EDITORIAL: Russians — You just can’t Trust Them

EDITORIAL

Russians — You just can’t Trust Them

When the 2011 Edelman Trust Barometer surveyed 200 members of the Russian elite recently, it found that “Russia’s elite are the least likely out of 22 world nations to trust their country’s business institutions. Only 41 percent of those surveyed expressed confidence in businesses.”  The level of trust, already pitifully low, slipped from last year.

Do Russians think their government and/or the media is their champion, honest itself and fighting against business corruption on their behalf? They do not. The Moscow Times reports:

The survey revealed that Russians are also wary of their political and social institutions, with confidence ratings falling at least 14 points below the world average in each category. Nongovernmental organizations got the highest confidence vote, 42 percent. But only 39 percent of the elite trust the government, while only 37 percent believe the media.

It’s exactly what one would predict in a country that has chosen to allow itself to be ruled by a proud KGB spy whose raison d’etre is lies and deception.

The MT explains that the financial costs to the Russian people of all this suspicion are astronomical.

The MT reports:

An absence of trust in business and law enforcement contributes to higher interest rates on loans, said Jason Hurwitz, senior analyst at Alfa Bank. “As companies that need investment capital seek funds, trust obviously plays a substantial role in the interest rate that they must be willing to pay,” Hurwitz wrote in an e-mail. “A lack of trust thus pushes up costs for virtually everything.” Higher perceived risk levels play a substantial role in determining how much a company is worth, especially risks due to perceived corporate governance issues, Hurwitz said. Interest rates in Russia are high compared with interest rates worldwide, at 7.75 percent, while the United States and Britain have much lower rates of 0.25 and 0.50 percent respectively.

That’s right:  Interest rates in Russia are hundreds of percentage points higher than they are in the United States or Britain for the use of money.  Businesses have to pay through the nose for the use of money, and that means they have less of it to build efficiency and capacity. Prices soar (inflation in Russia is also far higher than in the United States or Britain), and people live in poverty.

What’s worse, though, is that state repression keeps Russians from understanding these basic facts, because journalists are not allowed to report them.

So Russia will go on descending into the mire of corruption, and it is already documented by Transparency International to be one of the most corrupt and untrustworthy nations on this planet.

 

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