Tuesday May 26, 07:43 PM
Medvedev reaches out to Russia's struggling businesses
By Anna Smolchenko
BARVIKHA, Russia (AFP) - President Dmitry Medvedev reached out on Tuesday to Russian businesses hit hard by the downturn, as officials gave more stark warnings on the state of the economy.
After issuing a stern rebuke to officials for their doom-and-gloom predictions, Medvedev quipped that he might decree the country had reached the bottom of the crisis if that would help ease businesses' access to loans.
"It is clear that without successful entrepreneurship our state will not have a future," Medvedev told two dozen business leaders, most from small and medium sized companies, gathered at his residence outside Moscow.
Some of those gathered in a white tent pitched on the lawn at Medvedev's Barvikha residence complained it was very difficult to get bank loans, with interest rates as high as 24 percent, and access to foreign-made agriculture and other equipment was scarce, among other issues.
Igor Kim, chief executive of MDM bank, said it would be hard for companies to get access to credit from banks before the economy reached a trough.
Medvedev jokingly replied: "There is a possibility to issue a decree about the crisis reaching the bottom."
He insisted lenders were not the "enemies of the people" and that there would be "more or less normal rates in the foreseeable future."
Russian officials on Tuesday announced an even gloomier economic outlook than previously anticipated.
One unnamed official told Russian news agencies the budget deficit this year would equal nine percent of gross domestic product (GDP) and Deputy Economy Minister Andrei Klepach said GDP shrank by 10.5 percent in April compared to the same month last year.
The government has taken a series of steps to prop up the economy as the country heads into its first recession in a decade but businesses have long complained they are not receiving money from state banks meant for them.
During the two-hour meeting, which was fully open to the media in a break with the Kremlin (Frankfurt: 513350 - news) tradition, Medvedev took pains to show his knowledge of the problems the business faced.
"Ninety-five percent of what you told me about I am aware of," he said. "We don't have a movement forward."
Several of those present told Medvedev that being a private businessman was so hard in the country that young Russian people would rather land state jobs than become entrepreneurs.
"Entrepreneurship is not a dream for people," said Ruben Vardanyan, chairman of Troika Dialog, a leading investment bank.
Medvedev said he was an optimist, however. "I believe that the youth should also be oriented towards working in business, private business first and foremost," he added.
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