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Russia Reform Monitor - No. 1819
Opposition leader placed under house arrest;
Corruption’s staggering cost
Edited by Amanda Pitrof
February 18, 2013
Russian officials detained 271 people after a raid in St. Petersburg. Most of the detainees are migrants from Central Asia and the North Caucasus region, reports the New York Times, including citizens of Azerbaijan, Tajikistan, Uzbekistan, Egypt, and Afghanistan. About thirty were found to be in violation of Russian migration laws, and one man from southern Russia was detained on suspicion of distributing extremist literature and video clips depicting terrorist acts from 2010 and 2011. According to officials, an extremist group is operating within St. Petersburg, and has been planning terrorist attacks. The raid was intended to locate “extremist literature, weapons, objects and documents relevant to criminal cases, and people who have carried out such crimes.”
A Moscow court placed Sergei Udaltsov, the leader of the Left Front coalition, under house arrest on charges of organizing “mass disorder” during a protest in May 2012. The opposition activist is expected to remain on house arrest until his investigation concludes in April, reports the BBC. While in custody, Udaltsov’s communications will be limited to his closest relatives and lawyers, and he will be banned from using the internet. The two other activists charged with Udaltsov – Konstantin Lebedev, and Leonid Razvozzhayev – remain in police custody. Udaltsov called the new restrictions “purely political,” while analysts attributed them to the ongoing government crackdown on the opposition movement.
U.S. officials called on the Kremlin to lift a new import ban on American meat products, noting the commitments Moscow made last year on joining the World Trade Organization. Reuters reports that the ban, which went into effect this week, was the result of concerns over the use of ractopamine, a growth stimulant widely used by U.S. beef, pork, and poultry farmers to produce leaner meat. U.S. Trade Representative Ron Kirk insisted that U.S. meat is “produced to the highest safety standards in the world,” adding that Russian officials “refused to engage in any constructive dialogue,” and questioned the Kremlin’s commitment to the global trading system.
The Duma, Russia’s lower house of Parliament, approved a bill banning smoking in public places. There is little public support for the ban, reports the New York Times, which is unsurprising given that Russia has one of the highest smoking rates in the world. The country’s leaders are the driving force behind the bill, citing the hundreds of thousands of deaths annually linked to smoking. To become law, the bill must be voted through the parliament’s upper house and be signed by President Putin.
Corruption cost Russia an estimated $211.5 billion between 1994 and 2011, according to a report released by Global Financial Integrity, a U.S.-based research and advocacy organization. Even more staggering is the $552.9 billion that flowed illegally into the Russian economy in the same 18-year span. The report goes on to estimate the size of the country’s underground economy at nearly 46% of GDP annually over the same period. According to World Bank experts, this statistic makes Russia’s underground economy 3.5 times larger than corresponding G-7 economies like the U.S., France, and Canada. For every 1% increase in the size of the underground economy, the report estimates that the cross-border flow of illicit money increased by 7%. “Russia has a severe problem with illegal flows of money,” noted GFI’s Director, Raymond Baker. “Hundreds of billions of dollars have been lost that could have been used to invest in Russian healthcare, education, and infrastructure. At the same time, more than a half trillion dollars has illegally flowed into the Russian underground economy, fueling crime and corruption.”