Central Bank urged to quit the company weak for the common good

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Photo: Natalia Seliverstova / RIA Novosti

To accelerate economic growth, the authorities should refuse to support inefficient businesses and even create the conditions for its withdrawal from the market, said the Central Bank. Such proposals outlined in the newsletter “what do the trends”, excerpts of which leads the family-owned Demyan Kudryavtsev, the newspaper “Vedomosti”.

Central Bank writes that the greatest productivity and efficiency show only ten percent of the leading companies in each industry. They lay the Foundation for GDP growth. Others, including enterprises from the second ten, far behind and only demand labour and capital. This trend is typical for the whole world, but in Russia, the inefficient firms from the market, notes the regulator.

The biggest gap between the leaders and all the rest observed in the mining industry. Moreover, the lagging indicators understate the entire industry. However, if there is at least someone there is growth in the service sector are stagnating even the leaders and outsiders and all show disappointing results.

The authors of the Bulletin suggest that the reason for this phenomenon may be the devaluation from four years ago. It played into the hands of Industrialists and merchants, but backfired in the service sector.

The decision of the Central Bank is to stimulate weak inefficient players to exit the market. For example, using the simplified procedures of bankruptcy or restructuring. The workers of these companies are offered additional support and provide them with the conditions for retraining and new employment.

Support measures should be aimed at new and developing companies, rather than those that have long been present on the market, not getting results.

Video, photo All from Russia.

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