Russia entrepreneurs adapt to lockdown challenges

Mikhail Kavin recalls a turbulent year for his bar since Russia first went into lockdown a year ago.

Commode, located just off St Petersburg's famed Nevsky Prospekt, stopped operating for almost two months, and again as a result of second-wave restrictions a few months later.

Over New Year, Kavin joined a backlash by restaurant and bar owners in the city who were ordered to shut between December 31 and January 3 and were required to close at 7 p.m. for a week after that due to a surge in coronavirus cases.

Dozens of businesses joined what was called the Map of Resistance — a short-lived website listing bars and restaurants that refused to obey the restrictions.

"How else were we supposed to survive?" said Kavin, manager of the Commode bar, that features rooms named after different cultural figures such as "Gershwin," "Brando," "Rockefeller" and "Lebowski."

"People needed to be able to eat and work. The authorities were unwilling to enter into a dialogue", he said, noting that joining the Map of Resistance "was our only way to be heard."

Police raided Commode in early December for serving customers behind closed doors past 11 p.m.

Security video showed a dozen officers in balaclavas breaking through the door and walking amid patrons who apparently were made lie on the floor, some were beaten.

Authorities eventually eased the restrictions and сafes, restaurants and bars were allowed to open between 6 a.m. and 11 p.m. the week after the ban.

Commode operated during the holidays despite the restrictions, but it still hasn't bounced back to its pre-pandemic level of sales, Kavin said.

Russia was never fully locked down again after last spring, and as a result, its economy and some of its businesses did not suffer as much as those in other countries during the pandemic.

However, it also has seen its mortality rates rise.

When infections surged again in the fall, the government resisted imposing restrictions that would have shut many businesses.

The six-week lockdown in March damaged the weakening economy and compounded Russians' frustrations over declining incomes and worsening living conditions.

President Vladimir Putin's approval rating fell from 69% in February 2020 to a historic low of 59% two months later, according to the Levada Center, the country's top independent pollster.

For the rest of 2020, industries and enterprises mostly stayed open.

During the fall resurgence, some regions imposed restrictions that limited the hours or capacity of bars, restaurants and other businesses, but rarely were they closed altogether.

According to the Organization for Economic Cooperation and Development, Russia's GDP fell by just 3.6% -- a little more than the global average of 3.4%.

By comparison, GDP in the U.K. shrank by 9.9%, 8.2% in France and in Germany it fell by 5.3%.

Still, it was Russia's biggest plunge since 2009.

A survey of 5,000 small to medium-sized enterprises found that about a third are still seeing a decline in revenue at the start of 2021.

The survey, conducted by Russia's business ombudsman Boris Titov and cited by the news outlet RBC last month, said about 27% reported revenue at the same level as last year and nearly one in 10 companies were looking to close.

Russians' incomes fell by 3.5% last year, experts say, noting that Moscow spent far less supporting businesses and consumers than other countries.

That could be because the government, with its sovereign wealth fund worth $165 billion as of April 2020, was reluctant to open state coffers last spring, when oil prices had plunged.

Some small and medium-sized businesses needed creative ways to stay afloat, with government support mostly limited to tax deferrals, cheap but hard-to-access loans, and relatively small direct subsidies.

The company Stend-Do of Artyom Borovoy, co-founder of a company that builds stands for exhibitions, started making folding desks for those working from home when conventional business ground to a halt — an idea he said came from Zoom discussions with his friends "out of desperation."

Simple plywood desks that fold like an easel and can be used either sitting or standing proved popular for those working remotely from tiny apartments.

Borovoy sold about 2,100 desks last year, but admits the new project is making only enough to cover costs.

On the other side of the coin, online sales had a good year.

Ozon, a major Russian e-commerce platform similar to Amazon, saw sales jump last year, the company's communications director Maria Zaikina said.