathematicians and programmers can successfully develop software. These kinds of small businesses could bring Russia out from the background, but the government has not done a thing to make it grow. Most likely, the government does not even know that such an opportunity exists. There are definitely many good programmers in Russia, but they work here for Western companies. They get paid very little in comparison with Western paychecks, but in Russia, it’s pretty good money. Their products could bring billions of dollars to the country. Yet, everything they make goes abroad.

This is what the Russian government has to pay its attention to. The comedy of the governmental session mentioned above only proved the low level of its competence. International experts conducted a research, according to which Russia takes the 107th position in terms of the efficiency of state authorities. Untalented power is untalented everywhere, including the field of the economic governance.

Mikhail Antonov
PRAVDA.Ru