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Russian Corruption At Eight-Year Peak, Says Report

MOSCOW (Reuters) -- Corruption in Russia is at its worst for eight years, watchdog Transparency International has said, stoking investor fears just a week after Russian markets suffered their biggest losses in a decade.

The annual survey by the Berlin-based watchdog put Russia in joint 147th position with Bangladesh, Kenya, and Syria, raising the challenge for President Dmitry Medvedev, who has made fighting graft a priority.

"All this data taken together demonstrates that the situation in Russia has reached a threatening scale," the watchdog said in a commentary attached to the survey.

"The phenomenon of corruption...seriously undermines the very statehood of Russia."

Corruption has penetrated every sphere of life from politics, the police, and judiciary to business, health, and education, the report said.

Medvedev, a former corporate lawyer who says he wants to implement a liberal reform agenda, has named corruption as one of the key challenges of his presidency and drawn up a package of measures to tackle the problem.

"It is a very painful and difficult problem for our country," Medvedev said in an interview with Reuters in July.

"Corruption as a systemic challenge, as a threat to national security, as a problem which leads to a lack of faith among citizens in the ability of government to bring order and protect them."

Transparency International voiced skepticism that Medvedev's package of anticorruption measures would be effective.

"The existence of such a plan on its own cannot reduce the level of corruption in the country...if the implementation of anticorruption projects is carried out just by civil servants and the authorities while society once again watches from the sidelines," the watchdog said.

A senior Russian prosecutor estimated earlier this year that corrupt officials were pocketing $120 billion annually, a sum equivalent to one-third of Russia's budget.

Russia's benchmark RTS stock index was 3.4 percent lower by 1002 GMT, underperforming weaker markets across Europe. The RTS has recouped last week's losses, which forced a two-day market closure.