Dealing with Russians

(Talk delivered at the May 2009 annual dinner of the Law Society, Hughes Hall College, Cambridge University)

What is best for an after dinner speech, without boring the attendees nor leading them to a thoughtful anticipation of their next drink?

Exploring an academic subject may cause severe indigestion effects while making the organizers feel anxiety and possibly anorexia for any future collegial dining.

What causes instability in a professional’s life and at the same time forces him to indulge in learning new ways and plunge in the riches of different cultures? The answer obviously lies with the necessity to confront the challenges of working in a different country.
Sharing with you my experiences in confronting Russians in an official capacity or as a simple traveler and observer may possibly keep you awake and at a distance from exuberant booz consumption.

I first set foot in Russia as a member of a parliamentary delegation to discuss issues of mutual concern with members of the State Duma. My vivid memories from this visit evolve around rich banquets and heavy drinking. My colleagues from the Russian heartland resembled single minded party diehards rather than eloquent debaters on issues of economic development, public well being and world affairs. From within the maelstrom of meaningless pleasantries and boring prefabricated occasion speeches only one comment from a southern parliamentarian comes back to my mind. “How can we deal with dwindling population rates when immigrants from the east and the Muslim south multiply rapidly?” Of course, no easy answer was forthcoming. But it was obvious to me that there is a shimmering undercurrent in the country worrying leaders and unsettling concerned citizens.

Upon returning to Moscow as a consultant working with the government under the auspices of the European Union the riddle that is Russia started to gradually unravel. Not easily, alas, nor in a straightforward line. The first impression in dealing with Russian officials was secrecy, suspicion and mild xenophobia. Being a foreigner, particularly a westerner, carried a historical overload of wrongdoings and perceived injustices. Add to that the worsening atmosphere of russo – western relations and you understand our ordeal.

We were supposed to advise the Russians on preparing a new Bill on free competition and anti-trust policies. It was not however easy to make them explain the law making process. How a new Bill was perceived and what was the necessary stages to follow before it was to reach Parliament (the State Duma). It took some considerable time for them to trust us enough to make us understand that a certain sector of the government was under the direct jurisdiction of the Prime Minister and his Deputies while at least five Ministries and Agencies were accountable directly to the President. And that the Deputy PM in charge was obliged to consult the Presidential Administration – a kind of parallel government run by the President himself and his closest associates - on any new legal initiative. I was flabbergasted when the almost finished Bill came back from the Kremlin with two additions that essentially rendered the future law almost inoperative.

Similar to the case of my raising objections about Gazprom’s purchase of all Sibneft’s assets and possibly violating the rules of gas market domination, the comment I received dumbfounded me: “It is the wish of the President”. Full stop. This was when I was lead to start attempting to identify centers of power within the Russian hierarchy. There were comments in the media and in the government backrooms and corridors about the siloviki. The men of power. But who exactly are they? Do they have any common characteristics?

Everything emanates from the all powerful figure of, Prime Minister today, Vladimir Putin. He had a career in the place of his birth, as a functionary in the City Hall of St. Petersbourg. He was a KGB officer having held important posts abroad. Putin was renown for his loyalty to people around him and for his close friendships. It is not a surprise therefore that most of the power dwellers who emerged under his rule either come from St. Petersbourg or served at some point with the intelligence services. If, as some of them do, combine both the above characteristics then they are at the highest levels of the power scale.

The image of a KGB officer brings shivers to many a western mind. Their view of themselves is however very different. During a conversation I had an evening after dinner, and drinks of course, with a powerful siloviki he disclosed to me his former intelligence services past. He was very proud of it. “We are the best public servants the country has today. We are well educated and practically among the very few who speak fluently foreign languages. We are not corrupt and we do not take bribes. And we did not train to serve communism, but the power and the integrity of the state. Besides, we were the only ones who were able to openly criticize the old regime”. To my obvious surprise, he immediately commented: “We would send messages back to Moscow displaying the faults of our system, at least as we were perceiving them from where we were, attributing the comments to …western speakers and commentators(!) It is not by chance that only the KGB and its chief at that time, Yuri Andropov, were aware of the doom awaiting the Soviet Union. Wasn’t, after all, Andropov who promoted Gorbachev and enabled him to control the reigns of power?”
Along with the siloviki the most important maestros of Russian domestic social and economic policy are the notorious “oligarchs”. Surprising young, almost all of them, do not radiate at first glance either status or power. Before Putin, however, they were holding in essence the steering wheel of the Russian economy. Putin explained to them that he was representing the state. And the state had to be strong and omnipotent. He was prepared to let them alone in their business dealings. But he was determined to confront anyone who did dare to involve himself in politics. Thus, his stand off with Berezhovsky and Khodorkovski. Their arrogance and explicit political ambition clashed head on with a determined and ruthless state machinery. There was no doubt in whose favour the odds lay.

The confrontation went far beyond the official explanations of tax fraud and economic misdeeds. It was primarily a clash of characters – the two oligarchs wanted to sustain the flabby Russia of the Yeltsin years threatening to topple the President or buy off deputies to kill bills in the Duma. Putin desired a mighty state reminiscent of the years of the Soviet Empire. The oligarchs were unpopular. The new President caught the aspirations of a tormented public. When I met some prominent oligarchs in a presentation of the new competition law at their Union premises the battle was already over. The young and, some of them, fiercely looking entrepreneurs were devoted exclusively to their business objectives. They understood silently the restrictions that the new law was bringing upon their practices, as explained by the Minister Igor Artemiev. Medvedev, as the head of Gazprom and not as a government member explained that business had to comply with the new legal regime. It would be good for their prospects, he assured everyone. I remember sitting behind the Minister and feeling uncomfortable encountering the inquiring eyes of the most powerful men in Russian society.

A different novelty was the realization, in picking a westernized flat in Moscow’s center, that there are no fire exits in the old buildings’ designs. As the housekeeper put it to me, “in Moscow you get out from your house in the same way that you get in”. Provided you find the way to do it, I said to myself. I was thus obliged, on the advice of a Swedish colleague, to buy a relatively long rope bound staircase to hang from my balcony in case of emergency. I was never forced to try it. I still doubt it would had worked!!

It was also an unexpected surprise, even for someone coming from the southern Balkans, that in shops, office buildings or at the underground exits if you were unlucky enough to open a door and keep it for someone behind you to follow, you might had to keep it open yourself for the rest of the day. Nobody would volunteer to hold after you!! People would pour out urgently overlooking your presence and your polite (!) gesture…

What really strikes the visitor in this intriguing and in many respects amazing country is the ability if its people to remain idle for most of the time and suddenly rush - completing tasks at a blink. Someone explained to me that this is due to their collective social memory and historical character trend. That is, Russians used to live in village communities relying for their livelihood upon a hard and adverse physical environment. Russians were accustomed to spend long dimly lit days and dark nights idly – doing practically nothing. They would work suddenly in a frenzy, almost all together, to complete agricultural mainly tasks within the short range of bearable climatic conditions. This explains their slack attitude today that worries observers and brings colleagues almost to the brink of panic and hysteria.

Many a westerner may find himself dumfounded upon the discovery of unbelievable situations. Once in a seminar, with government cadres and judiciary members of central Siberia in Novosibirsk, I came across a rather unexpected query. A respectful and aging judge came up to me and addressing me in a very sincere voice said: “Could you please explain to me the meaning of the word bankruptcy?” These people, remnants of Soviet times, were called upon to apply rules of anti-trust and cartel embattling policies. The difficulties were, and are, obvious.
Likewise, the cheating practices of communist times, are still quite prevalent. Meeting with representatives of various Russian government departments and European Commission officials for a progress report occasion concerning our competition project, a cadre from the Presidential administration reiterated the government’s interest in the publication of numerous leaflets to propagate the new law’s auspices. After the end of the meeting, and the agreement of all parties concerned to fulfill the Presidential Administration’s request, it suddenly came to me. The aforementioned “official” was no other than an employee of the publisher who was destined to profit handsomely from the publication of the leaflets!!

A few words finally about Russia’s regions. The country is immense. It is extremely difficult for the center to hold. Center and periphery are often at odds. The government tried to hijack the regions from the all embracing and greedy claws of the country’ oligarchs. Before governors were appointed by Moscow, they were essentially “elected appointees” (that is, men of straw) of the various regional business tycoons. That does not mean that even today Moscow is in absolute control of the regions. Recent events in Dagestan (an eastern Caucasus republic) prove the point. A Moscow appointee as tax inspector was thrown out of his office by guards loyal to the President of the autonomous Republic. He came back with an armed escort, and he was finally forced to go into hiding, fearing for his life. And this is not an isolated incident. There are frequent clashes between Moscow emissaries and regional strongmen. Tensions are not appeasing. The lack of funds makes things worse. While rivalries emanating from ethnic differences and religious controversies do not appease alarmists and Russian nationalists who fear fragmentation and centrifugal regional trends.

Russia remains a fascinating and intriguing country. No matter what its differences with the West are it will always be an integral part of European Christian tradition. Irrespective of difficulties and problems working with Russians will always be a learning experience and a challenging and attractive task.