Andrew Jack’s Inside Russia records with remarkable accuracy the endemic cycle of corruption that prevails, “because the endless forms and time-wasting procedures they are supposed to follow only serve to push drivers to slip a Rbs 50 note to their tormentor to bypass the rules.”
Inflation has rendered Jack’s Rbs 50 conservative in the two years since his book was first published. But the basic premise – endemic bribery – continues apace. And it’s not just confined to drivers: pedestrians are just as susceptible to arbitrary stoppages, as I can attest.
It happened as I passed one of the GIBDD checkpoints on an exit road opposite the Foreign Ministry en route to my local supermarket not so long ago.
A supercilious-looking officer stopped me and demanded to see my documents (passport and work visa). He then asked for my apartment registration forms – something I wasn’t aware I had to carry. Transpires a précised version was already in my passport – albeit hidden behind another document stapled into the book – something he would have spotted as he pored over every page with studied attention. My ignorance, though, was the trigger for him pretending it wasn’t there and telling me a “fine” was now payable if I wanted to move on without a scene.
In one of the ‘surviving Russia’ sessions I attended at work when I arrived in Moscow almost a year ago, the most memorable piece of theoretical advice was “don’t pay a bribe – you only fan the flames of corruption”. Indeed, had I not been playing Jamie Oliver for some colleagues that night, with time against me and the oven on, I would have stood my ground.
But theory is different to practical living. And the arbitrary exercise of authority in Russia is something you can never really ever outmanoeuvre. So I paid up (one sixth of the ‘fine’ originally demanded) and it went straight into his back pocket. But I was free to go, which at that point was all-important.
Think Franz Kafka’s The Castle – one man’s fruitless attempt to stand against the system and overcome bureaucracy – and you have some idea of Russia today. Behind all the glitz, glamour and frisson of an emerging market, old practices die hard.
There will be plenty of glitz in under a fortnight, when world leaders of the G8 gather to quaff canapés and mouth platitudes, as is their habit every 12 months. Russia plays hosts this year, with the summit taking place in St Petersburg – Putin’s home town no less.
Russia is being taken seriously in the West, if only because of its power and influence as Europe’s key energy supplier. The state owns the world’s largest gas company, Gazprom, while another state majority-owned asset, oil company Rosneft, is floating on the London Stock Exchange later this month – giving Westerners the chance to strategically invest in a company with global ambitions.
Gazprom has just been granted a legal monopoly on exporting gas from Russia – closing the door on foreign companies exporting Russian gas. That’s worrying the EU, concerned Gazprom’s monopoly could make it difficult for Russia to meet the Union’s growing energy needs, particularly as the company stands accused of under-investing in production.
And then there’s Rosneft’s IPO. Seventy percent of the company’s value comes from a production unit acquired at auction from Yukos – once Russia’s largest oil company but now a shell company, with former CEO Mikhail Khodorkovsky in prison for fraud and tax evasion. He claims the charges were politically motivated to remove a thorn from the Kremlin’s side and says he’ll pursue a lifetime of litigation against Rosneft when he’s released from prison – threats that have put a dampener on the IPO.
But BP and friends will no doubt hold their noses and invest anyway. It’ll get them closer to the Kremlin - essential when it comes to doing business in this country. In this Kafkaesque world, you can champion ethical capitalism all you like. But if the price is right, no deal is out of the question either. After all, business is business.
