Last December, we reported an ironic proclamation by the leader of one of the world’s leading oligarchies, Vladimir Putin. At that time, he said that Russia’s best hope to turn around its beleaguered economy was to “let small businesses flourish in Russia.” In that speech, Putin called for a series of incentives for business startups, including tax holidays and curbs on red tape. He said it would also include financial aid for small businesses and assistance for technological innovators. This week, Putin signed some of those reforms into law.

Background

Since Russia’s annexation of Crimea in early 2014 (and the resulting trade sanctions targeting Putin’s network of cronies who control many of Russia’s leading industries) and the steep decline in the price of oil, Russia’s economy has tanked. With little hope that his deep-pocketed allies can lead the country out of its protracted recession as long as the western sanctions are in place, Putin has started sounding like a lobbyist for the U.S. Chamber of Commerce.

Small business isn’t that big in Russia, and that’s a problem

According to the English-language Moscow Times, “Putin has signed a law giving small companies a three-year holiday from regular inspections, a measure lawmakers hope will spur the development of small business in the country.” Small business is relatively underdeveloped in Russia, making up only 21 percent of the country’s gross domestic product, according to the newspaper. (According to estimates based on data between 2002 and 2010, in the U.S., small businesses accounted for 46-50 percent of the GDP.)

“Reforms” even small businesses in the U.S. won’t believe

While small business owners aren’t big fans of government paperwork and nit-picky regulations, few would consider going as far as suggesting some of what’s in the Russian law. According to the Moscow Times, “Under the new legislation, regional and federal authorities will not be allowed to conduct regular checks of small companies or individual entrepreneurs from Jan. 1 of next year through the end of 2018.” Some exceptions to that rule exist, however. Regular checks on the following can still take place: fire safety, environmental standards, radiation control, state secrets or nuclear energy.