The scale of corruption in Russia was undervalued

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Photo: Michael Pochuev / TASS

The level of corruption in Russia is much higher than commonly believed, said the chief economist of the European Bank for reconstruction and development (EBRD) Sergei Guriev in an interview with the family-owned Demyan Kudryavtsev, the newspaper “Vedomosti”.

“Russia is much more corrupt than could be expected, given its level of development and especially the level of education”, — said Guriev.

According to him, Russia is lagging behind countries with comparable income levels on key parameters, which are estimated by the EBRD. The main ones are: government effectiveness, quality of regulation, rule of law and control of corruption. They are the main components in calculating the WGI (World Governance Indicators).

Guriev also cited another measure — price/earnings ratio (the ratio of the value of the shares to the company’s revenue). In Russia it is usually equal to six — it means that the value of the company accepted the value of six of its annual profits. “In other countries the EBRD index is an average of 12 other developed and emerging markets — 15-16, in America and India, 20-25. That is a huge discount compared to comparable economies,” the economist noted.

As a solution to the problem Guriev advised the Russian authorities to pay more attention to the protection of property rights, strengthening judicial independence and integration into the global economy. All this, according to him, can lead to the fact that the Russian economy will become more market-oriented. While in Russia there are already examples of successful business, built on innovation and human capital. Chief among them Guriev considers that “Yandex”.

According to the Prosecutor General, in 2018 in Russia was recorded 3171 case of receiving a bribe. This is 9.4 percent more than the year before. The most corruption-prone regions were Moscow, the Moscow and Rostov region.

Video, photo All from Russia.

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