What is the corruption picture? What effects does corruption have on the development of countries in general and Russia in particular?
In 2008, one of the most crucial policy issues facing the country was the extent of state intervention in business and the economy. The future of capitalism in Russia depended on whether its economic policies maintained a supportive environment, or continued to impede the creativity, growth and profitability of private companies.80 Small business, the economic engine of most developed economies, employed only 20 percent of Russias economically active population, versus more than 50 percent in Europe and 80 percent in Japan.81 Economists argued that supportive policies would encourage entrepreneurship by reducing the bureaucratic requirements for starting businesses, and also reduce opportunities for bribery and corruption. Russia was one of the most industrialized of the former Soviet republics. However, despite the prevalence of a large manufacturing sector, much of the industry was antiquated, highly inefficient, and unproductive according to global standards. The replacement or modernization of equipment and production processes was deemed essential if this sector was to contribute to economic growth. Russia also inherited most of the defense industry of the former Soviet Union. Efforts throughout the late 1990s and early 2000s to convert defense industries to civilian use had met with varying levels of success. One positive consequence of this conversion was the availability of highly skilled scientists, engineers, and technicians in the business environment.
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