Thursday, July 28, 2005

Russian Jokes

When Russia decided to use disposable descent vehicles, America decided to use disposable astronauts.

A week ago traces of cocaine were found everywhere in the building of the European Parlaiment. In the meanwhile European MP's suddenly discovered that they banned all borders, introduced new currency and almost agreed on a new constitution.

"Euthanasia Made Easy" Store in London. New merchandise - a sack with an inscription "My name is Ahmed and I'm a bombist".

More jokes on Russian Marketing Blog

Tuesday, July 26, 2005

Civilized Way of Bribing

Peter Lavalle also believes that INDEM estimation of total sum that Russian business spends on bribes is impossible. I wrote about it in my previous post. Only Peter’s argument is different. He views bribes as illegal taxation of the business and argues that 65% of GDP tax burden is too high. I also agree with him that a sharp 13-fold increase of an average bribe looks possible and to a certain extent realistic. I believe an average bribe became so high mostly for one reason - corruption became ‘civilized’. TV shows make us believe that corrupt officials get bribes in cash – like, a big case packed with 100-dollar bills – in exchange for a license to build a hotel in a national forest reserve. While cash bribes were quite common some 10 years ago they are extinct today when it comes to bribing high rank officials. Nowadays you give cash in an envelope to a sanitary inspector who finds rats in your restaurant. If you want to get a permission to build, for example, a hotel in a highly lucrative, but closed for construction, national forest reserve you need to find a ‘special’ (albeit very respectful and transparent) legal advice company. There for a fair fee of 500 dollars an hour, respectful lawyers will tell you that there’s a certain loophole (quite possible, created on purpose by corrupt PMs) in the legislation. Certainly, that ‘special’ legal advice company will mobilize all its best lawyers and when you sign a 900 thousands dollar bill they will present a lot of very convincing arguments why it’s legal for you (personally) to build in that reserve. Of course, if you hire a company that is not ‘special’, their arguments will not sound that convincing for a high rank official who issues construction permissions. This way the matter is usually solved. Although, in my example – construction in a national reserve – just presenting convincing arguments will not be enough. The case should go to court. For that matter you don’t even need a corrupt judge like many would think. On the contrary, an honest judge would be more desirable. In the court your side is presented by highly professional, Rolex watches decorated lawyers with Harvard degrees. The government side is presented by Mr. Petrovich who got his lawyer degree in 1954 at the Mukhosransk University. You see, Russian government bodies are so underfinanced – they cannot hire a lawyer who asks for more than 50 dollars a month. It’s highly desirable that Mr. Petrovich is rude to the judge, looses important documents, occasionally falls asleep during the hearing and suffers from senile dementia. This highly Western way of giving bribes is so impeccably civilized and transparent, no wonder more and more Russian businesses switch to it. The irony in this matter is that Russian businessmen know exactly that they are still giving good old bribes. Western businesses operating in Russia act as a crowd in a fairy tale delighted by the emperor new clothes. American, European or Japanese businesses hire a Russian – ‘a guy who solves problems’ – and are very happy with his incredible effectiveness and luck. Their only concern – legal bills are too high for such a poor country as Russia. So, when you take into consideration all the extra costs, like keeping the legal advice company, paying lawyers, paying taxes, maintaining a chain that ultimately leads to the corrupt official private account on Bahamas, etc. – it’s no wonder that the average bribe increased from $10,200 in 2001 to $135,800 in 2005.

Monday, July 25, 2005

316 Billion Dollar Ravings

INDEM – a ‘respected Russian think tank’, as BBC called it – published a report on corruption in Russia based on a poll conducted among 3000 respondents. Its key points: in 2004 the total volume of ‘business corruption’ (bribes businessmen give to government officials) was 316 bln. US dollars, an average bribe was 136 thousand US dollars and an average sum one business spends on bribes reached 243 thousand US dollars. Almost every major newspaper in Russia and abroad cited this with usual rants about Russia being totally rotten and corrupt. Although a couple of experts expressed some disbelief in the result, the majority of Russia specialists didn’t show even a sign of doubt. I couldn’t believe it. What INDEM presented as a serious research results is totally ludicrous! I don’t deny that corruption is a serious problem in Russia but let us make some simple calculation. Dividing 316 bln. by 243 thous. means 1 300 thousand businesses that bribe government official but there are “only” 2 mln. 756 thousands businesses in this country all in all, including small kiosks, cafes, street vendors. Does anyone believe that almost every second Russian business can afford to spend 243 thousand USD on bribes every year? Russians must be richer than Saudi princes. Now let’s make another type of calculation. Only 3% of Russian households have monthly income that exceeds 2 000 USD. There are 45 900 thousand households in Russia and 3% from this number means 1 380 thousands “rich” families. In the executive branch in Russia there are 983 thousand working people including every petty clerk and receptionist. On average everyone of them should get 312 thousand USD last year. Ok, let’s say that among them only 10% are those who make important decisions and the result will be 3 mln. 120 thousands USD extra income. Three cases packed with 100 dollar bills for every corrupt bureaucrat just in one year. Not bad.

Wednesday, July 20, 2005

Traffic Police Corruption

Ukrainian President Yuschchenko disbanded the national traffic police (DAI). The main reason – they are too corrupt and take too many bribes from drivers. Today is the first day of police free traffic extravaganza in Ukraine. For what I know from guys at our Kiev office drivers there are speeding, ignore traffic lights and make U-turns wherever they like. It’s a real festival of disobedience and everyone is happy. Yuschchenko is not original in this matter. About a year ago Georgian President Saakashvili disbanded traffic police and for three months drivers could do whatever they like. The only traffic rule they were strictly obliged to follow was checking every two minutes if their car horns were functioning well.
I believe Russian traffic police is not much different from Ukrainian. In the list of the most corrupt government organizations it is number one. Their greed is legendary and their talent for setting radar traps on highways is unmatched. But if one looks at the problem soberly I would say that the main reason of this type of corruption is absolutely reckless Russian driving. First, Russian policemen don’t stop drivers who don’t break rules of the road. There are too few of them, anyway. Second, policemen rarely ask for a bribe themselves – almost always drivers start bargaining. The reason is fantastically high (by Russian standards) fines. Fines are so high because the government if fighting reckless driving. What is better – to pay a 3000 rubles official fine or a 500 rubles bribe? If a driver is a man of principle it’s ok. Traffic policemen don’t harass such people because they need to hit their daily fines target. Otherwise their chief would think they were just hanging around. Sometimes a traffic policeman would reject a bribe saying, “I’m very sorry but our shift is over in twenty minutes and I’m two speeding tickets behind the plan”. Now it’s very bad news for a Russian driver. Just a few years ago drivers could pay the fine cash right on the spot and get a receipt but the government got on traffic police corruption really hard. Nowadays policemen give tickets and for a driver it means a very long and tedious bureaucratic procedure of paying it through a state-run Sberbank of Russia.
Fighting traffic police corruption is like fighting drug traffic – revenues exceed all possible risks. I believe the only effective way against this kind of corruption is punishing drivers but not policemen. Giving a bribe is a serious felony. About a year ago in the Vladimir region of Russia a driver was sentenced to one year in jail for trying to give a bribe. Actually he was set on probation but his case was several days on national news. The chief of Vladimir anti-corruption squad warned all Vladimir drivers, “Every time you try to bribe a traffic policeman there’s one to twenty chance that you’re bargaining with an anti-corruption squad agent under cover.” The effect was unimaginable! Even when real corrupt policemen tried to harass drivers it was considered a provocation and poor drivers held their ground.


Wednesday, July 13, 2005

London and Kursk

In the news from London I saw Queen Elisabeth, Tony Blair, some other politicians visiting hospitals and encouraging people. Does it make sense? Hospitals are working on top of their capacities. Hundreds of injured people are coming. Every doctor and nurse are on deck. And here comes the PM with numerous security people, retinue, photographers, reporters and TV crews. The head of the hospital is drawn away from work. These people crowd the already busy passages. What if there’s an emergency? Imagine – like in some ER show – a rescue crew is rushing to the operation room. Would they roughly push the queen aside?
There was a lot of fuss when Putin didn’t immediately rush to Murmansk when the news broke about Kursk catastrophe. That was viewed as an unspeakable act of callousness and indifference. In an interview right after that Putin explained that he simply didn’t want to hinder the work of the rescue staff. No matter how informal the appearance of the president (or any top politician) is it still draws away a lot of resources. Especially in situations when politicians couldn’t help and any second matters. I think he was right.

Friday, July 08, 2005

Pravda on Inosmi

The best way to increase anti-Western sentiments among Russians is to advertise the site Inosmi publishes daily translations of the articles about Russia from major European and American newspapers. What strikes a Russian reader who start browsing these articles is incredible bias and lack of diversity. Probably 90% of articles contain one set of clich?s. All facts of life in Russia are interpreted in the way to support the main thesis – Russia is moving away from freedom and democracy back to the USSR. About a week ago I read a column published in the WSJ on the sale of Ren TV network to Severstal (70% of shares) and a German media group RTL (30%). RenTV is a national network present in every Russian region albeit not very popular. Although RenTV is openly anti-Putin it belongs to the state-owned energy monopolist RAO ES. So it could be said that RenTV is (indirectly) state-owned. The WSJ columnist interprets the fact that a state-owned network is sold to a private Russian company and a private German media group as – surprise! – another step towards total censorship and destruction of the freedom of speech. His arguments are (1) Severstal is ‘loyal’ to Kremlin and (2) German RTL’s share of 30% is too small. Can anyone tell me, if General Electric is loyal to the White House or not?
For a person like me who remembers well Soviet TV and newspapers the similarity between Soviet coverage of the Western life and today’s Western approach is evident. First, the ideological glasses – in one case communist and in another “democratic”. Second, the rigid clich?s – in one case “The West is moving towards the total crisis and socialist revolutions” and in another “Russia is moving backwards from democracy and is simply mini-USSR”. Third, only news that support these dogmas are covered. Every contradiction is totally ignored. The fact that in the West people are not eager to support communism was explained by the lack of “real” free speech because communists are barred from national networks, radio and printed media. Sounds familiar? If only Russian liberals are given enough time to enlighten and educate poor brain-washed Russians!
One of the stories on really made me laugh. It reminded me so much of one story on the Soviet television I remember. The reporter gives a couple of pictures of Manhatten where only those Americans live who enriched themselves by exploiting the working class and then takes the viewer to the real America (he said that) – South Bronx. There he shows the horrible life of ordinary Americans, takes interviews and then asks the prominent American intellectuals – Noam Chomsky and Gore Vidal – to comment on what he saw. I then thought that Vidal and Chomsky was really top US politicians. It turned out later that in the US they are in the same category as Kasparov and Piotrovskaya in today’s Russia.

Monday, July 04, 2005

Russian Jokes

President Mikhail Saakashvili announces a state of emergency in Georgia on TV, "My dear fellow countrymen! I have to inform you that Tbilisi was just hit by a meteorite. I know you want to ask me a question - what Russia has to with it? I am obliged to give you an honest answer. Russia has nothing to do with it. Yes, yes, yes. As always".

Friday, July 01, 2005

New Age Diplomacy

EU diplomats are always complaining that Russian diplomacy is too outdated and retrograde. Russian diplomats don’t get the new post-modernist style of European diplomacy. For example, EU diplomats try to find “win-win” solutions but Russians still choose old-fashioned “zero sum” scenarios. EU diplomats put forward global values but Russian diplomats stick to national interests.
Maxim Sokolov from “Izvestia” made a good point about diplomatic peculiarities of EU countries when dealing with Russia. Just several weeks ago, Russia and Estonia signed a border agreement. It took more than 10 years of hard negotiations before all controversial issues were settled down. The signed agreement then went to the Estonian parliament where Estonian MPs added (!) a couple of passages to the text with mentions of Tartu agreement of 1920 according to which a big chunk of Russian territory should belong to Estonia. They also couldn’t keep themselves from mentioning that Estonia was illegally occupied by the USSR. Then they ratified the agreement with these additions. That’s a very post-modernist thing to do! What was the use of 10 years of negotiations if the parliament can “enhance” the already signed document with whatever it wants? Does the new age diplomacy mean that Russian MPs can also add a passage about Neustadt Treaty of 1721 between Russia and Sweden when the territory of modern day Estonia was annexed to Russia? Therefore, Estonia and Russia can have two different texts of the same treaty.Another pearl of EU new age diplomacy was also spotted by Maxim Sokolov. Soon Russia will start celebrations of the 750 anniversary of Kaliningrad (Koenigsberg). Polish and Lithuanian diplomats officially expressed their indignation that they were not invited whereas Germany was invited. The out-dated retrograde style of diplomacy implies that state officials in such cases keep silent. Any celebration is an inner affair and hosts have the right to choose whom to send invitations and whom to ignore. Post-modernist diplomacy, probably, suggests that a country can demand to be invited to whatever celebration they like to attend. For example, in 1994 Russia was not invited to the Normandy celebration but Boris Yeltsin was smart enough to keep his mouth shut although, knowing his passion for international drinking bouts, he wanted it very much. An interesting twist in non-invitation of Poland and Lithuania is the Yalta-Potsdam post-WWII agreement. Poland and Lithuania believe that it was an evil and illegal act of betrayal that brought both countries under the Stalin tyranny. However, the same evil Yalta-Potsdam agreement annexed Koeningsberg to the USSR, Memel to Lithuania and Allenstein to Poland. So, what if Russians in this case were not rude but just very tactful?