x Abu Dhabi, UAEFriday 28 July 2017

Corruption makes life a 'nightmare' in Russia

The country ranks 147th in a watchdog's annual corruption survey, alongside Syria, Kenya and Bangladesh.

MOSCOW // Ilya Khandrikov, a Moscow businessman who runs a clothing factory, says government inspectors paid him a visit recently and informed him that his factory was in violation of several statutes on working conditions.

"Dust and noise levels, things of that sort," said Mr Khandrikov, who splits his time as head of a non-governmental organisation aimed at defending the rights of small businesses. The inspectors offered him a contract to sign with a consulting company that would assist in bringing his company in line with the law - to the tune of a thinly disguised bribe of US$350,000 (Dh1.3 billion). "And that was just for the consulting fee," Mr Khandrikov said. "There might have been additional fees."

But unlike many Russian small businessmen, Mr Khandrikov said he had a guiding principle when it came to dealing with bureaucrats: "If you give one bribe, it becomes a habit. And they will visit you again and again." The level of corruption is soaring in Russia, which ranked 147th - alongside Syria, Kenya and Bangladesh - in an annual survey, released last week by the international corruption watchdog Transparency International.

Russian citizens regularly pay bribes for everything from avoiding traffic tickets to getting quality medical care to securing a spot in university. But bribe-hungry inspectors "making life a nightmare" for small and medium-sized businesses, as Dmitry Medvedev, the Russian president, described the practice, have been the target of the government's latest pledge to cut down on graft. After being elected in March, Mr Medvedev promised to tackle corruption, saying it was holding back the economy and weakening the state. Two weeks ago, Russia's lower house of parliament passed a draft law that would slash the number of government inspections faced by businesses and require law enforcement officials to obtain authorisation from tax authorities before conducting tax inspections.

Mr Medvedev has denounced what he calls "legal nihilism" that permeates Russian society, and an anticorruption committee he created is to submit by November draft legislation aimed at battling systemic graft. Many in Russia, however, are sceptical about the government's ability to rein in corruption. According to a nationwide poll conducted earlier this month by the Russian state pollster VTsIOM, 74 per cent of respondents said corruption in Russia was either "high" or "very high", while 75 per cent said that the state's attempts to combat graft had brought either no improvement or "negligible" results.

Kirill Kabanov, head of the National Anticorruption Committee, a non-governmental organisation, said while the recent legislation passed in the Russian parliament was a step in the right direction, it was ultimately up to society to make a difference. "Laws are good, and they are necessary," Mr Kabanov said. "But just as important is how they are executed and with what oversight. This is the job of society, because corruption is a danger to everyone."

Most Russians, Mr Kabanov said, "either don't know or do not believe that they can influence the situation in any way. "In such circumstances, Medvedev can wish all he wants for change. It won't work." Mr Kabanov's organisation this month issued a joint report estimating the size of bribes required to carry out a variety of attacks on businesses in so-called "raider attacks", an umbrella term used in Russia to describe any illegal tactic for taking over someone else's company.

Getting law enforcement authorities to open a criminal investigation against a senior executive of a company, for example, will cost $30,000 in bribe money to the relevant official, according to the report, which surveyed more than 100 Russian lawyers and businesses. Mr Khandrikov, the clothing factory owner, is sceptical about the Russian government's high-profile anti-corruption campaigns. "Talking about doing something and actually doing something are two very different things," he said.

When he was offered to pay the consulting company $350,000 to eliminate the violations at his company, Mr Khandrikov said he went straight to city officials and showed them the contract. "They all of a sudden became big friends of small business," he said. cschreck@thenational.ae