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Saturday, June 16, 2007

Another Day, Another Humiliating Failure for Putin's Russia: Moscow, Mumbai . . . same difference

Once again, an international reviewer gives Russia a failing grade. And once again, instead of admitting faults and seeking to reform, all Russian leaders can see is foreign conspiracy. Just as in Soviet times, exactly the attitude that brought the USSR to its knees. The Moscow Times reports:

Moscow is the worst place to do business in terms of its economic stability, legal and political environment, according to a new survey of World Centers of Commerce published by MasterCard. London, the world's biggest financial center, topped the list ahead of New York and Tokyo, while Moscow came in 50th out of 50 cities. Immediately ahead of Moscow were Warsaw, Poland; Sao Paolo, Brazil; and Johannesburg, South Africa. Moscow city government officials said Thursday that the city's poor ranking could be partly due to a lack of reliable statistics. "It is clear at first glance that information about Moscow is clearly insufficient, a fact that forestalls active integration of the Russian capital into world economic processes," Yury Roslyak, the city's deputy mayor responsible for economic development, said in an e-mailed comment.

Roslyak added that City Hall would "use the results of any research on Moscow in its development planning." The research model for the MasterCard index consists of six complex aggregates, which include cities' legal and political framework, economic stability, ease of doing business, financial flows, business centers and knowledge creation. The index takes into account more than 100 separate indicators that show the changing role cities play in promoting commerce around the world. Moscow, along with Sao Paolo and Mumbai, scored the lowest in political climate and economic stability, occupying the last positions in both. Stockholm, Copenhagen and Singapore enjoy the best political climate and economic stability, the report said.

Political and economic institutions in Russia remain at a low level, compared with more advanced economies, the report said. The report said setting up a business or registering property remained a major hassle in Moscow, requiring heaps of paperwork and wasted time. A lot still depends on the whims of state officials while unclear rules can stifle business endeavors, the report said. The authors of the report define economic stability as stability in economic growth, national currency and inflation. For ease of doing business, Moscow inched up one place to 49th, ahead only of Mumbai. "Moscow taking the last place is not an accident but a sad commentary on the myriad of problems afflicting the megapolis," said Denis Vizgalov, an expert with Moscow's Economic Institute. "The black hole in the city's data collection system plays a big role as reliable statistics are difficult to come by in Moscow." Vizgalov said Russia's poor image abroad, coupled with the city's aggressive business environment, were big factors in the poor assessment. "Moscow needs to create a positive spin for itself abroad to shed its image as a city with lots of money but no organization," he said.

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