26.03.09

Kirill Kabanov, chairman of the National Anti-Corruption Committee (NAC), stated on March 17 that corruption in Russia amounts to $240-300 billion a year, and bribe demands will increase during the crisis.

The NAC has estimated the scale of corruption on the basis of interviews with well-informed specialists. Kabanov said: "The kickbacks system makes up 40-60% of corruption. Corruption is also seen in the system of state procurements and the allocation of various quotas, such as quotas for natural resources use." Kabanov predicts a new trend in corruption during the crisis: banks seizing business assets by making it look as if their clients have failed to meet debt payment commitments.

The scale of corruption and all kinds of "gray arrangements" will only increase during the crisis, as the government allocates more funding for anti-crisis measures. After all, no system of oversight has been established for spending this money; moreover, state officials and public servants don't want to reduce their living standards, so 90% of them are keeping their average bribes at existing amounts. Kabanov said: "The state bureaucracy perceives the crisis period as the last day before the end of the world. No one knows how long it will last, so they're all trying to extract as much money as possible from their current positions."

Elena Panfilova, general director of Transparency International Russia: "There may be a decrease in the amount of business-to-government bribes that are initiated by business owners, since they will be seeking to economize during the crisis." However, the volume of bribes initiated from the government side - when bureaucrats extort money from companies under threat of putting them out of business - will not decrease, and may even rise.

Yana Yakovleva, head of the Business Solidarity rights association: "We're seeing that the overall number of convictions isn't falling, although statistics show that convictions for common crimes such as burglary and murder have decreased. So the number of convictions for economic crimes must be growing." During the crisis, the bureaucracy's pressure on the business community is growing - along with the number of people convicted of "economic crimes" they may not have actually committed.

The authorities are aware that fighting bribery is an effective anti-crisis economic measure. The OPORa Rossii business association estimates that small business owners spend 6% of their earnings on bribes. Even before the crisis, the government didn't intend to cut profit tax below 5%; and tax cuts have now become impossible, since the budget has gone into deficit, but reducing corruption is still possible. President Dmitri Medvedev announced last week that state officials and public servants will have to submit income and asset declarations for family members as well as themselves - to rule out the possibility of illegal gains being transferred to relatives. Medvedev promised that he himself will file such a declaration every year.

But experts remain skeptical about these initiatives. Kabanov described the declaration announcement as a good measure, but added that it lacks a requirement regarding the employment of close relatives in fields where a government official holds power. Elena Panfilova says: "It's not just a question of declaring income. It's a matter of how thoroughly the police will verify these declarations - and that's something we don't know as yet."

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Source: Novye Izvestia