Offshore Capitalist

Rampant Theft and Bribery Make It Difficult to Transform Russia’s Economy

Russia is the worst country in the world for companies in terms of employee theft and extortion by officials, a PricewaterhouseCoopers LLP survey showed.

Seventy-one percent of domestic and foreign companies in Russia were victims of fraud in the past year, double the rate reported in fellow BRIC countries Brazil, India and China, PwC said in a report released today. That’s a “shocking” increase of 12 percentage points from 2007, when the last survey was conducted, PwC said. In Japan, the figure is 9.6 percent.

Theft and bribery hit Russia’s financial, energy and mining industries the hardest, according to the survey of 3,000 executives from 55 countries, including 86 Russians. “The nature of these industries means that they are particularly exposed to both asset misappropriation and corruption, the two most prevalent types of economic crime,” PwC said.

PwC said the prevalence of government graft in Russia is twice the global average, with 48 percent of all companies surveyed reporting an instance of bribery or corruption in the last 12 months.

The problem has been exacerbated by the country’s record economic contraction, which has lowered the “morale” of employees and made “asset misappropriation” more tempting, PwC said. The economy shrank 10.9 percent in the second quarter, the most on record, and 8.9 percent last quarter.

More people are feeling “real pressure to ‘cross the line’ or to look the other way,” PwC said.

via Rampant Theft and Bribery Make It Difficult to Transform Russia’s Economy — Seeking Alpha.

Related posts:

  1. Russia’s economy sees 13.9% growth in Q3
  2. Brazil’s economy adds record number of jobs in Feb
  3. Russia jobless down, but economy still limping
  4. Russian Inflation Slowed to 9.1% in November as Demand Fell
  5. Russian economy to grow faster than projected in 2010 – ministry
  6. India economy grows 7.9%, shatters forecasts
  7. Industrialization will help Africa fully join world economy, says Ban
  8. An emerging markets fund for Russia, India and China
  9. China won’t sell dollars to buy gold
  10. Distressed commercial property sales increasing around the world
  11. Latest Fund Asset Statistics from EFAMA
  12. Emerging-Market Rally to Extend to 2010
  13. EBRD revises down 2009 economic forecasts, sees fragile recovery in 2010
  14. Russia Chart (RTSI) – Marketwatch
  15. U.S. Stocks Outlook Is ‘Quite Positive’ for Legg Mason’s Miller
  • Welcome to Offshore Capitalist

    Do dramatic financial headlines every day drive you crazy? Forget them! Drop by Offshore Capitalist every now and then to catch the useful stuff.