Lenin would turn over in his coffin

Published plots of land look like a prehistoric dwelling caves in the hilly karst landscape. Nearly a thousand garages rows are pressed to the slope of the Ravine Petrov. The gates are closed, the street is not seen almost any resident. The ravine is located on the outskirts of new buildings in Ulyanovsk.

600 thousands inhabitants the city on the Volga river about 900 kilometers East of Moscow, is a rather small community. However, Ulyanovsk in Russia knows almost everyone. This also contributes to the extravagant Governor Sergey Morozov, who willingly makes the officials to write dictations or entire teams sends them to English classes. Morozov is famous for the fact that he can attract investors. With chocolate manufacturer Mars and the Turkish brewing company “Efes” he came two well-known foreign group. Also transport aircraft an-24 is mounted here. Who on 12 June, Russia Day, will give the nation a new citizen, among other things, a SUV “Patriot” Ulyanovsk automobile plant UAZ. To make it a success, September 2, declared a day off. Thank Governor.

And yet the most famous native of the city is Vladimir Ulyanov, whose name was in 1925, has the city and which is known as Vladimir Lenin and the leader of the October socialist revolution of 1917. Meanwhile, the city is famous as a citadel of the shadow economy.

Petrov Ravine could be a normal city shelter, if not for the plumes of smoke emanating from some garages on the homemade exhaust pipes. Those who heat their boxes, as in Russia, also called the garage, rarely put their cars. Garages often serve as workshops. They are cheaper than production facilities and do not require any incidental expenses.

Putin for the legalization

Alsu varies. Should she tell her story? 50-year-old woman suspicious, since there were rumors that the city can take owners of the garage. In the state Treasury empty. Last year, President Vladimir Putin demanded that the government find ways to “translate garage economy legal”. He was threatened by the Ministry of Finance and “the comprehensive state service”, as it has been one owner of the garage. However, nothing has happened yet. While the majority pays no taxes.

They call themselves “garazhniki”. Among them there are representatives of all professions. From mechanic to dental technician. Orders even to double the helicopters. These small private enterprises offer the same thing, what is produced and state-owned enterprises, only cheaper. Alsu for four years produces furniture. Since then the workshop has grown to 350 square meters. Business is going well. The development team includes two sons and a daughter-in-law. Currently Alsou employs ten people. “Officially hired only three,” she says. It was a compromise to appease the officials. The three “legal” on paper receive only the minimum wage. To pay all state taxes she cannot afford. For that she pays the best wages, said Alsu. Adam works at Lil Wayne for two years and making the stools. 25-year-old man happy, because 40 thousand rubles he receives twice more than in a state enterprise.

The foam and the finished parts are stacked to the ceiling. Product Alsu refers to the average price category. It is proud of its quality. Just one Executive officer of the urban management ordered the sofa. “They, too, need to save,” she laughs.

Meanwhile, the Ulyanovsk furniture workshop is considered to be Russia. 12 thousands of garages made almost everything from the Desk to the wardrobe. “Most of the owners boxes don’t want to make millions or to expand,” says economic historian Sergei Silaev which examines a garage production. Important to them reliable a profitable operation also in difficult times. Fits their own shop, as numerous personal contacts small business doing it during the crisis, less vulnerable than large enterprises.

Russia has great experience in the shadow economy. She made up for the deficit even under the Communist planned economy. After communism it was providing the population with all essential. And now its merits are obvious: despite double-digit inflation and falling growth at 3.7% in 2015, the country was quiet. About a quarter of Russian economic production is in the informal sector, experts say. Of the 76 million people of working age according to the most conservative estimates at least 30 million work in the informal economy — about 40% of the population.

Stay humble

Alsu successful, but she does not dream of own Ikea. “We need to stay humble,” she says. “One who becomes too rich, attracts the attention of the authorities and the envy of competitors.” Only 5% of the workshops had a chance to go legal. The poorer the province, the more luxuriant thriving of the informal sector. In the oil region around Tyumen or Moscow, it plays almost no role.

Neighbor Julia, Ivan Larin, is a different type of garage firms. It all legally, says 33-year-old computer specialist, who left in Moscow a well-paid job in a large firm. He wanted to try something and be free. Ivan produces air conditioners, however, he opened one niche: winter workshops pollute the air in the ravine, because they flush waste. This aroused the interest of the service for the protection of the environment. After this enterprise try to avoid contact with the bureaucracy. Now Ivan offers eco-friendly ovens that consume used oil. Demand among a huge garage firms. Ivan has nothing against that, “very quickly become very rich”.