[Deb Palmieri on Russia Table of Contents] The following article was published in the Russian Commerce News, September-October 1999. The Russian Commerce News is the official publication of The Russian-American Chamber of Commerce®. |
Like it or not, most companies are experiencing "down-time" in Russia right now. It's that inbetween period of suspension waiting to cycle through the parliamentary, but mostly the June presidential elections. Many are calling this a period of stagnation or "wait and see." I just call it "down-time." There won't be many new investments or expansion plans for at least the next seven months.
Nonetheless, it's pretty much common sentiment that regardless of who is elected, he's likely to be pro-foreign investment. So the bundle of new Russian policy learnings and attitudes is not likely to vary significantly from one candidate to the next, or vary significantly from what you see today, at least in the short-term. The market will eventually open; it's an academic question as to how fast and with how many bumps in the road we will experience and how severe or troublesome they will become.
So, long-term company players will keep doing what they're doing, and dig in and make optimal use of "down-time." It's actually a welcome breathing space, a good time to plan ahead and prepare for increased activity in the future. There are plenty of ways to use this time productively. Some optimal strategies to implement in this next period ahead include the following:
1. Build interpersonal relationships. Cultivate your Russian networks from top to bottom.
2. Minimize the impact of negative press coverage on Russia, the "Washington hysteria" and "rain on parade" think-tank chatter by getting your information and knowledge about business conditions from your industry peers and basing your business planning and outlook on that. I call this the optimal use of experience-driven knowledge, i.e. learning from other experienced players in the Russian market. It's critical right now.
3. Don't panic over every political or economic blip and ripple. . .Chechnya. . . alleged crime and corruption. . . all of the negatives. . . - things will settle down after the elections.
4. Hope that we continue to sustain general global growth and stability. Remember that Russian recovery is a function of all-around global economic stability. It was the Asian financial crisis that pushed Russia over the edge in August 1998. If the West should experience recessionary conditions, don't expect miracles from Russia. But, if our economic performance continues to surge ahead, expect to see the beginnings of sustained Russian recovery. Russia doesn't operate in a vacuum, but is highly sensitive to global conditions.
5. Communicate more with other companies inside and outside of your industry. Companies need to synergize with each other to minimize negative political effects on their Russian business involvement. This helps counteract feelings of being stigmatized by negative press and negative political currents.
It's important to have an historical perspective on what's going on in Russia. We can better predict the future by mastering the past. Russia today is experiencing growing pains. It's a state in transition. You are witnessing the transformation of a nation and rebuilding of the state on a new model. Russia, as a former superpower, is undergoing a huge identity change. It has an enormous stake to learn now from past failures, including the legacy of Czarism that led to the October Revolution of 1917, and the legacy of communism and planned economics that brought the once powerful Soviet Union to its knees and resulted in the disintegration of empire.
The point I would like to make is that the dysfunctionalities, weak institutions, and often seeming chaos, are normal and to be expected in the process of the maturation of a new state. This awkward transition will pass, and the maturation and strengthening of the state and its institutions will take place.
Have no doubt that sooner or later, from the weaknesses and growing
pains, we will see the emergence of a strong and stable Russian state.
This is the paradigm and set of expectations on which your Russian business
plans for tomorrow should be based.
Deborah Anne Palmieri
Russian Commerce News, September-October 1999
Copyright 2001 The Russian-American Chamber of Commerce®