To Give and Take - By Nikolai Popov

Corruption

TO GIVE AND TAKE

By Nikolai Popov
September 2006
Source

Corruption in Russia is ineradicable, just as winter frost and the lack of good roads

Bribery in Russia is, by all indications ineradicable, just as winter frost and the lack of good roads. The number of corrupt officials is growing, the size of bribes is on the increase, and although ordinary people and businessmen try to avoid giving bribes, government officials continue to rob society of ever greater sums. The volume of bribery has grown from $36 billion in 2001 to $319 billion in 2005. New data on corruption was obtained in a recent survey by the INDEM Foundation and the ROMIR Monitoring Company.

Plain citizens and government officials

Judging from the results of the survey, half of Russian citizens during their lifetime find themselves in a situation where it is clear to them, or it is said directly, that they won’t get anywhere if they don’t give a bribe. Their number has grown from 50 percent in 2001 to 55 percent in 2005. Corruption arises from citizens’ contacts with government officials and institutions at all levels. This survey deals with citizens’ contacts with state institutions in the past year, as reported by 60 percent of those polled. Only a quarter of them were satisfied with these contacts, or, in other words, they received from the state what they were after: medical assistance, social benefits, pensions, or other things from among the 20 spheres of citizens’ relationships with the state dealt with in the survey. The remaining three quarters were not satisfied, but still wanted to get what they needed. This dissatisfaction was well recognized by government officials, who, in one way or another, made it known that the situation could be improved and the necessary solution reached or simplified, if they receive personal material remuneration, or, to be exact, a bribe. Last year, that situation arose in 35 percent of all contacts with government bodies or officials. In 2001, such situations, or “corruption risks”, arose in 26 percent of cases. Naturally, the applicant is not eager to give a bribe, so the increase in the number of corruption situations reflects the growing desire and greater opportunities of government officials to profit from their position, or, in other words, the greater intensity of “corruption pressure” from the authorities on citizens.

Another important feature of corruption is the citizens’ desire to avoid bribe-giving. First, they have no money. This is why some people don’t even attempt to solve their problems through government bodies if they don’t involve health matters or their children’s future. Second, people have become more knowledgeable about corruption. They are aware of who they have to give to and how much, and they are better informed of what guarantees they receive in exchange. Third, people are gradually beginning to discover that they have certain rights provided legislatively, and that they can appeal to higher bodies to insist on these rights. Finally, citizens know that, in many cases, they can get along without the state, or turn to private medical assistance, education, repair work, etc. It may even be cheaper.

Government officials meet this challenge from the market by increasing the size of the bribe per operation: it has grown from $62 to $97 on average in the past four years. Thus, people give bribes more seldom, but these are bigger, and, as a result, government officials receive $3 billion a year from citizens for what they should have done free of charge.

Although the overall volume of everyday corruption is stable, sharp changes have taken place in individual sections of the corruption market. Corruption in health service has decreased from $600 million to $400 million, and this section of the market has moved from first to second place. Municipal medical service is the sphere of the most frequent contacts between citizens and state bodies – 22 percent of all contacts; second place is held by the official registration of social payments (10 percent). The greatest number of corruption situations (23 percent) is there.

Corruption in higher educational institutions has grown by almost a third, from $450 million to $580 million. The average bribe is now smaller, but the variety of corruption services has broadened: exams, tests, consultations, etc.

The volume of corruption in the sphere of conscription has grown noticeably: from $13 million in 2001 to $357 million in 2005. Everything is now bigger there: supply of “services” (from 33 to 58 percent), citizens’ readiness to pay for their children to be exempt from military service (from 50 to 63 percent), and the average size of the bribe (from $110 to $530).

Fourth place is held by the registration of living space: from $300 million to $450 million in four years. Then courts come next: $210 million down, by 24 percent. The volume of corruption in the traffic police departments reaches $183 million annually, which is only half of what it was four years ago. People are less afraid of traffic cops and try to pay less frequently. However, the size of the bribe remains almost the same. Corruption on the labor market in government offices is $143 million (a threefold increase). Corruption at secondary schools continues to grow, reaching $92 million now. Corruption in land purchasing has increased fourfold and comprises $84 million. The figure for corruption in the registration of social payments has reached $80 million.

Champions of secret extortion

The relatively weak flow of bribes from people to government officials is more than compensated for extortion from businessmen. In 2001, observers were greatly surprised by the volume of corruption, which comprised two-thirds of the country’s budget. Now it surpasses the budget by 2.66 times.

Entrepreneurs give bribes more seldom (by about 20 percent), but the size of a bribe is now 13 times bigger; $10,000 in 2001, and $136,000 this year. As a result, the size of the average annual contribution of a firm in the form of bribes has reached $244,000, 11 times more than in 2001.

Just as four years ago, the lion’s share of bribes is taken by officials in executive bodies of power (87 percent), officials in legislative bodies receive 7 percent, and representatives of the judiciary system take six percent.

The leading bribe-takers in the executive branch of power are officials who grant permission to start a business, in other words, those issuing licenses for that purpose. They account for 16 percent of it, and those working in control and inspection bodies take 39 percent, as much as four years ago. This stability means that the situation with supervision and regulation has not improved in the past four years. As before, there are dozens of bodies that inspect the operation of enterprises on the basis of an enormous mass of legal and financial documents, which often contradict one another. Bribe-giving in this sphere is practiced by almost all entrepreneurs, especially in small and medium-sized businesses.

Businessmen are now reluctant to disclose how much they give in bribes. For example, four years ago, 36 percent refused to disclose the figure of bribe-giving to officials, whereas now their number is 54 percent. Nevertheless, the available figures are impressive enough. Twenty-five percent of companies pay up to five percent of their turnover in the form of bribes; 13 percent of companies pay from five to ten percent; 5 percent of companies give from 10 to 20 percent of their turnover as bribes, and 2.5 percent of companies are forced to pay to the state racket from 20 to 50 percent of their turnover. Thus, businessmen are deprived of a sum equal to two and a half state budgets. In other words, bribe-taking government officials are two-and-a-half times more effective than the tax-collection services.

Forty-one percent of businessmen assess the level of corruption in the country as “high,” whereas in 2001, that assessment was given by 28 percent of businessmen. Among ordinary people, 50 percent call the corruption level “high” in 2005, as against 29 percent in 2001. Four years ago, 58 percent of people and 57 percent of businessmen believed that corruption reached its highest in Yeltsin’s time, whereas now 43 percent of citizens and 38 percent of businessmen say that corruption is at its highest level during the period of Putin’s presidency. Four years ago, 16 percent of businessmen named greed and bribery of government officials the most crucial problem of our society; now this view is expressed by 26 percent.

These assessments are close to the international ratings of corruption in various countries. For example, according to the organization Transparency International, Russia holds 95th place of 145 in all, close to such countries as Iran, Iraq, Kazakhstan, Sudan and Libya. Russia has 2.8 points, which is lower than the critical three points. Countries in this category are believed to have the highest level of corruption by Transparency International.

Part of life

Most Russian citizens and businessmen are of the opinion that corruption is omnipotent and omnipresent and that it has increased and broadened during the past four years. But do they really denounce this social phenomenon? Do they believe that the fight against it is the No 1 priority for the economy and people’s life?

First, let’s dwell on the causes of corruption as they are understood by the population. The major cause of it, people think, is “the corrupt character of the supreme power.” Ninety-two percent maintain that this is the main reason for corruption. Only 5 percent regard it as not important. Businessmen hold the same view. It was named the most important cause by 91 percent of the entrepreneurs polled. Seventy-nine percent of the population say that leaders set a bad example, “the fish rots from the head,” they assert. Eighty-four percent of citizens and businessmen name “the immorality of politicians and government officials” the main reasons for corruption. They claim that it is not the hard life in government offices and the ill will of businessmen and other applicants that force high and middle government officials to take bribes, but they go to work in bodies of power for personal profit and to enrich themselves through deals and machinations in which direct bribes are just part of the process.

Citizens name, among other important reasons for corruption, “the poor performance of law-enforcement agencies” (84 percent.) Eighty percent say that “the need to secure all those permits and licenses to start a business” also gives rise to corruption. Seventy-six percent name “the weakened control of the state over business” as a reason for corruption. And only 41 percent claim that “the low salaries of the government officials” are the cause of growing corruption.

Businessmen give similar assessments. They also emphasize “the vague character of the laws, which gives government officials an opportunity to interpret them widely ( 91 percent of those polled.) In contrast to the population, only 56 percent of businessmen regard “the weakened control of the state over business” as a major reason for corruption. On the contrary, they say that excessive control and the pressure brought to bear on business by bureaucrats breed corruption. And just as most ordinary people, less than half of businessmen believe the low wages of government officials are a major reason for corruption.

While railing at corruption, both ordinary people and businessmen tend to accept it as a rule of the game and an unpleasant but inevitable part of life. Most people denounce corruption as a social phenomenon and at the same time, accept it as an inevitable form of the relationship between the authorities and society. For instance, people say that “corruption should be avoided inasmuch as it corrodes us and the authorities.” (52 percent of those polled.) At the same time, 32 percent believe that “corruption can be avoided, but it’s easier to do business with bribes.” And 13 percent are sure that “this is an inalienable part of our life, without which nothing can be done.”

At present, 71 percent maintain that “most government officials take bribes,” whereas in 2001, 48 percent held this view. At the same time, only a little over 25 percent of the population believe that the main method of combating corruption should be “merciless punishment of those guilty of it.” Fifty-one percent of all Russians claim that “first of all the conditions engendering corruption should be eliminated.” Only 8 percent maintain that corruption can be conquered “if dishonest leaders are replaced with honest ones.” In general, 12 percent hold the view that “no strategy will help,” because government officials never fight one another. Four years ago, there were 24 percent of idealists who believed that “corruption would be conquered if the president would fight against it.” Now only 17 percent hold this view. The number of people (26 percent at present) has increased who believe that “Russia has always been characterized by bribery and embezzlement, and nothing can be done about it.”

Speaking about giving bribes in the present situation, half the population does not object to it, 26 percent regard it “too expensive” for them, and 24 percent say “I don’t know how it should be done, it’s awkward for me.” Thirty-seven percent say “I don’t give bribes in principle, I abhor it.”

But those who do give bribes are quite satisfied. Twenty-six percent admit that they have achieved what they wanted, 29 percent speeded up the solution to their problems, and 12 percent say their problem has been resolved in a better way. Twenty-nine percent are displeased with our state system that places people in such conditions; 16 percent are repugnant that they couldn’t do otherwise, and 13 percent hate the officials they bribed. At the same time, 18 percent say that “they were used to such situation and didn’t feel anything,” and 34 percent feel “relieved that the situation is resolved.”

The survey didn’t include government officials. Perhaps they would have answered just as the 51 percent of ordinary citizens, namely, that “corruption can be conquered by everyone together, it should be fought by the authorities and all citizens.” However, they may think to themselves that “power will be changed in three years’ time, so we must take as much as we can while we rule the roost.”