In Russia bad governance is expensive. The National Project Institute, a think-tank in Moscow, says that Russian companies spend at least 10% of their revenue bribing government officials.
The institute was founded in 1999 by Club 2015, a group of 49 businessmen intent on reforming Russia and reducing corruption. They are making headway. The club proposed five economic reforms; three became law in 2001, and a fourth is due to pass in 2002. Not a single bribe was paid.
They would probably have failed if Vladimir Putin had not become president, in May 2000. Indeed, the wheels of reform were set in motion several months earlier, when, as prime minister, Putin asked his minister of trade, German Gref, to produce a ten-year plan for social and economic development. Gref worked closely with members of Club 2015 to produce one with a very ambitious (and wholesome) agenda: the reform of pensions, taxes and customs, the protection of privacy and the education of workers. It also calls for the development of infrastructure, financial transparency and the nurturing of a civil society.
The club was the idea of Sergei Vorobiev, the managing partner of the Moscow office of Ward Howell, a U.S. headhunter. The Russian government had just announced that it would default on its loans, a move that infuriated Vorobiev and his colleagues. "We were mad that our country allowed itself to default,"says Vorobiev, 37. "We simply couldn't live with this image of corruption."
Most Russians, benumbed by official ineptitude, threw up their hands in disgust, but Vorobiev decided to do something. He contacted the brightest, most successful young entrepreneurs he knew. Eighteen of them formed Club 2015 in 1998, naming it for the year when Russia will become, Vorobiev and his friends hope, a worthwhile country in which to live and do business. Vorobiev has a son. "If he were of age, he wouldn't stay [in Russia] now," he declares. "But by 2015, he will be 18 and able to choose." If Russia becomes what his father hopes it will, he'll choose to stay.
Club 2015's members, 20 of them under the age of 40, either run some of the most successful Russian companies or are high-ranking executives of foreign companies. One of its members is Pavel Teplukhin, founder of Troika Dialog Asset Management; with $500 million to look after, it's the largest such outfit in Russia. Andrei Arofikin, who was a director at the Moscow office of Credit Suisse First Boston, now heads the club's National Project Institute, which is financed by billionaire George Soros.
Club 2015's members may be idealistic, but they are not naive. "This is all about how to get out of the swamp, not how to fly,"says Vorobiev. One of the club's activities is to peer into Russia's future with the help of scientists, artists and philosophers (this is Russia, after all), thus generating ideas for reform.
The five laws they proposed included one to limit the number of licenses needed to do business, another to simplify regulations and another to rationalize the tax code. "Club 2015 is gaining prominence thanks to the new administration,"says Clifford Gaddy of the Brookings Institution in Washington, D.C. "But a lot of other people were pushing those same policies as well. There's been a whole climate change in Russia."
Besides guiding Russia to economic success, the club also aims to help members think in new ways about Russia's problems. The club invites speakers, including top Western businessmen, writers and artists. "We are learning to think with the right side of the brain, which is hard for those of us who are scientists," says Vorobiev. The club has even invited as a guest speaker a specialist in ancient Slavonic myths. "This is very applicable to today's conflicts,"says Vorobiev. "We have learned that you must understand what the reality is first before you can change things. You cannot destroy someone else's myth; instead, you must create a new reality and a new myth."