RUSSIA IS AMONG THE TRIO OF OUTSIDERS AMONG THE COUNTRIES WHOSE COMPANIES PAY BRIBES ABROAD
Russia is among the trio of outsiders among countries whose companies give bribes abroad. The only countries that are even worse are Russia's BRIC colleagues India and China, according to Transparency International (TI), which has released its third Corruption Index, for 2006. Then again, companies from even the least corruption-inclined African countries are still inclined to forget the proprieties.
The list includes 30 countries which accounted for 82% of global exports in 2005. Indian companies give the most bribes abroad (4.62 on a ten-point scale), followed by Chinese companies (4.94) and Russian companies (5.16). Bribery abroad is practiced least by Swiss companies (7.81), although even they are not faultless, followed by Swedish companies (7.62) and Australian companies (7.59).
China's exports have grown by an average of 19.5% per annum over the past decade; in the past 20 years, China has moved up from 30th place to third place on the list of the world's leading exporters, after Europe and the United States. In 2005, China's exports amounted to $752.2 billion, Russia reached $268.1 billion (a 33.9% increase compared to 2004), and India recorded $89.8 billion.
"Russia, China, and India are starting to play an increasingly noticeable role in international business," says Juanita Olaya, TI research director. "But the behavior of companies from these countries in foreign markets not only fails to meet existing standards, but actually worsens the problem of corruption."
It is entirely appropriate for Russia to be at the bottom of this ranking, says TI Russian branch director Elena Panfilova: "Our companies behave abroad just like they behave at home." But Western companies sometimes show "a vast difference" between their behavior at home and their behavior in countries where systems for countering corruption are lacking: in Africa, French and Italian companies are among the worst bribe-givers.
But it is not only the French and Italians, and not only in Africa. In March 2006, Daimler-Chrysler (Germany in 7th place, United States 9th) confirmed that some of its personnel had made "unlawful payments" in Africa, Asia, and Eastern Europe.
ING Bank economist Charles Robertson suggests that companies from countries like Switzerland, Sweden, or Australia might pay just as much as Russia or China to promote their goods - but in those cases, the sums would be unnoticeable against the background of how much their exports are worth, whereas for developing countries the bribes make up a bigger share of the value of exports.
Based on TI studies, Russia's levels of domestic corruption have long since outstripped those in China and India - but we have still got some catching up to do in the area of exports, jokes Georgy Satarov, president of the InDem Foundation, which studies corruption in Russia: "We should try harder – it is enough to make you ashamed of your country."
Russia's high ranking is also assisted by the fact that it has been the world's second-largest arms exporter (after the USA) for the past three years ($6.3 billion in 2005). Ivan Safranchuk from the Center for Defense Information points out that the arms trade is not very transparent, with kickbacks and other incentives being widespread: but the United States does more of this than Russia.
<ref>Vedomosti, October 5, 2006
THE QUANTITY OF NEW FOREIGN CARS SOLD IN RUSSIA APPROACHES 1 MILLION
In 2006
Ford may become the leader according to sales of foreign cars in Russia. The incumbent leader in the form of Hyundai may fall short of production capacity for meeting demand for its models. In 2006, the quantity of new foreign cars sold in Russia will approach 1 million. In the first nine months of 2006, sales of new foreign cars amounted to 655,430 vehicles.
Ford Focus remains the most popular foreign car in Russia. In the first nine months of 2006, Ford sold 44,763 such cars (in the same period of 2005 it sold 37,253 cars). The second place was retained by Mitsubishi Lancer with 36,315 cars sold (27,108). The third place was taken by Hyundai Accent with 25,759 cars sold (28,757).
According to report of the European business club about sales of new cars in Russia, 655,430 foreign cars (including light commercial vehicles but excluding data on sales of Peugeot and Porsche in September) were sold in the first three quarters of 2006, which was 13.89% more than in entire 2005.
About 400,000 new foreign cars were sold in Russia in the first half of 2006. In 2005, sales of new foreign cars amounted to 615,000 vehicles and in 2004, they amounted to 350,000 vehicles.
Korean Hyundai remains the best selling brand (69,204 cars sold in nine months). Second place was taken by Ford (68,245) and third place was taken by Toyota (68,133). Ford and Toyota changed places. In the first half of the year Toyota had second place and Ford had third place.
According to Yevgeny Bogdanov, head of the section of A. T. Kearney for machine building and transport in Russia and CIS, this change of places may manifest both unwillingness of the Russian consumers to buy more cars of Toyota and saturation of demand in more expensive segments of the market, “Prices of Toyota start from $19,000.”
Fourth and fifth place was taken by Mitsubishi (51,705) and Daewoo (50,709). In the first nine months of 2006, sales of Chevrolet cars amounted to 77,334 vehicles, more than one-third (29,392) of them being Chevrolet Niva. Valery Tarakanov, independent expert of the automotive market, says that it is possible to call Niva a foreign car with big reservations and it is not taken into account in the list.
Market analysts presume that by the end of 2006, the top three leaders will change. According to Alexander Agibalov, Managing Director of AG Capital, Ford will become the leader among foreign automakers.
Tarakanov agrees with him and adds that Toyota will take second place and Hyundai will take only third. Nissan and Daewoo will retain fourth and fifth place. Tarakanov says, “Hyundai could remain the leader of sales like in 2004 and 2005. In 2006, Hyundai could sell up to 140,000 cars in Russia but Korea lacks production capacity to meet the growing demand all over the world.”
Toyota took first place according to sales in 2003. Ford has never been the leader according to results of a year before.
Experts agree that in full year 2006, the quantity of foreign cars sold in Russia will approach 1 million. According to Agibalov, in 2006, sales of foreign cars will amount to about 900,000 vehicles due to availability of credit programs, growing popularity of the trade in service and growth in incomes of the population.
Tarakanov forecasts that 975,000 new foreign cars (without Chevrolet Niva) will be sold in 2006, including cars from China and Iran (about 24,000 vehicles).
Igor Morzharetto from Za Rulem magazine says that by the end of the year sales of foreign cars in Russia will exceed 1 million vehicles and three companies – Chevrolet, Hyundai and Ford – will exceed the level of sales of 1000,000 vehicles. According to Morzharetto, companies that have assembling facilities in Russia will win because their cars are affordable and there is no need to wait in a queue to buy them for a long time.
The top group traditionally includes Toyota, Mitsubishi and Nissan also, that do not have production facilities in Russia yet, says Morzharetto. Popularity of Toyota relies on the image of the brand and demand for it does not decrease, although its price is growing. Morzharetto concludes,
”Sales of Mitsubishi, mostly Lancer that accounts for 60% of its sales and Nissan (Almera Classic), are growing on account of inexpensive (in the limits of $20,000) “people’s cars” of C class.”
<ref>Vedomosti, October 10, 2006
