Russian businesses bidding for public sector contracts are forced to shell out vast quantities of cash in order to win major deals, a new study conducted by researchers at one of the country’s top universities has revealed.
The research, involving more than 1,200 company representatives surveyed by the Higher School of Economics (HSE) and made available to Moscow business daily outlet RBK on Monday, found that 71% of suppliers had encountered corruption during tendering processes. The average kickback is estimated to be around 22.5% of the contract’s total value.
Researchers acknowledged that many may have avoided giving truthful answers to direct questions about dishonest dealings for fear of prosecution or public condemnation, however. The overwhelming majority (83%) of those surveyed said they condemned corruption.
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The total amount of bribes in public procurement is estimated at almost $88.9 billion – 6.2% of Russia’s official nominal GDP in 2020, or just over 35% of the federal budget revenue. According to the Institute of Public Administration at HSE, the volume of corrupt payments in procurement is higher even than spending on education or healthcare.
Just over half of the sample was made up of representatives of micro-enterprises (53%), while 34% represented small businesses, 6% medium-sized firms and 7% large companies.
Earlier this year, the head of the anti-corruption taskforce in the Prosecutor General’s office, Viktor Baldin, revealed that the greatest number of bribery cases over the past year had been reported in the Russian capital, Moscow, which is home to government departments and senior public servants, as well as being a global financial and commercial hub.
The Republic of Tatarstan situated around 800km east of Moscow, took second place for dishonest dealings. Manufacturing hub Bashkortostan, tourism and commercial hot-spot Krasnodar, and Chelyabinsk, the industrial center of the Urals, also featured high in the rankings.
Corruption has long been a topic of concern in Russia. In 2018, a survey found that close to 80% of those living in the country wanted to see the introduction of the death penalty for officials and security officers convicted of pocketing dishonest cash.
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