The Russian Interior Ministry says criminal gangs control more than half the country's financial capital and a third of its turnover in goods and services. The crooks run 40,000 businesses, including 1,500 state enterprises and 500 joint ventures. The Russian gangs make business unattractive for non-criminals. Like the Al Capones of America's 1930s, they use gangland shootings and bombings to keep bankers and businessmen in line. The Interior Ministry said that 80 percent of private businesses and commercial banks are forced to pay extortionists or protection rackets.
Criminals also avoid paying taxes on their enterprises' profits.
Russia collects only 58 percent of taxes due. Some schools have had to close. Workers have held sit-ins, blocked roads, conducted hunger strikes, marched in the streets, and held officials hostage to back up their demands for pay. The government has just announced it will have to cut social welfare spending by 20 percent. The instability can only grow.