In Which I Will be Called a Kremlin Apologist

This has been an interesting, educational, and sometimes complicated week being in Moscow.

First, to deal with Russian complexities: The one thing I never quite got when I worked here was to understand the unspoken nature of doing business. You never knew who you were really dealing with; their backgrounds, loyalties, and connections. Quite easily you could be speaking with someone you thought was friendly with this government, or the last government, or the government that almost was, and the truth was always a bit fuzzy. The point is you could never be sure what was going on and you never knew what hidden agenda was in play.

There are always the survivors, the ones who found a home in business or government during Soviet times, the Yeltsin years, and yet remain friendly with the present government. I think only Alan Greenspan has managed such a feat in the U.S. and you can’t help but bump into Russians who have managed to remain friendly with them all.

In Russian business, there is a maze of interconnected companies that act like competitors most days but often make larger deals with each other for the grander good. It’s a bit like a Japanese Keiretsu. Technically they’re called Oligarchs and at one time or another all are either attacking or defending an attack. But most are not any less bottom-line oriented than any other corporate CEO. Yes, some conduct business like Martin Blank, with lead-pipe cruelty, and I wish it wasn’t the system because ultimately it gives Russia a dubious appearance and hurts foreign investment, the one thing that would lessen the roll of the bad guys.

Just the same the Fortune 500 companies doing business here are rarely affected by anything more than monstrous red tape. Mafia shootouts are always Russian on Russian or on foreigners who want to play in their world, their way; which makes it comparable to drug battles in the inner city or among Tony Soprano followers. It may take a generation to breed out this nasty business, but already in the span of a decade it’s become a kinder, gentler brand of Oligarchy.

As for educational, I have come to realize the people here are more optimistic about the future than I think Americans are. Maybe it’s because they have come from so far behind, but most believe there is personal opportunity in Russia. Many work for foreign companies now and are paid enough to have sparked a huge real estate boom all over Russia, with prices for 900 square foot apartments in the center of Moscow going for $500,000 and up. I briefly visited a friend of my partner who had just purchased a flat for $175,000 that was not refurbished and only 600 square feet. She took great satisfaction in showing the ways she was going to bring her apartment up to modern standards, doubling the value. Out of one of her rooms, she had a view of the Kremlin and out of another, a beautiful park where she could walk her loathsome little dog.

This story is not uncommon here. She works for 3M and they are happy to pay her half what they would pay any American who is less educated and probably doesn’t speak English as well. In other words, the level of sophistication in the under-40 worker in Moscow rivals anywhere else in the West. The cause of this isn’t organized crime but organized education that is now teaching their students to compete. We should be studying what they are doing – as should the Europeans – because Russia will leap past us and Khrushchev may end up being correct in his assessment that the Russians will sell the Americans the rope to hang themselves – if the Chinese don’t do it first.

As for politics in Russia, it’s never a dull moment. While I was here, there were a number of policy makers who were supposed to attend our event, but they were asked to go to London to be taken into the woodshed by the Europeans over their human rights abuses. Of course human rights ended up getting trumped by the need for Russia’s cheap oil, so whatever whipping Mr. Putin got in London was done in the basement of 10 Downing because there was no official rebuke. Except by the press, which never fails to miss the chance to miss the point. In a Kafkaesque moment, the European press bitterly complained that Russia was being heavy-handed with the former republics (Belarus, Uzbekistan, Georgia, etc.) while giving high-fives to great bastions of Democracy that paid for and organized popular uprisings in Russia’s sphere of influence. I’m all for Democracy, but Democracy earned, not paid (except in the U.S., because I’m paid to engage in it).

Propping up leaders like Viktor Yuschenko in Ukraine and some dude names Saakashvili in the Republic of Georgia is not the same as promoting Democracy. Since both are failing, I hope we got a receipt so we can get a refund. Near as I can tell, all the two have done for Democracy is exchange black S430s with the old regimes.

I remember in 2000 I went to a World Economic Forum event and Russia was the subject on the agenda. The Russian government sent a number of people to explain themselves and offer excuses. I remember all the bashing that went on in front of these once proud people. At one point, I asked the leader of the Duma at the time (like a Speaker of the House) how he could accept all that was being said. He told me it was okay to hear it, that they (the Russians) deserved it. But he also pointed out that there would come a day in which they wouldn’t deserve it, so all the do-gooders should get their licks in while they could.

Russia is far from perfect, but watching Putin standing with the European brethren, it made me wonder if the time had come to put an end to openly criticizing Russia and start to look within. As much as he’s been nicknamed the “Little Tyrant” here, I’ll take Putin over Chirac, Schroeder, Zapatero and the Euro-Weenies at the EU any day of the week and twice on Sundays.

In the end, the only event that occurred at the European/Russian summit (besides keeping me from meeting an old friend or two) was to ease restrictions on visas. It is now slightly easier for a Russian to travel to Europe. The interesting twist to this is I mentioned this as a positive development to a Russian woman. She slapped me around a bit and told me the Iron Curtain is no longer the property of the Soviet Union, but of the West because Russians are forbidden to travel to most places in the world, while I can waltz in to Moscow and buy a Versace purse in the shadow of Lenin’s Tomb (don’t worry, Gail, I didn’t buy one, I couldn’t afford it, although I considered one that cost $100,000). I have to admit she has a point.