He responded candidly when McCauley broached the subject of the mafia: “He told me, ‘The mafia are not a problem’. He confirmed that most Russian banks have their own private armies.”The obstacles stacked against creating a more transparent business environment are pervasive Yet progress is being made. The London solicitor is positive: “It’s becoming progressively easier to do business in Russia. You can make honest money now and in 10-15 years’ time, Russia will be the same as the UK.”FBI investigations during the 1930s and 1940s provide a context for the progress to date.
They expose Russian businessmen acknowledging that they could do nothing without paying the mafia. Today a businessman is required to give a backhander to someone in government to obtain a licence, but thereafter he is effectively able to run his business as he sees fit.Two days ago, Putin announced that by 2010, life will have improved dramatically in Russia, which is currently one of the only economies in Europe to be growing. That said, Russia’s greatest weakness remains its inability to attract foreign investment. In 1999, total accumulated foreign investment was $29.3bn, compared to $600bn in China.
Scarred by the experiences of the 1990s, Western businesses continue to be wary.Should they be? A corporate financier who worked in Moscow for most of his twenties blames Western businessmen and their Russian counterparts for the misfortunes of the 1990s. “Many Western businesses demonstrated terrible arrogance,” he says “They were naive and far too quick to sign up Business is done differently everywhere In Russia … any negotiation is preceded by an arranged dinner that is extremely boozy … You can’t expect to go in there with a stiff upper lip and a pressed suit It’s a test. The trick is to play the game, but not get distracted by it.”‘Bandits, Gangsters and the Media’ by Martin McCauley is published by Longman on 19 November.. Corporate financiers are like football players
Corporate financiers are like football players When they join a club, the praise is fulsome. “The manager understands football and the club has ambition,” they say.