Corruption on the Rise for Business

According to a recent survey of businesses operating in Russia, corruption and economic crime have increased dramatically in the past two years.

Reuters reported the results of the survey, which was commissioned by PricewaterhouseCoopers (PWC), and published in the company’s global biennial report. PWC is the world’s largest accountancy group, with over 146,000 employees, and offices in 150 countries:

“Although corruption and bribery continues to be perceived as the most prevalent type of fraud, the most common type of fraud was asset misappropriation”

PWC surveyed 125 of Russia’s biggest companies and reported 59 percent had suffered at least one economic crime in the last year, up from 49 percent in their 2005 survey.

The survey also found the average cost of the economic crimes for Russian business had quadrupled to $12.8 million since 2005.

The report said that almost half of the companies felt they had been placed in a position where they had to pay a bribe in the last two years, and just over half felt they had lost out to a competitor because they had not paid a bribe.

The Putin regime has failed to rein in the disastrous problem of corruption in Russia’s business and public life. Instead of strengthening the country’s judiciary and legal institutions, the Kremlin has concentrated power in the presidency. The result is a system where the courts are helpless in prosecuting economic crimes, and where only cases that Putin personally takes note of are ever investigated. It therefore comes at no surprise that corruption continues to spread.