Curbing Corruption In Russia

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  Twenty years after the collapse of the Soviet Union, corruption has become a pervading quandary in Russia. According to the Corruption Perceptions Index 2012 released by the non-governmental organization Transparency International, Russia ranked No. 133 of 176 countries and territories. The ranking even lagged far behind some underdeveloped countries in Africa.
  Anti-corruption is currently a global trend. Being one of the countries with a severe corruption problem, Russia’s anti-corruption policies have become a worldwide focus.
   Characteristics
  Three characteristics summarize the nature of Russia’s corruption:
  First, the large-scale loss of former state assets in the early period of Russia’s economic transformation. Russia carried out a massive systemic transformation after the Soviet Union disintegrated. A key component of the transformation was the privatization of mammoth stateowned enterprises. Some government officials and economic oligarchs swallowed former state assets through illegal methods like undervaluation and under-the-table auctions during the privatization process. According to information released by the State Duma, the lower house of the Russian parliament, Russia lost about 9,500 trillion rubles ($1.7 trillion at the exchange rate at the time) in the privatization process in 1997, about 4.2 times of Russia’s total GDP in 1996.
  Second, universal corruption among government officials of all ranks. Former Russian Prosecutor General Vladimir Ustinov said that about 80 percent of Russian officials were corrupt on some level. Statistics from the Russian Interior Ministry showed that average bribetaking per Russian official in 2011 was 300,000 rubles ($9,120), much higher than the 2010 figure of 61,000 rubles ($1,855). Former Russian President Dmitry Medvedev once asserted that unscrupulous officials could misappropriate as much as $300 billion in state funds every year by colluding with businesspeople. Experts estimated that the money funneled for corruption in the country might equal $350 billion per year.
  Third, Russian people have increasingly given tacit consent to corruption, accepting the practice as a part of daily life. Some citizens even participate in a range of corrupt activities. According to statistics from an anti-corruption investigation center in Russia, 20 percent of Russian citizens admitted to offering bribes in 2009. The percentage grew to 29 percent a year later. Statistics from Russia’s Levada Center showed that about 88 percent of Russians have reported poor service while seeking help from government departments in recent years, and 53 percent of Russians admitted to engaging in acts of bribery to resolve their problems.    Corruption Buster
  The Russian Government adopted its first anticorruption and anti-bribery law in 1992. In 1997, then Russian President Boris Yeltsin signed a presidential decree that required public servants to declare their assets. But neither the law nor the presidential decree had much practical effect.
  When Vladimir Putin first came to power in 2000, he initiated an aggressive campaign against corruption. The Russian Government issued a series of anti-corruption laws on the civil service system beginning in 2002. Putin signed a presidential decree in 2003 establishing a commission against corruption and bribery that worked directly under the president. Anticorruption supervision bureaus were later set up at procuratorial organs at different levels.
  Medvedev founded and chaired a presidential anti-corruption commission after he became Russian president in 2008. In the same year, Russia released a national anti-corruption guideline and an anti-corruption law. According to these regulations, a Russian official can only accept gifts that are valued less than 3,000 rubles ($91).
  Putin re-launched the anti-corruption process in 2012 after his reelection. On May 19, 2012, he issued a presidential order, reducing half the number of official vehicles in the country. Many high-ranking government officials,including former Defense Minister Anatoly Serdyukov, lost their positions one after another for corruption. Serdyukov conducted military reform after assuming office, and outsourced the Russian military’s logistics business to civilian enterprises. According to reports from Russian media, the defense service company attached to the Ministry of Defense sold buildings and land owned by the ministry at prices that were much lower than market prices. Some officials obtained private gains during the transaction. Another military-attached logistics service company also was suspected of extracting capital from the state budget. The two cases caused losses of over 6.7 billion rubles ($204 million). As a result, Serdyukov became the first minister who lost his position due to corruption since 1991.
  Yelena Borisovna Skrynnik, former Minister of Agriculture, also was under investigation for suspicion of embezzling federal funds of about 39 billion rubles ($1.19 billion) when she served as general manager of Russia’s agriculture leasing company. Roman Panov, Prime Minister of Russia’s Perm Territory and a former Deputy Regional Development Minister of Russia, was arrested for the embezzlement of funds earmarked for the 2012 APEC Summit that were as high as 93 million rubles ($2.83 million). Several officials from public health, education and aviation departments were also removed from office because of corrupt practices.   Putin swore to expel corrupt officials from departments of political power in his state-ofthe-nation address on December 12, 2012. After that, Russia issued a stream of new laws and regulations on anti-corruption.
  On December 21, 2012, Russia’s State Duma passed a bill prohibiting civil servants and their family members from owning overseas assets (real estate and deposits in banks) within prescribed time limits, which includes an official’s tenure and three years after leaving office. Offenders will be imposed fines up to 10 million rubles ($304,000), or will be sentenced to prison for up to five years, and they cannot take public office within three years thereafter. Since 2013, government officials and family members must declare and explain their sources of income if they spend money that exceeds the sum of family income in the previous three years upon purchasing real estate, land, vehicles, securities and stocks. Related information should be published on government websites, if they do not involve state secrets. Some officials have resigned from public office because of the bill.
  Putin signed another bill on April 2, 2013, requiring that Russian officials declare their purchased real estate, land, cars, luxuries, stocks and assets overseas, and explain how the expenses were paid for.
   Not easy


  Although every Russian president targets corruption, the problem persists, causing many Russians to lose confidence in their government. In 2010, only 21 percent of Russians believed their president and government can effectively curb corruption. In this context, many are increasingly thinking about the underlying causes of Russia’s escalating corruption.
  The major obstacle to Russia’s anti-corruption efforts is the emergence of an alliance of corrupt bureaucrats who resist the government’s anti-corruption policies in order to protect their private interests. The energy industry is currently Russia’s economic backbone and a major source of its fiscal revenues. Most highranking managers in the industry are current or former senior government officials. Bureaucrats and business oligarchs form a complicated vested interest group. At the same time, supervision and monitoring of corrupt activities in Russia are insufficient. Therefore, the anti-corruption initiatives of the Russian Government and leaders can hardly be implemented to the letter.
  The stubborn habit of corruption has become endemic in Russia, which is the reason why President Putin regards anti-corruption as one of his priorities and has tried to strike down corruption since returning to the Kremlin. Russian society has a common understanding that serious corruption is a burden that severely hinders the country’s economic development. To realize Putin’s vision, Russia must be prepared to strengthen systemic reform and media supervision in a long-term war on corruption.
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