Medvedev says poor rule of law holds Russia back

Fri May 20, 2011 9:43am EDT

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* Medvedev calls for rule of law, property rights

* Says corruption holding back Russian economy

By Alexei Anishchuk

ST PETERSBURG, Russia, May 20 (Reuters) - Corruption and the lack of a consistent rule of law hinder Russia's development, President Dmitry Medvedev said on Friday, as he sought to present himself as a reformer ahead of a 2012 election.

Russia, the world's largest energy producer, says it needs trillions of dollars in investment to reduce reliance on oil, gas and metals exports and to bolster economic growth rates which are forecast far below those in China and India.

Medvedev, who has pitched himself as an alternative to Prime Minister Vladimir Putin ahead of the March 2012 presidential election, called on senior officials and judges to ensure property rights were protected and the law implemented.

"Even the best laws will not work, will remain simple declarations, if judicial institutions don't work, or if the institutional procedures are too flabby or excessive," Medvedev told a legal forum in his hometown of St Petersburg.

"Shortcomings in implementing laws, a lack of respect for courts and corruption are not just the perceptions of society but they are basically macro-economic factors which restrain the growth of national prosperity," he said.

With oil prices hovering at $100 a barrel, Russia forecasts that its economy will grow 4.5 percent annually over the next four years to about $2.3 trillion in 2015, half the growth rates forecast for China's $5.9 trillion economy. [ID:nLDE74J01M]

Western executives agree that a lack of respect for the rule of law holds back Russia's economy, but many say privately that Medvedev has done little to improve the situation since Putin steered him into the Kremlin in 2008.

Investors say they run the risk of extortion when seeking a slice of the vast profits on offer in Russia and anti-bribery groups say corruption has increased under Medvedev.

Transparency International rated Russia joint 154th out of 178 nations in its corruption perceptions index last year, along with Cambodia, Kenya and Laos. It was Russia's lowest ranking since the index began in 1995. In 2009 it was 146th.

Russia was perceived to be more corrupt than any other member of the G8, G20 or even peers such as India, China and Brazil, which were ranked at 87th, 78th and 69th, Transparency said.

"Corruption is a challenge. It exists in every country. In countries that are swiftly developing, like Russia, it is very significant, it is huge," Medvedev said. "The trillions of dollars we pay for such development is an unacceptable price."

Medvedev said he had made progress in creating what he called a "lawful state" but admitted there was still a vast amount of work to be done to help businesses.

"Honest entrepreneurs must be confident in property rights, in the rights to what they have purchased in any deals," Medvedev said. (Writing by Guy Faulconbridge, editing by Michel Rose)

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Comments (1)
kolea wrote:
It’s sad that a country as rich as Russia in natural and human resources is rapidly disintegrating from internal rot. It’s downhill skid endangers the entire world and should scare everyone. It’s biggest problem now is Putin splitting the government into two camps making an already weak system even weaker. It’s also interesting that India is rated more corrupt than China and Brazil.

May 24, 2011 2:35pm EDT  --  Report as abuse
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