Russian small businesses reopen to uncertain future

When Moscow authorities closed non-essential businesses to stop the spread of the coronavirus, Boris Kupriyanov began to personally deliver books to his customers.

This, he said, has helped him and his indie bookstore survive over the past two months.

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"In many ways this has become our salvation," Kupriyanov, co-founder of Falanster, one of the country's most famous independent bookshops, told AFP.

"We've kept going only because people wanted to buy our books and help us," he added.

Companies in the trade and services industries are among the hardest-hit, the think-tank said.

Many small and medium-sized businesses including Kupriyanov's bookstore will be allowed to reopen on Monday as authorities gradually ease confinement restrictions in Russia, which has reported more than 396,000 coronavirus infections — the third-largest caseload after the United States and Brazil.

Not everyone will resume operations, however.

According to a study by the Center for Strategic Research in April, about a third of Russian companies risk bankruptcy following a collapse in demand fuelled by the epidemic.

Companies in the trade and services industries are among the hardest-hit, the think-tank said.

While authorities have unveiled measures to prop up the economy, including tax payment deferrals and interest-free loans, many small and medium-sized businesses complain they pale in comparison with measures extended to enterprises in the West.

Vladimir Gimpelson, head of the Centre for Labour Market Studies at Moscow's Higher School of Economics, said tax breaks and loans were of little help for companies on the brink of bankruptcy.

"Deferrals are not a solution to the problem," Gimpelson said in a recent report, warning of a rise in poverty and inequality.

The Russian government has refused to tap into the country's sovereign wealth fund, which had assets worth $150 billion as of early March, and instead ordered companies to continue paying their employees in April despite the shutdown.

Agence France-Presse