Corruption is a major problem facing developing countries and a couple of recent reports suggest that Russia may lead the world in the bribery business.
This month Transparency International reported that companies in Russia are more likely to pay bribes to officials than in any other emerging market country in the world. That report was followed up a couple days later by a report from the Indem think tank highlighting the staggering toll that bribery takes on the Russian economy.
Indem’s study estimated that bribes add up to almost 12 percent of the total Russian gross domestic product — a staggering $36 billion a year.
Almost all of that is paid by businesses, who spent an estimated $33.5 billion a year in 2000 and 2001. Bribes made up about 10 percent of the cost of all business transactions in Russia.
Individuals paid about $2.8 billion in bribes, generally in order to procure “free” government services such as health care or access to education.
That is a level of corruption that is difficult to fathom. Clearly Russia will have a difficult time achieving decent economic growth with this hidden corruption tax and lack of transparency in its economy.
Source:
Study: Bribery a $36Bln Business. Valeria Korchagina, Moscow Times, May 22, 2002.