I watch the corruption virtually daily in Russia and agree a 100 percent that something must be done. Until it is eradicated from Russia. So as everyone tries to corral corruption and bribery in Russia. They have found themselves going in twenty different directions, all with good cause and reasons. This article was sent by a very good reader and I will express myself at the end of said article…
Combating corruption: a hope for honesty from Business
Author: Julia Ryshkina, Finam.Info columnist.
Original article: http://www.finam.info/currency/news236BF00001/default.asp
Bribes and kickbacks in the interaction of businesses with the authorities have become so common in our country (Russia) that they are perceived almost as the norm. If we imagine for a moment that employers no longer succumb to provocations, and officials conduct their duties honestly, a huge field for corruption would simply disappear.
To build your own business is not easy, in whatever country you are in. In order to do this you need to understand economics and management, have the courage and appetite to take risks and possess good skills of self-organization. However, in Russia it is even more complicated due to the high level of corruption.
Bribes and kickbacks – an indispensable condition for doing business?
To create your own business in Russia is almost like going to work for the police. You can start with the purest of intentions, but as “circumstances force” an honest man turns into a corrupt one. Bribes and kickbacks in Russia have become so common that they are perceived as the norm and the main way to interact with the authorities. A bribe for a license, “gifts” to tax and other authorities, a victorious kickback for winning the tender. Most entrepreneurs have a firm conviction that without this it is impossible to do business in our country.
“As we know, there are enough different kinds of corruption, said Catherine Aspen, Chief Financial Officer Teleperformance Russia. Among those that make the work of Russian companies within the law really difficult are the following. First, it is bribery. In Russia today a company can be checked by more than 30 departments of various regulatory bodies. Countless audits end with simple pay-offs. Secondly, there are “kickbacks”. First of all, it concerns the use of one-day firms. Such companies are widely used for various operations, such as falsification of accounts, check cashing, money laundering, etc.”.
Corruption and Business: Facts
The level of corruption in our country is comparable to such countries as Venezuela, Zimbabwe, Kenya, Pakistan, Cameroon and Sierra Leone. According to the international non-governmental organization Transparency International, Russia is 146th out of 180 countries included in the ranking.
According to the Director of Russian Center Transparency International Russia Elena Panfilova, the Russian market of corruption is estimated at 300 billion dollars a year. According to the Public Opinion Fund, 75% of Russians complain about the high level of corruption in Russia. Only 3% of considered it to be low. Only 7% of Russians thought corruption was reducing, 34% thought it was growing, while 40% believe that the situation does not change. Only 8% of respondents believe the level of corruption will fall in the next year, while 22% say that it will increase, and 40% do not expect any changes. The majority of respondents, 55%, said that corruption in Russia cannot be eradicated. But 27% of respondents still believe in the possibility to defeat this scourge.
A poll among Russian entrepreneurs showed that corruption is a major problem for business. In 2009, 62% of businesses were concerned about corruption at all levels of power.
According to the research center recruitment portal SuperJob.ru, 73% of managers on procurement and 69% of sales managers complained about the high level of corruption in public procurement. “Any tender can be won for money, even if it is dangerous to human life!”, “All government purchases are corrupt” – they say.
However, bribes and kickbacks are not just a problem, they are a crime in which the fault is not only with the officials but also with the entrepreneurs themselves. “The Criminal Code has an article on Commercial Bribery, which explains that those who give bribes and those who take them are criminally liable. Responsibility cannot be only on one side”– Oleg Ivanov, Vice President of the Association of regional banks, told Finam.Info
In the hope for honest business
Representatives of the Finance & Investments Market Players Club (KIFIR) are trying to reverse this trend. They have initiated an anti-corruption campaign “NO BRIBES & NO KICKBACKS”. KIFIR is a social business community, established in 2008 to bring together international business leaders with operations in Russia.
The club provides companies the opportunity to register on its website, confirming that they will not enter into transactions, contracts and any other agreements using the practice of bribery and kickbacks.
Chairman and founder of the Club, Eugene Kasevin, is aware that the challenge will not be easy. “Having conceived this initiative, I clearly knew that the specifics of the problem and the depth of its roots in the society will require some innovative approaches, as opposed to the traditional administrative measures, he said. Here we are already talking about mentality, habits and psychological barriers to fundamental changes in the society. Therefore, this initiative is based on qualities such as conscience, self-esteem, moral ethics, etc. At the same time shame, a sense of backwardness, the desire to be modern – these are the tools for change in pandemic habits and traditions. So, to live and function through kickbacks and bribes is no longer fashionable, it is embarrassing and, more importantly, is detrimental to other people and the country.”
In their fight against corruption the Club is aiming at the entrepreneurs’ concern for their reputation. “If, for example, a company will mark its support for and protest against bribery and kickbacks, and in the future it will be found that one of the employees practiced bribes or kickbacks (which is quite possible within large commercial and industrial enterprises), this issue and the company in question will be raised at a discussion of the Club, – said Eugene Kasevin to Finnam.Info. If an employee has indeed conducted covert activities, the Club will publish the news that ABC Company has detected a problem and promptly dealt with it in support of its internal anti-corruption policy, which, in this case, makes positive news for ABC Company. If the problem is deep-rooted and lead by the management, the Club will take that company off the list, notify its members and business community.”
However, Ms Aspen from Teleperformance Russia believes that such measures may not be enough: “I would like to see a mechanism, based not only on the moral obligations of participating businesses, but also a control mechanism that would regulate and minimize the possibility for the use of “sliding schemes”.
Indeed, Russians are so accustomed to corruption, that it is unlikely to cause a significant blow to the reputation of the company that practices it. However, Eugene Kasevin emphasizes that “NO BRIBES & NO KICKBACKS” is not a short-term project, but a long-term campaign, so “gradually, public acceptance of corruption as an act of disgrace will promote the growth of reputational damage from such activities”.
“In my view, this approach will ensure transparency and long-term success of this campaign – he said. Not everything that is done compulsorily is sincere and long term. Modern society has enough experience and knowledge to insure self-development and to improvement the quality of its life.”
It is not yet appropriate to talk about instant results of this campaign. However, this is a step to make business aware of its responsibility for corruption on the way to building a transparent economy. www.FINAM.info
NO BRIBES & NO KICKBACKS –
I have followed the anti corruption issues in Russia since I have landed on her shores and decided to stay awhile…
Why is this such a interest for me?
That is a good question and the answer lies in my past. I being from America always knew that America was wonderful compared to other countries in terms of freedoms, bribery, corruption and many other things… (Huh, OK, Right!)
So my past of doing business in all aspects from self employed to upper corporate level management gave me a basis to compare countries on a governmental and business level of corruption…
My past also allows me to compare local, state and federal levels of police corruption…
What does all this jabbering that I am expressing mean? It means that I came from a world of slide the envelope under the table, to keep the real pressure of government agencies at bay…
I came from a world that cops are bribed as frequently as any cop in Russia. I came from a world that saw fire inspectors paid to go away. I came from a world that saw building inspectors paid to look down the street. I came from a world that saw health inspectors make a damn nice living by political turmoil and…
So I was very disappointed to the point of – What the crud is wrong with people in Russia and the thinking that they are the arm pit of corrupt nations…
Here is why, organizations like this ****The level of corruption in our country is comparable to such countries as Venezuela, Zimbabwe, Kenya, Pakistan, Cameroon and Sierra Leone. According to the international non-governmental organization Transparency International, Russia is 146th out of 180 countries included in the ranking.**** This is the reason that Russians do not know better. The real issue is that Russia has obtained par with America but heaven forbid if anyone would admit that. These type of reports are political castration to control other countries…
They believe this bull that is printed. Then they pass it on never thinking that who wrote it is more corrupt than who is using the data…
I could tear the article apart line by line but that does not prove anything. I have a different way at looking at things when it comes to corruption and bribery. The article is good and I feel much needed. The article has a place and purpose that needs to be centered and focused with outside sources told to jump off a cliff…
I want to see Russia crawl out from under the stigma of the “armpit of society” in corruption. Maybe it will take articles like this with the ideas buried within to accomplish that. But I want to see Russia realize that they have come a long way and even I have seen this in a few years.
One thing that Sveta and I made up our minds about was that we would not attempt to speed any process up. We stuck to our guns when we got car tags this last time and succeeded by never once dealing with bribery. It was an opportunity available to manipulate, but we refused. Sveta and I do all our business this way and once they have realized that we will wait the time involved or return 20 times. They proceed and finalize the transaction quickly…
I really think that the idea of “NO BRIBES & NO KICKBACKS” is great but this is where I have expressed issues. Russia must never kid themselves that outside business coming to Russia is corruption free and that is where the ball drops. That company that enters Russia’s business world is probably as or more corrupt than the Russian companies. It is just that they are use to hiding the fact during and after the business. Russia got use to flagrant open corruption that was allowed to flourish unhindered in virtually all levels…
I know because I sat in on many dealings with corporations. I have personally had to organize, fulfill and extradite many transactions that I call a bribe. If it walks and talks like a duck, it is a duck…
In conclusion: I think that at one time Russia could lay claim to the armpit of corruption but that fell in a different time and era. Things collapsed and carpetbagger’s moved in. Russia has changed a tremendous amount in the 4 years that I have been here and I can honestly say that in two years I have not paid a bribe either to a cop stopping me while driving or while doing transactions in governmental or private agencies. Russia needs to take pride in the fact that they have started to change and with that the people of Russia need to back up that start with their personal mental adjustments. It takes two to tangle and there are two sides to every action including a bribe. I see a future that Bribery and corruption will be pacified in Russia.
Windows to Russia!
- Russia orders research in corruption, as average bribe cost doubles (rt.com)
- Alexandra Wrage: Bribery as a Business Strategy (huffingtonpost.com)
- Russia looks into Daimler corruption charges-media (reuters.com)