The net effect of his “comment” is, in the manner of a Soviet propagandist, to undermine the drive for reform and the assignment of blame, helping Russia to continue on its failed course towards national collapse.

And yes, haggling over the money is important. Determining whether Russia’s “corruption market” is closer to 30bn $ or 300bn $ is quite important, since obviously a tenfold difference in the bribe tax is highly significant.

Well, maybe it’s not so odd. Being just as corrupt and mendacious as the “country” he ritualistically defends (thereby helping it to avoid reform and perish), we can expect nothing else.

The notion that corruption in Russia, documented by respected scholarly sources around the globe in a systemmatic fashion and confirmed by every businessman who deals with Russia (including those who have been jailed and killed for trying to oppose corruption), is somehow overblown by a Russophobic conspiriacy is so laughably idiotic that it’s surprising even from filth of this ilk.

Lotsa luck!

(1) The figure for the annual volume of business corruption market (USD 316 bln.) appears to us to have been obtained by multiplying the number of active business entities in Russia (approx. 1.3 mln.) by the average annual bribe contribution (USD 243,750). Given the fact that the vast majority of these entities are small businesses which are not likely to generate even annual sales of such magnitude, correctness of the above USD 316 bln. annual volume is questionable. For instance, in 2004 there were approx. 151,000 business entities in the Russian manufacturing industry that sold goods totalling 11.209 trillion RUR (approx. USD 389.07 billion), which on a per manufacturing entity basis works out to average sales of approx. USD 2.6 mln. Thus, such average manufacturing entity should have paid approx. 9.4% of its total SALES (i.e., USD 243,750 / USD 2.6 mln.) in bribes. Of course, unfortunately, there is tax evasion, underreporting of income, shifting of sales to trade companies, etc. Even so, it is much more difficult to understate sales (than it is, for example, to manipulate the expense side), and at large enterprises this practice is less prevalent – therefore, if we were to agree with the average annual bribe contribution amount (USD 243,750), then it would be rather safe to assume that this amount would represent at least 5% of total sales of a relatively large industrial entity which simply would eat up at least 50% of its profit margin. Obviously, for smaller entities USD 243,750 in bribes would simply be unbearable.

(2) There are a little over 1 mln. government officials in Russia. Thus, on average one public servant should have received in excess of USD 300,000 annually in bribes, which in our estimation is quite unlikely.

(3) Russian official GDP in 2004 was USD 580 bln. Thus, the suggested business corruption market represents 55% (!) of official GDP. We are afraid that this 55% figure is a little high even for Zaire during the rule of infamous Mobutu. Of course, without a doubt there is a significant unreported portion of the Russian economy. However, even if we increase the official GDP figure by 50% (which is what various international and domestic organizations estimate the understated percentage to be) to USD 870 bln. to take into account the shadow economy, business bribes would still represent a staggering 36% of total GDP. One should also keep in mind that the gross profit portion of GDP (which theoretically should form the source for bribes) was officially only USD 210 bln., i.e. much less than the USD 316 bil. annual volume of business corruption market. Even after increasing this gross profit to take the shadow economy into account, it seems that entrepreneurs would be giving away all of their profit as bribes. Of course, one could argue that there can be a double (or even triple) count in the bribe market (see Mr. Satarov’s comment below) or that earlier accumulated wealth might be used as a source, but even so the aggregate USD 316 bln. figure still seems too high. From an economic standpoint a bribe can be considered a sort of informal “tax”, and at a certain point if the levy is too heavy entrepreneurs would prefer just to wind up business than to pay too much. This does not seem to be what is happening with businesses in Russia.

(4) Finally, if annual volume of the consumer corruption market with its tens of millions of participants is estimated at USD 3.014 bln., in our estimation it is questionable that the business corruption market with much less participants can be USD 316 bln., i.e., a staggering 105x (!) difference.