Corrections or additions?
This article by Bart Jackson was prepared for the April 17, 2002
edition of U.S. 1 Newspaper. All rights reserved.
The Russians are Buying
The days of America’s wild, wild West, while inspiring
a century of fantasy and mediocre TV, lasted but a few brief decades.
The land of the cowboy fast became a nation of laws. And even the
Tommy Gun blasts of the 1920s gangsters proved a noise offstage to
the real roaring of our nation’s burgeoning business. So it is with
the old Soviet Union. The wide open frontier of the Russian Mafia
and black market has given way to capitalist turf.
Both entrepreneurs and established companies seeking to deal with
some of the world’s wealthiest new democracies may want to attend
"How to Do Business with Russia" on Thursday, April 18, at
8 a.m. at the West Windsor campus of Mercer County Community College.
Cost: $25. Call 609-586-4800, ext. 3639.
This workshop is one in a series of breakfast meetings designed by
the MCCC Global Business Center to help small and medium size
establish markets abroad. Speakers include
of Collective Consulting International, and
representative of construction equipment distributor Hoffman
"A wealth of misunderstanding, despite a wealth of need, currently
separates Americans and Russians from joining in profitable business
ventures," says Artemenko. An expert at bridging this cultural
gap, Artemenko was born and raised in Kiev where she studied for the
diplomatic corp and also earned a teaching degree. After gaining
from Kiev University, she continued her studies in Princeton
In 1994 she founded Collective Consulting International in Basking
Ridge to help ease the flow of trade in both directions.
For decades, Americans have kept to the style of business practiced
within their own borders. And why not? The Chicago businessman could
trade a thousand miles in any direction and never leave his language
or commercial customs. Unfortunately, as we now enter global markets,
the American trader has found himself burdened with a severe
disadvantage. On the up side, Artemenko says, American goods hold
an almost mystical appeal in the Baltics and old Soviet states. Those
American businesspersons willing to arm themselves with a little
and lots of understanding will find great rewards.
regional language you can learn before you travel, the better. But
since 88 languages exist within Russia and the old Soviet states,
it is not always wise to count on a translator from home. Artemenko,
who herself knows seven languages, suggests that an interpreter be
established in each city or region you intend to visit. While the
small business may not have the capital, even a middle size firm may
profitably seek a consultant’s guidance.
Co-speaker Tumanyan agrees that language is a major separating point,
but argues that the entire culture should be studied before
travel plans, let alone business deals. In addition to holding its
own set of general customs, each nation’s business community operates
within its own culture.
For the past 25 years, Tumanyan has developed a expertise in several
global business cultures. After immigrating to the U.S. from Moldavia,
where she studied German, Tumanyan studied at the Texas University
Latin American Institute and became a teacher of Russian. Since then
she has worked for Hoffman International, easing the corporate path
in such areas as China, Latin America, the Baltics, and Russia.
demanding a letter of credit before any negotiations can begin.
says Artemenko, "you are just not going to get it." Russian
capitalism is barely a decade old. Established credit records seldom
exist — and when they do, they may be scrawled on hand written
ledgers. Virtually every other nation negotiating with new Russian
companies offers substantial financing. Americans, once legally denied
this tool, can now employ the financing lever to win contracts.
belief is required," says Tumanyan. "In America, laws are
designed to push trade forward. In Russia, they are made to halt the
flow of business and examine it at every step."
For example, five years ago Russia faced an onslaught of new goods
and a cash drain of $20 million a day. To halt this, the government
installed restrictions, forbidding any currency from leaving the
for more than 90 days before the goods were delivered. The fact that
you may need that cash for goods which take 180 days to produce or
procure is incidental. Yet, as always, there are little instruments
such as the "passport of the deal" allowing an exception,
or the creatively conceived "comfort letter," which lands
you within the legal zone. Doing business is a matter of learning
how to negotiate these loopholes.
up trying to explain, train, and cajole," warns Tumanyan. Covering
the complexities and benefits of a three-year T-bill can take easily
an hour and a half. Convincing people to ship in cost-saving partial
containers, delving in the exactitudes of Russian or American banking
forms — everything takes an enormous amount of time. In addition,
the old Soviet states operate on a system of trust. Winning this trust
must be done day in and day out; but once won, your dealings further
on are assured.
goods, but it needs them delivered its way. For example, under
the Soviets dealt only with major manufacturers in large lots. This
attitude retains. If you are a distributor, who is supplying only
100 units to a given dealer, you may have to break down this small
lot reticence by including a full accessories inventory and warranty
and service commitment.
not the ruble — is the preferred currency in Russia. Yet too many
off-site managers have endured losses in this, and other currencies,
by depending on the Western system of long-distance cash collection.
In Russia, out of sight leads to out of pocket. Managers who continue
to present themselves on site, overseeing production and sales, will
discover that businesses and local banks respond, albeit slowly.
managers who show up American-style, exacting payment schedules, will
very likely be disappointed.
Russia holds a somewhat unique position in the global economy. In
one sense, it is a new democracy with an emerging capitalism. But
unlike others in this category, it is massive in area, unrivaled in
resources, and has enormous purchasing power in the hands of both
its government and its individuals. As Tumanyan puts it: "America
and Russia are closer souls than either one thinks. We are sisters.
We learn from them — they learn from us."
— Bart Jackson
Corrections or additions?
This page is published by PrincetonInfo.com
— the web site for U.S. 1 Newspaper in Princeton, New Jersey.