Russian firms ‘most likely to bribe’ says Transparency survey

Russian companies are the most likely to pay bribes while doing business abroad, according to the latest Bribe Payers Survey released by anti-corruption watchdog Transparency International on Wednesday.

The 2011 Bribe Payers Index ranked 28 of the world’s largest economies according to the perceived likelihood of companies from their countries to pay bribes abroad. The Index measures the level of bribery in 19 business sectors from 0 (highly corrupt) to 10 (very clean) and is based on a poll of over 3,000 businessmen from the surveyed countries.

Russia scored just 6.1 points out of 10 and holds 28th place at the bottom of the index, just behind China at 27th place. Dutch, Swiss, Belgian, German and Japanese companies get the top scores and are least prepared to pay bribes, the survey said.

Russia also ranked at the bottom of the index in the previous survey published by Transparency International in 2008.

The countries ranked in the Index cover all regions of the world and represent almost 80 per cent of the total world market for goods, services and investment.

The most alarming fact is that companies from Russia and China, which invested $120 billion overseas in 2010 and are seen as most likely to pay bribes abroad, are increasingly active in global business, the survey said.

“It is of particular concern that China and Russia are at the bottom of the index,” Transparency said.

“Given the increasing global presence of businesses from these countries, bribery and corruption are likely to have a substantial impact on the societies in which they operate and on the ability of companies to compete fairly in these markets,” the watchdog added.

Russia’s bottom place in the Index came as no surprise because the Russian government is still trying to find effective tools to fight corruption, said Yelena Panfilova, head of the Russian office of Transparency International.

“It would be strange to expect any improvement from businessmen at a time when officials are still corrupt,” she said.

“There is a hope that strict observance of new anti-corruption legislation and international commitments will help change the situation in coming years,” she said.

Alexandra Lozovaya, head of analysis at Russia-based investment company Vector Securities, said corruption and bribes were the problems common for all emerging market countries.

“The emerging markets are characterized by high risks, including legal issues,” Lozovaya said.

“That is why it is more difficult for companies from emerging markets to compete with European and U.S. firms. From this viewpoint, a bribe can be considered as a competitive advantage,” Lozovaya said.

Anatoly Golubev, head of the Committee for the Fight against Corruption, an inter-regional public association, said the Bribe Payers Survey was not representative as there were so few Russian entrepreneurs working abroad.

“There are not enough Russian businessmen working abroad to place Russia even in fiftieth place,” he said.

When asked about possible measures to fight corruption, Golubev said the fight against corruption should not be confused with the struggle against corrupt officials.

“Corruption can only be prevented. If a corrupt deal has been closed, it is too late to talk about it,” he said.

The experts said that the rating was unlikely to have a strong impact on perception of Russia.

“I don’t think the rating will influence investors,” Lozovaya said. “Despite specific risks, the return on investment in emerging markets exceeds by several times yields in developed countries,” she said, adding Russia’s prospects were quite good considering its imminent accession to the World Trade Organization and the anticipated repeal of the Jackson–Vanik amendment by the U.S. Congress.


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