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Moscow bulldozes business backbone

A decision to bulldoze kiosks and allegedly illegally built shopping centers in Moscow is seen by small business operators as a stab in the back. Fiona Clark reports.

"Guess I won't go to work today. They've bulldozed my office," one worker tweeted when he discovered his building had been demolished at the orders of Moscow's City Council. His one was of around 100 that were targeted for destruction last week - now known as "the night of long shovels" - a reference to Hitler's "night of the long knives" when he ordered the slaying of upwards of 70 opponents in 1934. And not surprisingly, business owners are feeling as though they've been stabbed in the back.

These kiosks and shopping centers were the first targets in a wave of demolitions that will see more than 200 razed to the ground in the coming days. It will leave a number of people out of work. So far, it's estimated that around 2,000 people have lost their livelihoods - and when Russia is suffering what is said to be its

worst economic crisis

since 1998, it begs the question - what is the council thinking?

The city's mayor, Sergei Sobyanin, says the owners of the buildings - ranging from demountable structures to fully fledged multi-storey constructions - were given notice about their upcoming destruction well in advance. The council maintains the buildings were illegally constructed in the 1990s and any documents asserting legal ownership aren't worth the paper they're written on. In addition, as the businesses hadn't vacated their premises, they would not be entitled to compensation.

While critics say the move is a cynical land grab that will allow the council to put out tenders for new constructions to their cronies, Sobyanin maintains the move is about public safety and beautifying the city. The council also said the buildings, some of which have been standing since the mid '90s, now contravene a new 2015 regulation that allows the destruction of buildings built 'alongside utility lines.' It would be hard to find one that wasn't built alongside utility lines in Moscow, or in any city.

Extraordinary claims

On television, news readers described the buildings as 'unsanitary,' a hotbed of 'underworld criminal activity,' and, most extraordinarily, claimed they could be 'used by terrorists.' Well, in theory any building could. What makes these ones, which housed shops selling stockings, photo frames and clothing, more susceptible to that type of activity wasn't explained, nor was any evidence of crime produced. Nor was it explained how nearby restaurants, that were also flattened, fitted into that picture.

onlookers watch building being torn down copyright: Fiona Clark

The city council's motives for destroying the buildings are opaque at best

But what is clear is that many families, already struggling to stay afloat as real wages diminish (down 9 percent) as inflation rises (up 13 percent), will find it hard to find other sources of income. The government says there are 120,000 job vacancies in the city but I guess street sweeping probably won't pay the same as your own small business. And if people have less money, they spend less, and the

economy shrinks further.

No tax, no care

It's ironic that in a time of crisis you wouldn't do all you could to help small businesses, but they don't bring in the same tax revenue that large multinationals do. According to the English language newspaper The Moscow Times, the taxes collected from these types of operations is insignificant, amounting to 3.13 percent of the city's total revenue in 2015, or around 1.7 trillion rubles (19.5 billion euros).

And the paper says the number of small businesses in Moscow is shrinking. In 2013 small-to-medium sized enterprises employed 1.54 million people, but in the first nine months of 2015 that figure dropped by 45,000.

And are this week's victims likely to re-open new businesses? If the legal documents they had showing ownership of a shop for about 25 years weren't worth anything, it's highly unlikely.

police on street copyright: Fiona Clark

If the buildings were built illegally who's going after those responsible?

The city says it's establishing a 'rule of law' for businesses to operate in so they should feel confident, but no one seems to be going after the people who built the allegedly illegal shopping centers in the first place, or sold leases to the businesses in their buildings. It's only the small business person who is paying the price. And by the end of this 'long shovels' episode another few thousand or so will be added to the pool of unemployed.

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