ALEXEY VEDEV: TIME TO SWITCH TO DIRECT FUNDING AMID CRISIS

Alexey Vedev, Head of Financial Studies Department of the Gaidar Institute, shared his thoughts with mk.ru on the need for more effective measures to provide support to small and medium business. Given the introduction of quarantine restrictions and the announcement by the President of non-working days, small and medium-sized businesses suffer great damage. Previous anti-crisis support measures are clearly not sufficient. The government discuss additional tools to support small and medium-sized businesses and consider the possibility of direct subsidies. However, according to Maxim Reshetnikov, Minister of Economic Development, this is a "very expensive" measure.

According to Alexey Vedev, “The announced support measures, including preferential loans, will not achieve anything. Tax holidays seem almost ridiculous: how one can pay taxes on no income? It is critical to switch to direct funding, turn to international experience of “helicopter money”, when help goes to all affected. However, this requires industry analysis, an assessment of SME activities and financial situation of enterprises. This refers to direct subsidies in the amount of RUB 5-7 trillion, as the size of potential losses is envisaged from this perspective. However, it is highly probable that money will be allocated according to the administrative principle: first come, first serve.