Business in Russia is a challenge, but a positive one
What the heads of international companies who work in Russia think about
The case of 51-year-old Michael Calvey shocked the international business community in Russia. According to experts, it once again illustrated that doing business in Russia is difficult. It seems like the whole business community immediately jumped to the American investor’s defense. For example, here is what Boris Titov, Presidential Commissioner for Entrepreneurs’ Rights, told Euronews right after Michael Calvey’s arrest in February: “There is no damage to society here. There is damage done to one of the parties in the conflict. There is a strictly corporate conflict…”. According to Chairman of the Accounts Chamber Alexei Kudrin, the arrest of Baring Vostok’s founder is an “emergency situation” for the Russian economy. “I want to point out that the President’s directive to avoid arrest for economic crimes has been violated,” Kudrin wrote on Twitter, “I consider this situation to be an emergency for our economy.” Be that as it may, regardless of the challenges that come with doing business in Russia, the majority of foreign entrepreneurs are convinced it’s worth it. “Yes, it’s a challenge, but a positive one,” said Juergen Koenig, President, CEO of Merck in Russia at the Gaidar Forum in the beginning of the year. This point of view was shared by every single participant of the “International Company in Russia: CEO’s view” discussion. Antonio Linares, Director General at Roca Group in Russia and the CIS, said that there is no other place on earth he would like to work in more than Russia. “Look, for example, at the kind of grandiose construction that’s happening in Moscow, although there is still room for improvement in the regions,” he said.
When speaking of the pros, all the of the speakers focused primarily on the vast opportunities of the Russian market, the country’s territory, and its population of 145 million people. They noted that, although Russians are not as mobile as Americans or Europeans for historical reasons, overall they are competent people who are ready to learn and grow professionally. Cesare Biggiogera, CEO of Prysmian Group in Russia, told an interesting story with a smile. He recalled that when he came to to Russia, he didn’t speak a single word of Russian and this made communicating with his colleagues difficult. So Cesare promised everyone that he would learn Russian in four years. He told his colleagues that he would be wishing them happy New Year in Russian four years later. “Though by the time I learned Russian, many of my Russian colleagues, even the older ones, spoke English,” he said.
Everybody also agreed that another advantage of doing business in Russia is that there is less bureaucratic red tape, which had always been a major stumbling block for entrepreneurship. Still, there are cons as well. Albert Grigoryan, Head of Representative Office of ENIE in Russia, said that “there must be more protection for foreign investors. They must be sure that if problems come up, they can be settled in court.” Another con is Russia’s economic instability. Johan Vanderplaetse, Senior Vice-President and President for Russia and CIS at Schneider Electric, urged to avoid saving money on education: “otherwise, you’ll lose your future.” He also said that there needs to be a better approach to manufacturing localization, which is what many foreign companies in Russia are currently doing. “There is no reason to force us to manufacture all of the parts in Russia,” Johan Vanderplaetse said, “It’s difficult to do this right now. Don’t forget that we still live in a global economy.” At the end of the discussion, all of the speakers said that even though people know more about Russia after the World Cup, a lot still has to be done to improve Moscow’s image throughout the world.