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Case For Russia: But More Than A Decade Ago

by John on 03/10/2014

(This was an article I wrote for In Business Las Vegas in 2002 after spending time working in Moscow.  As you will see, it is a whole different vibe about business and capitalism than it is now in 20014.) 

            A car bomb explodes at a Moscow McDonald’s.

Two days later, a regional governor is assassinated on a busy Moscow street.

Four days later, Chechen extremists take theater-goers hostage leading to more than one hundred deaths.

I was there days before the week of carnage in Moscow.  A potential client flew me to Russia to see if my production company would produce videos for a joint Russian-American investment fund.  Daly Productions has negotiated a contract.  But even if we hadn’t, I can still make the case for Russia – despite Chechen rebels, organized crime, and recent financial failures.

The main reason is the people I met. But the most important reason came from one woman’s gasp.

She is the wife of one of our Russian hosts.  The gasp echoed over the twelve vodka-laced voices enjoying a feast of meats, cheese, salad, and wine.  Neither Chechens nor organized crime caused the two-second jolt of terror.  It was far worse.  She was staring at Joseph Stalin.

The ghost was really an impersonator.  He was an employee at Stalin’s Bunker, an elaborate underground hideout built for the Soviet leader in the 1930’s, now a museum and the setting for dinner.

Stalin’s double toasted us then departed to his working class family.  Yet the ghost of the real Stalin lingered.  Call it a frightened glance over an historical shoulder.

Alexander Nikinov, a colonel in the Russian Air Force, raised a glass to his American guests.  “We are not Americans and Russians. We are people working together.”

Victor, a successful entrepreneur, also toasted: “Let us remember the times we were allies in the Great War.”

There was no talk of the Cold War or the Cuban Missile Crisis, just friendship from a distant, victorious past.  Despite recent events in Moscow, most Russians are gasping in horror about the past, not the future.

 

Giving birth to capitalism has been a long, painful delivery for Russia.  But, like parenthood, a free market society will be worthwhile eventually.

One labor pain is the lack of western-style service.  At the MoscowAirport, I needed directions to baggage claim.  “Excuse me,” I asked a female airport employee, “Do you speak English?”  Without missing a step or an English syllable she said, “No, I do not.”

In many restaurants you cannot deviate from the menu.  At the Metropol Hotel bar, I ordered a turkey sandwich.  I asked for Swiss cheese on the sandwich.  “It’s not possible,” the waiter said – even though Swiss cheese was on the menu with another sandwich.

That waiter was the rule; Nadia was the exception.  Nadia is a waitress at a chain restaurant called Yaukey Paulkey.  Victor, our translator, gave Nadia our order; she wrote it down; then she read it back to him perfectly.  We complimented her for her service; then our Russian guests asked for her name and number to consider her for future work.

Another breach in the Russian economy: Bribes.  Again, at the MoscowAirport, a customs guard spotted the computer boxes I was delivering.  He apparently wanted dollars in return for not putting the boxes through a lengthy Russian paper shuffle.  One of my client’s Russian business partners talked to the guard privately; then the computers were released.

An hour later, our Russian driver made an illegal U-turn and got pulled over by a police officer, who then escorted him inside a police van, out of sight, for ten minutes. Our driver kept his rubles, though.  He had better government connections.

Even the Russian adoption agencies have joined the bribery game.  An American businesswoman we met told us this story.  An American couple went to Russia to adopt two children only to discover the adoption fee had doubled well into the tens of thousands.  The businesswoman was summoned to Moscow to pay the added fee (bribe) before the children could be taken to the United States.

Many Russians resent the shakedowns by civil servants.  They use jokes to endure it.

A man is stopped by a Moscow cop.  But before the cop says anything the man tells him, “I have a political joke for you.”  The cop, who is a part of the political structure, is astounded.  “Why would you tell me a joke like that?”  “Don’t worry,” the man says, “I will tell it to you slow and twice.”

In defense of Russian civil servants, they are paid poorly and for a good reason.  Russian President Putin has delivered three consecutive balanced budgets.  Any surplus pays off the country’s debt from the financial collapse of 1998 – not to salary raises.  Seen this way, you realize the Russians are suffering from the pains of progress.

However, not all Russian government workers are corrupt.

Andre is a Russian sailor.  He makes one hundred dollars a month to support three boys and his wife in a small apartment.  To survive, he is part of the new underground Moscow economy.  Two days a week, he drives around Moscow picking up people who need a ride.  A traveler simply sticks out a thumb, a driver stops, you negotiate a fee, and you get to your destination.  No taxi authority is necessary.

Like Andre, many Russians are learning how to work the system.

Kirill Galetski is twenty-five and Russian-born.  He looks like a young Johnny Unitas with the baby face and blond crew cut.  He spoke English with an All-American accent, too.

Kirill’s American-born mother and Russian-born father divorced when he was five.  Kirill went to America with his mother where he eventually earned a journalism degree from PortlandStateUniversity.

When I met him, he was writing for an English language newspaper while interpreting during a business seminar in Moscow.

I asked him why he returned to Russia.  His answer floored me. “I want to act,” he said.  Kirill was attending one of the world’s great acting schools: The Stanislavsky School of Acting.

Russian men speak with great pride about another treasure: Russian women.

Every block, a super model look-a-like walks by: tall, thin, dressed as if they strolling The Champs Elysee or Fifth Avenue; many blondes but some exotic Mediterranean beauties as well.

“Russian women are loyal and traditional,” Kirrill offered.  The typical scene at a McDonald’s was of a beautiful woman, dressed in fashionable business attire, with a young child and a husband.  “There’s not much of a feminist movement here,” he said.

That has led to a growth in dating or husband-finding agencies in Russia for American men.  Alla, a cherubic twenty year old who translated for me one day, said many of her friends had applied at one of the agencies.

There are also plenty of corporate executives popping up in Russia as well.  We met an owner of a software company; among his employees are 6 PhD’s.  His software will provide immediate translations from one language to another for text and voice.

Another man, a developer, had plans for hotels and office buildings.

I spoke with a group of businessmen who obtained scientific know-how from Russian military experts to create new technology, including a way to analyze blood without having to draw it from the person.

A scientist, who had worked at Lawrence Livermore, was creating a device to detect biological and chemical agents.

Las Vegan Rex Farris, the owner of Global Express Capital Corporation, marvels at the opportunities in Russia.  Rex is the client who created that half-billion dollar investment fund for Russia.

He believes Russia’s abundance of land and untapped natural resources resembles “America after World War II.”

The numbers confirm that.  The IMF reports that Russian GDP will increase 4.4% for 2002 and 4.9% for 2003.  The Russian stock market jumped 82% over the past two years, according to the Wall Street Journal.  “Foreign investors account for 20% of the money invested in Russian stocks,” the article on November 20, 2002 states.

That’s on paper, though.

I witnessed plenty signs of a society trying to blossom.  A woman stood in front of the Moscow Prosecutor’s Office holding a sign.  She was accusing Moscow’s mayor of murder.

Three of Moscow’s state-run museums, dedicated to preserving the history of the Russian military, did not varnish the truth.  My Russian guide showed me photos of nine Russian generals, all members of the Russian Military Council in the 1930’s. Stalin executed 77 of these men in 1936.  “We lost the top people of our army,” my guide said.  “The Germans knew it would be a good time to invade.”

She also guided me to displays honoring the men and women who fought in Afghanistan and Chechnya, Russia’s Vietnams.

Still, the Russians take great pride in their military victories – especially in World War II.  One artifact was a jacket worn by Hitler that I actually touched.  It had burn marks so it must have been worn during his final days.  The inside pocket had the inscription:  tailored for Adolf Hitler.

The museum also had two huge photos displayed on a huge wall.  One photo was the massing of Russian soldiers in Red Square as they prepared for the Nazi assault. The other photo was the victory parade in Red Square as a staff that bore the name Adolf Hitler was carried by one of the Russians.  The actual staff rests on the ground at the base of the photo.

Colonel Nikinov oversees all the military museums. He says he wants to display the museums’ exhibits throughout the world — mainly the United States.

Nikinov is a handsome man with white hair and a young face; one of those people that make the world a good place. At our final dinner, he prefaced his toast like this:  “You know I don’t care about making money.  I care about friendships and peace between our countries,” he said. Ironic when you consider for most of his career, he was trained to kill Americans.

Nikinov made me think of Tom Friedman, the foreign affairs columnist for The New York Times, whose latest book, “Attitudes and Longitudes” is about the new world after September 11th.

Most of the book is about the Arab world.  But Friedman writes about a trip he took to Moscow.  He saw the early stages of capitalism in Russia and compared it to the Arab world.

In my final toast to our Russian friends, I paraphrased Tom Friedman.  I admit to being eloquent, but the credit goes to Friedman and vodka.

“Tom Friedman says the world is no longer east versus west or free market versus communism.  It is the civilized world against the uncivilized world.  At the height of the Cold War, Friedman says, the Soviets still cherished life.  You knew,” I said pointing to my Russian guests, “destroying us meant also destroying yourselves.  Neither of us did it.  We cherish life unlike the terrorists today destroying the world and themselves.  What we are doing here tonight, having dinner, telling stories, making lasting friendships, that is what civilization is all about.  So, a toast to civilization, my friends.”

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