The Stifling Russian Bureaucracy

The Moscow Times featured an article that examined Russia's efforts to develop a strong IT culture and to promote economic development in Russia. The Russian state want to imitate India and its successful high-tech industry that focuses on computer programming. Russia's efforts are bogged down in bureacracy. According to the Moscow Times:

[Sergei Matsotsky, general director of leading IT firm Information Business Systems] said the original legislation would have spurred the IT industry and made it competitive with India and China. But seemingly never-ending promises and declarations from state officials took precedence over real action, he said.

As the law stands now, IT companies can qualify for tax relief if they export 70 percent of their goods and employ at least 50 people. But no company can claim the relief because the law, which came into force Jan. 1, also requires them to register with a special government agency, which has yet to be created.

Bureaucracy has also beset attempts to simplify export duties on software and reduce the value-added tax.

The Russian state is spending billions on other high-tech ventures such as nanotechnology, but it is not addressing the main challenges facing the country and its economy: the stifling bureaucracy that crushes initiative and the Russian state's endless bureaucracy.