Russia and Its Neighbors - Comparing Environmental Policies in 16 Countries - page 226

Health Ministry assumed responsibility for the Sanitary Epidemiologi-
cal Inspectorate and downgraded its functions. In 2000 the Goskome-
kologiya was abolished, and greater emphasis was placed on commercial
exploitation of natural resources.
The collapse of the Russian economy after the reforms of Gorbachev and
the dissolution of the USSR ironically reduced air and water pollution with
the closing of old-fashioned inefficient factories and power plants. After
the breakup, its economy contracted by a third or more. Inflation in 1996
was 2,500%, effectively destroying savings. The Russian transition from
socialism to a market economy was sudden and brutal. Economic advisors
advocated this shock as the most effective way, but the human suffering
was great. The crisis came in August 1998 following the Asian financial
collapse and the temporary low price for oil (Russia's chief export). Many
banks failed. After a change of prime ministers, the government devalued
the ruble and stopped payment on bonds worth $40 billion. Amazingly, the
economy bounced back, growing at an annual rate of 7%. High prices for
its chief exports of oil, natural gas, metals, and timber helped. As of 2010
the GDP was $2.2 trillion according to purchasing power parity, rank-
ing seventh in the world. Per capita income was $15,900 per year based
on purchasing power parity. (China's was $7,600.) On the positive side,
a middle class is emerging, and 80% of businesses are privately owned. On
the negative side, poverty is extensive, corruption is endemic, and orga-
nized crime permeates society. There is an enormous disparity between
rich and poor. A handful of men control the oil business. Corruption adds
to the expense of conducting a business.
Some critics maintain that the corruption has overwhelmed the govern-
ment, claiming it has been reconstituted as a vast criminal enterprise. It is
a money-making apparatus engaged in stealing and extortion. The Federal
Security Service exploits the big companies and the local police exploit the
small ones. At least during the old days the KGB and the police were sub-
servient to the Communist Party. The various agencies are no longer oper-
ating as governmental bureaucracies, but as rogues. It is a kleptocracy,
meaning a government that steals from its citizens. Putin and the top
leaders fear that they can never let go of their control because if they retire,
their enemies will go after them for criminal prosecution. All top leaders
take elaborate measures for their physical safety. They employ bodyguards
and live in secure gated communities. Many own houses in the West and
are sending their children there for education and careers. Their fortunes
are in Swiss bank accounts. The most rapacious have gotten land and