9 ms·

Corruption is forcing Russia’s best and brightest to flee the country

123 points by sharms 16y ago

DenisM 16y ago
sad :(
yurylifshits 16y ago
The situation is more complex. All bad stories mentioned in the article are described pretty accurately. On the other hand, there are big businesses that feel OK to be in Russia. The trick is to be in coalition with government/law enforcement. Unlike US you can not operate keeping full independence.
- eps 16y ago
  Yep, that's your good old corruption. Just like the title says.
- ovi256 16y ago
  >there are big businesses that feel OK to be in Russia Ikea recently withdrew, abandoning several in-construction stores. Supposedly, they couldn't take the twists and turns anymore.
  - vl 16y ago
    Withdrew is incorrect. It appears that Ikea suspended further investments, but still continues to operate existing stores. http://www.ikea.com/ms/en_US/about_ikea/facts_and_figures/ikea_group_stores/russia.html http://www.ikea.com/ms/en_US/about_ikea/facts_and_figures/ik...
snitko 16y ago
As a Russian I'm, of course, concerned about it. Almost every intelligent young person under 30s here believes that the system is really broken. However we don't see any changes and I've been puzzled why. Theoretically, even the most egoistic government who's only purpose is to get more for themselves must realize that in order to preserve it's welfare it must make sure the citizens are doing fine. Russians are not desperate yet, so maybe the government has found the right balance. Obviously, many are involved in the scheme and many people have things to lose if the government initiates a real war on corruption. So the government must be afraid too and that fear is greater. However, I don't think you can keep that balance forever. Like the article suggests, the brightest flee the country and someone has to make the economy going. I realize I probably don't know many things guys up there are aware of, but it seems pretty obvious from down here that the only thing that should be done to help the country bloom is to eliminate corruption. For real. Then all those silicon valleys and scientists start reappearing on their own, healthcare starts recovering, investors begin coming back. Focus.
- snitko 16y ago
  That is to say, eliminating corruption is a dangerous and a difficult task. Someone really smart should be working on it. I can tell by the speeches they're not doing it at all right now.
  - jeromec 16y ago
    I watched an interview with President Medvedev in which problems like corruption were brought up. It seemed like he is taking a long term view of improving conditions in Russia, which makes sense to me, because it's not possible to transition to the kind of democracy with limited corruption we see in the U.S. overnight. What do you think of the actions or non-actions of the current Russian leadership? Are they at least on a path toward improving the situation? Interview: http://www.youtube.com/watch?v=HwZLhqDEnSo&feature=player_embedded http://www.youtube.com/watch?v=HwZLhqDEnSo&feature=playe...
    - snitko 16y ago
      If you listen carefully to this interview and others, you'll only hear he says he's going to fight corruption, but he doesn't say how. Politicians are usually all like this in any country, though. I listen a lot to Obama's speeches and interviews and he's pretty much the same. It's all blabbing. To give you an impression of how it probably should be, may I remind you of Mikhail Saakashvili, a Georgian president, who is so much hated in Russia. Personally, I don't know what happened at that war in 2008, but what many people in Russia realized recently is that he managed to eliminate corruption in Georgia in a matter of 3-4 years. How? One example: they fired all of the police force there overnight, hired and trained new people, raised their salaries and punished seriously for any bribes. What was the result? A great raise in respect for police in Georgia in less than 2 months.
      - adobriyan 16y ago
        > he says he's going to fight corruption, but he doesn't say how. That's because he doesn't have a clue. Last step is to rename "militia" to "police" with trivial changes to law enforcement and direct insult of all those who served in supposedly "ineffective" Soviet militia.
huhtenberg 16y ago
Let me see if I got it right. Chichvarkin was able to build his "multi-billion dollar empire" with clean hands, and then all of a sudden the corrupted government noticed his success and cracked down on him. I am sorry, I find this very hard to believe. A more plausible explanation is that "Russia's best and brightest" simply stepped on the toes of the very same corrupted officials that helped him with his rise. This is not to say that best and brightest, those who are considering starting a business, are not leaving the country because of the corruption. It's just that Chichvarkin is not a good example to illustrate the point.
- deleted 16y ago
  [deleted]
- dchest 16y ago
  The point is, you absolutely cannot build _any_ business with "clean hands" in Russia. It's like a chicken and egg problem.
  - rdtsc 16y ago
    That is true. The "anti" corruption police branch is the center of corruption. Everyone who gets anything done business wise has to bribe someone, steal something or defraud somebody. If they become successful they'll get the knock on their door from the "anti-corruption" officials who tells them charges will be pressed since they used "unclean" methods in the past. Unless, of course, you offer to pay even more bribes to bribe the anti-bribery police.... And yes, it is a chicken and egg problem. Even on the cultural level. Starting from the hospital when the baby is born, up through kindergarten, high-school, university and so on there are expected bribes to be payed. So people already grow up with this constant culture of corruption in mind. It is like a latent infection, always there in the background.
- raquo 16y ago
  You're right on both points: 1) if you're doing the business in Russia with clean hands you're wildly uncompetitive 2) in most cases you won't be able to do that anyway because the laws assume benevolent government therefore giving it too much power
raquo 16y ago
I wanted to write a lengthy comment about the problems in Russia, but it was going to be so long that I'll just list the key points, they're pretty much self-explaining: Corruption, weak law enforcement, very strict laws, everyone is guilty, selective enforcement, no rule of law, government has a backdoor to every process, government can block or initiate any action (think business operations, bankruptcy, legal actions), courts not independent of course, weak property rights, insanely complex and outdated legislation, people adapted to this system, some actually prefer it because they can buy their way out of troubles. I hope I will be able to immigrate out of here in 2011. It's not my job to estimate my brightness though.
- huhtenberg 16y ago
  > out of here in 2011 Where to?
  - raquo 16y ago
    The final destination for me is US, the path may vary.
    - thaumaturgy 16y ago
      There are very many people in the U.S. that would say it's only a handful of decades behind this view of Russia.
      - houseabsolute 16y ago
        I'm sure there are a lot of shit stupid things certain people in America will say. But there is so little evidence for this point of view that it's breathtaking to even hear it uttered.
    - elai 16y ago
      You'll be taxed internationally as a US citizen/PR for an income over a typical worker even if you don't live there anymore, so do beware. The USA is pretty much the only significant country does that.
rdtsc 16y ago
I am out. I have been gone for many years and just keep watching it from a distance. I am not touching that country with a 10 foot pole. I don't want to go near it. I recently payed a higher price for a plane ticket just not to have to connect through Moscow. Capitalist economy + corrupt judicial system + corrupt government officials at all level = hell for businesses. You cannot do anything unless you bribe or do something illegal. Then if you become successful, both the mafia and the corrupt govt officials come after you. The police threaten to press charges, the mafia offer protection from the charges. You are fucked either way.
- old-gregg 16y ago
  Chill out comrade. The country you left and despise so much doesn't exist anymore and I've learned to treat these sentiments as a mental reinforcement for your decades-long decision to leave. The country I left and frequently keep visiting is great: I love the people, the food and the culture. I love what I hear from young graduates, I like seeing people smile more and new businesses pop up everywhere. I like doing business there myself. And by the way we are growing. The quality of tech. talent is impeccable, easily on par with US schools and the latest waves of graduates have good English as well. Not everything is rosy yet, but the risks are manageable, especially when you "zoom out" and face the entire spectrum of possibilities of why your business may fail. Lack of customer interest/traction is orders of magnitude scarier problem that issues with authorities. Be my guest and stay out, it only makes me easier to compete because I'm in.
  - raquo 16y ago
    > risks are manageable Not really. I live a hundred meters away from the future Skolkovo site and if they decide they want my land, it will not be manageable for me, even though they have no rights for it. You're right though that not everything is so bad. But I don't see it getting better at macro-scale. If anything, the economic growth of the last X years was despite, not because of government actions.
    - old-gregg 16y ago
igorlev 16y ago
I left the country right when it fell apart so I'm not exactly an expert on the current events, but from what I see doesn't seem like 20 years have made any difference. I think you can trace this whole mess to Brezhnev's Zastoy(Stagnation) period of Soviet history (http://en.wikipedia.org/wiki/Brezhnev_stagnation http://en.wikipedia.org/wiki/Brezhnev_stagnation). The upper echelons of government achieved a comfortable and stable enough level of life and pretty much froze the rest of society in time, in order to support their lifestyle. They cracked down on any dissension or change from the status quo which by definition means that they cracked down on the most entrepreneurial and dynamic members of society. They jailed the makers and made the thieves rulers. And unfortunately you can keep this charade going for a while; in the 70's-80's you can steal technology from the West; in the 90's you can sell minerals and in the 2000s you can wait for your people to invent something and then steal it from them. When the Soviet Union fell down there was a glimmer of hope but it was silly to think anything would change. You have now 2-3 generations of people at the highest levels of power who grew up with this mentality and it's not going to change any time soon. It's sad, I remember watching a talk show on a Russian satellite station where the discussion was whether Russia needed an "innovation economy" or whether pumping and mining is perfectly fine. An obviously liberal member of the panel was pleading and cajoling with the others that oil and timber don't last forever and they only enrich a few people. The other side, a representative of a mining concern, had an awesome reply: "They'll last long enough for me" ...and to hell with the rest of you
snom370 16y ago
A lot of big companies are learning the hard way that doing business in Russia is riskier than they thought, when the other party has the legal system on their side. One example that made it to national politics, and AFAIK ended up being settled by basically giving in to the demands: http://en.wikipedia.org/wiki/Alfa_Group#Dispute_with_Telenor http://en.wikipedia.org/wiki/Alfa_Group#Dispute_with_Telenor
dnsworks 16y ago
Come on, is this really news?
cousin_it 16y ago
Article is spot on about the corruption - if anything, the tone is too mild - but overall I can't say the situation for businesses has become worse since the 90s. Police methods have simply displaced blatantly criminal methods from the ecological niche :-) Yes, today businesses get taken over by corrupt police and courts. In the 90s it was done by kidnappings, soldering irons and automatic gunfire in the centre of Moscow. And also corrupt police and courts. Disclaimer: I'm a Russian living in Moscow. Wouldn't dream of starting a business here. Life as a programmer is pretty nice, though.
bh23ha 16y ago
You can replace Russia with almost any developing country and that sentence would be equally true. For some it would be war more then corruption and for a very few it's not true at all, but they won't be developing for long.
- varjag 16y ago
  Russia is not a developing country though.
sridharvembu 16y ago
India is known to be a very corrupt country too, but in my personal experience and the experience of others I know well, the on-the-ground-reality can be quite good. India is a vast country, so all generalizations are very likely to be both right and wrong and many many times of each, but where we sit in India (Chennai in the deep south - but this applies to Bangalore as well), India is a good place to do business. The main thing to accept about India is the general atmosphere of chaos, the feeling that everything-is-breaking-down-but-somehow-running, but if you can mentally look past that, there are huge opportunities. The reason I say all this about India is that a western journalist could write a similar story about India or China, yet there exist many versions of reality in which the story would be wrong. Both India and China export a lot of people too. But normally you would not describe that as "fleeing corruption" but more of "seeking economic opportunity." Is Russia any different from that perspective? I don't know the answer, I am just asking the question.
- electromagnetic 16y ago
  From what I understood in India corruption is kind of societal. Government officials take a sort of 'cut' for doing things (this can be seen in France, however from what I understand in France it gets things done now rather than getting it done whenever), otherwise you're screwed. From what I got in Russia the cut is an all level corruption, often with organized crime involved taking their own cuts. Ex: Say in India you have to pay a bribe for a business license, in Russia you'd have to pay a bribe for a business license and then you have to pay for protection from the mob, then you likely have to pay protection from the crooked cops. At least, this is how it's always been represented to me.
  - iampims 16y ago
    I don't know where you got the idea — that corruption in France is significant — from. Care to elaborate?
    - CaptainZapp 16y ago
      Transparency International (an NGO fighting corruption) rates France at 26th, India at 84th and Russia at 146th. The league table can be found here : http://transparency.org/policy_research/surveys_indices/cpi/2009/cpi_2009_table http://transparency.org/policy_research/surveys_indices/cpi/... . It doesn't seem that France is overly corrupt (if maybe overly bureaucratic) and I'd like to second your question for clarification.
srw 16y ago
Wow, I can say the same of Argentina! Except for the Mafia level and now the supreme court is more independent.
andreyf 16y ago
And has been for decades... so?
stretchwithme 16y ago
I thought it was absurd that Medvedev was here several weeks ago exploring how get more innovative companies growing in Moscow. Maybe not terrorizing them might be a good first step. There are good reasons Sergei Brin called it Nigeria with snow.
Konstantin 16y ago
It's not an issue of Putin's control. It's an matter of people's mind. I'd like to point out two issues. 1. Too many people here want a tough and strong leader with nearly absolute political power. Few days ago I ran into my childhood friend. And he told me, by the way, 'You know buddy I'd like to see a Tsar as a leader'. I was deeply depressed. I think it's a heritage of the Soviet where people could sidestep responsibility of their own life. 2. Most people do not like entrepreneurs. So you are entrepreneur. Then you're fraud and rouge by definition (in the eyes of common people). That's why Chichvarkin did not gain public backing. And it's a sad and shameful thing. I think things will change someday. But it will take neither one nor three years but half a score.
shadchnev 16y ago
Russia as of today isn't good or bad. For some people, what's happening is inappropriate, others accept it. For everyone here, I guess, Russia seems a nightmare but there are quite a few Russians, many of them, actually, who genuinely support Putin and Medvedev and have no desire of leaving. It's a different mindset, different way of life. As for me, I left for London when I was 23, 4 years ago, never visited Russia ever since and have no intention of going back. Many (most, almost all?) of my friends who exiled feel the same.
nxd 16y ago
It is interesting to see this article today as the South African president has just used Russia as an example, to defend his attitude to the media (more about that below). As a South African, reading stories like this is frightening, since we seem to be embracing a trajectory that could lead us the same way. While corruption is pretty high, it doesn't impact most people's day-to-day lives. However, serious institutional problems are becoming apparent: there have been cases where company directors have been removed by politically connected individuals, due to corruption at the government agency that registers companies. Significant amounts of real estate have been stolen due to corruption at the deeds office. And mineral rights are being seized because of weak controls at the government department that regulates these rights. In one case last week, a listed steelmaker was forced to buy mineral rights from a group of politically connected at a huge premium. All of these have been widely reported in the media, but that is where the problems start. South Africa's media and constitution generally allow for free expression, but, a few weeks ago a newspaper was launched with an explicitly pro-ruling party stance (by some of the same people who benefitted from the steel shakedown described above). At the same time, proposals were released for a statuatory tribunal to regulate the print media (South Africa already has libel laws, so this has been interpreted as an opportunity to muzzle the press). The government is also pushing an act that would allow government officials broad powers to classify information. And a journalist was dramatically jailed (on what seem to be trumped up charges) by an elite police unit, days after reporting on a huge, and apparently irregular lease made by the Police Commissioner, again with a politically connected individual. Will South Africa lose whatever gains it has made and follow the path of Russia? I hope not, but I am becoming increasingly pessimistic.
- temphn 16y ago
  You should leave South Africa while you still can.
known 16y ago
I think you should hire a local politician ( http://en.wikipedia.org/wiki/Member_of_Parliament http://en.wikipedia.org/wiki/Member_of_Parliament ) on your payroll if you wanted to do business in countries like Russia and India.

123 points by sharms 16y ago

sad :(

The situation is more complex. All bad stories mentioned in the article are described pretty accurately. On the other hand, there are big businesses that feel OK to be in Russia. The trick is to be in coalition with government/law enforcement. Unlike US you can not operate keeping full independence.

eps 16y ago
Yep, that's your good old corruption. Just like the title says.
ovi256 16y ago
>there are big businesses that feel OK to be in Russia Ikea recently withdrew, abandoning several in-construction stores. Supposedly, they couldn't take the twists and turns anymore.
- vl 16y ago
  Withdrew is incorrect. It appears that Ikea suspended further investments, but still continues to operate existing stores. http://www.ikea.com/ms/en_US/about_ikea/facts_and_figures/ikea_group_stores/russia.html http://www.ikea.com/ms/en_US/about_ikea/facts_and_figures/ik...

snitko 16y ago

As a Russian I'm, of course, concerned about it. Almost every intelligent young person under 30s here believes that the system is really broken. However we don't see any changes and I've been puzzled why. Theoretically, even the most egoistic government who's only purpose is to get more for themselves must realize that in order to preserve it's welfare it must make sure the citizens are doing fine. Russians are not desperate yet, so maybe the government has found the right balance. Obviously, many are involved in the scheme and many people have things to lose if the government initiates a real war on corruption. So the government must be afraid too and that fear is greater. However, I don't think you can keep that balance forever. Like the article suggests, the brightest flee the country and someone has to make the economy going. I realize I probably don't know many things guys up there are aware of, but it seems pretty obvious from down here that the only thing that should be done to help the country bloom is to eliminate corruption. For real. Then all those silicon valleys and scientists start reappearing on their own, healthcare starts recovering, investors begin coming back. Focus.

snitko 16y ago
That is to say, eliminating corruption is a dangerous and a difficult task. Someone really smart should be working on it. I can tell by the speeches they're not doing it at all right now.
- jeromec 16y ago
  I watched an interview with President Medvedev in which problems like corruption were brought up. It seemed like he is taking a long term view of improving conditions in Russia, which makes sense to me, because it's not possible to transition to the kind of democracy with limited corruption we see in the U.S. overnight. What do you think of the actions or non-actions of the current Russian leadership? Are they at least on a path toward improving the situation? Interview: http://www.youtube.com/watch?v=HwZLhqDEnSo&feature=player_embedded http://www.youtube.com/watch?v=HwZLhqDEnSo&feature=playe...
  - snitko 16y ago
    If you listen carefully to this interview and others, you'll only hear he says he's going to fight corruption, but he doesn't say how. Politicians are usually all like this in any country, though. I listen a lot to Obama's speeches and interviews and he's pretty much the same. It's all blabbing. To give you an impression of how it probably should be, may I remind you of Mikhail Saakashvili, a Georgian president, who is so much hated in Russia. Personally, I don't know what happened at that war in 2008, but what many people in Russia realized recently is that he managed to eliminate corruption in Georgia in a matter of 3-4 years. How? One example: they fired all of the police force there overnight, hired and trained new people, raised their salaries and punished seriously for any bribes. What was the result? A great raise in respect for police in Georgia in less than 2 months.
    - adobriyan 16y ago
      > he says he's going to fight corruption, but he doesn't say how. That's because he doesn't have a clue. Last step is to rename "militia" to "police" with trivial changes to law enforcement and direct insult of all those who served in supposedly "ineffective" Soviet militia.

huhtenberg 16y ago

Let me see if I got it right. Chichvarkin was able to build his "multi-billion dollar empire" with clean hands, and then all of a sudden the corrupted government noticed his success and cracked down on him. I am sorry, I find this very hard to believe. A more plausible explanation is that "Russia's best and brightest" simply stepped on the toes of the very same corrupted officials that helped him with his rise. This is not to say that best and brightest, those who are considering starting a business, are not leaving the country because of the corruption. It's just that Chichvarkin is not a good example to illustrate the point.

deleted 16y ago
[deleted]
dchest 16y ago
The point is, you absolutely cannot build _any_ business with "clean hands" in Russia. It's like a chicken and egg problem.
- rdtsc 16y ago
  That is true. The "anti" corruption police branch is the center of corruption. Everyone who gets anything done business wise has to bribe someone, steal something or defraud somebody. If they become successful they'll get the knock on their door from the "anti-corruption" officials who tells them charges will be pressed since they used "unclean" methods in the past. Unless, of course, you offer to pay even more bribes to bribe the anti-bribery police.... And yes, it is a chicken and egg problem. Even on the cultural level. Starting from the hospital when the baby is born, up through kindergarten, high-school, university and so on there are expected bribes to be payed. So people already grow up with this constant culture of corruption in mind. It is like a latent infection, always there in the background.
raquo 16y ago
You're right on both points: 1) if you're doing the business in Russia with clean hands you're wildly uncompetitive 2) in most cases you won't be able to do that anyway because the laws assume benevolent government therefore giving it too much power

raquo 16y ago

I wanted to write a lengthy comment about the problems in Russia, but it was going to be so long that I'll just list the key points, they're pretty much self-explaining: Corruption, weak law enforcement, very strict laws, everyone is guilty, selective enforcement, no rule of law, government has a backdoor to every process, government can block or initiate any action (think business operations, bankruptcy, legal actions), courts not independent of course, weak property rights, insanely complex and outdated legislation, people adapted to this system, some actually prefer it because they can buy their way out of troubles. I hope I will be able to immigrate out of here in 2011. It's not my job to estimate my brightness though.

huhtenberg 16y ago
> out of here in 2011 Where to?
- raquo 16y ago
  The final destination for me is US, the path may vary.
  - thaumaturgy 16y ago
    There are very many people in the U.S. that would say it's only a handful of decades behind this view of Russia.
    - houseabsolute 16y ago
      I'm sure there are a lot of shit stupid things certain people in America will say. But there is so little evidence for this point of view that it's breathtaking to even hear it uttered.
  - elai 16y ago
    You'll be taxed internationally as a US citizen/PR for an income over a typical worker even if you don't live there anymore, so do beware. The USA is pretty much the only significant country does that.

rdtsc 16y ago

I am out. I have been gone for many years and just keep watching it from a distance. I am not touching that country with a 10 foot pole. I don't want to go near it. I recently payed a higher price for a plane ticket just not to have to connect through Moscow. Capitalist economy + corrupt judicial system + corrupt government officials at all level = hell for businesses. You cannot do anything unless you bribe or do something illegal. Then if you become successful, both the mafia and the corrupt govt officials come after you. The police threaten to press charges, the mafia offer protection from the charges. You are fucked either way.

old-gregg 16y ago
Chill out comrade. The country you left and despise so much doesn't exist anymore and I've learned to treat these sentiments as a mental reinforcement for your decades-long decision to leave. The country I left and frequently keep visiting is great: I love the people, the food and the culture. I love what I hear from young graduates, I like seeing people smile more and new businesses pop up everywhere. I like doing business there myself. And by the way we are growing. The quality of tech. talent is impeccable, easily on par with US schools and the latest waves of graduates have good English as well. Not everything is rosy yet, but the risks are manageable, especially when you "zoom out" and face the entire spectrum of possibilities of why your business may fail. Lack of customer interest/traction is orders of magnitude scarier problem that issues with authorities. Be my guest and stay out, it only makes me easier to compete because I'm in.
- raquo 16y ago
  > risks are manageable Not really. I live a hundred meters away from the future Skolkovo site and if they decide they want my land, it will not be manageable for me, even though they have no rights for it. You're right though that not everything is so bad. But I don't see it getting better at macro-scale. If anything, the economic growth of the last X years was despite, not because of government actions.
  - old-gregg 16y ago

igorlev 16y ago

I left the country right when it fell apart so I'm not exactly an expert on the current events, but from what I see doesn't seem like 20 years have made any difference. I think you can trace this whole mess to Brezhnev's Zastoy(Stagnation) period of Soviet history (http://en.wikipedia.org/wiki/Brezhnev_stagnation http://en.wikipedia.org/wiki/Brezhnev_stagnation). The upper echelons of government achieved a comfortable and stable enough level of life and pretty much froze the rest of society in time, in order to support their lifestyle. They cracked down on any dissension or change from the status quo which by definition means that they cracked down on the most entrepreneurial and dynamic members of society. They jailed the makers and made the thieves rulers. And unfortunately you can keep this charade going for a while; in the 70's-80's you can steal technology from the West; in the 90's you can sell minerals and in the 2000s you can wait for your people to invent something and then steal it from them. When the Soviet Union fell down there was a glimmer of hope but it was silly to think anything would change. You have now 2-3 generations of people at the highest levels of power who grew up with this mentality and it's not going to change any time soon. It's sad, I remember watching a talk show on a Russian satellite station where the discussion was whether Russia needed an "innovation economy" or whether pumping and mining is perfectly fine. An obviously liberal member of the panel was pleading and cajoling with the others that oil and timber don't last forever and they only enrich a few people. The other side, a representative of a mining concern, had an awesome reply: "They'll last long enough for me" ...and to hell with the rest of you

snom370 16y ago

A lot of big companies are learning the hard way that doing business in Russia is riskier than they thought, when the other party has the legal system on their side. One example that made it to national politics, and AFAIK ended up being settled by basically giving in to the demands: http://en.wikipedia.org/wiki/Alfa_Group#Dispute_with_Telenor http://en.wikipedia.org/wiki/Alfa_Group#Dispute_with_Telenor

dnsworks 16y ago

Come on, is this really news?

cousin_it 16y ago

Article is spot on about the corruption - if anything, the tone is too mild - but overall I can't say the situation for businesses has become worse since the 90s. Police methods have simply displaced blatantly criminal methods from the ecological niche :-) Yes, today businesses get taken over by corrupt police and courts. In the 90s it was done by kidnappings, soldering irons and automatic gunfire in the centre of Moscow. And also corrupt police and courts. Disclaimer: I'm a Russian living in Moscow. Wouldn't dream of starting a business here. Life as a programmer is pretty nice, though.

bh23ha 16y ago

You can replace Russia with almost any developing country and that sentence would be equally true. For some it would be war more then corruption and for a very few it's not true at all, but they won't be developing for long.

varjag 16y ago
Russia is not a developing country though.

sridharvembu 16y ago

India is known to be a very corrupt country too, but in my personal experience and the experience of others I know well, the on-the-ground-reality can be quite good. India is a vast country, so all generalizations are very likely to be both right and wrong and many many times of each, but where we sit in India (Chennai in the deep south - but this applies to Bangalore as well), India is a good place to do business. The main thing to accept about India is the general atmosphere of chaos, the feeling that everything-is-breaking-down-but-somehow-running, but if you can mentally look past that, there are huge opportunities. The reason I say all this about India is that a western journalist could write a similar story about India or China, yet there exist many versions of reality in which the story would be wrong. Both India and China export a lot of people too. But normally you would not describe that as "fleeing corruption" but more of "seeking economic opportunity." Is Russia any different from that perspective? I don't know the answer, I am just asking the question.

electromagnetic 16y ago
From what I understood in India corruption is kind of societal. Government officials take a sort of 'cut' for doing things (this can be seen in France, however from what I understand in France it gets things done now rather than getting it done whenever), otherwise you're screwed. From what I got in Russia the cut is an all level corruption, often with organized crime involved taking their own cuts. Ex: Say in India you have to pay a bribe for a business license, in Russia you'd have to pay a bribe for a business license and then you have to pay for protection from the mob, then you likely have to pay protection from the crooked cops. At least, this is how it's always been represented to me.
- iampims 16y ago
  I don't know where you got the idea — that corruption in France is significant — from. Care to elaborate?
  - CaptainZapp 16y ago
    Transparency International (an NGO fighting corruption) rates France at 26th, India at 84th and Russia at 146th. The league table can be found here : http://transparency.org/policy_research/surveys_indices/cpi/2009/cpi_2009_table http://transparency.org/policy_research/surveys_indices/cpi/... . It doesn't seem that France is overly corrupt (if maybe overly bureaucratic) and I'd like to second your question for clarification.

srw 16y ago

Wow, I can say the same of Argentina! Except for the Mafia level and now the supreme court is more independent.

andreyf 16y ago

And has been for decades... so?

stretchwithme 16y ago

I thought it was absurd that Medvedev was here several weeks ago exploring how get more innovative companies growing in Moscow. Maybe not terrorizing them might be a good first step. There are good reasons Sergei Brin called it Nigeria with snow.

Konstantin 16y ago

It's not an issue of Putin's control. It's an matter of people's mind. I'd like to point out two issues. 1. Too many people here want a tough and strong leader with nearly absolute political power. Few days ago I ran into my childhood friend. And he told me, by the way, 'You know buddy I'd like to see a Tsar as a leader'. I was deeply depressed. I think it's a heritage of the Soviet where people could sidestep responsibility of their own life. 2. Most people do not like entrepreneurs. So you are entrepreneur. Then you're fraud and rouge by definition (in the eyes of common people). That's why Chichvarkin did not gain public backing. And it's a sad and shameful thing. I think things will change someday. But it will take neither one nor three years but half a score.

shadchnev 16y ago

Russia as of today isn't good or bad. For some people, what's happening is inappropriate, others accept it. For everyone here, I guess, Russia seems a nightmare but there are quite a few Russians, many of them, actually, who genuinely support Putin and Medvedev and have no desire of leaving. It's a different mindset, different way of life. As for me, I left for London when I was 23, 4 years ago, never visited Russia ever since and have no intention of going back. Many (most, almost all?) of my friends who exiled feel the same.

nxd 16y ago

It is interesting to see this article today as the South African president has just used Russia as an example, to defend his attitude to the media (more about that below). As a South African, reading stories like this is frightening, since we seem to be embracing a trajectory that could lead us the same way. While corruption is pretty high, it doesn't impact most people's day-to-day lives. However, serious institutional problems are becoming apparent: there have been cases where company directors have been removed by politically connected individuals, due to corruption at the government agency that registers companies. Significant amounts of real estate have been stolen due to corruption at the deeds office. And mineral rights are being seized because of weak controls at the government department that regulates these rights. In one case last week, a listed steelmaker was forced to buy mineral rights from a group of politically connected at a huge premium. All of these have been widely reported in the media, but that is where the problems start. South Africa's media and constitution generally allow for free expression, but, a few weeks ago a newspaper was launched with an explicitly pro-ruling party stance (by some of the same people who benefitted from the steel shakedown described above). At the same time, proposals were released for a statuatory tribunal to regulate the print media (South Africa already has libel laws, so this has been interpreted as an opportunity to muzzle the press). The government is also pushing an act that would allow government officials broad powers to classify information. And a journalist was dramatically jailed (on what seem to be trumped up charges) by an elite police unit, days after reporting on a huge, and apparently irregular lease made by the Police Commissioner, again with a politically connected individual. Will South Africa lose whatever gains it has made and follow the path of Russia? I hope not, but I am becoming increasingly pessimistic.

temphn 16y ago
You should leave South Africa while you still can.

known 16y ago

I think you should hire a local politician ( http://en.wikipedia.org/wiki/Member_of_Parliament http://en.wikipedia.org/wiki/Member_of_Parliament ) on your payroll if you wanted to do business in countries like Russia and India.