The Effects of Organized Crime on Russia's Economic Reform

Topics: Organized crime, Russian Mafia, Mafia Pages: 8 (2921 words) Published: November 30, 2010
Angela Tien
The Effect of Organized Crime on Russia’s Economic Reform With Russia’s extensive history, there is no saying that organized crime is not an issue of this nation. Organized crime promotes the overall performance of the economy in Russia, and it was also a problem during the rise of democratic Russia. Influence from organized crime is harmful internally, yet beneficial to Russia on a global scale. Although the Russian economy thrives as a nascent country experiencing capitalism and democracy, it is deteriorating from the core of their government from corruption. Several factors minister the failure of Russia’s economic reform. Corruption, change in political and economic concepts, and the ever-expanding global economy have fueled the power and influence organized crime has asserted on Russia’s economic reform. The impact of organized crime on Russia’s economic reform is significant to both the development and adherence of Russia’s previous economy by incorporating elements of transitions such as corruption and revolutions in both capitalist and democratic ideals, at the same time establishing and preserving an influential association with the global economy while constituting achievements within it, which reflects on their economy today. Background:

When Stalin proposed freedom to the prisoners in the Soviet Union in exchange for fighting in World War Two, he had upset the entire perennial system of the “Code of Thieves”, an underground colony of criminals. There was no knowledge of the repercussion that Stalin’s actions would alter. The “Thieves” had evolved into a much more sophisticated group of criminals, after the betrayal of those who enlisted to work with the government. Later, as the Soviet Union fell apart, it gave birth to the Red Mafia, otherwise known as the Russian Mafia. Previously, the Cold War contributed to the augmentation of the Russian Mafia too, like Stalin. Ruined, Russia’s economy was devastated. Subsequently, with the down fall of the Soviet Union and the Cold War over, the Russian government inherited the world’s greatest weapon storage. Using these weapons as a way to profit, the mafia and other forms of organized crime took advantage of the desperate government workers, who turned to crime for cash. The sources for currency in Russia were weapons and poverty-stricken people forsaken from the Cold War scouring for work. In order to improve the Russian’s economy, America introduced the controversial “shock therapy”, a method that involves the sudden self-governing free market to release price and currencies, withdrawals of state contribution, and immediate global trade, (Murrell, 1993). Since then, the Russian Mafia has had control over the majority of businesses in Russia. Despite the democratic surge throughout Russia, the promotion of capitalism and democracy was futile. Basically, the Americans introduced Russia with the sudden surge of capitalism. Unexpectedly, the result was disastrous and the treatment backfired. Starving homeless people wandered through the streets aimlessly looking for a job to pay for food, agreeing to work for cheap labor. Government official turned to crime as a means of making money. Corruption is a major factor that made the economic reform difficult to succeed: Recently, forest fires rage throughout Russia’s landscape. Mr. Luzhkov, a politician, was residing in his estate when he was criticized for the lack of concern he expressed. Almost the entire government responded this way. Hence, “Mr. Luzhkov has been derided for behaving like an autocrat, muzzling dissent and allowing corruption to flourish,” (Levy, 2010). Russia’s economy was at stake, partly to the increasing problem of corruption. Corruption has deprived Russia of any success with its economic reform. With the consecutive capital flight each year during the economic reform, Russia’s economy was not stable, nor was it sustainable. Even today, little of that has improved....
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