Why Russia Locks Up So Many Entrepreneurs

http://www.bbc.co.uk/news/magazine-18706597

by ytNumbers • 14 years ago

173 128 14 years ago

bbc.co.uk

skrebbel• 14 years ago

3 million people? i have a very hard time believing that Russia has locked up 2% of their population the last 10 years - oh, and those were only the enterpreneurs, so the total figure is even higher.

rorrr2• 14 years ago

You're assuming at one time. Russia's overall incarceration rate is 0.522%.

You're right however, the 3 million figure seems very high.

Russia is a lost cause. Police/government can (and regularly do) take over any business, especially any small business.

Russia is so corrupt, only a full scale revolution will have a chance at fixing the country.

corin_• 14 years ago

Not only is it not 3 million at one time, there's also no definition provided of what it means for them to have been locked up. It could presumably be a whole load of one week sentences, or maybe even a night or two in jail?

its_so_on• 14 years ago

>Russia is so corrupt, only a full scale revolution will have a chance at fixing the country.

So you're saying there's a violent class struggle between the populist system and the oppressed business class - and that the only way the downtrodden business owners can rise up and free themselves from their chains is through full scale revolution?

This sounds like it's straight out of Monty Python - but hey, good luck with that.

raverbashing• 14 years ago

>> Russia is so corrupt, only a full scale revolution will have a chance at fixing the country

Thank communism, because corruption was the only way for business to do any kind of transaction

yaakov342• 14 years ago

Yeah, absolutely. Revolutions have worked out so well before, especially in Russia. What Russia needs right now is some serious destruction and civil war, followed by a few decades of rule by hard men who know that their Cause comes before anything. Oh yeah.

ajuc3• 14 years ago

Or maybe low level stats are falsified in each prison/police station to show better "effectiveness" of cops. Only when it's aggregated it's stuppidly big number.

The same happened with recent elections to Duma (over 100% people voted in many regions of Russia).

perfunctory• 14 years ago

https://en.wikipedia.org/wiki/List_of_countries_by_incarcera...

This is ~0.5% at a given moment. 2% over 10 years doesn't sound too much.

wavephorm• 14 years ago

USA Number One! Hoo-ah!

molmalo5• 14 years ago

Well, we are 102. And not because of benevolence (even when we have a lot of soft judges lately, that seem to prefer to look after criminals instead of the population), but because our prisons are old and full of people, and there's no political intent to build more. (The government even destroyed some cuz they were too old, but didn't replaced them)

I bet that a lot of poor countries down there share the same reasons (and maybe, some lack the money to build more).

rizumu2• 14 years ago

There is no freedom of speech, and a pervading censorship of all media, including more and more of the internet. Speak out, go to jail.

"Just today (june 29) a Court ruled the feminist punk rockers must remain in jail while police slowly investigate them for the crime of allegedly chanting a 'punk prayer' against Putin from a church pulpit." http://news.infoshop.org/article.php?story=20120627165225580

guard-of-terra5• 14 years ago

"and a pervading censorship of all media"

http://en.wikipedia.org/wiki/Sin%C3%A9ad_O%27Connor#Saturday...

"NBC did not edit the performance out of the West coast tape-delayed broadcast that night, but reruns of the episode use footage from the dress rehearsal"

Where's the difference? Talking about media.

rb2k_• 14 years ago

According to Wikipedia's http://en.wikipedia.org/wiki/United_States_incarceration_rat...:

> The incarceration rate in the United States of America is the highest in the world. As of 2009, the incarceration rate was 743 per 100,000 of national population (0.743%).[2] In comparison, Russia had the second highest, at 577 per 100,000,

prostoalex• 14 years ago

It's a natural progression of corrupt regimes where

1) An entrepreneur pays off someone in the position of power (police, local government, tax collector) to facilitate quick problem resolution.

2) The aforementioned person in the position of power realizes that instead of the paltry fee they could lay claim on a large share of the business or entire 100% stake.

sasoon• 14 years ago

3 million per in 10 years is 300,000 per year, or 820(!) per day. I doubt they lock up 820 entrepreneurs per day.

diminish2• 14 years ago

Can someone from Russian, please confirm the 3million number? It seems so unbelievable.

vborovikov• 14 years ago

Titov talked about 13000 entrepreneurs.

shadchnev• 14 years ago

In other sources Titov mentions 13,000 entrepreneurs who are currently in jail. A quick search in Russian for "Titov entrepreneurs three million" doesn't give any other results but the BBC article.

hastur• 14 years ago

Now, compare that to Putin's pipe dreams of creating his own version of Silicon Valley in Russia. Obviously, even he can't be that stupid. So it's all PR, Putin doesn't want Russia to go anywhere, he just loves presiding over the vast criminal empire of intelligence services, organized crime and oligarchs.

BadassFractal2• 14 years ago

What ever happened to that, by the way? So far the only big companies to come out of Russia were basically local language counterparts of Yahoo, Facebook and Norton.

krasin• 14 years ago

Please, define "big"?

What's about Parascript (acquired for $50M in 2008)? http://www.crunchbase.com/company/parascript

Abbyy? http://www.crunchbase.com/company/abbyy

Evernote? Badoo? Parallels?

alexro• 14 years ago

There are nice exceptions, nginx is the most prominent one in the open source space. Nonetheless, the SV dream is just a PR.

huhtenberg2• 14 years ago

Kaspersky would be another one. There's also Paragraph (creators of Newton's handrwriting recognition module), but they are from the earlier times.

marcuspovey• 14 years ago

When I went to visit my then girlfriend's family in Russia a few years ago there was what was known as the $100 rule - basically that nobody ever left the house without $100 US in their pocket, because that amount would be enough to get you out of pretty much any trouble.

Bribery of police is so endemic in Russia that the state's most effective counter to this so far has been to simply bribe the police more and reclaim the losses from the perp - so for a traffic offence, the policeman would get a bonus from the state for not taking the bribe and the offender would have his car sold.

Paying police more in the first place might be a good start.

cousin_it2• 14 years ago

Russian person here. Why do you think paying the police more would reduce corruption? Highly paid government officials in Russia are just as corrupt.

da02• 14 years ago

I agree. Bank tellers are not that highly paid, but the local banks have no problem with massive theft.

Here in the US, police are paid quite well and retire with a nice pension. They also win a free-paid vacation if they kill an unarmed civilian. They call it "suspended with pay".

Despite all that, they also taser the elderly and teens half their size: https://www.google.com/search?q=police+taser+elderly++&o... I read a blog for priv. prop. anarchists and they never run out of stories like those.

rdtsc• 14 years ago

> Businessmen have complained for years that people have been able to frame commercial rivals

Corruption is like an infectious disease. It infects the body from the head to the toes. Corruption is involved in every stage of a person's life. When a person is born, in the hospital bribes need to be doled out to nurses, doctors and staff if appropriate care is expected. In school starting from kindergaden and all through highschool teachers and principles are bribed to ensure good grades are assigned.

Then bribes are given to government officials. Say, if you take a driver's exam (this happened to me) they will fail you on purpose expecting that you will realize that you need to pay them a bribe in order to pass it. It is not that are you good or not, it doesn't matter, because others pay, pay is expected always and those that don't pay get failed until they pay.

There is a price you can pay to get away with murder. There is a price you pay to the court DNA tester to either fabricate or deny a paternity test. There is a price for every single piece of certificate or license issued for conducting a business( and, not surprisingly the number of said certificates and licenses never decreases ).

It is not just bribes. It is also nepotism. There is so much freakin' incompetence because people who are not qualified are put in position just as a result of being related to some higher-up.

This corruption is also transmitted to offspring. Children observe their parents interact with the corrupt system and they learn to do the same, in the process also become corrupt.

To get back to the article. I think a lot of businessmen get locked up because they did not play by the un-official rules and thought, perhaps some thought, they could function like they would do in the West or in America.

smsm423• 14 years ago

It's actually worse. There are no rules that would prevent that from happening. If you have money, you are a target for criminals, and bigger organized crime syndicate is the security services themselves. If you're lucky, you lose some money, if you're less lucky - you can lose everything, including your freedom. Since judicial system and law enforcement as a rule do not protect potential targets from attacks, but rather facilitate and sometimes initiate them - there's nothing to prevent that from happening. You can bribe someone, of course, if you have money - but somebody else can pay more, or threaten, or the bribed official may decide to take the money, but do nothing to help you. What you're gonna do, sue him? Another part of it is that the laws are purposely built in a way to ensure it's impossible to not have some problems with them. This way, of course, the officials can solicit more bribes - but also more people would be imprisoned because there's always something he can be accused of. Or, as famous Russian saying goes, if there's a man, there's always a criminal code article for him.

mootothemax• 14 years ago

Whilst the situation in Russia is undoubtedly horrific, let's not pretend that corruption isn't endemic in the rest of the world; some counties have just legalized it to some extent.

Crony capitalism is criticised but rarely has action taken against it, and political campaign donations are seen as being perfectly acceptable. It doesn't appear to matter whether it's giving money to US senators, or joining "donor's clubs" that guarantee access to the UK's prime minister, e.g.:

http://www.conservatives.com/donate/donor_clubs.aspx

molmalo5• 14 years ago

yay! You just taught me a new term in english: Crony capitalism. It's almost the same in spanish btw: ("capitalismo de amigos", literally: "friend's capitalism"). Thanks for that ;)

And yes, that kind of problem seems to be present all around the world. Probably, it's something related to human nature. And sometimes, it looks like the system is trying to encourage that behavior. We learn of the importance of knowing certain people, pertaining to certain circles, making contacts, grow our social network, and so on.

As a simple example, things like LinkedIn are essentially encouraging the use of our contacts, to get an advantage in our professional careers. Doing that in public service, would be unethical (and most probably, illegal). But doing it in the private sector, seems to be fine. So, that dichotomy blurs as long as it doesn't go too far away. But then, you'll eventually end up in that crony capitalism... unless something or someone stops you. And sadly, the law doesn't seem to be stopping anyone.

Andrew_Quentin6• 14 years ago

That may be so, but it is difficult to suggest that the legal system is corrupt in the west.

The worst part about the article is the fact that there is no fair trial in Russia.

Imagine a fictitious world where everything is corrupt, but the legal system. It isn't a perfect place to live, but, you know that at the very least your freedom is protected, your contract if breached is remunerated etc.

Imagine a fictitious world where everything is not corrupt, but the legal system is. In such place, one has no freedom, for out of spite perhaps, out of jealousy, out of greed, someone could simply send you to prison.

7 acquittals in 1000 cases, and even then 5 overturned, so practically only 2 people being acquitted in 1000 cases is a practical tyrannical state.

In the west, at least, the legal system protects against corruption by itself not being corrupt. If such bastion of freedom fails, then the land is no longer free.

ajays2• 14 years ago

Whilst the situation in Russia is undoubtedly horrific, let's not pretend that corruption isn't endemic in the rest of the world; some counties have just legalized it to some extent.

Every time there's a discussion of corruption, people make this statement, and it bothers me (I'm originally from India, which has a lot of corruption too). You cannot just equate the two. Corruption as described by the GP is like a cancer which has metastasized all over the body; corruption in the West is like an isolated blotch of melanoma on the skin.

So yes, there is corruption everywhere I guess ( perhaps even in Sweden and Norway and Switzerland); but it's not at the same level as that in Somalia and Russia.

The thing that draws entrepreneurs from all over the world to the US is that it is almost trivial to register and start a business here; and even if you're wildly successful, your "corruption overhead" is minimal (the occasional $35K dinner for $PRESIDENTIAL_CANDIDATE notwithstanding). This may not be the case in ALL industries, but in general it's true.

Consider for example Google. Till a few years ago, despite revenue in the billions, Google didn't even have a lobbying presence in DC.

This is not to say that we should not be alert. The way lobbying (i.e. corruption) is playing out in DC is a troubling trend. If things are left unchecked, there could come a time when, for example, instead of putting a competitor in jail (as in the article), companies would just get laws passed which kneecapped the competitor. We're not there yet (there might be exceptions), but we have to be vigilant.

molmalo5• 14 years ago

Thanks, You make me feel better for my country. Even when there is a lot of corruption in Argentina, luckily we are not at that level yet.

I mean, yes... some things are common: police taking money from prostitution and even from drug dealers in some places, Union leaders getting rich and powerful by using union's money as if it was of their own, politicians contracting companies owned by friends or family members while public prosecutors and judges turning a blind eye... and so on...

But taking money to put innocent people in jail? Maybe there's hope yet...

But then, somebody else coming from a different country would read my message and would also say: Wow!

Surely, that's an advantage of having a highly banked system as in some places of Europe and the US. I think that most of this "low level corruption" problems would be solved if people used less cash. I don't know in Russia, but here, most of the transactions are made in cash. Even when buying a house, most people go to make the transaction carrying USD 150,000/250,000 in cash. People do not trust in banks (mainly after the 2001 crisis), and lots of people have safe deposit boxes instead of savings accounts, just to avoid the government from knowing how much money they have (tax evasion). But, if people used less and less cash, it would be harder to have these kind of corruption in lower levels, simply because of money laundry's complexity for most people would be just too much, or too risky.

JonnieCache2• 14 years ago

>But then, somebody else coming from a different country would read my message and would also say: Wow!

I'm not so sure. All of those things you list in your first paragraph happen in the UK all the time and nobody cares, and I imagine it is the same in most other countries.

As usual, there's probably some Scandinavian place where everyone behaves exemplarily.

danmaz74• 14 years ago

Incidentally, a new law was just passed here in Italy to reduce the maximum amount a transaction can legally be made in cash. That is mostly to contrast tax evasion, but the same logic applies to corruption, I guess.

dsabanin• 14 years ago

I live in Russia and I never gave a single bribe to anyone. My parents did, but I'm 27 and never been in situation when I needed to bribe anyone.

guard-of-terra5• 14 years ago

You have in one article two kinds of businessmen mixed up:

First are the owners of small- (and medium-) scale businesses which they built by themselves.

Second are the owners of companies which were previously state-owned during USSR and then they were suddently privatized and "somehow" landed into a hands of very select few.

I don't think it's correct to call the latter group "enterpreneurs". I think it's bad for the former group to have both groups mixed together in one article. What you really have is using some real and ugly problems of the first group to pitch some ongoing cases featuring persons from the second group.

Those cases being ugly too not makes this spin a good thing. My mother owns a small cloth shop, she has quite a few problems as a small business owner, but I doubt she wants to be used as a lever in the favour of Hodorkovsky or Kozlov. She might sympathise them, she might not. She's NOT on the same field anyway.

kinleyd• 14 years ago

Whoa, that is some statistic! Eventually the best entrepreneurs are going to vote with their feet and that cannot be good for Russia. High time for Putin to fix the broken legal/police system.

obtu2• 14 years ago

Indeed. According to the UN report on inclusive wealth ( http://www.ihdp.unu.edu/article/iwr via http://www.economist.com/node/21557732/ and https://news.ycombinator.com/item?id=4196895 ) Russia's wealth is all natural resources, and decreasing mostly due to a fast drop in human capital.

maga• 14 years ago

What I love about English-speaking communities is that articles like this one receive real comments from real people. It might sound strange, but try to put this kind of article somewhere in Russian and you're guarantied to receive first 10 comments telling you that it's just America trying to destroy the Mighty Russia with this kind of falsehood. And those comments are rarely from common people, even though Cold War ideas are strong in their heads, mostly they are written by paid pro-Kremlin activists or just simple bots.

obtu2• 14 years ago

Well, these astroturfers are a message in themselves. They do exist in the English web as well, though.

guard-of-terra5• 14 years ago

When did you see Youtube comments the last time?

Anyway, you are wrong. Five of that ten comments would be about how their authors hate Russia and are eager to abandon it.

And you are wrong twice because both kinds of comments seem to originate from real people. This is much more sad than any propaganda machine.

kalmsy2• 14 years ago

Makes me appreciate living in Scandinavia (Denmark). Corruption here is barely measurable.

Found this: http://blog.transparency.org/2011/12/07/what-makes-new-zeala...

tomjen3• 14 years ago

Depends on how you count it. All those government IT contracts which goes over budget because they keep getting awarded to the same incompetents can't be pure stupidity.

The most important thing though is that people think bribery is wrong which means they won't hesitate to report and prosecute you.

debacle2• 14 years ago

> "You don't know him, you'll never see him again, and you get a financial reward - so why do you care?"

That sums up the ethical viewpoint of most of the Russians I know.

huhtenberg2• 14 years ago

You hang around with wrong Russians.

debacle2• 14 years ago

My wife tells me that all the time.

agentgt• 14 years ago

I'm curious how "free" the news organizations are in Russia.

I recently was accused of something here in USA along with a ton of other people (copyright troll... I share my internet connection w/ my tenets).

The local news found out about it rather quickly and wanted to do an investigative report. I have to say I have never really liked local news but I'm glad things like this attract their attention.

Is whistle blowing a cultural thing?

In other words can Whistle Blowing be a counter virus to the Corruption virus?

aleyan• 14 years ago

Are they really talking about "entrepreneurs"? I have hardly heard that word in Russian media. Now if they talking about the people whom Russians call "businessmen", I can believe it. "Businessmen" has become a generic term for people involved in uncertain economic activity, often shady. It is not uncommon to hear on the evening news of a few "businessmen" resolving their differences with guns. Having so many "businessmen" locked up is not that unusually, especially considering that many criminals simply refer to their activities as business.

I am not making light of corruption in Russia, it is one the top three most serious issues that Russia faces. However, the BBC article seems disingenuous in translating an extremely loaded Russian word "businessman" into entrepreneur and dropping its tremendous criminal baggage.

tlear• 14 years ago

Russia is so corrupt that running a business without dealing with criminals is not practically possible. Nobody is "clean" and if you are you will not be running a business anymore or even better end up dead or in prison. That is the cost of doing business there. My dad's university friend ran a small company in Moscow, was too honest for his own good, they threw him out of the balcony of his apartment. Competition in in mother russia is a bit more cutthroat then what people NA can imagine.

antithesis• 14 years ago

> At the root of the problem is the criminal justice system itself. Statistically, once officially accused of a crime in Russia, there is little chance of proving your innocence.

Not to mention that it should be the other way around. People are innocent by default, so it should be innocent until proven guilty.

skylan_q• 14 years ago

agitprop

Why Russia Locks Up So Many Entrepreneurs

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