Wednesday, June 27, 2012

The Empowerment of a Tiny Shareholder through Blogging

Corruption defines the Russian public live at all levels. In the Corruption Perception Index 2011 by Transparency International, Russia is on the rank 143 from 182 ( It shares this position with countries like Nigeria, Belarus and Mauritania. Preparing for the Winter Olympics 2014 in Sochi, corruption reached such extremes that businesses involved in preparing the Black Sea resort report having to pay kickbacks of more than fifty percent. A Russian magazine calculated that a road in Sochi is so costly that it could have been paved with three and a half inches of Louis Vuitton handbags (!

Former President Dmitry Medvedev was eager to fight corruption in his country. One measure was the online posting of all government requests for tender initiated in 2008. Nonetheless it is said that the size of the average bribe quadrupled. In 2010 three percent of the Russian GDP disappeared annually on government contracts. On the one hand the increase of corruption can be explained by the growing risk of accepting bribes. As it became riskier the price went up. On the other hand people fear that everything is going to collapse, so they want to grab as much as they can ( However, thanks to Medvedev’s initiative the prominent blogger Navalny could launch his latest project, the web site RosPil. With the help of citizens the site collects information on obvious violation within the governmental procurement system.  

In 2007 Navalny’s campaign against corruption began by buying small stakes in publicly traded state-owned companies, which normally have senior government officials in their boards. Through public listings these companies can obtain crucial capital and international legitimacy. In exchange public listings force them to a modicum of transparency that is absent from Russian politics ( By using his status as a part owner, Navalny harasses senior management with unpleasant and delicate questions for example about suspicious expenses. Navalny publishes all his uncovering of wary acts and his efforts for the rights of minority shareholders in major Russian oil and gas companies, banks and government ministries on his blog (also available in English). With these actions Navalny demonstrates that stock can be more effective in controlling Russia’s ruling class than the ballot box. He earned many admirers in the Russian blogosphere and the independent-minded media. In Russia the blogosphere is a very important forum for free political discussion and gives people an opportunity to become civic activists. Through his blog the stakeholder, who was originally a shareholder interested in a secure investment, became a stakeholder, who is representing the civil society in his fight against the corruption that pervades Russian business and government.  

In December 2010 Navalny launched The idea for RosPil came up when Navalny heard about the invitation of the Ministry of Health and Social Development to build a two-million-dollar network to connect doctors and patients. The winner of the contract had only sixteen days to develop the site. Navalny was sure that the webpage had already been designed for a much lower sum. He asked his blog followers to send official complaints to the Federal Anti-Monopoly Agency. Nearly 2’000 of them did. The Health Ministry annulled the contract. The idea was born to design a site where people can submit a government request for tender and discuss it. If an associated expert finds the price, the schedule etc. unreasonable Navalny posts the alleged fraud on his blog ( Since RosPil started, more than a thousand users and 500 experts have registered to it. According to a tally on the webpage, the project has caused requests for tender worth 6.6 million US-Dollars, to be annulled.  

This example shows that even a tiny shareholder can become an important stakeholder, who can alienate the powerful. Furthermore it demonstrates that things can be changed by enforcing the dialogue between the stakeholders and the companies. By the help of social media Navalny has become a representative of the civil society. We should always keep in mind that Navalny has undertaken all this in a country where a number of people investigating such matters have been beaten or murdered.

Sabrina Stucki


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