Whom to Help in a Crisis

I read that Kazakhstan has drawn up a list of systemically important enterprises. I haven't seen the list itself, and I don't know the principle by which it was compiled.

The question, perhaps, is not the list but the selection criteria. In Russia, systemically important enterprises are chosen by revenue and headcount, with significant exporters added. But even that is probably not the main point.

The main point is to understand what the help is for and what it gives the economy and the country as a whole. Keeping large enterprises afloat in a major crisis is mostly about preserving jobs, keeping cities and villages and their residents supplied with essential services, and ensuring security. It is also about sustaining our biggest taxpayers, who will pay taxes later, when things get back to normal.

For example, the country cannot function without aviation, water supply or electricity.

Mining companies, oil producers included, are our main exporters. They bring foreign currency into the country and pay the bulk of taxes. If we don't help them now, there will be no one left to export later.

The construction sector is labor-intensive, so here the issue is more about employment and supporting households. We should not forget the buyers who have paid into housing projects that are still under construction.

Systemically important enterprises can also be a channel for helping other businesses.

For example, we can lower electricity prices by supporting the main power generators.

Energy-intensive enterprises would then receive meaningful, systemic help and reduce the production cost of their goods.

Or we can lower transportation tariffs by subsidizing fares.

What matters here is a systemic approach without selectivity: the reduction should apply to everyone, or to those sectors that have been hit.

We also need to distinguish between types of support, of which there are many. Some companies are exempted from taxes, some receive subsidies, and some are given government contracts.

For example, there is no point in giving tax breaks to oil companies. Their main taxes depend on the oil price, and when the price is low, their taxes are minimal too. They need other kinds of support: cheap funding, subsidized oil transportation, extension of exploration contracts for the duration of the crisis, relief from the obligation to fulfill minimum work programs, and write-off of penalties for failing to meet obligations.

Builders now need, above all, government construction contracts and demand for apartments driven by cheap mortgages. It is better to build infrastructure now, since it will have to be built sooner or later. Infrastructure always gives business a bigger multiplier effect than housing construction.

There is a lot of debate about IT companies. I think support for them should not be limited to a crisis but should be permanent, until the industry gets on its feet. IT companies need entirely different forms of support. At the moment the industry is more dead than alive, and it should be fully exempt from taxes. Most important of all, it needs a legislative framework that makes it possible to raise funding and protects investors' rights.