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Russian Press - Behind the Headlines, December 21

© Alex StefflerRussian Press - Behind the Headlines
Russian Press - Behind the Headlines - Sputnik International
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The chosen ones: Which banks won parliamentary elections? \ Russia’s bureaucrats hinder economic development \ National head count

Kommersant
The chosen ones: Which banks won parliamentary elections?

Wealthy members of the Sixth State Duma choose private banks over state-controlled ones. State banks are eager to catch up on VIP services.
Kommersant analyzed the bank details of wealthy lower house members after they finally received their seats in the Sixth Duma, using information they posted on the Central Election Commission website as candidates. Russia’s biggest lender, Sberbank, appears to be the leader among banks in which new lawmakers have million-plus ruble accounts by the total balance of 3.5 billion rubles ($109.2 million). Russian Agricultural Bank and United Investment Bank (Obibank) rank second and third.

However, the top three banks in terms of the number of million-plus ruble accounts opened by parliament members are Sberbank with 51 such accounts, VTB 24 (45) and Alfa Bank (9).

In brief, state and state-controlled banks account for 112 accounts totaling 6.5 billion rubles ($202.8 million), and private banks for 124 accounts worth 7.9 billion rubles ($246.5 million). Lawmakers appear to have 11% more accounts containing 22% more funds with private banks. Analysts believe that their preferences reflect those of most wealthy Russians.

At the same time, nationwide bank customer statistics suggest the reverse. According to the Central Bank, individuals’ bank accounts total 11.06 trillion rubles ($345.1 billion), with state-controlled Sberbank and VTB 24 accounting for 46.7% of that.

Bankers believe this discrepancy stems from the differences in preference between the majority of Russians and wealthy bank clients. “Lawmakers’ behavioral models are not very different from those of other wealthy people,” said Alexander Deryagin from BrokerCreditService (BCS) financial group. “They prefer to use private banks, offering more convenient services and higher interest compared with state banks.”

“Unlike other retail clients, VIP clients have greater financial awareness and are able to assess the bank’s performance themselves or through financial consultancy,” said Nomos Bank vice president Alina Bisembayeva.

On the other hand, wealthy clients prefer to diversify their investments rather than relying on a single private bank. “They use banks that they deem acceptable in terms of reliability, service, conditions, and profitability, and which are low risk,” said Alexander Sveshnikov, vice president at VTB 24. “Different clients take different attitudes to the bank’s ownership status.”

Billionaire lawmakers interviewed by Kommersant also cited the owner’s guarantees as an important reason for choosing their bank, particularly in cases when they own the bank personally or through affiliated persons. Lawmaker Leonid Simanovsky said he keeps the greater part of his capital in a private bank co-owned by his wife, while diversifying the remainder between several banks including Sberbank.
Nikolai Bortsov, deputy head of the Fifth Duma agricultural committee, uses state-controlled Russian Agricultural Bank. Airat Khairullin invested over 1 billion rubles in Tatarstan’s Energobank chaired by his brother.

Others said they were guided by the quality of service provided, including Vladislav Reznik who praised the private banking services at Alba Alliance. He is not affiliated with that bank in any way, he noted.

Vedomosti
Russia’s bureaucrats hinder economic development

There are too many bureaucrats, they cost Russia more each year. Their number should be cut 30% and the remaining officials must be taught to work efficiently, government experts say.

The number of officials increased 40% across the board in 2000-2010, from 1.16 million to 1.65 million, the final report on adjusting the country’s development strategy through 2020 says. The number of bureaucrats is growing while the population is falling. In 2010, there were 1,153 officials per 100,000 people, up from 794 ten years ago. The report states that in the United States, the number of bureaucrats per 100,000 people is four times smaller, and the number of customs officials 2.5 times smaller than in Russia.

There are 25 officials per 1,000 employed Russians (18 in 2000 and 15 in 1994). Bureaucrats hinder economic growth and cost the country too much, the report says. Their salaries cost the budget about 67 billion rubles ($2.1 billion) each month, or 804 billion rubles ($25 billion) a year. Slashing bureaucracy to 2000 levels would save Russia approximately 240 billion rubles ($7.5 billion) a year. Given the costs incurred by their offices, transportation, communications and other expenses, these savings could be doubled, said Andrei Klimenko, director of the Institute for Public Administration and Municipal Management at the Higher School of Economics (HSE).

Government experts propose cutting the bureaucracy 30% by 2020, and directing half the funds released to increase salaries, still saving the country 120 billion rubles, 1.3% of GDP. The remaining officials must learn to perform better for incentive-based salaries. Currently, officials perform worse than staff in other sectors of the economy. Yevgeny Mironov, deputy director of the HSE’s Centre of Development Institute, said officials’ productivity has fallen approximately 20% over ten years. “We work nights and weekends, how can our productivity be low?” one official wonders. The answer is they spend too much time in meetings.

“We lose two days to a two-hour conference chaired by the prime minister, because we need to fly to Siberia and spend several hours there ahead of the meeting,” one source told Vedomosti.

The government has attempted to cut the number of bureaucrats twice since 2000, one Economic Development Ministry employee noted. The first attempt failed because the number of bureaucrats started rising again after the 2004 reforms. In 2010, the Finance Ministry proposed dismissing 120,507 federal officials (20% of the total) to save 43.4 billion rubles ($1.35bn). However, ministries and agencies only dismissed pensioners and closed vacant positions, a source in the government staff said. However, a gradual reduction is planned for the next few years, he added.
Political analyst Mikhail Vinogradov believes that this growing number of bureaucrats is a result of Putin’s policy. Spending on state officials is also on the rise in other countries, but in those cases allocations are closely monitored by society, Klimenko said. “This is a political issue, which is why bureaucrats are routinely reshuffled, like in the United States and France.”

Moskovskiye Novosti 

National head count

Moscow is 91% ethnically Russian.
The proportion of ethnic Russians in Moscow has grown substantially in the past eight years. Russians make up over 90% of the capital’s residents, according to the latest census. The numbers of Tatars, Ukrainians, Armenians and other peoples have, conversely, decreased. However the number of Muscovites who refused to indicate their ethnicity also rose. Experts and officials claim the census does not reflect reality.

There are an additional 1.122 million Russians in Moscow compared to the figures for 2002. Eight years ago, they made up 84.8% of the population. The recently published 2010 Census gives a different picture. It shows that there are currently 9.93 million Russians, which is 91.6%, while the proportion of other ethnicities is lower. In eight years the proportion of Ukrainians, the second largest ethnicity in the city, fell from 2.5% to 1.4%.

The Ukrainians now share this runner-up position with the Tartars. Their numbers also fell – by 17,000. Many of the other ethnic groups present also shrank, including the Armenians, Azerbaijanis, Jews, Belarusians, Georgians, Moldovans, Tajiks, Mordvins, Chuvash, Vietnamese and Chinese. The number of Chechens seems to remain steady at 14,500 people. The Ossetian and Bashkir communities did not grow by more than a thousand people each. The only diaspora that enlarged dramatically is the Uzbek community, at 35,600 in 2010 compared to 24,300 in 2002.

Meanwhile, the number of Muscovites who refused to state their ethnic origin has increased by nearly 250,000, to a total of 668,500 people in 2010.
Oleg Ageyev, Moscow’s deputy chief for interregional collaboration, ethnic policy and religious affairs, believes that both the discrepancy between the proportion of ethnic Russians in 2002 and 2010 and the large number of people who did not indicate their ethnicity could be due to statistical error. “When I was interviewed, they did not ask about my education. Inaccurate data might have led to a conclusion that the number of people with university degrees had decreased,” Ageyev suggested. He noted the large percentage of Russians in Moscow is nothing extraordinary. The census, however, does not reflect reality, as 50% of migrants do not register with the police and are therefore excluded from the census. The latest poll indicates that 88% of Muscovites refer to themselves as ethnic Russians.

Natalya Zubarevich of the Independent Institute for Social Policy says the expert community sets little store by census results. They believe the city is becoming increasingly ethnically diverse while the census proves otherwise. The actual number of residents is more likely to be understated as these head counts tend to overlook migrants.

“In fact, the census only covered 60-70% of the population while a third went uncounted,” Zubarevich says adding “Muscovites tend to be unwilling to open their doors (to census officials).” Official data on Moscow’s ethnic breakdown is therefore unreliable. People were counted according to records from local housing maintenance offices which contain no information about ethnicity.

RIA Novosti is not responsible for the content of outside sources.

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