Photo: yvonne lewington via flickr
In the face of growing corruption, graft, and prosecution, the newest generation of Russian entrepreneurs are leaving the country in numbers not seen since the fall of the Soviet empire.The past three years have seen more than 1.25 million Russians emigrations, most of them young businesspeople and members of the middle-class, according to Time.
Corruption is a way of life in Russia, but a recent article lays out just how extreme the situation’s become. Time’s Simon Shuster describes 22-year-old Alexei Terentev, who graduated from one of Moscow’s elite universities, and began a start-up in his parent’s apartment.
Although the start-up was successful, the young entrepreneur fled to the Czech Republic because his start-up was getting big enough “to get the wrong kind of attention from officials”.
For Terentev, the wake-up call came last February, when one of the data centres of Agava, a leading Russian Internet-hosting company, was raided by police on suspicion of hosting an unlicensed video game. Six weeks later, the company’s server farm was raided by another police unit, this time on suspicion that one of its servers was hosting child pornography. Instead of taking the server in question, the police shut down all of them, forcing many of Agava’s clients off-line. The news caused such an outcry that President Dmitri Medvedev, who styles himself as a techie crusader for the rule of law, personally intervened the next day. The servers were quickly switched on. But the damage to the industry’s confidence had been done, says Terentev. “The Agava case shook everyone awake.” Even before that, he says, “it was becoming clear to people in our industry that websites are being very actively shut down. Anyone can do this. A competitor can pay police to take your server and pass on your entire database.” Terentev’s hosting company, NKVD.pro (whose name is a wink at Stalin’s secret police, the NKVD), has tried to innovate around that problem. All of its servers are housed abroad.
Other entrepreneurs have had to accept offers to buy their business at a deeply discounted price.
The BBC reported on milk producer Dmitry Malov who refused such an offer from Russia’s interior security service. Shortly after, Malov was sentence to five years in prison for not using his bank loan for the stated purpose. His wife is still telling his kids that he’s away on a business trip.
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