Organized Crime & Corruption in the Former Soviet Union
The Rising Tide of Graft
By Lynda L. Maillet

Since the break-up of the Soviet Union, the business environment in the former republics has become infamous for rampant corruption and the rapid growth of organized crime -- not without justification. In February 1993, Russian president Boris Yeltsin said that almost two-thirds of all commercial enterprises and about forty percent of individual businessmen were engaged in some form of corruption. In addition, millions of dollars in hard currency have "disappeared" from various ministries as a result of corruption. The extent of the problem makes it difficult for private domestic or foreign businesses to work honestly. They will undoubtedly come up against an official or businessman who will demand a bribe for their services.

Corruption and crime have also become volatile political issues inflaming public anger at the reforms and the new democratic system, which many hold responsible. This "crime card" has been played frequently by conservatives in the Russian parliament and by vice president Alexandr Rutskoi, who hope to discredit Yeltsin, the reform process, or both. Outside of Russia, fear of disorder has played into the hands of officials who wish to retain tighter political and economic control.

As the West toys with the idea of providing major aid packages to Russia, billions of dollars in money and goods are embezzled or smuggled out of the country. The World Bank estimated capital flight at between $10 and $20 billion in 1992.

The increase in official corruption and crime is one result of the chaotic atmosphere of economic reform and of disarray in law enforcement. But much of the corruption is also a legacy from the communist system, where to get anything done in a timely manner an individual had to have blat (influence or bribe) for what would normally be a free or at least very inexpensive service (e.g. receiving medical treatment, admission to university, or getting a plumber). Crime and corruption were rampant in a society plagued with shortages; most people engaged in black market trade in order to obtain goods and services that would be otherwise unobtainable....

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