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Shadow of the mafia keeps the Dark Ages in view

In the run-up to this month's Russian parliamentary elections, an unusual image began cropping up on billboards around Moscow. It showed a grim-faced Viktor Chernomyrdin, the prime minister, holding his hands in the shape of an inverted "V" - like a roof.

His overt message was that his pro-government party, "Our Home Is Russia", would provide people with a sense of safety and stability. The world will probably never know whether he intended Muscovites to detect another rather more sinister undertone, but many will have done so.

For them, the sign was an emblem of the krysha system, the mafia practice of extorting money from businesses by forcing them to accept their offer to provide security, and then gradually swallowing them into a criminal empire. Krysha is Russian for roof.

Such a conclusion was hardly surprising, given the facts. According to the Moscow Times, the Government found that all retail stores, restaurants, cafes, kiosks, and car importers along with 70-80 per cent of banks and privatised enterprises were making payments to criminal gangs. Some of the gangsters are even said to insist on installing their own accountants within the companies upon which they prey - just to make sure that no potential plunder is being hidden from their greedy gaze.

You would have to be living in a dream world to spend any time in Moscow without being aware of the mafia - or, at least, their minions. Open any Russian newspaper and there's a good chance you'll read about the assassination of yet another executive, usually with a bullet through the head - the standard punishment for not paying the krysha fees. So regular are contract murders (which can be commissioned for as little as a few thousand dollars) that they no longer make the headlines.

Walk into any of the sleazier bars or casinos here, and you may well be accosted by one of the mafia's cauliflower-eared cohorts, although it's easy to confuse them with the growing army of security guards -some 800,000 - that have cropped up around the country. I was sitting in a cafe not long ago, when four such louts abruptly decided to announce that it was closed, presumably to allow them to carry on drinking and playing cards undisturbed by clients. No one dared protest, least of all the cafe's staff.

And stroll into any modern supermarket (past the armed guards), and you'll notice that the prices for most consumer goods are sky high - a reflection, at least in part, of the pay-offs that retailers must make to carry on trading. A survey published last week by Corporate Resources, a Geneva- based consultancy, said that Moscow had jumped from eighth to third in the league table of the world's most expensive cities for foreign workers, and was only outpriced by Tokyo and Osaka. The survey used New York as a base of 100; Moscow scored 142.

The mafia is a loose term, which embraces a diverse world of criminals which is as foggy as it is foul. What is clear, though, is that it is a significant deterrent from doing business.

There are plenty of others: despite Mr Chernomyrdin's promises, the Communists emerged from the parliamentary elections as the strongest party, spawning speculation that they will win next June's presidential contest. If this happens - the pessimists warn - they will renationalise private enterprises and spend so much money fulfilling their welfare commitments that inflation will run amok.

Yet there are also some positive points that should not be overlooked. Despite the heavy costs of the war in Chechnya, the economy has pulled out of its nosedive. At least for now, the Russians have reined in their runaway inflation. The rouble has stabilised, thanks to the Yeltsin administration's policy of maintaining it within a corridor. Some economists even forecast that Russia will go into growth in 1996.

And, in practical terms, working in Moscow is becoming easier by the day (although life outside the big cities remains lost in the Dark Ages). Computer communications in the capital are improving, although the Russian lines tend to be erratic and slow, and often cut off mid-transmission.

More and more people are on-line; the ability to receive e-mail no longer makes much of a dinner party vaunt.

Entertaining clients is more of a problem. New Western restaurants have been popping up around the city like mushrooms but one often walks away from them with a heavy heart and a light wallet. A half-decent meal at a half-decent Chinese, for instance, is likely to set your company back by more than $120 (pounds 80).

My search for a good Russian eating establishment near the office has so far proved to be an odyssey of the odious, a series of utter disasters featuring dishes that would make the average road kill look appetising.

But, for the truly hungry entrepreneurs, this won't matter. It will take more than a bowl of congealed grease to scare them away from a country where there are still fortunes to be made by anyone brave enough to face down the thugs.