Half Of Russia’s Labour Force Employed In Shadow Economy: Deputy PM
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Nearly half of Russia’s employable population are working in illegitimate businesses or operations, admitted Deputy Prime Minister Olga Golodets on Wednesday, warning that Russia could be at least 20 years behind on the international labour market in terms of the level of employment.
Nearly half of Russia’s employable population are working in illegitimate businesses or operations, admitted Deputy Prime Minister Olga Golodets on Wednesday, warning that Russia could be at least 20 years behind on the international labour market in terms of the level of employment.
Golodets, who was speaking at a conference in Moscow’s Higher School of Economics, as cited by Russia Today, said that at least 86 million people were being employed in various economic sectors, of which only 48 million were working in legitimate businesses.
[quote]”We don’t understand where and how the rest are employed,” she said. “Our labour market is practically illegitimate, with only a tiny sector functioning under transparent rules.”[/quote]Related: Infographic: The Black Market, The Second Largest Economy In The World
Related: Black Money: The Business of Money Laundering
According to the World Bank, Russia’s underground economy is approximately 3.5 times bigger than those in other G-8 countries. The size of Russia’s underground economy also reached 46 percent of the nation’s GDP in 2011, though estimates now place it at around 35 percent.
[quote]Golodets lamented that “with the shadow sector this large, we have lack of funding for all our social costs.”[/quote]Compounding the problem, Russia also faces the problem of illicit capital outflows. According to the Russian central bank, nearly $50 billion left Russia illegally last year. Research and advocacy organisation Global Financial Integrity (GFI) further estimated that at least $212 billion have left the nation since the fall of the Soviet Union.
[quote]“Russia has a severe problem with illegal flows of money. Hundreds of billions of dollars have been lost that could have been used to invest in Russian healthcare, education, and infrastructure. At the same time, more than a half trillion dollars has illegally flowed into the Russian underground economy, fuelling crime and corruption,” GFI Director Raymond Baker said.[/quote]Related: Post-Soviet Russia Sees $764 Billion In Total Illicit Flows: Report
Related: Putin Orders Russian Civil Servants To Dump Foreign Assets
Related: Nearly $50bn Left Russia Illegally in 2012, Reveals Central Bank
Nonetheless, Moscow at present only ranks fifth among developing economies for total illegal money flows. In 2011 alone, China lost over $600 billion – more than any other country over the entire ten-year period.
The Kremlin in recent days have been cracking down on offshore finances, particularly among its own officials. On Tuesday, Russian President Vladimir Putin on Tuesday signed a decree ordering all officials to close their foreign bank accounts within the next three months, or face the sack.
