Friday, November 10, 2006

Corruption discussion

I would like to invite you to discuss corruption as a phenomenon. It is obviously a barrier to business and trade develpopment and it is, unfortunately, most common in those countries which now represent the most attractive markets: India, China, Russia...

Corruption always has a money label attached to it but how do you define the following phenomenon, which doesn' t involve money transaction but still is a barrier to fair trade in the aforesaid countries: Mr X needs A from Mr Y. But instead of paying 100 USD to get A, Mr X promises Mr Y to help him with B because he knows that Mr Y needs B. Mr V and W who also need A will never get it and Mr S and T who need B will never get B because Mr X and Mr Y have a sort of agreement or arrangement with regards A-B exchange. A and B can represent products, services, favors - anything besides money. It looks like corruption it feels like one and it hurts like one. So what is it?

I cannot find a name for it, at least not in English, which is not my native language but the issue is that this phenomenon exists and florishes. In Russia there are networks of people (on personal, busness and government levels) that are tied together in this way. It doesn't matter that you are the best at what you do, someone esle will get the contract you want because, say, his wife is a personal dentist of the guy from the local authorities who is responsible for deciding who gets the contract under discussion.

It is extrememly difficult to do business in Russia in this respect for those who are not a part of the relevant network or if you don't know anyone who can connect you to the network. So even if the government solves the problem of corruption this phenomenon will still remain because it is a part of culture and mentality. So what do you think of that?

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