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The media often focuses on the "CNN vision
of Russia", which is a negative perception
of business practices here. How can MIBA change
this perception and support investors before they
arrive in Moscow, and how are you opening the
City of Moscow to further international investments?
When the Association was created at the end
of 1997, its main task was to protect companies
that were coming from abroad to Moscow. However,
after the financial crisis of August 1998, many
companies faced difficulties with fiscal and customs
authorities. So we changed our main strategy -
we decided to attract, to help and to develop
the Russian economy. I think it has been a success
so far. Mere statistics prove this: when we started
in 1997 we had 30 company members, then in ?ugust
1998 we had 73 members and today we have over
200 members, banks and enterprises from 21 countries
of the world.
We commit ourselves in the face of our company
members to protect them, and during our 4-year
existence we have never had to ask the Mayor or
the city chief of police to intervene or to protect
some of our companies. Why? First of all, when
a company starts a business here we are very attentive
to its choice of partners; that was the reason
for admitting numerous Russian companies (especially
after the August crisis). At the first stage of
our development we were actually composed of the
majority of foreign companies and after that we
understood that our company members also need
reliable Russian partners.
Today the Association is composed of three major
groups:
1. Major international companies like IBM, Ericsson,
Siemens, Nestle, Pricewaterhouse, Deloitte &
Touch, Pepsi, Procter & Gamble, etc.
2. Moscow-based medium and larger size companies,
except the major state companies like the oil
and gas corporations
3. Regional companies. Today we have 32 representatives
in Russian regions and 12 representatives abroad.
This developed network allows us have closer links
with foreign companies which are not yet represented
in Russia but intend to come here. On the other
hand this also includes regional companies who
wish to expand to a national or even international
level through Moscow.
And as far as the business climate, would you
say that things have changed since MIBA was inaugurated?
Do you feel that business partnerships are stronger
now? Perhaps this reflects the maturity of the
city today?
Indeed, the Mayor of Moscow was a leader in this
matter and he has led the way to raise the level
of security in the city. Not only did he pay the
police force to increase their regular federal
budget salaries, but he also purchased modern
equipment, he constructed new offices for the
police force and he invested money and effort
for 5 or 6 years until the statistics showed considerable
improvement. Finally, the situation concerning
city security, safety of citizens and business
climate is stable and positive. In spite of the
fact that Moscow was potentially a fertile soil
for crime growth because of the bright social
contrasts, the city has developed a major leisure
industry for business and tourism, and security
is no longer a major concern.
One of main concerns of MIBA is constructing
a business dialogue between the government and
the business sector. How are you bringing both
these sectors together?
If you have a look at the membership of MIBA you
will see that both the administration and business
sectors are represented here. Our President is
the mayor of the biggest metropolis in Europe,
and our Board includes representatives of the
Moscow City government, the Federal Parliament,
as well as top-management of major Russian and
foreign companies.
Our logo for four years has been: BUSINESS - GOVERNEMENT-
DIRECT DIALOGUE. We try to organise this dialogue
on all the levels of the board. The first level
is regular meetings of the Board with , discussions,
tough definitions and so on. The next level is
bilateral meetings of the company members with
city authorities, federal authorities and chiefs
of the different services. Finally, the third
level of dialogue is a series of events which
we organise. These are of special importance -
we organise 80 to 100 events every year which
includes professional seminars addressing specific
topics like accounting practices, tax legislation
and customs policy. We are also hosting conferences
on specific sectors of economy like e-commerce,
logistics, retail, transportation.
Let us consider the modernisation of Moscow,
and its international image. The first thing which
comes to mind is Moscow city roads and traffic
congestions, but there are also numerous dynamic
projects under way such as the Moscow "City"
Project…
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Yes, this is a gigantic project which will create
a huge new business district in Moscow. This will
be a new centre of attraction, with the modern
technology of "intelligent" buildings
and a major infrastructure plan which will help
ease traffic congestion. In fact, the Moscow City
government has already started building a monorail
from Sheremetievo Airport to the "City",
and we are preparing the next stage of construction
which will involve a link with the Domodedovo
airport as well. New metro lines will also be
constructed while the pedetrian bridge is already
in place/.
Moreover, we have taken the decision to move all
of the Moscow City government offices and services
to the Moscow "City" site, which will
increase the importance of the centre in the business
life of Moscow.
With such modern and innovative project, we believe
that the public funds invested will bring a considerable
return to the City of Moscow.
What are some success stories where you can
say that MIBA has been able to make a significant
contribution to the City of Moscow?
In the course of the past four years, foreign
company members of MIBA made more than three billion
dollars investments in Moscow and Russia as a
whole. For the last ten years all foreign investments
accumulated in Russia are estimated at 45 billion
dollars… Of course membership in MIBA was
not the only reason for such a strong investment
growth, but the fact remains that MIBA has truly
provided accessibility to the city government,
availability of investment information, and partnership
building activities.
Some worthy specific cases I can mention include:
· PEPSI, which has already made almost
600 million dollars worth of investment here,
are operating brilliantly in the Russian market
5 own plants.
· Sun Group has made $500 million in investments
through commissioning breweries, IT companies
and creating a distribution network in the country.
· Construction companies like Skanska or
Hochtief have already built more than 200 sites.
· Heidelberg, the German giant for polygraph
equipment, has recently completed a huge program
of press houses modernization.
· The hypermarkets network METRO CASH &
CARRY, a German retail company, succeeded to open
3 retail centres in Moscow and plans to open at
least two more this year. Their experience proves
very convincingly that you can work here, succeed
and prosper.
During your career you have worked in the military,
then in foreign affairs, and you finally moved
on to the Mayor's Office of the City of Moscow.
How does your experience change your focus in
promoting Moscow abroad and attracting foreign
investment?
For me practically nothing has changed - I was
always a patriot of Russia, not of the ideology
or its policies. I practically have my life divided
in two: after the military service I worked in
the City of Moscow and started as an inspector
in the municipal district, which was a good education
in human relations and community building. Then
I came from the district to the municipality of
the city and became first the assistant of the
Executive Committee for the City Council, then
I became Vice Director of the Department of International
Relations. I worked for three consecutive mayors
- Saikin, Popov and now for Mr. Luzhkov.
When I was appointed 4 years ago as the General
Director of MIBA I was oriented to defend the
interests of the city, but today I can say that
my priorities are with the interests of MIBA's
company members. After this, we represent the
interests of the city government and business
community as a whole. And finally we also protect
the interests of the citizens, for this is our
ultimate aim.
Our company members create social ingeneering
and business infrastructure, they construct residential
houses, office buildings, theatres, cinemas, leisure
centres, create new working places, pay taxes,
hire new young active people and thus help grow
and develop those who will change the country.
I am also very proud to say that practically all
the top management of foreign company members
are now Russian.
What is your final message to potential investors
who may be interested in coming to and investing
in Russia?
In the past two or three years Russia's market
has radically changed - and even though this may
not yet reflected in public opinion or business
circles abroad, there are many success stories
here, and many more to come. You have to choose
your partners in the Russian market very carefully,
and meticulously establish the legal base of your
business in order to succeed.
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