Although all panelists participating in a discussion last week at the World Trade Club, Atlanta on investment opportunities in Russia recounted tales of having been robbed on visits to the former Soviet Union, they remained surprisingly upbeat about their activities there and about the future of the country’s economy due to its human and vast natural resources.
June Q. Koch, a former official in the Reagan Administration and president and chief executive officer of CMT (Construction Marketing & Trading Inc.), a consulting firm to companies doing business in Russia, foresaw expanding business opportunities, even if political turmoil and frequent government collapses occur. She said that CMT had been tracking U.S. government funding opportunities for its clients and has held meetings with top officials running government agencies and multilateral lending institutions. “We have projects waiting in every pipeline,” she added, “so when money comes in we are ready.”
Concerning Russia’s future, Dr. Koch cited a conversation she had with Victor Bukato, chairman of Mosbusinessbank, the largest commercial bank in Russia, who optimistically referred to Italy’s economic successes in the face of constantly changing governments. Her conclusion is that “political instability is a natural outcome and an inherent part of Russia’s move to democracy.”
She also cited Russia’s reassertion of its economic influence in Belarus and its military and political influence on Georgia as positive, strengthening internal stability within Russia as well as providing some needed stability in the region. And she added that Germany’s “toehold” in Russia based upon both current and historical relationships may have a moderating influence on political and economic developments.
Robert L. Schwartz, chairman of the St. Petersburg World Financial and Trade Center and president of HDC of Atlanta, has developed the Crystal Business Center in St. Petersburg which recently opened with Pepsi-Cola and Schlumberger as tenants. He also heads a group developing a larger business center near St. Petersburg on the Bay of Finland.
When asked what he hoped his aspirations were for Russia’s future, he held up photographs of a model of the proposed center, which is to be designed and built by Atlanta-based Lockwood Greene and Frankfurt-based Philipp Holzmann. The center will cover 17 acres and provide Western-style office space and apartments.
Both Dr. Koch and Mr. Schwartz remarked that despite enormous economic difficulties, the Russian market is potentially very wealthy. Even corruption, according to Dr. Koch, could be viewed as a positive sign in that “organized crime flourishes only where commerce flourishes.” However, Dr. Koch said that as the corruption “becomes more and more scandalous” a popular backlash will take place “because they can’t keep on doing it forever.”
CMT’s office in Washington D.C. may be reached by calling (202) 296-8228 or by fax at (202) 296-6125. Mr. Schwartz may be reached at the HDC office by calling (404) 804-5777.