Crime and corruption: Enduring problems of post-Soviet development

The present homicide rate in Russia is approximately 22 per 100,000, far exceeding that recorded in the Soviet period. The vast majority of homicide cases are those connected with family members or known individuals. But homicide numbers have also increased because of the contract killings associated with organized crime groups. Contract killings are most prevalent in large urban areas and in regions of Russia with valuable enterprises and natural resources. The enormous increase in homicides is a consequence of such factors as the greater availability of arms, the reduced quality of emergency medical care, and the increased familial tensions resulting from high unemployment and the absence of social benefits. The armed conflict in the Chechen region may also contribute to the rise in violence in other regions of the country.

The homicide rate is approximately half that found in countries wracked by civil war, such as Colombia. Although Russia's violent conflict is confined to one part of the country, its patterns of homicide more closely resemble those of countries with serious internal conflicts. Its homicide picture diverges significantly from those in countries such as Ukraine that have much lower rates of homicide but no armed conflict within its borders. The divergence suggests that there are great differences in the processes of transformation in these regions.

Globalized Corruption

The globalization of Russian corruption has tarnished Russia's international image and undermined its state capacity. Capital flight and money laundering deprived Russia of the possibility of investing in its infrastructure, paying salaries, and maintaining the quality of its institutions and social services. Russia's billions could not be laundered without the complicity of many Western experts in the banking sector, the legal profession, and the accounting professions. For this reason, the offshore entities of Enron closely resemble those of Gazprom and Itera.

Russia's corruption is not confined by the borders of Russia. The recent bribe payers index of Transparency International put Russia in twentieth place among the top bribe payers. South Africa identified Russians as major "corrupters" in its region. Russians use corruption to internationalize their businesses and buy assets abroad.

Through front companies, trust agreements, and other vehicles to hide wealth, the corrupt and criminalized elite of the Soviet successor states have been the major beneficiaries of the globalized economy. The most deleterious aspect of this globalized corruption is that great portions of Russia's assets are now in offshore havens, outside the reach of Russians and are so successfully hidden that they cannot be recovered.

Globalized corruption has led to massive asset stripping from Russia, Ukraine, and Kazakhstan, and to a lesser degree from the smaller successor states. The hundreds of millions of dollars tied to Pavel Lazarenko, the former prime minister of Ukraine, and the enormous sums tied to President Nazarbayev of Kazakhstan in Switzerland suggest that there is a common trend in the former Soviet states. Elites grab the resources and the ordinary citizens lack the capacity to address the looting of their countries. Instead national resources become part of the globalized economy.