Wednesday, October 26, 2016

Ever More Russians Support the Shadow Economy and Believe They Must Violate Laws to Live, New Survey Finds

Paul Goble

            Staunton, October 26 – The criminalization of the Russian state under Vladimir Putin is infecting Russian society more broadly, with ever more Russians saying that they support and even participate in the shadow economy and indeed declaring that they believe the only way to get ahead in Russia is to violate its laws.

            A new survey by the Russian Academy of Economics and State Service finds the share of Russians who support the operation of the illegal economy has risen from 17.9 percent at the state of Vladimir Putin’s reign to 29.3 percent now, while the share opposed to it has fallen from 42.2 percent to 16.4 percent (

            Commenting on this survey in today’s “Nezavisimaya gazeta,” Mikhail Sergeyev, the paper’s economics editor, says that “hopes for the rapid triumph of legality which were characteristic of the first years of Putin’s time have been replaced today with disappointment and depression” (

                Over the last 16 years, ever more Russians approve avoiding taxes by whatever means possible, engaging in various kinds of activity without official registration, and being paid on the side rather than in ways that allow the government to collect taxes of various kinds, he says, citing the words of Andrey Pokida, a sociologist at the Russian Academy.

            Russians “are broadly included in the shadow economy both as its active participants as workers, employers and consumers of off-the-books work and services,” the report shows, with higher rates of involvement in the black market found among those with lower incomes but not absent among those with higher ones.

            According to Sergeyev, “a trend toward the growth of positive attitudes toward the unofficial economy has been observed beginning in 2001.” The situation has not become markedly worse in the last three years, but it has not improved either.

            A major reason that citizens support the shadow economy, the Russian Academy experts say, is “distrust in the possibility of legal earnings … about 30 percent of respondents are certain that they will not have the chance to increase their incomes and standard of living without violating the laws.”

            Sociologist Pokida who oversaw this research suggests that this is worrisome because with the fall of real incomes among Russians increasing, ever more of them are prepared to take part in the shadow economy, depriving the government of income and predisposing them to other illegal actions as well.

             The “Nezavisimaya gazeta” journalist says that the existence of this trend throughout the last 16 years reflects the fact that Russians have experienced so many crises and thus have little confidence that they can make their way forward without taking advantage of various off-the-books strategies.

            He quotes Moscow analyst Aleksey Markarkin on this point. The first vice president of the Center for Political Technologies says that “in the early 2000s, there was the sense among citizens that the country was escaping from the 1990s when for many the only possibility of survival was the shadow economy.”

            There was a new president, economic growth took off thanks to the oil boom, and the government carried out a successful tax reform. “But,” he continues, “the crisis of 2008-2009 generated disappointment. It continued and with the start of the current crisis when we have fallen from recession into stagnation and from stagnation into recession.”

            As a result, Makarkin says, Russians have shifted the paradigm within which they operate from one of development to one of survival; and they are prepared to do what they have to in order to hold on.


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