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Energy Revenues and Corruption Increase in Russia

Russia is gearing up to host the leaders of the worlds most developed countries at a G8 Summit in St. Petersburg. The leaders will get to see the fruit of the Russian energy boom: with oil prices soaring, the country is swimming in cash. But as Anya Ardayeva reports from Moscow, the meeting isn't expected to be all smooth-sailing -- the West is likely to express its concerns about a number of issues including backsliding on democracy and increasing corruption.

It’s been a pretty good year for Russia. As oil prices continue to grow, so do Russia's gold and foreign currency reserves, which are now the 4th largest in the world -- a remarkable recovery after the 1998 ruble crisis.

But it's not only Russian money that grew. Experts say corruption also increased dramatically in the last few years and its levels are so high that it hampers economic growth.

President Putin addressed this issue in his annual State of the Nation address in May. He said that corruption was one of the most serious barriers to Russia's development and that the state was failing to get rid of it.

Georgi Satarov, head of Moscow's Indem Foundation, has been studying Russian corruption for years. He says he's skeptical about the Russian leader’s intention to fight corruption and predicts it will not go beyond public speeches.

"There's one reason why corruption grew so greatly in the last few years -- that there's absolutely no control over bureaucracy. During all the previous times, bureaucracy was somewhat controlled either by aristocracy, nobility or party leadership,” said Mr. Satarov. He continued, “Or during Yeltsin times, there used to be effective opposition, media freedom, diversified institutions of power, independent courts, more or less free civil society -- all of these served as controlling tools. During the last six years, all of these tools were destroyed."

But others, like Mikhail Grishankov, head of the Anti-Corruption Committee at the State Duma, are more optimistic. "I am sure that very soon, these rules will start to change. Everyone will realize that the time of lawlessness is over. If you take Western Europe, I am sure no one there will have the idea of offering -- bribing -- to a policeman who stops them on the road. No one. They give it because they know that they will take it. "

Russian traffic police serve as the best example for how widespread corruption is in Russian society. Money will buy you out of virtually any trouble you might face on the road from exceeding a speeding limit to much more serious crimes.

Moscow businessman Sergei Anikushin says money can buy you out of most violations. "Even more serious violations of the rules can be sorted out for money. Recently, someone told me that if you kill someone on the road, it would cost you $50,000, maybe less, but definitely not more."

The 31-year-old businessman says bribing on the road comes naturally and doesn't think that anything can -- or should -- change. "I think it’s impossible to change anything aside from assisting law enforcement organs when they try to arrest those who take bribes. If someone from the state services, who you are dealing with is asking you for money, you can go to police and punish this person. The other thing is how then your problem will be solved. Not everyone of us is ready to spend personal time on fighting windmills."

Experts agree that in order to root out Russian corruption, the state needs a full-scale anti-corruption policy. But critics say that in a country where all television channels belong to the state, political competition is virtually non-existent and prosecution is selective. Public cynicism is so deep that any steps to fight corruption would be taken as a temporary and useless measure.