A strong local partner
Anders Sejerøe
Paper presented at the Fourth Nordic Conference on the Anthropology of Post-Socialism, April 2002, by Anders Sejerøe, student at Institute of Anthropology, University of Copenhagen
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The
case of a strong local partner
A
definition of corruption
The
legal and moral aspect of the case
The system of redistribution
Survival of the system
To live within or
outside the structures
The consequences for the Danish
project
Pragmatic approach in
order to get results
A
reorientation of the focus
Concluding remarks
Literature
Notes
In this text I will discuss the use of a strong local partner in a Danish development project in Russia and explore to what extent personal networks can be termed as corruption. The interpretation is based on understandings of features from the socialist era such as networks and personal connections.
I draw the empirical data from my fieldwork in Russia in the autumn of 2001 at a Danish agricultural project and from talks in general with Russians and non-Russians, anthropological books and other literature as well.
My fieldwork was focused on a Danish agricultural project in Russia. The project was initiated six years ago with the purpose of helping and supporting family farmers(1). The Danish side supported the construction of a grain-store, machinery station and an agricultural advisory centre, with the aim of giving facilities that could help family farmers. It was done by supplying machinery and equipment from Denmark with frequent visits by Danish agricultural consultants staying from a few days to several weeks. The visits were in the beginning focused on technical assistance in implementing the Danish equipment, and later on on helping especially the employees at the advisory centre on how to work as agricultural advisors.
The reality six years after the project was started, and almost ten years after the first visit, is, that the number of family farmers didn't increase as expected, but actually dropped in the period, and the large former collective farms continued to exist. This led to a gradual change of the project description to include all agricultural producers in general(2). All the facilities connected with the project belonged to the Russian part, the regional administration.
During my stay the project period was ending and the Danish company(3) worked on making a new project proposal. I followed discussions between the Danish company executing the project and the Danish ministry funding it, and between the Russian and the Danish project partners. The people from the Danish ministry expressed large concerns to ensure that no money or resources went the wrong way - went to "corruption". I never experienced or heard of any direct corruption in relation to the project, although the region locally is considered one of the most corrupt in Russia. But the following could be interpreted as something related to corruption.
The case I wish to discuss is the role of a strong local partner in the project. The Danish side worked with a person, who by the local regional administration was appointed as responsible for the Russian-Danish cooperation. His position and work were a bit unclear, but among other things he helped select the farms to participate in the project and the individuals going on study tour to Denmark. Very late in my fieldwork I found out, that he charged a commission from the farms receiving seed material in connection to the project. The seed material was given for free from Denmark and no tax or commission was supposed to go on this. Besides he also had a construction company, which had done renovation work at the regional duma, built the machinery station established by the project and also worked on one of the demonstration farms. I do not know how this exactly was arranged or if it was connected, but my spontaneous assumption was to understand this as some kind of corruption, that is, that he was able to exploit his official position for personal interest. But what exactly is corruption?
The dictionary defines corruption as "a: impairment of integrity, virtue, or moral principle: depravity b: decay, decomposition c: inducement to wrong by improper or unlawful means (as bribery) d: a departure from the original or from what is pure or correct" (Merriam-Webster 1994). Corruption is wrong and unlawful, incorrect and impure, that is both by law and by social moral. This entails that an act is only corrupt if people consider it corrupt, and thereby there is space for negotiation. A Polish nurse explains her distinction between corruption and other acts:
"If someone proposes to me "take care of this for me and I'll repay the favour", then I sense that if I arrange something for that person, he'll repay the favour by doing something for me that only he can do. But a bribe is just simply, "take this and give me that." That person may not repay the favour until 10 or 15 years later. Maybe I'll find myself in just the situation he was in. So there's a difference. This, I feel, is on the level of a kind of mutual goodwill, a kind of assistance, while bribe is an ugly word and generally an ugly business" (Quoted in Pawlik 1992: 93).
Corruption is in this sense an illegal economic relationship with no personal relationship and no long-term trust. The corrupt person is in a position to gain personal advantage by circumventing laws for selected individuals as opposed to a person who is in a fortunate position to help a friend in need, and only sidesteps the laws for this morally good deed. The corrupt person is violating his official position only for selfish reasons and is not morally relieved. This is of course not a very practical definition, as conceptions of relationships between persons vary depending on who is describing them. Is it corruption to accept a gift from an old friend before an official meeting? And how is one to tell when a decision is based on subjective criteria or not?
If we look at the legal aspect of the case described above, there were no violations of the law or the principles for the project funding from the Danish side. From the Russian side it was more complicated and the legal aspects weren't clear to me and I wasn't able to get a direct answer. It seemed that the case was in a grey zone, neither completely legal nor illegal, and apparently it wasn't in anybody's interest with strongly demarcated lines of the law.
The Danish consultants were in the beginning sceptical about the arrangement and the person's double role as both director of a private company working for the project and coordinator of the project cooperation. But over the years they found him indispensable in keeping the project running locally. He persuaded the people in the Russian administration to keep supporting the project and also oversaw that the practical work actually was done, and he continually kept an eye on things. The attitude among the Danish consultants was that to have a person like him was essential for the daily work of the project, and that somehow it was only fair that he received payment for this, official or not. Just as long as most of the resources for the project went the right way and helped improve the agricultural sector locally. "It is peanuts" as a Danish adviser expressed to me referring to the value of the free seed material a former collective farm received compared to its overall budget, and also not of high value in comparison with the extra work needed implementing the new system. The overall purpose with the project was not to help directly, but to introduce and show some new techniques, which could work as examples and improve the agricultural production. The Danish consultants wanted to have good demonstration fields, which showed good results, and where it was possible to calculate the expenses and income. They could thereby prove the efficiency and profitability of the new techniques. The attitude among the Danish consultants was, that this "petty" corruption was a reminiscent of the old system, where everybody wanted or expected a side deal or special arrangement made before a contract was written, and it was of course a nuisance, but not a real problem or hindering of the project-work.
I had difficulties finding out what was really happening and these aspects of the project were not spoken of, but at the same time they weren't a real secret. Who did know and who didn't was not clear, as was to what extent it mattered. It wasn't an object for discussion neither on the Russian side nor the Danish. If it was corruption or not didn't seem to matter much, because both sides acknowledged that this was the way of the "system", so the case was left in a grey zone area both morally and legally. People, both Russian and Danish, looked pragmatically at the case, as they on the one hand all had an interest in the continuation of the project, and on the other hand didn't seem to have any possibilities to change the procedure.
This case is not unique, and having a strong local partner has actually been pointed out as a prerequisite for working in the region (see e.g. the Danish Foreign Ministry (1995) or Lyager (1993). Commercial companies can accept many things, as long as they don't violate the law, but it is not that simple for aid organisations. The use of a strong local partner might be a prerequisite for a successful project, but it could be on the expense of the ideology behind the project. Wedel (2001) describes how the large American aid to Russia went through "a few favoured cliques", which were very capable and effective in creating good projects, but at the same time concentrated the power created by redistributing these huge funds to a few individuals. The donations aimed at creating a society based on principles of the free market and democracy thereby reproduced parts of the mechanism from the socialist era: The function of gatekeepers, who where in powerful positions to redistribute large amounts of resources.
To understand why the concept of a strong local partner is so essential, it is necessary with an understanding of the system in the socialist era.
During the Soviet regime the socialistic plan economy functioned by the centre allocating resources to production-units, who in return should achieve the planned production. Redistribution was a positive tool of power by which the state could reward or punish (Verdery 1996:24). The power of the state was achieved by control over the means of production and thereby the products. Efficiency and profitability became less important than control, and this led to a chronic shortage of products, resources and workforce. This system of power by control went down the hierarchy, and all the different units sought to gain control over the resources locally by links up in the hierarchy, and thereby power to distribute them down. The socialist system should therefore not be seen as an absolute state with complete power over the production and the individuals, but, as Verdery (1996) points to, more by an almost feudal system with local domains. A production unit, whatever a factory or a collective farm didn't just provide the employees with a salary, but tried to take care of all needs such as housing, medical attention, child care and so on. By securing resources from the outside and distributing them, the people in charge gained the support of the employees and were thus safeguarded against scarcity of labour. To get resources for the planned production as well as for the informal distribution it was necessary at the same time to secure the units own resources by maintaining strong boundaries to the outside world, and finding loopholes in own and other boundaries to get access to extra resources.
The transactions between the different domains were illegal, but they had a beneficial effect on the overall economy, as they redirected resources between the units, which couldn't be done within the rigid bureaucracy, and thereby making it possible to achieve the planned production. At the same time these transaction, termed as the second economy, led to a strengthening of the shortage by redirecting resources from the official economy and hoarding the resources. This was done in all levels, from private individuals who wanted consumer goods, to production units that needed specific resources to fulfil the planned production. These transactions was based on the use of informal connection, and they could be placed on a continuum with what is considered simple acts of friendship in the one end, to hard criminality and mafia in the other end.
The constant shortage was therefore not only a consequence of the plan-economy, but also a stabilising factor, and the very foundation for power within the system. Without shortage and strong boundaries making it difficult to get access to resources it would not be necessary to be part of the official and unofficial networks of personal relations. The illegal aspect of the second economy even further strengthened this. When everybody is criminal to some degree, what matters is whether there is a criminal enquirer or not. That again never happened without the approval by those higher in the hierarchy. The big corruption cases in the Soviet Union, and later in Russia, should therefore not be seen as a development to remove corruption, but as the result of internal political fights between rivalling fractions (Smith 1977: 129). During the Soviet regime it was therefore essential with a good network to achieve a high position. The network could simultaneously pave the way for a career, and protect one against official enquirers.
This system of redistribution didn't collapse with the Soviet Union. The most successful people in the post-socialist era were those who were able to use their old networks and create private capital by transferring former public or collective resources to private through the privatisation. As Humphrey (1995) describes; the communist party can be seen as an iceberg with only the top, the official institutions and symbols, removed by the political change, and the hidden 8/9 of personal relations and networks still in place, securing the old nomenclatures interests.
This is evident locally in the region of the Danish project as the majority, if not all, in the top level of the local administration have a background in the communist party or more often in the komsomol, the youth branch of the party. And also it wasn't coincidental which of the former collective farms that became part of the project in the beginning. Personal friendship between the project coordinator, the people in the agricultural administration and the directors of farms was of high importance. But not all were a part of this network, as I will show below.
Former state and collective farms still make up the majority of the agricultural sector, and although many of them officially have new structures and forms of ownership, the daily work and the leadership are to a large extent as it was earlier (see e.g. Humphrey 1998: 446). The farms still depend on support from the regional administration and many of them sign contracts to receive e.g. seed material and gasoline in the beginning of the season just to be able to maintain the production and in return deliver their harvest to a fixed and low price. Most of them have large debts to the administration or public institutions like the power-station, and every year barter-like arrangements are made to keep the credit going, and the large farm survives, but have no resources for investments, and face still higher problems the following year with a rising debt and still more run-down machinery. Until now it has been impossible to declare a large farm bankrupt regardless the condition and the often extremely low productivity(4).
With the weakening of the state and the sharp decline in production there has been fewer resources to distribute within the official structures. For most people in the province there is no alternative to the established networks and systems of distribution, and they have to cope with the fewer resources. A sharp decline in the standards of living is evident, and many people working on the large farms or in the rural towns fall back on subsistent farming via the private plot, but keep their old jobs and the access to the resources still available, albeit limited.
Still other, as many family farmers, are almost completely outside the old system and receive no help whatsoever from the administration. They rely alone on their agriculture(5). The few who have managed to establish a production with buildings, machinery and land, today have a profitable production and are able to expand and invest in their farm. They receive no help from the administration, but are on the other hand without restrictions on their production and are able to buy the supplies needed. With the fewer resources from the administration it is no longer necessary to cultivate connections within this network, and as a result of this, some of the family farmers connected to the project refuse to pay anything to the Russian project coordinator. This apparently had no direct consequences on a financial or legal level, but could mean, that those persons were prioritised lower, when people were selected for study tours to Denmark. This was evident in the summer of 2001 when I participated in a study tours with Russians going to Denmark. The list of participants was changed after wish by the Russian project coordinator and the Russian Regional administration and two family farmers were replaced by two directors from local agricultural administrations. This was accepted from the Danish side because the two farmers had been on another study tour two years earlier.
Although a company executing a development project is not dependent on creating a profit from its business in the same way as a private company, it is still important to show visible results for the project. I have talked about "the project", which is a bit misleading since it is a conglomerate of projects. In the period from 1997 - 2001 seven projects have been undertaken, running in periods for up to two years each. This means, that the people executing the projects regularly have to make new applications and show good results from the previous projects in order to continue the work.
As the project is funded by the Danish state according to bilateral agreements between the Danish and Russian governments, the Danish consultants have to cooperate with the official authorities, the regional agricultural administration. According to principles of the Danish funding they can only give equipment to official institutions and cannot hire local people themselves, so local goodwill from the administration is imperative. There is no alternative cooperating with them except by stopping the Danish involvement in the project. The frustrations among the Danish consultants when things didn't work out as expected, fuelled the idea of how much easier it would be if they could run the project on their own: Hiring the people they needed themselves and not have to rely on the local cooperation. But this wasn't possible according to the principles for the funding.
The project model of equal partners (Russian and Danish) who equally contributed to the project further strengthened the need for a strong local partner, especially with the long timeframe of building up and supporting the project institutions. This meant, that the projects survival not only depended on Danish funding, but also local financial support throughout the entire period. The political situation in the region changed several times during the project period, and this meant that new people in the regional administration had to be convinced of the use of the project institutions to secure the continual support. The Danish consultants felt, that this wouldn't have been possible without the hard work of the Russian project coordinator.
To sum up, the Danish consultants had a rather pragmatic approach to the local cooperation and accepted elements that could be interpreted as in opposition to the project idea, but they did that in order to keep the project running and never to a degree clearly against the law or the principles for the Danish funding. On the other hand, the Russian side (the people in charge in the agricultural administration) had to accept a certain degree of autonomy in the institutions established by the project. It seemed, that the partners knew each other well and knew each other's limits. An example of this was during the final negotiations concerning an eventual new project period, when the Russians stressed especially the value and importance of two elements in the project: The study tour and the demonstrations fields with Danish seed material. I interpreted this as elements with high "trading value" - that is, they could be distributed within the network to farms and individuals, while other, more valuable elements, such as tractors or other equipment, couldn't be handled as freely, simply because they were either too big or too expensive. The Danish consultants agreed on the importance of these elements, and as long as the farms or individuals participating in the project fulfilled the demanded criteria and showed responsibility, the Danish consultants more or less didn't care who participated in these activities. The importance of the project itself was for the Danish consultants higher than who exactly participated in it.
As I only followed the project and talked to the Danish consultants in this late stage of the project, I don't know how their individual opinions on their work in Russia have changed during the years working with the project. But there has certainly been a change in the overall focus.
The project started out with the intention to help the family farmers in the new Russia. This group was considered important in the transition to a society based on principles of the free market and democracy. The initial aim of the project was therefore not only to provide technical assistance, but also to help develop some institutions at grassroot level after the "Danish model", that is cooperatives with a high focus on participation and democracy. This resulted in the organisation of a cooperative of family farmers, who should take responsibility of the grain-store and machinery station established by the project. This cooperative was given the rights of using the institutions, but not direct ownership, which was in the hands of the local agricultural administration. Over the years, it became evident, that this cooperative and its board of directors didn't function as intended, and the participation of the local family farmers was minimum. The number of family farmers in the area near the grain-store and machinery station fell, and the basic idea of only serving family farmers was dropped. The former collective farms became the largest partners and later on customers of the project-institutions. The most important reason for this, as I understand it, was that they had the capacity and size to take highest advantage of the new techniques offered.
The project focus was changed from technical assistance combined with "democratising" or empowering elements to technical assistance combined with commercial elements(6). This was due to two main reasons: first of all the larger part of the agricultural production remained at the former collective farms and secondly the results with participation and empowering democracy were all unsatisfying, as they couldn't be established outside the existing structures.
The Danish project started with ideas of helping the new class of independent family farmers in a new society after the end of socialism. The new Russian society was seen as starting a fresh after the "dark years" under Soviet rule. But as the Danish consultants learned, old systems and structures were still existing. The project adjusted to the circumstances by changing the goal of the project and continuously tried to find progressive elements that could work in the local setting, and they had more success with some elements than with others. The project on the one hand fuelled the existing structure by supplying the system of redistribution with resources, but at the same time tried to establish alternatives to the same structures.
The strong local partner was essential for the project survival, but more and more farms were connected to the project institutions via commercial interest on both sides, reducing the necessity of a personal network. The resources given within the old structures and networks were still of high importance, but they gradually lost importance compared to the commercial interest showed not only by western companies settling in Russia but also economically strong actors from St. Petersburg and Moscow. If this development is continuing towards an increasingly commercial and legal market, the necessity of personal connections and networks will lose importance.
Danish Foreign Ministry 1995. Markedsorientering Rusland. (Market orientation Russia). Copenhagen.
Humphrey, Caroline 1995 "The politics of privatization in provincial Russia" i: Cambridge Anthropology 18: 1.
Humphrey, Caroline 1998 Marx went away - But Karl stayed behind. Updated edition of Karl Marx Collective: Economy, Society and Religion in a Siberian Collective Farm.
Pawlik, Wojciech. 1992: Intimate Commerce: In: J. Wedel (ed.): The Unplanned Society. Poland During and After Communism. Columbia University Press, New York.
Smith, Hedrick. 1977: Russerne. Det Schønberske Forlag, København. Danish edition of "The Russians" (1976).
Verdery, Katherine. 1996: A transition from socialism to feudalism? Thoughts on the postsocialist state. In: Verdery ed.: What was Socialism, and what comes next? (Princeton Univ. Press.)
Merriam-Webster 1994: Merriam-Webster's Collegiate Dictionary, Tenth Edition.
Wedel, Janine R.: 1998 "Collision and Collusion - The strange case of Western aid to Eastern Europe 1989 - 1998."
1. Family farmers are the individuals who have started a private commercial agricultural production with the help of family members or a few hired hands. This kind of small scale private farming was abolished with the collectivization in the first half of last century and only gradually became legal during the perestroika of the late eighties.
2. This change happened simultaneously with the gradual change in the Danish politics for donation to Eastern Europe to focus more on environmental issues.
3. The Danish company is a large actor in Denmark working on agricultural consulting and research. It has an international department that has executed projects in different countries, especially Eastern Europe.
4. In 2002 every company and institution have to deliver a balance sheet with all their debts and assets, and in Smolensk it is expected that only 1/3 will be able to pay their debts within a 5 year time frame. The administration is expected to help another third to keep the production running, while the last third is expected to be declared bankrupt. Only very few of the big farms have been able to invest in new technology and machinery and improve their production to efficiency comparable to that of Western Europe.
5. The family farmers received land and cheap loans in the beginning of the nineties. Practically all family farmers in Russia today were established then.
6. This includes making connections between western, especially Danish, companies supplying modern equipment and also focus on economy and book-keeping in the farms connecting good "agricultural production" with a basic understanding of economy and the market.