Medvedev Lays Out Anti-Graft Steps

Ria-NovostiPresident-elect Dmitry Medvedev speaking at a State Council meeting in the Siberian city of Tobolsk on Thursday.
President-elect Dmitry Medvedev ordered anti-corruption steps to protect small businesses Thursday, a first sign that he is serious about fighting the endemic graft economists say is hampering growth.

Arbitrary inspections by officials -- from firemen to the police -- are often an excuse to extort bribes from small firms and must halt, Medvedev told a State Council meeting in Tobolsk.

"This proposal might leave some officials from the fire, sanitary services and police ... close to a heart attack, because this is what they make money on -- both officially and illegally," Medvedev told the council.

"The proposal goes as follows: Controlling bodies should be barred from entering small enterprises," he said. "They can only enter if there is an appropriate instruction from a court or prosecutor."

Medvedev also ordered the government to review legislation to protect small companies from being forced to enter dubious contracts with officials.

"It is clear this is a legalized bribe, which was formerly passed on in an envelope and now dressed up in a perfectly respectable form," he said.

Medvedev, who will take over from President Vladimir Putin on May 7, has declared corruption a key threat to modernization and social stability.

Firms employing less than 100 people account for 15 percent of gross domestic product. The government wants to increase that share by at least 50 percent as a way to diversify an economy currently overdependent on the energy sector.

Medvedev has said his job is to ensure "decades of economic stability" for the country. Most analysts expect his presidency to be marked by economic fine-tuning, rather than bold reforms.

Rory MacFarquhar, executive director of Goldman Sachs, said Medvedev's announcement confirmed that "on the margin, relative to the current policy framework, [he] is somewhat more liberal. But there is no sense that there's going to be some big push. ... This is exactly the kind of incremental improvement that it is right to expect."