To Russia With Dollars
Will he believe this time?
Good news on the Russian front! I am always leery of doing business in a system I don’t understand, and I am no expert on Russia. I’ve been there but several years ago. But this week, the country is grabbing my attention – for positive reasons.
One piece of good news is Moscow’s decision to delink its application to join the World Trade Organization from its neighbors Kazakhstan and Belarus. Trying to join as a customs union was always going to be complex and long struck me as a delaying tactic by those in Moscow who didn’t really want to subject themselves to the WTO’s rules of behavior. Now they seem to be getting serious – possibly a sign that more forward-thinking power brokers are gaining an upper hand. We can hope. In any event, applying alone can only speed things up, especially now that Washington has apparently agreed to be Russia’s champion to make things happen in Geneva.
And American companies are taking a rosier view of Russia’s prospects as a decent place to do business. Dunkin’ Donuts is re-entering the market after giving up eleven years ago – planning to open twenty coffee and donut shops in Moscow this year. The company couldn’t get the Russians interested in donuts the first time around, plus they had to cope with a rogue franchisee who added vodka and meat pies to the menu. Wasn’t the right image, apparently. McDonalds has survived in Russia for twenty years, but Burger King joined the fray only in January. Starbucks has been in Moscow for three years and now has 26 shops in the Russian capital.
The big bet, however, is John Deere’s decision to invest half a billion dollars in Russia! The tractor company opened a huge new plant in Russia Tuesday, banking on strong growth in Russian agricultural production. The company plans to assemble tractors, combines, backhoes, graders, loaders and forestry equipment. That kind of investment shows confidence though I am bemused by the reasoning. Says John Deere’s CEO, Samuel Allen, himself quoting a Russian poet: “Russia cannot be understood by the mind alone. … In Russia one can only believe.”
Believing is sometimes tough. Witness yesterday’s New York Times article about Russian investigators simply ignoring evidence, presented by Germany and the United States, about Russian agencies seeking and accepting corporate bribes. Until Russia takes corruption seriously and does something about it, it’s going to hard for the rest of us to take Russia seriously.
