15 ms·

1 in 6 Russian entrepreneurs are in jail, 1 in 3 prisoners are businessmen

268 points by srgseg 15y ago

hartror 15y ago
Corruption is the scourge of the developing world, there is a significant drive in India to try to stamp out the practice but they have a long way to go. Organizers of the Indian Commonwealth games are embroiled in corruption scandals that have greatly embarrassed the country.
- dimmuborgir 15y ago
  Apples and oranges. We're talking about corporate entrepreneurs and you're talking about games organisers who are/were on government payroll. Corporate scandals in India are almost unheard of. (Satyam fiasco is an exception though)
  - khafra 15y ago
    What about the rumors that Monsanto bought its way into a near-monopoly there, with the consequent small farmers committing suicide in droves as they lose everything?
  - hartror 15y ago
    Eh? I thought we were talking about corrupt government officials?
ilitirit 15y ago
> Business Solidarity, an organisation that works to protect small businessmen, estimates that one in six Russian entrepreneurs is in jail, and that one in three prisoners in Russia is a businessman. How on Earth did they come up with that estimate?
- mathrawka 15y ago
  No idea, but after reading that article... I don't think the numbers really matter. If all the facts in the story are right, then one man will be away from his children for 5 years, just because he didn't want to be strong-armed out of his business. That is enough for me to realize that something is very wrong with Russia.
  - guard-of-terra 15y ago
    We have to look at numbers (and look at how these numbers are calculated) because else we're the are hand-waving and permanently-shocked. It's obvious that you can find some atrociously bad things happening in any place on earth. The interesting question is the general quality of life.
- andrest 15y ago
  How did they come up with the estimate? http://www.youtube.com/watch?v=1eixjRLlvtk http://www.youtube.com/watch?v=1eixjRLlvtk (full documentary can be found on YouTube) Having had some business interests in the same region I can tell you from first-hand experience that people like the Russian gentleman living in France are VERY common. Lots of criminals with business interests are considered to be businessmen.
- vvpan 15y ago
  That sounds like complete BS. I grew up in Russia and no way that statistic could be remotely true.
- rbanffy 15y ago
  They must consider criminal enterprise a business. And that gives me pause... Who are the other five Russians in jail?
guard-of-terra 15y ago
Does that mean that Russia has twice as much enterpreneurs as prisoners? It's interesting how this article seem to already raise much more interest on news.yc that the recent russian IT IPO with 8B valuation. I'd take it with a grain of salt if I were you. My mother owns a small cloth store in a town near Moscow and I'm positive that: - She's not afraid - She doesn't "share her profits with the police and people from the tax authorities" - Still she blames the amount of paper she have to submit (taxes, pension funds etc) and how careless then they interpret those papers.
- rms 15y ago
  Grain of salt, sure, but it's enough for me as a foreigner to never want to invest in Russia or do business with Russia (or similar states like China). The rule of law is sublimely important in having a functioning business economy. Maybe Russia is worse than China in that China everyone knows the rule is that you have to sell out to the government when they ask, and in Russia naive entrepreneurs are going to jail en masse.
  - FlowerPower 15y ago
    Maybe somebody wants you to not consider investing in Russia or China, so these kind of "news" are told. The corruption exists, and it may be more so than in other countries comparativly, that does not mean it is not safe to do business in Russia, it just means that the corruption is open enough so we know about it, unlike the highly advanced countries where the corruption is a similary advanced skill.
- dchest 15y ago
  Have you read Yandex's SEC filing? If not, I encourage you to read the "Risks related to doing business and investing in Russia and the other countries in which we operate" section. http://www.scribd.com/doc/54292357/Yandex-F-1-Filing-With-SEC-04-28 http://www.scribd.com/doc/54292357/Yandex-F-1-Filing-With-SE... page 22. (Easier link: http://constructive-project.org/en/articles/25.htm http://constructive-project.org/en/articles/25.htm)
- VladRussian 15y ago
adaml_623 15y ago
British understatement: "Doing business in Russia is notoriously difficult". It will be interesting to see Russia's progress over the next couple of decades and see whether the problems with corruption get worse before they get better.
- guard-of-terra 15y ago
  Isn't it equally interesting to look at the two decades just passed? Nobody does. Of course, future is always more interesting because you can theorize instead of analyze, but in the next couple of decades it would turn boring past, too.
  - adaml_623 15y ago
    Of course we look at the past. But how would you summarise the last 2 decades in the ex-USSR region from the point of view of 'Business Friendliness'. Is it getting better or worse? Are our standards changing, I certainly hope they are.
    - guard-of-terra 15y ago
      - There is an actual economy (there wasn't after the collapse of USSR) - It is possible to run a "white" business paying taxes and social securities (During the 199x it was possible to add up all taxes on profit and get e. g. 102%, meaning that you have to pay 102 roubles in taxes for every 100 you earn:) - There were all sorts of organized crime. They are no longer. (At least they never intervene with the normal leagal business these days. Because I understand how "There is no longer any organized crime" would be seen as overstatement). There are surely still many problems, but you just can't compare.
adaml_623 15y ago
The Transparency International reports on corruption are an interesting insight into how widespread these issues are. A lot of corruption grows on the 'everybody does it' mentality. http://transparency.org/policy_research/surveys_indices/cpi/2010/results http://transparency.org/policy_research/surveys_indices/cpi/...
- radu_floricica 15y ago
  Please, please don't suggest it's the fault of the people paying the money. It's a system problem, and it's clearly encouraged from the top. I've seen it happen in many contexts...
  - iwwr 15y ago
    In many instances, it's the cost of doing business or securing an otherwise legitimate service. Of course, there are those paying bribes to trip up the competition or to secure protection from obvious crimes (like theft, murder etc). But for ordinary citizens, paying a bribe is an escape valve from an otherwise rigid bureaucratic dictatorship. The solution is not to crack down on corruption (except perhaps those 'obvious crimes'), but to eliminate the bureaucracy fostering it. Normally, bureaucracy was invented to ensure continuity of government even with changing political leaders. You need something to keep track of expenses and procedures on how to make decisions. But that creature grew like an octopus, engulfing ever greater portions of society. This stranglehold must be eliminated and not just reformed or offloaded into big web portals.
Fice 15y ago
> 1 in 6 Russian entrepreneurs are in jail, 1 in 3 prisoners are businessmen The title is pure FUD.
- vog 15y ago
  > The title is pure FUD. Would you care to elaborate?
  - Fice 15y ago
    That is from the definition: «Fear, uncertainty and doubt, frequently abbreviated as FUD, is a tactic used in sales, marketing, public relations, politics and propaganda. FUD is generally a strategic attempt to influence public perception by disseminating negative and dubious/false information designed to undermine the credibility of their beliefs.» (Wikipedia) And I am not talking about the whole article, only the dubious "1 in 6, 1 in 3" statement.
  - kds 15y ago
    One Possible Elaboration, Part I: (without claims for the absolute truth attached to it) The biggest nightmare in the minds of the ruling class in the anlgo-saxon world (chief US and UK political and business powers) is that Russia might create an Eurasian political and economic union with Germany and France (and EU generally), with high mutual economic, political, military and cultural benefits. That would mean huge loss of markets, power and influence for Washington and London. There are such tendencies, no matter how improbable in the short-term they look to the casual political observer who doesn't follow closely what's really going on. So in a certain way the Cold War is needed (if not required) to continue, even after pretending it is something of the past. One PR-related nasty form of this war - only bad news or no news allowed from Russia in the mainstream western media. The less people think Russia, Russian, (or even just Russians) are notions you could attach nice, friendly, good-minded connotations, the better! The president Putin really pissed-off the western state and big-business powers that in a period of rising petrol/gas prices in 2000s they couldn't extract the tens of billions $ they used to do easily in the 90s - back then with the help of the local oligarchs enriched overnight by criminally grabbing ownership of state economic base and infrastructure they themselves had not built in the preceding decades. Putin even had the temerity to use the extra-profits for increasing the country's living standard and modernizing the armed forces - one of the 3 to 5 really formidable military organizations in the world. And he started doing the really unthinkable - gently probing EU, Asian and African (think Libya) countries for this disgusting idea of selling energy resources for currencies other than the $. (And this in times of this self-inflicted financial crisis.) On the [re]New[ed] Cold War - just a few points of thought or questions for someone to ponder over, if really interested: How come NATO still exists when its mirror-antagonist military organization of the former socialist EE-countries from the soviet block has gone to history, dissolved peacefully and voluntarily? Why are there still US military bases (old and new) across the EU-countries today since Gorbachev retreated back the Russian/Soviet armed forces from East Germany and Eastern Europe? Why was the Gorbachev's 80-year jubilee held in London? If he was uniformly acknowledged as such a good doer to humanity and democracy why wasn't that an event held in his home country and among his own people proud of him? What does the average ordinary Russian think of Gorbachev? Actually who was robbed and who profited from the neo-liberal economic policies he had been instrumental to be installed in Russia? (continues...)
stygianguest 15y ago
In a way, the same could probably be said of American entrepeneurs. Drugs is a business, an illegal one, but still business. Imagine the (potential) talent wasted, although perhaps the talented ones don't get caught.
- ulvund 15y ago
  And it doesn't stop at selling Imagine if everyone who used Google to expand their horizon was imprisoned
- wisty 15y ago
  Bullshit semantics. Drugs are not legal. They are in jail for breaking the law, and possibly destroying the lives of addicts. Not creating jobs, and resisting a corrupt shakedown. You can run a legal business in the US with only a tiny chance of being imprisoned for it.
  - radu_floricica 15y ago
    I'm not flirting with the "true Scotsman" here, but the problem is the definition of what is legal. I'm positive Dmitry Malov did break a number of laws - as an entrepreneur in an ex-communist country I understand very well that this is unavoidable. The problem is that the law is designed to be broken, in order to facilitate corruption - something no country is completely immune to. This is not very different from drugs, either. I still have to see a clear study that marijuana is more harmful then either tobacco or alcohol, and that it's not merely an accident of history supported by commercial and political interests that it is now illegal and the other two aren't. Not as bad as blatant corruption, true, but not semantics either.
    - wisty 15y ago
      OK. But you do know that selling pot is illegal, right? As do other drug dealers. Businessmen in every country know they will inadvertently break a few rules, but try to avoid it. As for the legality of drugs, while I'm anti-drug, I think they should be legal. At least then they can be controlled. Besides, enforcement is often too spotty. The last three Presidents most likely used drugs, but nobody seems to care. Just don't apply for a government job if you want to be honest about it :) And then there's the difference between manufactured drugs, imports, and home grown; and the type of criminal organizations they support. I don't really care about some dropout growing herbs for college kids, but other drugs funnel large amounts of money to criminal organizations, who spend it on turf wars. That's the question, isn't it? Are these "businessmen" just growing illegal plants in a greenhouse, or are they also shooting their rivals outside schools? I guess it depends on the case.
askar_yu 15y ago
actually it's the same situation in most (if not all) Post-Soviet countries.
- bgarbiak 15y ago
  Actually, you're wrong. Unless you don't count Czech Republic, Slovakia, Poland, Latvia, Lithuania, Estonia and some others as Post-Soviet countries. You could, eventually, be right about Ukraine and Belarus though.
  - guard-of-terra 15y ago
    Czech Republic, Slovakia and Poland were never Soviet countries.
    - I-RIGHT-I 15y ago
      The Soviet tanks were just sightseeing? They used to be called Satellites but under Communist Russian control all the same. Post WWII History 101.
      - guard-of-terra 15y ago
        It's like calling Canada just another state of USA. It's an interesting metaphor, but factually incorrect and it matters in some important areas (for example, netflix selection:)
        jarek 15y ago
        I'm not seeing a lot of U.S. tanks in Canada...
        guard-of-terra 15y ago
        Canada, no; These countries, some: http://en.wikipedia.org/wiki/List_of_United_States_military_bases http://en.wikipedia.org/wiki/List_of_United_States_military_...
spenvo 15y ago
If there's no safe harbor for legitimate businesses, then it makes sense Russia would be one of the world's leaders in cyber-crime.
I-RIGHT-I 15y ago
"How on Earth did they come up with that estimate?" What does it matter when the "interesting thing is the quality of life" and when “the same could be said of American entrepreneurs" who deal drugs? The truth of the matter and the logical conclusions drawn from the example are lost on the all to willing ignorant. Too many Americans are contemptuous of their own freedoms.
SkimThat 15y ago
TL;DR - According to Business Solidarity, one in six Russian entrepreneurs is in prison, with one in three total prisoners being classed as a businessman. One example is a dairy farmer who refused to sell his thriving business to an unknown buyer at the request of Russia’s interior security service. After repeated threats, he was accused of fraudulently using a bank loan and sentenced to five years in prison. Not all businessmen end up in jail, as an estimated 60-80% don’t complain, share their profits and bribe officials.
- colanderman 15y ago
  Wait... is this a novelty account on HN? I feel like I've just seen the first horseman of the apocalypse.
  - rms 15y ago
    But... it's useful. :o
    - bh42222 15y ago
      But there's a high cost to this kind of "usefulness".
      - rms 15y ago
        I don't even know anymore.
      - srgseg 15y ago
        I thought it was an excellent summary. What kind of cost do you perceive/predict?
    - colanderman 15y ago
      It's only useful to those who haven't read the article. To those who have, it adds only noise (at best, filler) to the discussion. Beside, it sets a poor precedent. Novelty accounts are "OK" at Reddit and 99% of them only decrease quality. It'd be nice for them not to be "OK" here.
deleted 15y ago
[deleted]
kjw 15y ago
Funny conversation in the office: "A combination of excessive bureaucracy and corrupt officials makes it a hazardous enterprise." Isn't that the same in the US? Yes, except - in America, the government bribes business; in Soviet Russia, you bribe the government.
startupstella 15y ago
it's always interesting to see non-Russians comment on this kind of news. for Russians well aware of rampant corruption in post-Soviet countries, it's more of an eye roll than anything else. Russia is infamously corrupt as a result of the legacy of Soviet mentalities that made free market enterprise inherently black market. until the justice system is cleaned up and held accountable, russian will remain a corrupt 3rd world country unable to compete in the global business rena.
- veyron 15y ago
  if this is the extent of the problem, i dare say India and China are more corrupt
  - alexro 15y ago
    you can't really compare corruption, can you?
    - veyron 15y ago
      Oh yes you can! There are a few criteria: 1) Is the corruption social or economic in nature? ie in India, many years ago, it was impossible for someone from lower castes to become priests. An economic corruption at least has a remote chance of being breached by anyone 2) Is the corruption racial or religious or gender-based? I guess this is better termed "discrimination" 3) Is there a way to join the corrupted? ie if the police force and military are corrupt, is there a way to join them? There are versions of corruption for which most people are physically unable to rise, and versions of corruption for which a clever few are able to swim with the sharks
    - edj 15y ago
      Why not? The Corruption Perception Index[1] is the most famous attempt to do so. In their 0-10 scale--higher numbers being less corrupt--Russia is ranked at 2.1, India at 3.3, and China at 3.5. [1]: http://www.transparency.org/policy_research/surveys_indices/cpi/2010 http://www.transparency.org/policy_research/surveys_indices/...
- 15y ago
asciilifeform 15y ago
Then he bought two old Soviet dairy farms. This sentence is the key to understanding why many Russians feel little or no sympathy for "victims" like him. Soviet dairy farms once belonged to the Soviet people - in much the same way that, say, the Washington Monument, the US National Parks, or the US Army belong to the people of the United States. How would you feel if the most hardened violent criminals came to power in the US, and arranged to have these properties turned over to private owners, to run for their benefit (or to pillage and destroy, as was the fate of most Soviet industry) ? One can debate the practical merits of planned economies all day long but this does not change the fact that privatization is theft. The former owners of Soviet facilities - the Soviet people - were not adequately compensated for their loss. It is highly doubtful that fair compensation for the privatization of public property is possible even in principle. Do you dole out homeopathic-sized shares of stock? (Criminals buy them back for pennies-on-the-dollar from the masses in lean times - or at gunpoint...) What do you issue to the not-yet-born citizens who will no longer be heir to the means of production? (Answer in practice: zilch.) Privatization is "what's mine is mine and what's yours is mine" writ large, plain and simple. Russians who are not in some way aligned with the thieves' guild which has been running that country since the Soviet collapse by and large quietly recognize this fact. This is why sympathy and political support for the so-called "entrepreneurs" is and will continue to be thin.
- sili 15y ago
  On the other side of the coin, there was little guaranty that most state run businesses would survive any way. Yes, some were bought up by by shady characters, dismantled and sold of by parts for profit. However, others were bought by the likes of the protagonist of the story who invested in them and made them profitable businesses. The alternative would have been for those companies to become abandoned, which means they would have been picked apart by the locals anyway.
  - asciilifeform 15y ago
    there was little guaranty that most state run businesses would survive any way. Why? Oh, because their immune system, that keeps parasites down (the State in question) was murdered. That's right, murdered. The alternative would have been for those companies to become abandoned Why? As long as the natural resources to run the farms continue to be available (and why should they not?) and Russians still want to drink milk and eat cheese (they do), the farms would keep going happily ever after. made them profitable businesses It is possible to get high-quality milk and cheese into peoples' stomachs without American notions of "profit" being in the mix at all. Is the sewer system in the town where you live profitable?
olegious 15y ago
"1 in 3 prisoners are businessmen." Bullshit. The reporter probably misquoted his source or "Business Solidarity" is simply pulling numbers out of their ass for shock value- BBC has never been a friend of Russia so is happy to report non-sensical numbers without further elaboration. While it is true that corruption is Russia's biggest problem, the numbers quoted make no sense. I know people on both sides of the coin- small and large businessmen, tech entrepreneurs and high ranking FSB/military officials, so I know a little bit about what's happening. edit: Another piece of the article that screams of embellishment- "small flat"- no Russian businessman that owns a 300+ employee enterprise would be living in a "small flat."
known 15y ago
In India entrepreneurs face similar harassment if you're not from http://en.wikipedia.org/wiki/Forward_caste http://en.wikipedia.org/wiki/Forward_caste community
known 15y ago
Hope http://www.fairtrials.net/ http://www.fairtrials.net/ can help them out.

268 points by srgseg 15y ago

Corruption is the scourge of the developing world, there is a significant drive in India to try to stamp out the practice but they have a long way to go. Organizers of the Indian Commonwealth games are embroiled in corruption scandals that have greatly embarrassed the country.

dimmuborgir 15y ago
Apples and oranges. We're talking about corporate entrepreneurs and you're talking about games organisers who are/were on government payroll. Corporate scandals in India are almost unheard of. (Satyam fiasco is an exception though)
- khafra 15y ago
  What about the rumors that Monsanto bought its way into a near-monopoly there, with the consequent small farmers committing suicide in droves as they lose everything?
- hartror 15y ago
  Eh? I thought we were talking about corrupt government officials?

ilitirit 15y ago

> Business Solidarity, an organisation that works to protect small businessmen, estimates that one in six Russian entrepreneurs is in jail, and that one in three prisoners in Russia is a businessman. How on Earth did they come up with that estimate?

mathrawka 15y ago
No idea, but after reading that article... I don't think the numbers really matter. If all the facts in the story are right, then one man will be away from his children for 5 years, just because he didn't want to be strong-armed out of his business. That is enough for me to realize that something is very wrong with Russia.
- guard-of-terra 15y ago
  We have to look at numbers (and look at how these numbers are calculated) because else we're the are hand-waving and permanently-shocked. It's obvious that you can find some atrociously bad things happening in any place on earth. The interesting question is the general quality of life.
andrest 15y ago
How did they come up with the estimate? http://www.youtube.com/watch?v=1eixjRLlvtk http://www.youtube.com/watch?v=1eixjRLlvtk (full documentary can be found on YouTube) Having had some business interests in the same region I can tell you from first-hand experience that people like the Russian gentleman living in France are VERY common. Lots of criminals with business interests are considered to be businessmen.
vvpan 15y ago
That sounds like complete BS. I grew up in Russia and no way that statistic could be remotely true.
rbanffy 15y ago
They must consider criminal enterprise a business. And that gives me pause... Who are the other five Russians in jail?

guard-of-terra 15y ago

Does that mean that Russia has twice as much enterpreneurs as prisoners? It's interesting how this article seem to already raise much more interest on news.yc that the recent russian IT IPO with 8B valuation. I'd take it with a grain of salt if I were you. My mother owns a small cloth store in a town near Moscow and I'm positive that: - She's not afraid - She doesn't "share her profits with the police and people from the tax authorities" - Still she blames the amount of paper she have to submit (taxes, pension funds etc) and how careless then they interpret those papers.

rms 15y ago
Grain of salt, sure, but it's enough for me as a foreigner to never want to invest in Russia or do business with Russia (or similar states like China). The rule of law is sublimely important in having a functioning business economy. Maybe Russia is worse than China in that China everyone knows the rule is that you have to sell out to the government when they ask, and in Russia naive entrepreneurs are going to jail en masse.
- FlowerPower 15y ago
  Maybe somebody wants you to not consider investing in Russia or China, so these kind of "news" are told. The corruption exists, and it may be more so than in other countries comparativly, that does not mean it is not safe to do business in Russia, it just means that the corruption is open enough so we know about it, unlike the highly advanced countries where the corruption is a similary advanced skill.
dchest 15y ago
Have you read Yandex's SEC filing? If not, I encourage you to read the "Risks related to doing business and investing in Russia and the other countries in which we operate" section. http://www.scribd.com/doc/54292357/Yandex-F-1-Filing-With-SEC-04-28 http://www.scribd.com/doc/54292357/Yandex-F-1-Filing-With-SE... page 22. (Easier link: http://constructive-project.org/en/articles/25.htm http://constructive-project.org/en/articles/25.htm)
VladRussian 15y ago

adaml_623 15y ago

British understatement: "Doing business in Russia is notoriously difficult". It will be interesting to see Russia's progress over the next couple of decades and see whether the problems with corruption get worse before they get better.

guard-of-terra 15y ago
Isn't it equally interesting to look at the two decades just passed? Nobody does. Of course, future is always more interesting because you can theorize instead of analyze, but in the next couple of decades it would turn boring past, too.
- adaml_623 15y ago
  Of course we look at the past. But how would you summarise the last 2 decades in the ex-USSR region from the point of view of 'Business Friendliness'. Is it getting better or worse? Are our standards changing, I certainly hope they are.
  - guard-of-terra 15y ago
    - There is an actual economy (there wasn't after the collapse of USSR) - It is possible to run a "white" business paying taxes and social securities (During the 199x it was possible to add up all taxes on profit and get e. g. 102%, meaning that you have to pay 102 roubles in taxes for every 100 you earn:) - There were all sorts of organized crime. They are no longer. (At least they never intervene with the normal leagal business these days. Because I understand how "There is no longer any organized crime" would be seen as overstatement). There are surely still many problems, but you just can't compare.

adaml_623 15y ago

The Transparency International reports on corruption are an interesting insight into how widespread these issues are. A lot of corruption grows on the 'everybody does it' mentality. http://transparency.org/policy_research/surveys_indices/cpi/2010/results http://transparency.org/policy_research/surveys_indices/cpi/...

radu_floricica 15y ago
Please, please don't suggest it's the fault of the people paying the money. It's a system problem, and it's clearly encouraged from the top. I've seen it happen in many contexts...
- iwwr 15y ago
  In many instances, it's the cost of doing business or securing an otherwise legitimate service. Of course, there are those paying bribes to trip up the competition or to secure protection from obvious crimes (like theft, murder etc). But for ordinary citizens, paying a bribe is an escape valve from an otherwise rigid bureaucratic dictatorship. The solution is not to crack down on corruption (except perhaps those 'obvious crimes'), but to eliminate the bureaucracy fostering it. Normally, bureaucracy was invented to ensure continuity of government even with changing political leaders. You need something to keep track of expenses and procedures on how to make decisions. But that creature grew like an octopus, engulfing ever greater portions of society. This stranglehold must be eliminated and not just reformed or offloaded into big web portals.

Fice 15y ago

> 1 in 6 Russian entrepreneurs are in jail, 1 in 3 prisoners are businessmen The title is pure FUD.

vog 15y ago
> The title is pure FUD. Would you care to elaborate?
- Fice 15y ago
  That is from the definition: «Fear, uncertainty and doubt, frequently abbreviated as FUD, is a tactic used in sales, marketing, public relations, politics and propaganda. FUD is generally a strategic attempt to influence public perception by disseminating negative and dubious/false information designed to undermine the credibility of their beliefs.» (Wikipedia) And I am not talking about the whole article, only the dubious "1 in 6, 1 in 3" statement.
- kds 15y ago
  One Possible Elaboration, Part I: (without claims for the absolute truth attached to it) The biggest nightmare in the minds of the ruling class in the anlgo-saxon world (chief US and UK political and business powers) is that Russia might create an Eurasian political and economic union with Germany and France (and EU generally), with high mutual economic, political, military and cultural benefits. That would mean huge loss of markets, power and influence for Washington and London. There are such tendencies, no matter how improbable in the short-term they look to the casual political observer who doesn't follow closely what's really going on. So in a certain way the Cold War is needed (if not required) to continue, even after pretending it is something of the past. One PR-related nasty form of this war - only bad news or no news allowed from Russia in the mainstream western media. The less people think Russia, Russian, (or even just Russians) are notions you could attach nice, friendly, good-minded connotations, the better! The president Putin really pissed-off the western state and big-business powers that in a period of rising petrol/gas prices in 2000s they couldn't extract the tens of billions $ they used to do easily in the 90s - back then with the help of the local oligarchs enriched overnight by criminally grabbing ownership of state economic base and infrastructure they themselves had not built in the preceding decades. Putin even had the temerity to use the extra-profits for increasing the country's living standard and modernizing the armed forces - one of the 3 to 5 really formidable military organizations in the world. And he started doing the really unthinkable - gently probing EU, Asian and African (think Libya) countries for this disgusting idea of selling energy resources for currencies other than the $. (And this in times of this self-inflicted financial crisis.) On the [re]New[ed] Cold War - just a few points of thought or questions for someone to ponder over, if really interested: How come NATO still exists when its mirror-antagonist military organization of the former socialist EE-countries from the soviet block has gone to history, dissolved peacefully and voluntarily? Why are there still US military bases (old and new) across the EU-countries today since Gorbachev retreated back the Russian/Soviet armed forces from East Germany and Eastern Europe? Why was the Gorbachev's 80-year jubilee held in London? If he was uniformly acknowledged as such a good doer to humanity and democracy why wasn't that an event held in his home country and among his own people proud of him? What does the average ordinary Russian think of Gorbachev? Actually who was robbed and who profited from the neo-liberal economic policies he had been instrumental to be installed in Russia? (continues...)

stygianguest 15y ago

In a way, the same could probably be said of American entrepeneurs. Drugs is a business, an illegal one, but still business. Imagine the (potential) talent wasted, although perhaps the talented ones don't get caught.

ulvund 15y ago
And it doesn't stop at selling Imagine if everyone who used Google to expand their horizon was imprisoned
wisty 15y ago
Bullshit semantics. Drugs are not legal. They are in jail for breaking the law, and possibly destroying the lives of addicts. Not creating jobs, and resisting a corrupt shakedown. You can run a legal business in the US with only a tiny chance of being imprisoned for it.
- radu_floricica 15y ago
  I'm not flirting with the "true Scotsman" here, but the problem is the definition of what is legal. I'm positive Dmitry Malov did break a number of laws - as an entrepreneur in an ex-communist country I understand very well that this is unavoidable. The problem is that the law is designed to be broken, in order to facilitate corruption - something no country is completely immune to. This is not very different from drugs, either. I still have to see a clear study that marijuana is more harmful then either tobacco or alcohol, and that it's not merely an accident of history supported by commercial and political interests that it is now illegal and the other two aren't. Not as bad as blatant corruption, true, but not semantics either.
  - wisty 15y ago
    OK. But you do know that selling pot is illegal, right? As do other drug dealers. Businessmen in every country know they will inadvertently break a few rules, but try to avoid it. As for the legality of drugs, while I'm anti-drug, I think they should be legal. At least then they can be controlled. Besides, enforcement is often too spotty. The last three Presidents most likely used drugs, but nobody seems to care. Just don't apply for a government job if you want to be honest about it :) And then there's the difference between manufactured drugs, imports, and home grown; and the type of criminal organizations they support. I don't really care about some dropout growing herbs for college kids, but other drugs funnel large amounts of money to criminal organizations, who spend it on turf wars. That's the question, isn't it? Are these "businessmen" just growing illegal plants in a greenhouse, or are they also shooting their rivals outside schools? I guess it depends on the case.

askar_yu 15y ago

actually it's the same situation in most (if not all) Post-Soviet countries.

bgarbiak 15y ago
Actually, you're wrong. Unless you don't count Czech Republic, Slovakia, Poland, Latvia, Lithuania, Estonia and some others as Post-Soviet countries. You could, eventually, be right about Ukraine and Belarus though.
- guard-of-terra 15y ago
  Czech Republic, Slovakia and Poland were never Soviet countries.
  - I-RIGHT-I 15y ago
    The Soviet tanks were just sightseeing? They used to be called Satellites but under Communist Russian control all the same. Post WWII History 101.
    - guard-of-terra 15y ago
      It's like calling Canada just another state of USA. It's an interesting metaphor, but factually incorrect and it matters in some important areas (for example, netflix selection:)
      - jarek 15y ago
        I'm not seeing a lot of U.S. tanks in Canada...
        guard-of-terra 15y ago
        Canada, no; These countries, some: http://en.wikipedia.org/wiki/List_of_United_States_military_bases http://en.wikipedia.org/wiki/List_of_United_States_military_...

spenvo 15y ago

If there's no safe harbor for legitimate businesses, then it makes sense Russia would be one of the world's leaders in cyber-crime.

I-RIGHT-I 15y ago

"How on Earth did they come up with that estimate?" What does it matter when the "interesting thing is the quality of life" and when “the same could be said of American entrepreneurs" who deal drugs? The truth of the matter and the logical conclusions drawn from the example are lost on the all to willing ignorant. Too many Americans are contemptuous of their own freedoms.

SkimThat 15y ago

TL;DR - According to Business Solidarity, one in six Russian entrepreneurs is in prison, with one in three total prisoners being classed as a businessman. One example is a dairy farmer who refused to sell his thriving business to an unknown buyer at the request of Russia’s interior security service. After repeated threats, he was accused of fraudulently using a bank loan and sentenced to five years in prison. Not all businessmen end up in jail, as an estimated 60-80% don’t complain, share their profits and bribe officials.

colanderman 15y ago
Wait... is this a novelty account on HN? I feel like I've just seen the first horseman of the apocalypse.
- rms 15y ago
  But... it's useful. :o
  - bh42222 15y ago
    But there's a high cost to this kind of "usefulness".
    - rms 15y ago
      I don't even know anymore.
    - srgseg 15y ago
      I thought it was an excellent summary. What kind of cost do you perceive/predict?
  - colanderman 15y ago
    It's only useful to those who haven't read the article. To those who have, it adds only noise (at best, filler) to the discussion. Beside, it sets a poor precedent. Novelty accounts are "OK" at Reddit and 99% of them only decrease quality. It'd be nice for them not to be "OK" here.

deleted 15y ago

[deleted]

kjw 15y ago

Funny conversation in the office: "A combination of excessive bureaucracy and corrupt officials makes it a hazardous enterprise." Isn't that the same in the US? Yes, except - in America, the government bribes business; in Soviet Russia, you bribe the government.

startupstella 15y ago

it's always interesting to see non-Russians comment on this kind of news. for Russians well aware of rampant corruption in post-Soviet countries, it's more of an eye roll than anything else. Russia is infamously corrupt as a result of the legacy of Soviet mentalities that made free market enterprise inherently black market. until the justice system is cleaned up and held accountable, russian will remain a corrupt 3rd world country unable to compete in the global business rena.

veyron 15y ago
if this is the extent of the problem, i dare say India and China are more corrupt
- alexro 15y ago
  you can't really compare corruption, can you?
  - veyron 15y ago
    Oh yes you can! There are a few criteria: 1) Is the corruption social or economic in nature? ie in India, many years ago, it was impossible for someone from lower castes to become priests. An economic corruption at least has a remote chance of being breached by anyone 2) Is the corruption racial or religious or gender-based? I guess this is better termed "discrimination" 3) Is there a way to join the corrupted? ie if the police force and military are corrupt, is there a way to join them? There are versions of corruption for which most people are physically unable to rise, and versions of corruption for which a clever few are able to swim with the sharks
  - edj 15y ago
    Why not? The Corruption Perception Index[1] is the most famous attempt to do so. In their 0-10 scale--higher numbers being less corrupt--Russia is ranked at 2.1, India at 3.3, and China at 3.5. [1]: http://www.transparency.org/policy_research/surveys_indices/cpi/2010 http://www.transparency.org/policy_research/surveys_indices/...
15y ago

asciilifeform 15y ago

Then he bought two old Soviet dairy farms. This sentence is the key to understanding why many Russians feel little or no sympathy for "victims" like him. Soviet dairy farms once belonged to the Soviet people - in much the same way that, say, the Washington Monument, the US National Parks, or the US Army belong to the people of the United States. How would you feel if the most hardened violent criminals came to power in the US, and arranged to have these properties turned over to private owners, to run for their benefit (or to pillage and destroy, as was the fate of most Soviet industry) ? One can debate the practical merits of planned economies all day long but this does not change the fact that privatization is theft. The former owners of Soviet facilities - the Soviet people - were not adequately compensated for their loss. It is highly doubtful that fair compensation for the privatization of public property is possible even in principle. Do you dole out homeopathic-sized shares of stock? (Criminals buy them back for pennies-on-the-dollar from the masses in lean times - or at gunpoint...) What do you issue to the not-yet-born citizens who will no longer be heir to the means of production? (Answer in practice: zilch.) Privatization is "what's mine is mine and what's yours is mine" writ large, plain and simple. Russians who are not in some way aligned with the thieves' guild which has been running that country since the Soviet collapse by and large quietly recognize this fact. This is why sympathy and political support for the so-called "entrepreneurs" is and will continue to be thin.

sili 15y ago
On the other side of the coin, there was little guaranty that most state run businesses would survive any way. Yes, some were bought up by by shady characters, dismantled and sold of by parts for profit. However, others were bought by the likes of the protagonist of the story who invested in them and made them profitable businesses. The alternative would have been for those companies to become abandoned, which means they would have been picked apart by the locals anyway.
- asciilifeform 15y ago
  there was little guaranty that most state run businesses would survive any way. Why? Oh, because their immune system, that keeps parasites down (the State in question) was murdered. That's right, murdered. The alternative would have been for those companies to become abandoned Why? As long as the natural resources to run the farms continue to be available (and why should they not?) and Russians still want to drink milk and eat cheese (they do), the farms would keep going happily ever after. made them profitable businesses It is possible to get high-quality milk and cheese into peoples' stomachs without American notions of "profit" being in the mix at all. Is the sewer system in the town where you live profitable?

olegious 15y ago

"1 in 3 prisoners are businessmen." Bullshit. The reporter probably misquoted his source or "Business Solidarity" is simply pulling numbers out of their ass for shock value- BBC has never been a friend of Russia so is happy to report non-sensical numbers without further elaboration. While it is true that corruption is Russia's biggest problem, the numbers quoted make no sense. I know people on both sides of the coin- small and large businessmen, tech entrepreneurs and high ranking FSB/military officials, so I know a little bit about what's happening. edit: Another piece of the article that screams of embellishment- "small flat"- no Russian businessman that owns a 300+ employee enterprise would be living in a "small flat."

known 15y ago

In India entrepreneurs face similar harassment if you're not from http://en.wikipedia.org/wiki/Forward_caste http://en.wikipedia.org/wiki/Forward_caste community

known 15y ago

Hope http://www.fairtrials.net/ http://www.fairtrials.net/ can help them out.