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The Russian Minister of Economic Development Maxim Oreshkin gave Business FM an interview during the Eastern Economic Forum (EEF). In particular, he said that banks should be held responsible for “predatory lending” to the population and blocking business accounts.
Let's start with the recent revised economic forecast. It happened just a week before the forum, and on the same day, Vladimir Putin raised concerns about a slower growth of the Russian people’s incomes than it might be desired. But the most important figure in the revised forecast that, of course, everyone paid attention to, was the reduction of plans for revenue growth from 1 % to 0.1 % that was almost zero. What is it connected with and what may be opposed to this?
Maxim Oreshkin: In many respects, the adjustments of 2019 are just adjustments subject to the actual trends that are currently developing. If you look at the data expected in 2020 and 2021, then you may see that the average income growth will begin from 2 %. Due to it we take such a trajectory. There are no major changes in the forecast horizon. How may the acceleration of dynamics be achieved? Yes, indeed, this year we expect only a small, essentially zero, unchanged indicator of real incomes, and, of course, an increase in demand for labor that is explained by the development of the economy, the creation of new jobs, the shaping of demand, demand for skilled labor, demand for labor with a high salary level. That’s exactly what our plan of measures is now aimed in general, and what we are currently discussing in the Government. Our plan covers eight aspects, including the improvement of the investment climate, technology development and many other stories that will be specifically aimed at removing costs and creating additional demand for labor. But it’s wrong to talk only about the supply-side factors. It’s important to talk about the demand-side factors. The subject that we actively discuss this year is consumer loan. This is exactly the story, when through the shaping of a demand structure consumer loan is biased into consumer activity due to this type of lending. All this leads to the fact that the demand for labor is reduced. In this case the chain is very simple: the higher are consumer loans, the higher is consumer demand, and the higher is inflation, the higher are Central Bank rates, the lower is mortgage and corporate lending, the lower is labor demand, and the lower is wage growth. This is the first factor. The second factor is, of course, initiated payments. Similar to interest payments, in principle, are payments on these debts. There is an absolutely wrong logic that loans are taken because incomes are low. When they take 100 % of their annual income, we see that a significant part of loans are the loans where debt is the person’s annual income. It is clear that the very fact of a person’s falling into a debt trap is more influencing the adoption of such decisions. Having taken one loan, and starting to pay high interest payments, high amounts on the principal debt, a person collects additional debts because he is forced to maintain at least some decent level of consumption and to refinance. And we see that the people who have already shouldered high debt burden are becoming more and more in our economy. All this, including such interests, puts pressure on personal incomes. According to our estimates, interest payments on loans had “eaten” 0.7 percentage points of real disposable incomes in the first half of the year. If there was not this factor, this year we would be close to the initial forecast that we had.
Will this factor pass away next year?
Maxim Oreshkin: First, it will gradually pass away, because we expect a serious slowdown in providing new loans. A new regulation of the Central Bank which will be introduced from October 1 is aimed at this. Let's hope that it will be much more effective and successful, and will achieve its goals, because before that we saw that all the previous decisions did not lead to a significant slowdown in the growth of the credit burden. Therefore, from this point of view, the influence on this factor from the perspective of the growth of interest expenses will decrease, because interest expenses will stabilize at about the current level. And secondly, the slowdown in consumer lending will open the space for lowering the interest rate of the Bank of Russia. We see that the Central Bank already cut the rate two times, and according to all the information that comes from the Central Bank, it is getting ready to do it again.
Unless something unexpected happens.
Maxim Oreshkin: Well, you see, one must always look at reality, and at what is happening. One may always be afraid that something will happen, but then the damage from such a fear will be much greater than the potential minimization of risks in the future. There will be risks, because there are tools to deal with them. And risks will need to be dealt with, when they are realized to a great extent. Therefore, sooner or later, a reaction to lower rates will become an increase in both mortgage lending and corporate lending. This means that [there will be] an increase in demand for labor and more active growth in wages, because without an increase in demand for labor, without the shaping of such a demand structure in the economy, which is produced simply for labor, there will be no income growth.
I’ll talk a little about the new regulatory policy that will be introduced on October 1 this year. It makes sense that banks will look at the debt burden of their customers and depending on this they will reserve a part of the capital for these loans, and this should cool the market. But there is such an opinion that banks will simply issue consumer loans for a longer period. Generally speaking, it will be exactly the same mortgage.
Maxim Oreshkin: I’m just talking about this. I say that everything depends on the Central Bank in this matter. If the Central Bank introduces measures, it must ensure that they are effective. But it’s a very funny situation, when banks without anxiety deceive the Central Bank, tighten something up there, and as a result, the regulatory system does not work. Therefore, the regulation documents are thought out incorrectly, and the quality of the regulation documents in this case will be characterized by the end result. And the end result is a slowdown. If the slowdown will continue for long time, it will mean that the result is achieved. In opposite case it will mean that the measures have been ineffective.
But the Central Bank does not agree with you in your polemic that we have a credit bubble.
Maxim Oreshkin: I will repeat once again that we have a significant number of people who already have debt above annual income. Payments of 15 % of the population exceed 70 % of their annual income. Of course, this is an overload of a significant mass of the population. In this regard, it is very important, on the one hand, there is an overload, and on the other hand, there are the annual growth rates of 20–25 % with the nominal income growth below 10 % per year. 20–25 %. It means that the structure is absolutely unstable. While maintaining the current pace, we will be in a situation where the debt burden will worsen, worsen and worsen. These are obvious signs of debt bubble formation. From our point of view, the slowdown in the pace of debt accumulation to an income level or slightly lower, that is, somewhere in the range of about 5 % per year, is just an optimal trajectory. You can’t “squeeze” so that the debt begins to fall immediately. It will be very difficult to compensate in terms of monetary policy. However, slowing down to a pace consistent with incomes and assuming a smooth decrease in the debt burden of the population is the right strategy.
But let’s recall with this regards an idea of the Ministry of Economy, which has been recently published in the media. This is an opportunity for the Russians to redeem their debt themselves and, roughly speaking, forgive it later. In no time an opinion appeared that this could lead to abuses by debtors.
Maxim Oreshkin: It seems to me that in a situation where a person falls into a debt pit, both sides are to blame: both the bank, credit or microfinance organization that sold the product, realizing that the person would be in a difficult life situation, and, of course, the person oneself. Therefore, it is obvious that it won’t do that only people suffer from this situation. In some cases, banks shall be responsible for the predatory lending that they conduct. Therefore, it is obvious that, if a bank offers products that lead a person into a very difficult situation, the losses from such lending must be largely borne by this bank. Therefore, now we have our prepared proposal, for example, on simplified bankruptcy of individuals. What is going on there right now? The cost of this procedure is now 200 thousand rubles.
Do you mean the bankruptcy of an individual?
Maxim Oreshkin: Yes, I do. They wound up various intermediaries, different procedures that are really not needed at all. Now we make a proposal so that the cost of this procedure for a person drops down to 10 thousand rubles. From 200 thousand to 10 thousand to make this procedure much easier. It is obvious that people in a difficult situation must go through bankruptcy proceedings. This will have consequences for them in terms of their future credit profile, everyone will understand that they have already failed to cope with their debts. This is the price they will pay for their irrational behavior. But it is obvious that the loss on this loan must be a loss for the bank, and this bank shall also think whether this person may be granted a loan and about the conditions to issue this loan. Banks must work with their debtors. A bank shall not cash in on its debtor but shall work so that the debtor may have moderate debt burdens, understand one's credit profile, and shall explain the risks to its debtor. Often our banks are simply focused on selling a particular loan product to a person, without thinking about what will happen in that person’s life later, what consequences will be for him/her.
If a bank tells a person about the consequences and risks, this person will simply turn around, maybe leave away, but the bank will not receive its margin.
Maxim Oreshkin: In this case, the bank shall simply receive a loss from the bankruptcy of such person or from any other subsequent events.
Anyhow, I will ask you about the abuses. Don't you think that they may be intentional? For example, I take a loan of 1 million rubles, and then quit my job and submit a certificate certifying that I lost it. Then I will be registered as unemployed and will buy my debt for 3 % of the initial amount...
Maxim Oreshkin: If we open the statistics of wages in the economy, our banking sector is one of the highest paid, if not the most highly paid. Professionals who receive such money need to work so that none may cheat them. There is no need to worry about the fact that our banks are poor, that now they will be cheated, and so on. Banks have high salaries, competent specialists, so let them work and do their best for they will not be cheated.
I don’t worry, I'm for justice. Because I'm used to paying my debts and I want the rest to do the same.
Maxim Oreshkin: Once again I will repeat that it is a very important point that the responsibility for a difficult situation that a person is getting into due to the debt burden, lies not only on the shoulders of this person. It is clear that the person who took this loan made the decision himself.
He is a mature person.
Maxim Oreshkin: Yes, but there is always no understanding of a loan product, financial literacy is not enough. Therefore, in such matters a bank must not fulfill the role of a party that drives a person into a debt trap, but a party that works with the person and does everything so that this person may understand the consequences of the fact that he will take a bank loan at a rate of 15–20 % , and what kind of payments he is to pay, and how he will go out and settle his debt. A bank representative shall negotiate with the person and develop a schedule of the loan repayment and explain it for the debtor may understand from what sources of income he will make the repayment and how much income he shall receive to repay the loan. It shall not be so simple as a situation, when a bank gave a loan, and then do what you want.
A person must understand that the rate of 15 % is an effective rate, and not the one that he is told of.
Maxim Oreshkin: Yes, and it significantly exceeds both the inflation rate and the growth rate of incomes, and despite the fact that a person will increase one's consumption during the period of obtaining a loan, he will be able to spend much less for two to three years than he spent before.
So, based on all these aspects we will get the curve you drew at the very beginning that will lead finally to a decrease.
Maxim Oreshkin: Sure.
Let's pass on to another subject. Let's speak about the legislation guillotine. By the way, we often communicate with business communities, and it is clear that the concept of “legislation guillotine” is understood by business communities not in the same way as economists understand it. “Legislation guillotine” is necessary to cut off unnecessary requirements. But business communities think that such guillotine already exists, and this is exactly the requirements that are made to businessmen, and the requirements fall in the form of this knife. I want to make a quote from the person who spoke in our broadcast. He is the head of Rusit company that is engaged in textiles. He said: “We manufacture textiles with a component that has a very small proportion in final products. It is wool. It turns out that in order to manufacture it, I must get permission from the veterinarians. The expenses to obtain this permission amount to some 700,000 rubles. I may name five or six services that require from us some unjustified things over the past two years. Every time they frighten that for the violation of the procedure with obtaining this permission, we are subject to sufficient penalties.” Roughly said, the fabric contains a small piece of wool, and it is required to obtain a veterinary certificate for this wool. May regulatory reform prevent from such undertakings of our inspection authorities?
Maxim Oreshkin: The most important task is to reduce business expenditures so that entrepreneurs creating added value in our economy do not lose money or time. The number of investment projects for implementation, of course, is seriously reduced because of the loss of both money and time. We have two projects that are aimed at reducing these costs. The first project, as you correctly said, is the legislation guillotine. It relates to the sphere of control and supervision and cutting off all those requirements that have accumulated over the years. Their processing, based on the principles of risk orientation, convenience and clarity. As one example, to make it clear to everyone what we are doing in this area, I will mention the “White Book” that we published about restaurants. Within this context, we seriously reduced the extent of requirements and explained in a clear and accessible way to restaurateurs what to do in order to receive a quality product at the exit and not have any claims from the control and regulatory authorities. For this book to take effect we still have to work, and we are actively working on it now, but this is an example of what we strive for. And another point. In addition to the legislation guillotine, there are a few industry requirements, other administrative barriers that we have and that are not directly related to control and supervision. Under this framework we have the second mechanism. It is the transformation of the business climate. There we work with business associations, industry unions and regions. We collect just these excessive administrative requirements, excessive industry regulation, and through dialog with relevant authorities we try to remove them. Our first package was released at the beginning of the year, now we are ready to approve the second package of such changes. That is, through these two mechanisms, we try to reduce the unnecessary costs of money and time for business in the shortest possible time, in order to increase the efficiency of that activity, so that people can be engaged in productive activity, rather than what no one needs.
I’d like to speak about our restaurateurs. Their main request was: “Please, check the finished goods, and then everything will be comprehensible.” The goods are good, so, it means that it doesn’t matter what tray and what pan a dish was cooked in and so on.
Maxim Oreshkin: Absolutely. Actually, all these stories from the “white paper” on catering disappeared, it is important to minimize the risks that exist and are associated with products. Therefore, I said “a risk-based approach”, when the regulatory authorities will tell us what risk they are trying to avoid by introducing one or another requirement. The set of risk avoidance for consumers is just a key condition for all the work that we do.
But the controllers, on the contrary, have a different psychology. As we understand from business owners’ stories, it’s completely different. On the one hand, they cannot refrain from taking an opportunity to investigate the pan, because it seems to them that if they do not, then this is wrong. On the other hand, their goal is not to help a person do everything correctly, but to find violations.
Maxim Oreshkin: Our task is together with business to leave in the list of requirements only those that relate to real risks, and not to process and procedural matters. Because it is precisely to process, procedural things that controllers often begin to find faults, especially those that do not correspond to the spirit of control and supervision. What is the spirit of control and supervision? It is a desire to help the business and make sure that there are no serious risks for the business in the future, nor for consumers. Also, it is willingness to suggest what needs to be done so as not to risk neither your business nor the health of consumers. Unfortunately, not all controllers that we have, comply with this spirit. This is the problem.
They then drag an entrepreneur aside and say: “Forgive us, please, but if we do not find anything here, then we will be punished for this.”
Maxim Oreshkin: That’s what I’m talking about.
Because this is a psychological problem. May it be solved?
Maxim Oreshkin: Only those requirements must remain that are aimed at risk prevention. Accordingly, there are less unnecessary requirements, less space for abuse. Well, in general, this, of course, is the digitalization of all and everything. To a significant extent, it is necessary the same industrial enterprises switch, for example, to automatic control systems. If you have a camera that shows your production line and allows you to remotely monitor compliance with requirements, controllers do not need to come to a particular enterprise at all. And so on. The automatic control together with digitalization will minimize requirements and focus them on real risks. This is the answer to the current situation. It is clear that the system evolved over the years and decades, and its inertia and opposition are very strong. So, it will be difficult to reverse this situation without the active position of the business community. But we, on our part, will try to do everything so that such the tipping point in this situation occurs.
Sometimes, it seems to me that a generation must directly change for a turning point to happen.
Maxim Oreshkin: The generational issue is generally deep, it concerns not only control and supervision, but in general many areas of our lives.
Well, let’s speak about the second part. It is transformation of the business climate. There were publications with the most important matters, such as a bank lock and customs regulation. With regards to the first, it seems that the Central Bank had already done everything for this, including the procedure helping people to take steps to leave the black list when they were added there, and in such a way that it may be as simple as possible. But based on the stories that come to our attention, nothing changes.
Maxim Oreshkin: Absolutely. We travel a lot around the country. Just recently with Anton Germanovich Siluanov we were in Kaliningrad. Literally, it was a five to six day journey from Kaliningrad to Vladivostok. Everywhere entrepreneurs complain that first, often one may be included into this list, actually quite by accident, secondly, it is very difficult to get out of this list and get back to the white list. Some banks even make a business out of it and charge a fee for unlocking an account.
I know their names.
Maxim Oreshkin: This, of course, is absolutely unacceptable.
Commission is 15–20 %.
Maxim Oreshkin: See, that’s exactly what I’m talking about, and we have to fight against it. We have a lot of matters in the banking sector, when the rights and possibilities of banks turned out to be much wider than the rights and possibilities of those who use their services. We already talked about lending, exactly the same situation is with account blocking. It is clear that banks must be able, in case when they see the risks of capital laundering and some illegal actions, to carry out these blockings. But they must be held responsible if they did it wrongfully or unjustified. In this case a person shall not only be returned to the white list, but we may talk about some kind of compensation that he/she must receive. The banking sector is one of the most self-paid, therefore, here, high-quality specialists should not work to shift their problems on the population and entrepreneurs, but they must ensure that their services and work quality inflict minimum expenditure to population and business.
And how can you restrict their rights a little, and who will be the arbiter, who will come and say that if in some case an account blocking was absolutely unmotivated, illegal, it shall not be a businessman who shall pay 15 % for withdrawing funds from the account, but he shall be paid 15 %?
Maxim Oreshkin: Well, right now, we will work with the business community and the Central Bank to create such conditions for this to happen.
No details yet?
Maxim Oreshkin: Still early.
Well, let’s touch on the issues of customs regulation. I have read that you suggest that checks be carried out selectively.
Maxim Oreshkin: The first thing I would like to mention is that customs service has made a very big step forward over the past few years, and here I am very grateful to Vladimir Ivanovich Bulavin, who is 100 % committed to ensuring that the work of customs service becomes maximum honest and maximum transparent causing minimum expenses to the economy and business. But as we talked about control and supervision, the inertia of the system is great. It is clear that, like control and supervision, and in other schemes, the digitalization of all processes and their automation is a way to reduce unnecessary costs. We are doing a very good job with the customs service in this direction. They always respond to the initiatives that business associations are now giving, and we will step by step analyze what else can be improved, where the processes shall be automated, where some regulations shall be prescribed more explicitly for goods to pass faster, and those who are light-fingered had less opportunities for abuse. Therefore, there are also goals in this aspect. Our goal is to reduce time loss by 30 %. We will work together with the customs service under the framework of this goal. Our role in this field is to help them in the communication of business associations, although the customs service itself has no big problems with this.
Well, I tell another business story. Most of all businessmen complain of the customs service, especially in combination with the documents of the Rosselkhoznadzor, when customs officers are looking for some bacteria in some bars.
Maxim Oreshkin: It is also a very important issue. It is wrong to blame only the customs service in what often happens, because many departments gather at this site. In a cargo border crossing many departments are involved. A KPI will be recorded for each service in the view of the maximum time spent by goods on the border. This is just one of the indicators that affects the rating of Russia in Doing Business. It is in the direction of the crossing customs border, trading across borders, exports and imports, that Russia shows one of the most unpleasant positions that is the 99th position, while we are generally ranked 31st. There is an understanding of who creates the plugs, and the definite targets will be specified for them to reach.
You recently drove a Lada from Moscow to Tolyatti through several cities. What are your impressions?
Maxim Oreshkin: First, I like to drive a car. Secondly, it is very useful from a working point of view when the data you see in reports and inquiries, the objects you see on maps are associated with real roads, real traffic jams and with real people. I stood in a traffic jam in Balashikha and Pokrov and in a number of other places. Those who travel in these directions know these traffic jams well. Therefore, there is an understanding of what is happening in reality. And thirdly, of course, a pleasant experience, because our country is beautiful, and when you drive yourself, you look at the Volga, at the Kama, at other interesting places, it is very pleasant.
You met with business community representatives. What did they complain about, what did they talk about?
Maxim Oreshkin: We met, for example, in Pokrov, where the problem was in the large highway that the officials decided to run through the city of Pokrov. It may cut off a large number of small enterprises from access to the highway, and people de facto lose business. This problem is in neglecting the interests of small businesses in the implementation of large projects is, and of course, it is a very serious issue. We met with those who work in the shadow economy.
They were not shy, not hiding, were they?
Maxim Oreshkin: Our people are open, ready to communicate. When a person of retirement age sells cucumbers on a highway, it’s not from his good life, and there is nothing for him to hide from. We bought cucumbers, talked about the problems that existed, and what was happening.
After this trip, you expressed the opinion that, in your opinion, it would be more correct to reconstruct the M7 highway than to build a toll road.
Maxim Oreshkin: Not certainly in that way. What is our position? If you watch the M7 highway all over, there is the first section running from Moscow to Vladimir, where expansion is absolutely impossible. In this direction, an alternate paid route will seriously improve the transport situation. There is an existing highway, for example, a section from Nizhny Novgorod to Kazan. Even if we will build a toll road, anyway between these two large Russian cities, between these million-plus cities, all traffic will pass along the old highway. And here we have even dual roads in some places, low security and so on. In this part, from Nizhny Novgorod to Kazan, it is necessary to modify the route in such a way as to increase safety, so that there are less deaths on the road. Unfortunately, even during my trip I witnessed an automotive fatality. When I was already driving from Kazan to Samara along a regional road, a motorcyclist overrode me several times, and then I saw him, unfortunately, lying already dead on the road because he got into an accident. The issue of security is generally a critical story. Even I had a situation when I was driving along a highway with two lanes, a passenger car was driving ahead of a lorry, the three of us had to drive away on a rather narrow highway. Therefore, resolving security issues is a key issue. The existing road had to rise to the minimum level of safety requirements, at least three lanes, so that you could easily drive ahead without entering an oncoming lane. Motorists are well aware of this. As for the toll road, a section up to Vladimir is simply obligatory; it must be completed from the Moscow Ring Road to Vladimir as soon as possible. This is the first moment. Secondly, if we are talking about the development of our road network, Russia needs a route from Moscow to Yekaterinburg, not only to Kazan. Such goals must be precisely set no later than 2030 and this comprehensive project shall be implemented with the first mandatory stage of the construction of a route from Moscow to Vladimir. And then it’s a matter of the availability of financial resources, and how to plan this work arranged by the years. Obviously, Moscow — Vladimir highway plus bringing the existing route to at least a satisfactory condition is what you need to do first, and then think about how to implement the stages of construction of this highway, which, obviously, shall be a toll highway in the section to Yekaterinburg, where heavy-duty traffic should go, because the effect here will also be from the point of view of safety along the entire roadway network, and the reduction of term for goods delivery. Linking the central regions of Russia with the Urals is very important from the point of view of economic development.
This does not cancel another project that will connect China and Germany and run further in the south, does it?
Maxim Oreshkin: Absolutely does not cancel, because the Meridian project is aimed at the transit flow, it passes much south, and these are de facto two parallel channels. I believe that it is necessary to build Moscow — Yekaterinburg toll highway, we must have such a high-quality, high-speed highway, have it no later than 2030, and it would be better if we had it earlier.
Another issue is a four-day working week, which is now again being discussed, moreover at the level of the Prime Minister. What is your attitude? We questioned business communities. They are against it.
Maxim Oreshkin: The first thing we need to talk about is that the level of salary and the level of labor productivity will be high. If these two conditions are fulfilled, in a situation of high incomes, high productivity, both employers and employees may easily talk about and will support the idea of a four-day work week. Now often this idea is associated with the fact that they will pay less than this low salary that productivity will fall. Therefore, first of all, it is necessary to solve the problems of increasing the level of income and labor productivity. These two tasks, solved together, will open opportunities for any other decisions in terms of, for example, the duration of the working week.
Apparently, it will not be soon then.
Maxim Oreshkin: There is a lot of work to be done in this aspect.
Another issue is the decline in inflation as a factor that holds back the growth. Business community nevertheless wants their income to grow. In our view, it is necessary to have a more aggressive reduction in Central Bank rates, refinancing of previously issued loans at lower rates ...
Maxim Oreshkin: The task of monetary policy, inflation targeting, is not low inflation, but low and stable inflation. Now, for example, we see the risk, and you may see it in our forecasts. If you look at the dynamics of inflation, the decline is even more aggressive than in our forecast. If you look at our forecast, the expected inflation rate is 3.8 % this year, and 3 % in the first quarter of the next year. And this means a serious deviation from the target value. Low inflation means that the level of demand in the economy, the level of income for both business and people, is lower than it might be with stable inflation. This, of course, must be avoided. There are two instruments for managing aggregate demand in the economy. They are a common fiscal policy and monetary policy. We now have a common fiscal policy legislatively regulated by the fiscal rule, and it is clear there what revenues and expenses will be in the mid-term. Therefore, now all flexibility depends on the monetary policy,
on the Central Bank.
Maxim Oreshkin: It is very important that the Central Bank's policy be symmetric, so that both the excess of inflation rate over the inflation target and lowering of inflation rate below the target will be considered equally negative and risky, because the high inflation is a risk for financial stability, while low inflation entails the lost incomes of enterprises, and lost incomes of the population.
The Ministry of Economy of Russia is responsible for the national project for the development of small and medium-sized businesses. What are the main ideas and what should be the results?
Maxim Oreshkin: The results are understandable. They are set as the goals in the decree of the President, including the increase of employment in this sector, increase of economic activity, and from the point of view of what we are doing, it is just an attempt to make the life of a businessman easier from the moment the enterprise was created to its development. Accordingly, the whole group of actions that are taken is the reduction of administrative barriers, simplification of financing, work of regional microfinance organizations, guarantee mechanisms, leasing schemes, lending at a rate not exceeding 8.5 %. We gradually expand the program, which now starts to grow in intensity. Now there are already more than 100 billion rubles of loans issued this year. And, for example, the creation of the same production sites, industrial parks, technology parks. This already applies, first of all, to larger enterprises that want to develop and expand. The increase in the number of sites with ready-made infrastructure in order to create new industries, new businesses, and all together this is the chain of our actions that we do in order to achieve target results. We assist businesses starting from the smallest ones (and here is a new regime for the self-employed, which is now actively developing, and there are about 150 thousand registered people in this system) to already larger enterprises. Our assistance to larger enterprises includes loans, which can reach 1–1.5 billion rubles, and production sites, respectively, with the industries that will make a large contribution to GDP.
Are you satisfied with how the experiment with the self-employed regime works?
Maxim Oreshkin: Yes, I am. We see that a significant part of those who register are those who have not been registered before and were considered unemployed. These are the people who used to work in shadows. We have created a convenient tool that allows people to go out of the shadow and carry out legal economic activities, become transparent, which opens opportunities for them to further develop in terms of bank lending and in terms of a number of other factors. Therefore, there is an effect, it is necessary to apply to the whole country the pilot regime, which we have in four federal subjects.
Do they already enjoy these benefits?
Maxim Oreshkin: Yes, they gradually do. It became much more convenient to work, for example, for aggregators that work in this area. Yandex.Taxi, for example, completely transferred its system to the work through the self-employed people. This makes life easier for those who work in such a system. Reduction of financial costs and time expenditures is the key condition for entrepreneurs to have more time to do what they should do, namely, to create added value and develop our country.
And first of all, it is financing and regulation.
Maxim Oreshkin: Exactly.