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Feature Story November 17, 2006
Incorruptible: A Russian Fairy Tale
The Exile imagines a Russia without corruption! By Jake Rudnitsky Browse author Email

MOSCOW -- All the sure signs of winter's onset are in the air: the sound of snowplows scraping on the asphalt, black slush trails leading into entranceways, Metro stations getting Zambonied with increasing frequency, and, yes, Transparency International has issued its annual corruption survey rating Russia down with countries like Swaziland and Guyana.

This year, though, there's been a bizarre Alice-in-Wonderland effect when it comes to reporting on corruption. Corruption stories by Western correspondents flew off the presses last year, particularly after the Indem Foundation reported that Russian corruption had reached $319 billion annually. Now, it's the state-run media's turn to draw attention to the amazing depth and breadth of Russia's corruption problem. If Indem's figures drew skeptical or defensive responses from the Russian media last year, this year it's the opposite: the state's official newspaper, Rossiiskaya Gazeta, ran an interview with Deputy Prosecutor General Alexander Buksman last week in which he charged that corrupt Russian officials take bribes of $240 billion a year. Sure, a difference of $80 billion's a lot, but the two figures are in the same ballpark. The "Holy Shit!" ballpark.

Meanwhile, most Westerner correspondents have moved beyond obsessing about corruption to more fertile grounds. Now that it's become fashionable to compare Putin to a fascist (a comparison that would no doubt upset Mussolini, and is an insult to Nazis), who cares about writing up stories of bribe-taking? Corruption's just not as sexy as a story on the New Adolph Hitler Threat. And now that the Russian media's making more and more noise about corruption, the subject's become too mundane for the free Western press. After all, the Free Western Press cannot, by design, write about the same problems as the Fascist Controlled Press. You won't see the Economist claiming these days in startling headlines that "corruption is Russia's biggest problem" as they did on Oct. 20 last year. Nowadays, it writes fear-mongering editorials about the Russia and the "F word."

It may seem strange when a state as corrupt as Russia starts making lots of noise about anti-corruption campaigns, especially when the corrupt state controls so much of the media. There's been a proliferation of street banners by the "Anti-Corruption Committee," newspaper articles galore, and plenty of noise by politicians, especially Mr. Transparency Himself, German Gref, as well as recently-appointed Prosecutor General Yuri Chaika.

Of course, no-one in their right mind thinks that the siloviki are at all serious about this war on corruption. If they were, they'd be out of their jobs, with a one-way ticket to visit Misha Khodorkovsky out in scenic Krasnokamensk. But then, what if they've really had a change of heart, if the powers-that-be have finally stolen enough to be satisfied, if Putin's patriotism has made him believe that he's got to clean up corruption to guarantee Russia's future prosperity?

All of this talk of corruption, cleaning up, and skepticism about it got us here at The eXile to thinking: what would Russia look like if the government's really serious about ending corruption?... What if Putin's stated vision of a Russia without corruption could be realized with the simple wave of a magic wand... What would a Russia that rated up with Iceland and Finland and other Nordic paradises on TI's Corruption Perceptions Index look like? What would life be like?

As it turns out, what we learned, after long, hard imagining-sessions, is that the only thing worse for Russia than eliminating corruption would be a full-scale nuclear exchange with the US and China.

What would an uncorrupt Russia look like? First off, its economy would collapse overnight. Since the official laws in the books are quite serious and civilized, if someone started to enforce them to a "T," just about every factory in the entire country would be forced to shut down. For one thing, safety and fire code violations are so endemic in Russia's ancient Soviet-era industrial base that virtually every plant would be found in violation. Maybe a few new car assembly plants in Kaliningrad, where they bolt together a bunch of imported finished materials and stamp on "Made in Russia" for tax purposes, would survive the purge, but just about every other factory would be mothballed.

Take the steel industry, which hasn't added any capacity since back in the USSR. Not that it needed to, as even now Russia produces twice as much of the stuff as it consumes. For all the talk of modernizing Russia's steel industry, way less than 10 percent of the steel it produces is galvanized (compared to nearly 70 percent in the civilized world). The monkey change the EBRD has invested hasn't affected the other 90 percent of Russian capacity, more or less, that dates back to the Soviet Union. And, for all the USSR's pro-worker propaganda, it wasn't known for emphasizing individual safety, which it considered bourgeois and capitalist. So, Abramovich's Evraz mills use the same technology that was built in the 1970s (if not before), the last time the Soviet Union had money to invest in grandiose construction projects. And the only way a 30-year-old steel mill is going to pass any safety tests is a big ol' bribe. No corruption, no steel, no money to buy English soccer teams.

Work everywhere from steel smelters to mines and MIG factories would grind to a halt once workplace safety started to mean something and state inspectors couldn't be bought off. Industrial production would just about cease to exist, forcing Russians into a subsistence farming life. Even the British gold mining company Highland's safety standards are such that 25 Russian miners died in a single accident this September. More shocking still is that they were allowed to keep on mining without a break. Think that would happen if they hadn't greased a few palms? And that's gold mining, which is a picnic compared to coal mining where accidents resulting in multiple deaths are a monthly occurrence.

Enforcing the environmental standards on the books would close plenty of enterprises that H&S concerns didn't. Disaster areas like Usinsk (under TNK-BP's watchful eye) make Shell's Sakhalin violations look like jaywalking. If they started investigating the dead zones that Russian oil companies' leaky pipelines have created wherever they run, you can forget about that $110 billion branch of the economy. The over-capacity Soviet pipelines would be forced to upgrade, improve, and account for everything...which would mean turning most of the taps off and dismantling huge chunks of the eroded pipeline network. Suddenly, Russia would be pumping out less oil than Bakersfield, California. Vast fields that currently have the environmentally disastrous policy of burning excess gas, or flaring, would be forced shut until they could find a way to harness the energy they currently torch. Russia is the second largest flarer in the world, and simply burns up 3% of Europe's gas needs annually.

Gazprom would have to undergo a massive restructuring, as its corrupt administrators were purged and the bureaucrats who replaced them struggled to make sense to the convoluted, opaque "state-within-a-state." Its production would plummet as it was no longer immune to environmental law, while the management would be forced to export every drop they managed to pump in order to maintain the long-term contractual obligations signed under the previous, now-expelled management. No one would know which daughter company owned what, managed what, who tapped which pipeline. There's a method to Gazprom's current madness which, if tampered with, would collapse like a house of cards.

Which brings us back to Russia's now-devastated industrial base, which would suffer further in the oil clean-up since it could no longer count on cheap, subsidized energy. The population would watch as their electricity bills shot up to international market rates. But even this wouldn't be enough to prevent large swaths of Russia from plunging into freezing darkness regularly, as rolling blackouts proved to be the only way to properly maintain UES's nuclear plants and keep them from being at risk of meltdown.

As if the rapid disappearance of foreign currency revenues caused by the drop in oil exports weren't enough, the construction industry would be further decimated by a labor shortage, since about 50 percent of Russia's construction workers are illegal immigrants who'd be deported once immigration officials started doing their jobs. Those remaining would see their productivity plunge, as 70 hour weeks just wouldn't fly anymore with native Russians. The steep drop in worker productivity and in the pool of workers wouldn't increase wages, though, because every single construction site, from Ivan's unplumbed dacha up to the Moskva City skyscrapers, would be found to not have the necessary permits. Right now, all construction requires nine experts' reports. And it's a safe bet that not a single stroika in Russia has all nine of them.

Even with no new buildings entering the supply, real estate prices would plummet because the impossible process of buying and selling property couldn't be greased by bribes. Things like the psychiatric evaluation of the seller would be too much of a hassle to secure. Moreover, a good chunk of real estate prices has bribery and corruption built into it, since economically they don't make much sense. Now, following the letter of the law, the hassle of buying and selling would cause the market to stagnate, devastating those poor folks who bought during the height of the bubble (ie the past couple of years) and who now find themselves forced to pay off loans charging 10 percent interest on an apartment worth far less than the loan. Their inability would flood the market with foreclosed apartments, which couldn't be sold anyway due to the slow corruption-free process...meaning the real estate market would simply cease to be, and take the banks that offered the loans in the first place down with it.

The consumer sector wouldn't fare much better, making this summer's alcohol shortage look like a minor slipup. Foreign products would disappear from the shelves as Customs tried to apply the contradictory and heavy-handed laws regulating imports. Vast warehouses of perishables would rot in customs as over-worked inspectors tried to actually apply the law rather than just accepting bribes to let things through. Non-perishables would spend weeks or months waiting to get through the bottlenecks, as well. The delays and the fact that their business sense derived from who rather than what they know would drive every importer in the country bankrupt once it became clear that neither bribes nor connections would help. The lack of cash flow, the inability to sell, would destroy the entire import business.

Customs agents' jobs would be made harder by a sudden flight from the Customs Agency. Customs would face mass desertions as its employees quickly realized that, without bribes to boost their low official pay, they couldn't pay their market-rate electric bill, let alone support their families, on the meager government worker salary. It would be a problem that all government employees would face. We're talking about a bureaucracy that's 1.25 million strong, or twice the size of the USSR's famed chinovnik class. It would shrivel once state workers stopped supplementing their salaries with bribes. As workers quit the massive government bureaucracy, the apparatus would grind to a halt, further bottlenecking everything from customs to permit issuing to restaurant menu inpsecting.

There'd no longer be a regional nomenclature class, as there'd be no reason to enter into politics without the prospect of earning a dacha in the south of France out of corruption. The more insignificant the role, the harder it would be to fill, as town administrators and mayors of small cities would no longer receive free cars, unlimited gas and a chance to scrap money off the top of every single project undertaken in their jurisdiction. There'd be a thinning of the ranks of all state-sector workers, including doctors and university professors no longer able to force students or patients to pay them under the table.

Not everything would be bad, though. For instance, what would happen to the militsia and the GAI? Remarkably, a desertion of 80 percent of Russia's cops wouldn't have any effect on crime rates, and in fact might improve them. Conviction rates would drop, not because of lack of manpower, but because the militsia could no longer plant evidence and frame innocent people to take the fall for crimes. Meanwhile, the drop in GAI officers would be more than made up for by the fact that traffic problems throughout the country, particularly in Moscow, would clear up once all the people who simply bought their driver's licenses were barred from driving. Traffic deaths would plummet, while thousands of lives would be saved annually by the fact that ambulances' sirens once again meant something.

Improvements in traffic would lead to a huge increase in the volume of people taking public transport, particularly Moscow's metro system, which remains just about the only state institution in the entire country to continue to function as well as it always had. Construction of new stations would grind to a halt as contractors who won their bids through bribing officials would be weeded out, but otherwise the Metro would stay on track.

Not only would air quality improve vastly thanks to the reduction of cars and the cessation of most factory production, but an unexpected health benefit would see the life expectancy of public servants skyrocket. Since even cheap Russian tobacco and legitimate vodka would be far too expensive for members of the militsia and GAI living off of their official salary, they'd become far more healthy than they'd ever been before.

Demand for certain Russian consumer products, like Slava watches and Gzhelka porcelain, would skyrocket due to the bottlenecks at the border that keep foreign goods off the shelves. However, while these industries would witness a renaissance, foreign investors in previously profitable sectors like pulp and paper would flee once they realized the difficulty of operating in Russia when regulations were actually applied.

In fact, the very Westerners who ceaselessly called for Russians to weed out corruption would find themselves in a very difficult spot. As Western companies abandoned the market to domestic competition that didn't need to worry about dealing with border controls, the need for expatriate infrastructure from the Moscow Times to Anglo-American School would disappear. Restaurants like Starlite would fold once they could no longer import crowd pleasers like Cajun spices for the blackened chicken sandwich.

Furthermore, nearly half of all Westerners living in Russia would be expelled because they had either received their visa invitation on a false pretense or registered improperly. Foreigners in this group would have their right to visit Russia revoked for five years, while the other half of foreigners living in Russia would leave once the recession meant that their expatriate salaries were slashed by their employers, who themselves were desperately trying to stay afloat. All that would remain of foreigners in Russia would be the diplomatic corps and a few literature students. And perhaps a lucky alfons or two.

The ensuing recession would spread far beyond Russia's borders, with every CIS country that imports gas from Russia squeezed by a corrupt-free Russian government which now insists that they pay market-level rates, just as Russians themselves now do. The results of this transparent, market gas pricing would economically destroy Russia's "near abroad." Georgia would be completely deforested within a year, with erosion causing large sections of Abkhazia to slip into the Black Sea. Eastern Ukraine's steel mills and heavy industry all would go bankrupt due to the cost of electricity, and could no longer subsidize the country's western regions, which would then regress back into medieval subsistence farming, their only hope for survival being turning to sharecropping on Polish estates. Belorussians would vanish like the Etruscans, without even an architectural design like the arch for posterity to remember them by.

Soon, a viciously corrupt political party financed by the secret services of gas-starved Europeans would emerge as a threat to the new Russian political order. Russians, now starved, weak, without a state or a future, would be easily lulled into supporting this party. Within a year after coming to power, the new corrupt party would restore much of the old corrupt order. Factories would get back to work, real estate prices would rise for no apparent reason, and gas would flow cheaply and plentifully. But in time, the corruption would affect the ruling class, and they would turn on the Europeans who helped create them. That would leave the Europeans angry and desperate to overthrow the now-confident, corrupt, and insubordinate Russian regime. And that would mean demonizing the regime as a Fascist threat to humanity all over again, in the hopes that the next regime would get it right, and everything in Russia would work just as the West wants it to.

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