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→Russia's business environment
Thriving in a system rife with corruption and little accountability, Soviet-trained bureaucrats have stifled the growth of small businesses in Russia, according to Albats. She noted that the majority of regulations existing in Russia today were issued not by the Duma or the President, but by various state agencies—between 1991 and 2001, Russian federal ministries imposed 1474 regulations on business, compared with 156 passed by the legislature. Albats contended that bureaucrats find it easier to control several large businesses than many small businesses, and have set up a regulatory framework to reflect that preference.<ref>[https://www.wilsoncenter.org/publication/bureaucrats-and-russian-transition-the-politics-accommodation Bureaucrats and Russian Transition: The Politics of Accommodation]</ref>}}
Thriving in a system rife with corruption and little accountability, Soviet-trained bureaucrats have stifled the growth of small businesses in Russia, according to Albats. She noted that the majority of regulations existing in Russia today were issued not by the Duma or the President, but by various state agencies—between 1991 and 2001, Russian federal ministries imposed 1474 regulations on business, compared with 156 passed by the legislature. Albats contended that bureaucrats find it easier to control several large businesses than many small businesses, and have set up a regulatory framework to reflect that preference.<ref>[https://www.wilsoncenter.org/publication/bureaucrats-and-russian-transition-the-politics-accommodation Bureaucrats and Russian Transition: The Politics of Accommodation]</ref>}}
=== Russian corporations hit by a tsunami of bankruptcies ===
[[File:Bankruptcy.jpg|thumbnail|400px|right|Russia has seen a sharp spike in corporate bankruptcies, according to a report that comes as Vladimir Putin looks to tax companies more to pay for his social program and the sanctions-hit economy continues to face turbulence.<ref>[https://www.newsweek.com/russia-bankruptcies-economy-kommersant-1876806 Russia Hit By Tsunami of Bankruptcies], Newsweek, March 7, 2024</ref>]]
On March 7, 2024 Newsweek reported:
{{Cquote|Russia has seen a sharp spike in corporate bankruptcies, according to a report that comes as Vladimir Putin looks to tax companies more to pay for his social program and the sanctions-hit economy continues to face turbulence.
The business newspaper Kommersant reported that in the first two months of 2024, corporate bankruptcies had increased by more than a half compared with the same period last year—and experts predicted an increase in insolvencies in future.
Bartosz Sawicki, market analyst at Conotoxia Fintech, told Newsweek Russian firms are facing refinancing issues "as the effects of monetary tightening are starting to kick in."
Kommersant said that in January and February this year, 571 and 771 companies respectively, were declared bankrupt—57 percent and 61 percent more than in the same months in 2023, citing court records in the country's Unified Federal Register of Bankruptcy Information.<ref>[https://www.newsweek.com/russia-bankruptcies-economy-kommersant-1876806 Russia Hit By Tsunami of Bankruptcies], Newsweek, March 7, 2024</ref>}}
A 2024 Business Insider article indicates:
{{Cquote|"Companies are experiencing problems with refinancing as the effects of monetary tightening are starting to kick in," Bartosz Sawicki, a market analyst at Conotoxia, a Polish fintech firm, told Business Insider.
Apart from war-related sectors such as arms production, the Russian economy looks "far from rosy," Sawicki said.
"Although Russian companies are doing their utmost to dodge sanctions, international trade has become a significant issue for plenty of them," Sawicki wrote in an email.
"The private sector also feels the pressure of macroeconomic instabilities, which deepen as the economy is on the verge of overheating," he added.
It could get worse.
Russian President Vladimir Putin's regime is coming under tightening Western trade restrictions, including secondary sanctions against companies doing business with the country.
Putin has also pledged to give Russians billions of dollars in lifestyle upgrades weeks before they head to the ballot for the country's presidential election later this month.
While it's unclear where the extra budget for Putin's promises will come from, the Russian leader has proposed changes to the tax system that are designed to result in more taxes from high-income individuals and businesses — which could put even more pressure on private companies.<ref>[Russia's economy appears resilient, but companies are going bankrupt by the hundreds], Business Insider, 2024</ref>}}
== References ==
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