Jean-Claude Knebeler:

Despite our differences, we are the same

“I work with Russians to show them, through Luxembourg as an example, that Europe is not threatening, that expanding territory is not necessary in order to be successful, that you can be assertive and confident in yourself without engaging in policy adventures,” said Jean-Claude KNEBELER, Ambassador of the Grand Duchy of Luxembourg to the Russian Federation, in an exclusive interview with Sergo Kukhianidze, Editor-in-Chief of Capital Ideas.

 

Mr. Knebeler, to me you are an Ambassador of a new generation. You are young, you are witty, you are energetic, and you host barbecue parties. You became Ambassador in Russia two years ago, when you were 39 years old. How did you agree to take up this post and what did you know about Russia before coming here?

I came to Moscow from New York, where I was Consul General. I was in charge mainly of the economic relationship with the Eastern parts of the United States and Canada. Before that, I served for eight years as Diplomatic Adviser and Director General of Trade & Investment at the Ministry of the Economy. At that time – it was after the expansion of the European Union, when many Eastern and Central European countries became part of the European Union and thus the common Single Market – we were trying to figure out where we, as a government, could help promote trade. Political support is sometimes necessary, on a bilateral basis, and often more effective in emerging markets. At that time Russia, China, India and the Middle East became priorities for many of our companies. So I started to travel to Russia in 2002, mostly to Moscow, but also to other cities. I was a frequent visitor, and I even learned how to read Cyrillic.

Oh, really?

Initially just observing, from the car, while stuck in traffic. Over time, of course, I made friends here. I made friends at different levels: in the world of government, in the world of politics, in the world of business, also amongst ordinary people. I really enjoyed my time watching this dynamic city evolve and change. I think this is a country with great underlying potential. I’ve thus had an interest in Russia for quite some time. After a few years in New York, I started trying to figure out where to go next, as all diplomats do and I suggested amongst others to be sent to Moscow.

It means that you wanted to come to Moscow…

Yes, I wanted to come to Moscow. I put it amongst my preferences (we are allowed to indicate preferences). I put Moscow high on the list, but didn’t expect to move so quickly. The first priority as a family was to stay in New York: my wife Anna, who is from Buryatia, was pregnant at the time. Moving in this condition was difficult for her, but we decided together to accept the position when I received the offer in spring of 2016. Our son was born in Moscow two months after we arrived, so we will keep a very real and permanent connection to Russia in general and Moscow in particular.

What have you learned about Russia and Russians in these two years?

I’ve learned how it is to live in Moscow. It’s one thing when you come to Moscow just for a few days, stay at a hotel and go to meetings. Yet, it is another thing when you live here, when you navigate Russian society, when you do your shopping yourself. Of course I am in a very privileged position, but I got another perspective on the city. I am here when the weather is nice, I am here when the weather is not so nice, I become part of the city. Some colleagues from other countries, who are maybe more visible or who impose restrictions on themselves, might not have this experience, but I just take my family and we go to a park and spend our leisure time like any other citizen. I know that I am identified as a foreigner. It is obvious that I am not Russian: I am visibly a foreigner and my Russian skills are unfortunately still lacking. I definitely pay a foreigner’s price at some of the markets. But that’s all right, I see this as my contribution to the Russian economy.

Sounds like you feel pretty comfortable in Moscow now?

I feel very comfortable in the city. Like in every city, there are things that are great and there are things that are not so great. There are things you learn a lot from. There are little things that make you think: why don’t they move up to international standards in this, when they are leading in other fields? All in all, it is a wonderful city. And it is an underestimated city. People are often surprised when they visit Moscow, because they’re biased from what they see and hear in the media or have images stuck in their heads from 25 years ago. Yes, Moscow and Russia still have problems to overcome, but I also have to say that when I came here in 2016, I was stunned by the progress made during only the four years that I had been absent.

Let me ask you this. Many people think that Russians and Westerners are so different that they will never understand each other. Do you agree with that?

No. Actually, I think the exact opposite is true. To say nothing of the fact that most of the Russian population is concentrated in the European part of the country. Also, By the way, how to define “Westerners”? It’s better to say Europeans. It’s true that some Europeans think that Russians are different because they hardly know any. But in essence they are not. Once you know them, they are very similar to us. Russian literature and culture are European and part of our common heritage. It’s more the subtle differences that can lead to misunderstandings.

When you land in Beijing, you see the first Chinese person and understand visually you are in a country that is very different from yours. When you land in Sheremetyevo, you look at the first ethnically Russian person and think he could well be your neighbor. Of course there is a difference in historical background and experience, even for people of my age. I remember one Russian friend…I made a joke that was very common for my generation. It came with a reference to the first “Star Wars” movies. He did not get it. And I said myself: “OK, when Star Wars came out and I  went to see it as a kid, he was living in the Soviet Union.” His references to old Soviet films on the other hand are unknown to me. So, you have different cultural references, even though you have much in common. We are similar, but not identical. That is also true amongst the many European nations.

It is also true that we, in Western Europe, know very little about Orthodoxy, and we know very little about the history of Central Asia, the invasions, the Caucasus, all factors that shaped Russia and its people. There is one good place to go if you want to understand this better – the Kremlin Armoury. It has antique weapons from all over Russia, covering many centuries. You can see from the design of the weapons and the helmets that there was a lot of Eastern, of Persian and Tatar influence. All of this also has an impact on the collective Russian identity. It’s different from what we think of as European, Western European, Roman-Greek Christian culture. Similar, but not quite the same. The fact that we share quite a few references though makes understanding easier than with other cultures, but we need to keep in mind that there is also potential for misunderstandings. It’s a bit like speaking the same language, but with different dialects.

Now I haven’t even touched on the ethnic diversity within the Russian Federation, going into Asia, the Northern Caucasus, the Arctic. That’s another factor, but it would lead to a very long discussion and we don’t have the time…

And how do ordinary people in Europe, who are not politicians, view Russia? What do they think about this huge country?

They know very little. I think this is a big problem. I think Russia had a great opportunity with the World Cup to bring people here, to make them understand that Russia actually is a beautiful country, with very welcoming people. I know that when my father first stepped into Danilovsky market, which I of course know is not very representative of an average Russian market, he was stunned by the abundance and diversity of produce. He wouldn’t admit it, but I know that he still had images of empty supermarkets anchored in his head.

I am also happy to see Russians travelling to Europe, to discover and understand that we are normal people too, that there are no civil wars in Europe, and that we have a perfectly functioning society, very welcoming as well. Unfortunately, travel is not easy for people on both sides: Russia has a very complicated visa process too, very complicated procedures for many things. .

Let’s change the subject. How long will the Western sanctions last?

As long as Russia continues to provide reasons for these sanctions to exist. I would love to see them lifted tomorrow.

What is the current state of the economic relationship between our countries?

I think that, generally speaking, things are good. Industrial relationships are very good. We have engineering companies that help modernize Russia. They have been in this country for 40 years and they are the best in their field. There are companies who have manufacturing sites in Russia. Yes, some financial institutions have been impacted by sanctions and increased compliance procedures. They had to reduce their operations with Russian companies and institutions.

But otherwise I think we have a positive relationship. I was in Skolkovo this morning. It is always very rewarding to see that many Russian companies use Luxembourg as a gateway to the European market – not like moving everything out of Russia and leaving, but in terms of using Luxembourg to grow their business. If I had something on my wish list, I would like to have a direct flight between our two capitals because it would make life much easier for business travellers and tourists.

What kind of advice would you give to an investor thinking about coming to Russia. Because you know there are investors who want to come, but they are afraid. What advice would you give them?

It is not an easy country to invest in, but it is a rewarding country to invest in if you have a good project. You will find partners and you will find support from the government, both federal and regional. They are very devoted and they will help you to make your investment. Problems arise if you run into trouble…

Like what?

Disagreement, any kind of disagreement with your local partner. If you try to have legal recourse, it is often very difficult. There seem to be unwritten protections for Russian companies. That’s what I am being told by my business community : difficulty to enforce arbitration awards through the courts, very slow investigation of cases of corporate raiding, issues like this.

This for me is the main problem, evaluating and managing risk, commercial and political, over a longer period. It is difficult to get the shareholders and board members of a listed company to agree to deploy capital into Russia when there are other, less complex places to invest their money. Of course, it is easier if you are a privately-held business and there are fewer people to convince. Sometimes it is not easy to justify the decision to put capital into the Russian market, where the perceived risk is higher than elsewhere. But high risk can potentially mean high returns.

That is true. What does Moscow have to do to attract foreigners, both tourists and businessmen?

For tourists – open a direct flight to Luxembourg! That is what Istanbul did. Turkish Airlines now fly daily and are thinking about adding a second flight. Many Luxembourgers – not the poorest people in the world I might say – go to Istanbul for a nice weekend or a holiday, which is also easy because there is no need for a visa. They use Istanbul as a hub for onward travel, something that Sheremetyevo could also become for routes to East Asia. Additionally, I think that at some point the visa policy should be revised too.

I understand that my Russian colleagues from the Ministry of Foreign Affairs see this from the very diplomatic angle of the sacrosanct reciprocity – as long as Russians need visas to go to Europe, Europeans will need visas to go to Russia too. What they forget, besides the lost economic opportunity for Russia, is that the first reason for a visa regime to exist is to control the risk of illegal migration. I guess we both agree that this risk is unequally distributed between both sides.

I would guess that the risk of illegal immigration to Russia from Europe in general and Luxembourg in particular is rather low. I think one can find compromises that allow for pragmatic solutions. For example, take what Russia has done with China – eliminating visa requirements for tourist groups who come to Moscow. This is very smart, it translated into huge revenues for the city and its businesses. St. Petersbourg has a special regime for tourists coming on cruise ships, who can freely come and spend their money for 72 hours, if I am correct. The problem is that Moscow is certainly very important and the mayor a powerful leader who has done great things. But many of such key decisions are still made in other places, where caution seems to be more important.

Also, one has to remember that businesspeople are people too. They do not only travel for work, but often discover opportunities when abroad for leisure. Or combine both. If I am a businessperson and have to jump through many cumbersome regulatory hoops in order to just come and spend my private money to discover a city and a country, I will obviously think twice before investing my company’s money there… If I think of it at all, because the negative bias that I spoke about before might still be in my head.

They want to turn Moscow into an international financial center. Do you think this is realistic?

Good idea, because Russia as such is large enough to cover the needs of a financial center, for itself and the CIS. To become a truly international financial center is difficult though because you can’t just declare yourself an international financial center.

You become an international financial center because others decide that you are. When people ask me what Luxembourg did to become a center of global finance, I reply: “Well, maybe we reacted to things, we reacted well, and many decided that Luxembourg was attractive.” Initially, some policy choices were based on coincidence, in many ways. We also benefited from the mistakes of others around us and were then smart enough to defend and expand these advantages. I believe that Russia has a chance, Moscow has a chance. Sorry, there is also beautiful Saint Petersburg and Kazan took steps in Islamic finance, but Moscow is where people do business, there is only scope for one financial centre…

What is your main goal, what is your main aim as Ambassador to Russia?

I work with Russians to show them that Europe is not threatening. I show from the example of Luxembourg that you do not have to expand your territory and your military in order to be successful, that you can be assertive and confident in yourself without being adventurous in terms of security. I want to show ordinary Russians that we are the same. Despite our differences and diversity, we are the same at heart. Humans, who want to live in peace, provide for our families and assure a better future for our children. My son has two passports: Luxembourgish and Russian. I would like him to grow up being at perfect ease saying in Russia that he is Luxembourgish and in Luxembourg that he is Russian. We live in a world that makes global citizens out of all of us. We should and must keep our deep roots and the connection to our lands and cultures, but we also need to grow wide branches that can reach beyond borders.

Thank you very much. It was nice talking to you.

It was nice talking to you too.