Russia’s new president, Dmitri Medvedev, placed an early emphasis on anticorruption efforts, calling graft a “systemic problem” that requires a “systemic response.” Earlier this month, he bemoaned the fact that corruption had become “the norm, a daily occurrence in everyday life,” and went on to observe that victims seem “resigned” to this reality, while perpetrators assume they will enjoy impunity. He failed to mention that these conditions persisted, and indeed grew worse, during the eight-year presidency of his patron and now prime minister, Vladimir Putin, who made similar pronouncements about the need to root out lawlessness when he took office in 2000. Given the nature of his own election and his ongoing partnership with Putin, it is difficult to swallow the notion that Medvedev will usher in a new age of transparency in government and society.
A recent Washington Post article explored the depth of the problem, describing the banality and even necessity of bribes to obtain health care, diplomas, and basic government services. Another article reported that the size of bribes at universities had grown by 150 percent in the last four years. The deterioration of Russia’s education and health systems has been noted in this space before, as have the effects of corrupt governance on major public safety issues like fire prevention.
The general social breakdown bred by corruption can be seen clearly on the country’s dangerous roadways. Russia suffered some 900 road-accident deaths per million vehicles in 2007, about 10 times as many as Germany and 5.5 times as many as the United States. Poor road and vehicle maintenance is just part of the trouble. Motorists tend to flout the rules when they know they can bribe the traffic police, and when they see privileged government officials using special lights and license plates to drive as they please. Higher fines for violations seem to be having at least a temporary effect this year, if only because the bribes to avoid punishment have increased along with the fines. In any case, the traffic police often fabricate offenses to extract bribes, so good behavior brings few benefits.
Businessmen in Russia face a similar conundrum: they can pay bribes to ignore regulations, but they must pay bribes in any event to fend off predatory inspectors and breathe life into lethargic bureaucrats. They also have the option of paying the authorities to harass their rivals into submission, a practice known as raiding. Medvedev specifically called for “anti-raider measures” in May, but the Kremlin itself is widely known as the biggest raider of them all. It famously used tax prosecutions to demolish the oil firm Yukos and incarcerate its owner, Mikhail Khodorkovsky. In 2006, it lodged environmental complaints against Royal Dutch Shell, forcing the company to sell control over a major oil and gas project to state-owned Gazprom; that move was especially brazen, as the government has long ignored environmental concerns in its pursuit of oil wealth. And now, the Kremlin is thought to be behind an effort by a clutch of Russian billionaires to oust BP from another oil venture, this time under the guise of “shareholder activism.”
All of those arm-twisting takeovers may eventually be dwarfed by alleged plans to raid the country’s mammoth Stabilization Fund, which was established to conserve the state’s windfall oil and gas revenues for more difficult times, and to prevent the money from flooding the domestic economy and fueling inflation. Finance Minister Aleksei Kudrin, a holdover from the Yeltsin era, has reportedly resisted pressure to break open the colossal piggy-bank. One of his top deputies was jailed in 2007, apparently as part of this internecine struggle. However, the still-expanding fund was split in February into a Reserve Fund (currently over $129 billion), which will serve the original purpose by keeping revenues in conservative foreign investments, and a National Welfare Fund (currently about $33 billion). Initially, it was said that the latter would be used to invest in somewhat riskier securities and ventures abroad, but Medvedev indicated in June that it would be available for domestic investment as well, prompting critics to warn of crippling inflation and massive waste by state corporations. That month, the World Bank separately warned that the Russian economy is already overheating. It recommended a tighter fiscal policy and, more broadly, measures to improve governance, fight corruption, facilitate competition, and strengthen judicial independence.
Some observers have strained to see a glimmer of hope in a May defamation case, in which a high-ranking judge testified about judicial manipulation by the Putin administration. The plaintiff, administration official Vladimir Solovyov, had sued a journalist for accusing him of interference in the courts, but he quickly dropped the case after the damning testimony. The event remains open to interpretation, as is often the case in Russia’s opaque political system. The rosier view is that the judge, Yelena Valyavina, was allowed to testify because the new president genuinely wants court reform. A more sober analysis places the Kremlin behind the decision to end the proceedings and block any further testimony.
Even if Medvedev and his colleagues were not personally implicated in a patently corrupt system, in which top government officials double as chairmen of aggressive state-owned corporations, they would never be able to tackle Russia’s pervasive graft problem on their own. They would need to enlist the help of a vigorous political opposition, free media and civil society groups, and an independent judiciary—in other words, the very elements they have deliberately crushed.
Photo Credit: Flickr user Antonis SHEN