Two weeks ago the Duma (the lower house of the Russian parliament) voted to ratify WTO entry. Russia, after Brazil, India and China, will soon become the final BRIC country to join this global-trade club. This is an important step forward in the process of industrial modernisation for the country.
Russia has a population of over 140m people, and this population’s consumption is rapidly rising. Leading sectors of the Russian economy include aircraft, helicopters, engines, turbines, industrial gear such as pumps and compressors and military equipment. There are many Russian industries and businesses that are competitive, for example the Gorky Automobile Plant (GAZ) in Nizhny Novgorod. This company is taking advantage of its strong market position in commercial vehicles by producing profitable niche products such as ambulances, rescue vehicles, specialist lorries and buses. It is also assembling Skoda cars, Mercedes vans and other foreign-branded vehicles from imported kits.
Since 2009, around 600 state industrial firms with approximately 900,000 employees have been transferred to a restructuring agency, Russian Technologies (RT). The government seems to have decided that the best way to give a boost to industry is to encourage foreign investors to act freely.
Skolkovo, an attempt to create a Silicon Valley-style technology cluster outside Moscow, has attracted a lot of attention. Skolkovo is nearly 400 hectares, and it will boast a research university with 1,800 students, 40 corporate research and development (R&D) centres and a “Technopark” housing up to 1,000 start-ups. It will also be a special economic zone and companies based there will have large tax breaks and get special treatment for visas and imports.
In Russia there is a big difference between dealing with the government and dealing with private companies. Regulations to spend public money are strict and complicated, but at the same time Russians are keen to bypass rules: if you know the right people you can access public money quite easily. As for the private market, you cannot go there and sell independently; you need to find a local partner. Russians are sociable, they like knowing about your private life and spending time with you. If a Russian starts joking with you, it means that you are at a good level to start doing business. At the same time, Russians prefer oral agreements over written ones, so you have to be prepared to commit orally, which means you have to trust your commercial partner.
Having somebody who knows the language is very important, but at the same time it’s difficult to find Russians who speak good business English. The ones that do are very expensive. Russian is a Slavic language in the Indo-European family. The vocabulary (mainly abstract and literary words), principles of word formations, and, to some extent, inflections and the literary style of Russian have been also influenced by Church Slavonic. Over the course of centuries, the vocabulary and literary style of Russian have also been influenced by Western and Central European languages such as Greek, Latin, Polish, Dutch, German, French, English and to a lesser extent the languages to the north and the east: Finno-Ugric, Turkic, Persian and Arabic.