COMMENT: Russia's corruption score seen improving

By bne IntelliNews December 4, 2012

Chris Weafer of Sberbank CIB -

One of the events expected to grab headlines this week will be the release on December 5 of Transparency International's (TI) 2012 "Corruption Perceptions Index", which is expected to show an improvement in Russia's score.

The continuing high level of corruption, both real and perceived, is one of the major issues regularly highlighted by foreign business leaders as a reason why they remain wary of Russia. The high level of "everyday" corruption is consistently ranked along with concern about rising prices in the list of issues that most concern Russian people. TI's annual Corruption Perceptions Index is one of the indicators covering this subject that is widely followed by investors as a measure of reform progress.

Russia is expected to improve its score. Last year, Russia shared 143rd place in the list of 183 countries covered by the survey with a score of 2.4 on the table, which is scored from 1 (worst) to 10 (best). At that level, it was similarly ranked with Nigeria and Uganda. Among the other major emerging markets, Turkey placed 61st, Brazil 73rd, China 75th, India 95th and Kazakhstan 120th. The much more active campaign against corruption since the formation of the new government and the clearer commitment made by Putin during the last election campaign offers the prospect of a meaningful rise in Russia's position in this year's index. It would be a surprise if that is not the case.

Bad neighbourhood

Falling popularity

At the same timer, the independent Levada_Center's latest opinion poll shows a drop in the public approval rating for both President Vladimir Putin and Prime Minister Dmitri Medvedev. Both leaders also saw a similar drop in August that subsequently recovered, so taking one reading and extrapolating it is always dangerous and, usually, misleading. Still, a drop in public approval has previously resulted in a number of populist measures, such as the step-up in the campaign against corruption since the start of September. So, if the latest drop bolsters that campaign, allowing the president to show that he is responding to one of the two most important public concerns (the other being inflation), then it will be a good thing.

One of the possible contributory reasons to the drop in the approval rating is because there have been well-publicised rumours concerning the president's health as a result of several cancelled meetings and cancelled overseas visits. But from today, Putin has resumed a more visible role, making a rearranged official visit to Turkey and later attending the Shanghai Cooperation Organization summit in Bishkek. The Kremlin has also confirmed that Putin will hold a televised press conference on December 20. This is in place of his usual four-hour televised public Q & A.

The other survey released by the Levada Center asked people which politician or public figure they trusted. Here also there was a drop in the poll for Putin and Medvedev, while recently appointed Defense Minister Sergey Shoigu, rose further in the table. Shoigu, before his brief spell as Moscow Region's governor, was routinely (for around 10 years) voted the third most trusted political figure after the incumbent president and prime minister. At that time, he was the Emergency Situations Minister. Many people believe that Shoigu's popularity will mean he gets an even more important position in the future.

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