12 February 2013, 12:40

“Scratch-my-back-I'll-scratch-yours” Good Old Corruption type still exists in Russia - expert

“Scratch-my-back-I'll-scratch-yours” Good Old Corruption type still exists in Russia - expert

As one tries to make head or tail of the current anti-corruption campaign and the debate around it, one tends to feel that the debate's conceptual frame of reference itself is wrong or badly askew. Conceptions involved in the discussion can be summed up as Position 1 and Position 2 (see Vlad Sobell's theses).

Position 1: the current regime will pursue the campaign with vim and vigor, and in the end Russia will step out of the present hell of corruption into the paradise of instant modernization.

Position 2: the current regime is corrupt itself and thus cannot control corruption. Inference: give us power (variation: we will come to power via a color revolution), and corruption will vanish along with the regime.

In my view, neither of these conceptualizations fits the phenomenon that goes by the name of corruption in today's Russia.

Position 2 can be safely ignored as it is held by individuals like ex-Premier Kasyanov or ex-Vice-Premier Nemtsov and their cohorts, the people who were instrumental in creating the present state of affairs.

The fallacy of Position 1 is harder, though not impossible, to demonstrate. To do this, let us ask this childish question: What is corruption?

There is a succinct Russian phrase that aptly describes the phenomenon: “ty mne, ya tebe” - "you (give) me, I (give) you." A sort of service industry, you know.

It flourished in imperial Russia. Educated classes, the principal perpetrators of that industry, mostly spoke French, so its slogan was, Empochez! A sort of Frenchified version of Shylock's "Put money in thy purse." The industry was said to be endemic and impossible to root out.

In spite of that evil, however, from the time of Alexander II's reforms to 1914 the rate of Russia's economic growth was the envy of all Europe.

Stalin is said to have achieved the miracle of rooting out Russia's endemic corruption by the simple expedient of having anyone suspected of it, or denounced as suspect, or something, shot out of hand. Alas, this is yet another Stalin myth. I was a kid in Stalin's time, yet I learned the language of the epoch. A significant element of that language was, Blat vyshe Sovnarkoma ("Pull, connections are higher than the Council of People's Commissars").

Still, “blat” did not prevent the industrialization of Russia from virtual zero to a level that enabled it to crush the Third Reich, which had the industrial might of nearly all Europe behind it.

Post-Stalinist Russia saw a virtual efflorescence of blat. "Soviet man the builder of Communism" was also privately known as Homo equivalentus, a creature that existed in a system where a good filling for your tooth equaled a ticket to the Bolshoi equaled subscription to Brothers Strugatsky equaled a kilo of some rare species of sausage, etc. etc.

Despite such rampant corrupt practices, the same epoch achieved the building of a nuclear shield, the resettling of masses of people from communal flats to separate ones, the building of mammoth hydroelectric plants, primacy in space, and all the rest of it.

Now we come to the present. No question but that this scratch-my-back-I'll-scratch-yours type of corruption still exists. I myself was guilty of it recently. After an unpleasant cardiac experience I ended up in hospital. Fearing (perhaps needlessly) that I might be allowed to expire peacefully, my relatives corrupted a few white-coated figures to the tune of – well, no matter. As a result, I was given a thorough IV treatment, had countless painful needles stuck in my backside, was fed pills by the handful, the works.

Let me call this mode of behavior Good Old Corruption. And let me ask this further question: Is this what is basically wrong with Russia today? Is it this behavior that stands in the way of its modernization?

My answer is a curt "No."

By way of sidling up to the correct approach to the problem, let me cite a scene from yesterday's newscast. Putin is shown inspecting some Olympic facility in Sochi and questioning, with barely concealed fury, some minister as to why that facility was finished two years behind schedule and cost 8 bln rubles instead of the original estimate of 1.2 bln.

Well, my questions to Putin would be, Doesn't he know why? And if he doesn't, what is he doing being President?

The simple, the obvious answer to his questions is, the builders of that facility are not primarily in the business of building any facilities. The building thereof is a more or less incidental byproduct. They are, first and foremost, in the business of – listen to this beauty of Russian bureaucratese osvoyenie byudzhetnykh sredstv. Literally, appropriation of budgetary resources. There are the "budgetary resources" (public funds, in more human language), they must be "appropriated" - so they are. Simple as that.

Now, what does this have to do with Good Old Corruption? Nothing. To use a Hegelian term, it is a qualitatively different phenomenon: systemic privatization of public funds. Being systemic, it is ubiquitous.

Wherever you look, you observe evidence of it. The building of a stadium in St. Pete, originally estimated at 7 bln rubles, has cost 44 bln, and no end in sight. A road near Vladivostok, built at an exorbitant cost, was washed away by the first rain. Here in Moscow we regularly see asphalt being laid right on top of fallen snow - why? To appropriate more public funds in a few months, when the asphalt crumbles to dust. Or take the Bolshoi. How much did its renovation cost? Ask me another. No one knows, and that's a fact. Billions, many billions, is the nearest you'll get to know. Like I said, if you want to observe the process, all you have to do is look.

I could have traced this industry of privatization of public funds right from Gorbachev's "cooperatives" through the "loans for shares" scam to Chubais's privatization to privatization of power, with attendant proliferation of preternaturally gifted businesswomen who happen to be the wives of mayors, governors, ministers, and sundry others. Ex-Defense Minister Serdyukov stands apart in this respect: he merely had a preternaturally gifted mistress.

I could have attempted such labor, only why bother? For one thing, volumes have been written on the subject already. For another, more pertinently, Mr. Medvedev put the issue in a nutshell in an interview somewhere in the West: privatization in this country is "ideological in character." Why wonder, then, that it becomes an end in itself?

Just one example, a favorite of mine: Chubais's Rosnano Corp. There was no nanotechnology industry in Russia, so the powers that be resolved to create one. Originally it existed as a pile of "budgetary resources" - public funds - in the shape of a state corporation. No production facilities, nothing at all, just a big pile of money. Then that pile was privatized, and it is now an OAO, an "open shareholders society."

To me, the most interesting question is, What does this "society" produce? Can we mention its name in the same breath as, say, Nokia, or Samsung, or Telekom, or any such? No, we can't, and the reason is simple: the purpose of the operation has been achieved, public funds have been appropriated, and will continue to be so appropriated, thank you so much, finance ministry. If there was a different purpose of the scam, like production of some nano gimmicks, it was for the consumption of the credulous public only.

It looks to me that this phase of Russian capitalism will last as long as there are public funds to be appropriated, campaigns or no campaigns. My guess is, though, that the end of this phase is drawing uncomfortably near. Shale gas can put paid to Gazprom. Extracting oil will come more and more expensive, Russia's oil just cannot compete with cheap Arab oil. And there aren't many other sources of those "budgetary resources."

Well, perhaps then there will be no more of this ideological appropriation of public funds. Just Good Old Corruption. Hallelujah.

 

Sergei Roy, Former Editor-in-Chief, Moscow News

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