Boris Titov: ‘The old economic model does not work, but we can't start a new one’

Now we have to solve macroeconomic problems mostly

'Straight talk' between entrepreneurs of Tatarstan and the federal business-ombudsman Boris Titov, which was held on 10 March, before the first extended meeting of the Entrepreneurship Council under the President of Tatarstan, began with a rather unexpected, but close to Titov topic. However, it sounded quite ominous in an expensive conference hall of the hotel entertainment complex Korston. Titov, who has made many efforts for the amnesty of entrepreneurs, started with businesspersons that are still behind bars, which immediately put the dialogue in a serious way.

It should be noted that the magnitude of the federal business-ombudsman discorded with the claimed by businesspersons Tatarstan problems. It became clear from the dialogue that the real problems being on everyone's lips faced with such powerful resistance, that they seem impossible to overcome, and about smaller ones about which Titov, seemingly, simply does not know. He encouraged the entrepreneurs for several timeswhen reasoning their positions to give an example of global experience, including the USA.

Also, as a part of the conversation, there was an unobtrusive presentation of the political party Right Cause with parliamentary ambitions.

After the shake-up of the hall by reminding the entrepreneurs about the real prospects of being on a bunk, Titov outlined the range of challenges he has to deal with.

Boris Titov: 'The whole complex of economic problems, which prevents move to a new model: the old one is not working (no oil), but we can't start a new one.'

'Now we have to solve macroeconomic problems mostly, the Stolypin club has proposed the programme 'Economy of growth', where how to set tariffs, taxes, how to conduct monetary policy because interest rate increases, they kill. The whole complex of economic problems, which prevents to move to a new model: the old one is not working (no oil), but we can't to start a new one,' told Titov.

Then he added that now he has to manage the party to implement these programmes.

The battle for the VAT (value added tax) and the Ministry of Finance which is stronger than the presidents

The organizers of the 'Straight talk' formed the communication from closer to the business topics, that resulted in a little dissonance. On the one hand — Titov dealing with systemic problems of the current processes, on the other hand — the business, working 'on the ground'.

The first question was from a businessperson from Nizhnekamsk — about the deduction of VAT for contracts with small businesses. In particular, the entrepreneur offered to consider Tatarstan as a pilot region for testing the scheme, and asked what is the status of the initiative of Titov.

The reply of the business-ombudsman didn't add any optimism. What is more, he said about the relationships in the top-echelon authorities. According to Titov, the problem has been discussing for 10 years, and the resistance of the most principled opponents has even been overcome; both Medvedev and Putin, both as the President, were for this initiative.

Boris Titov: 'We did not get anything from the Ministry of Finance, nothing. It's been a few months – nothing. Although it doesn't cost anything, on the budget revenues it has minimal impact.'

'It seemed that they decided to implement at least in two regions. Unfortunately – nothing. We did not get anything from the Ministry of Finance, nothing. It's been a few months – nothing. Although it doesn't cost anything, on the budget revenues it has a minimal impact. Unfortunately, there is a tough attitude, despite the opinion of one President, the second President, but the Ministry of Finance has not changed its position,' told Titov.

However, he expressed hope that, probably, soon there will be opportunities to influence the process through the State Duma, and, in general, they will be able to 'put the squeeze'.

Project financing on reliable channels and the increase in the money supply

A successful development of the subject of the possible emergence of party entrepreneurs in the State Duma was the result of a question from the next businessperson who directly asked to tell about the proposed programme 'Economy of growth'.

However, Titov accepted it without much enthusiasm, noting that the regulation does not allow to describe adequately the programme, because it is complicated and one follows from another. But he said about some points.

'We suggest that the state through normal channels would bring liquidity to specific, tangible projects in the framework of project financing. This system works all over the world, only our Ministry of Finance and the Central Bank don't want. This will give an impetus to the development but not a draining of money supply,' told Titov.

He noted that the path is followed by most countries, from Japan and China to Vietnam, which currently is experiencing a flourishing development. The second part of the proposals was the idea of powers division. Titov suggested creating a separate body to manage the development while the government must solve the current problems.

Once again the entrepreneurs complained of unfair competition from the Recorder of deeds

Preferences for private security companies, patents for the garment industry and other utopian initiatives

Once again the entrepreneurs complained of unfair competition from the Recorder of deeds, Titov promised to initiate changes in the laws. Offers from private security companies to provide them a number of privileges, including parking opportunities, did not meet the understanding, however, the business-ombudsman proposed to give an example of the world experience.

Tatarstan representatives of garment industry complained of competitors from Kyrgyzstan, where in order to start the production it is needed only a patent that puts the Tatarstan businesspersons in unequal conditions for competition. In this issue, Titov complained that these problems had to have been solved during the formation of the Customs Union, and now it is unclear what to do with it. The proposal to ease the tax and administrative barriers for a Russian manufacturer didn't meet the understanding.

The subject of the demolition of stalls in Moscow did not remain without attention. It has an impact on the Tatarstan stall-holders, especially in the part where they called to extend this experience to the regions, although Kazan experienced a similar process in 2007-2010. Titov noted that he was clearly against Moscow demolition, calmed everyone saying that, for example, in St. Petersburg the Moscow approaches didn't meet the understanding.

The meeting with entrepreneurs ended with an optimistic promise that business in the near future will witness of great change in the psychology of officials

The state needed to 'whiten' the haulage

The hauliers asked with great hope about Platon. Titov expressed a rather unexpected support for this system.

'The state needed to 'whiten' the haulage, a large number of hauliers worked 'in black'. They carried unofficial freight. Of course, the government needed to 'whiten' and to control traffic. They had this problem. They implemented it not very well, but now they refuse to return the whole situation back when a lot of money had been spent, I think, no one will. They have already passed the take-off point. It is profitable for legal hauliers, it knocks out the black competition, you're constantly competing with those who pay nothing,' noted Titov.

Besides, he said about the toll increase has been frozen, the tariff will be analyzed – where the price for a kilometer came from, and other activities will be held to develop the system.

'I think that, not increasing the toll, they should got used to the existence of that system,' said Titov.

The meeting with entrepreneurs ended with an optimistic promise that business in the near future will witness of great change in the psychology of officials who in the face of low oil prices will finally understand that entrepreneurs are the only source of income and of the country development.

'The country does not have the other way, except the development. Earlier, there was another way, we have a lot of oil. Now, oil does not have the same price anymore, we need new sources of income, and you will see how it will change the psychology of officials who understand that we need to support entrepreneurs, because it is the goose that lays the golden eggs.'