Crime and punishment

In March, The Moscow Times ran a piece headlined “Corruption may force Western firms to quit Russia.” It made for pretty grim reading.

The article was spurred by comment from Alexandra Wrage of NGO TRACE International who ran workshops in Russia for Western companies on how to avoid bribery. She lambasted the “rampant, endemic” corruption in Russia, saying it was much worse than in other big emerging economies.

There is no denying corruption is both a big problem in Russia: some economists say that the cost of graft has shaved about 2pc off GDP growth rates. Berlin-based NGO Transparency International, which produces the global yardstick for corruption perception, rates Russia at joint 146th on the 180-strong list, and reckons bribe-taking is worth about £200bn a year – or nearly one third of Russia’s entire economic output.

However, while Russia gets the most attention on this score it is not alone. All the countries in the CIS are facing the same challenge. For example, Ukraine, which is arguably the only true democracy in the CIS, scores even worse than Russia. And Kazakhstan, which is run by president-for-life Nursultan Nazarbayev, whose children control huge swathes of the economy, scores better than Russia (120th in Transparency’s list). At least Russia has a real and functioning private sector and the nepotism is not quite so blatant.

Something needs to be done about corruption in the region. And that is the point: finally, Russia has begun tackle one of the most difficult reforms to make for a transition country. When Vladimir Putin was president he called for a crackdown on corruption in every one of his state-of-the-nation speeches, and absolutely nothing happened. Dmitry Medvedev also regularly talks about corruption, and has started acting on it, too.

The Interior Ministry has set up an anti-corruption unit and the Prosecutor’s Office (Russia’s top policeman) set up an investigative committee last year to examine more than 40,000 cases. The government says it exposed a total of 439,000 crimes in 2009 of which 173,000 were serious and caused a total of 1tr roubles (£23bn) of damage.

You can choose to believe the actual numbers of crimes solved or not, but an attack on the problem has clearly begun. Every week, some high-ranking official from across the spectrum of government has been either sacked or jailed. In all, some 800 members of Russia’s administrative elite were sent to prison in 2009. Of course, the numbers of those punished are tiny compared to the million-plus strong bureaucratic army, but the strategy is a warning shot across the bows of every branch of government to say “change is coming, mend your ways”.

More recently, Mr Medvedev has taken things up a gear and started to legislate. A police reform bill was passed in February; the interior ministry was given a shake-up in March; a bill to better define blue-collar crimes was passed the same month. More are on their way, although it will take years if not decades to make a real dent in the problem.

“Our task is to create justice of high quality that helps our citizens,” Mr Medvedev said, adding that it would not be an easy process.

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