What is AmCham’s primary purpose?
Our mission is to improve business conditions for our members. Our members come from all over the world, while the primary group are Americans. However, what an American company is these days is not very easy to define; but it usually means a company with American roots. Also, we have multinational companies from Asia, Europe, and we have Russian companies. We are involved in trying to make business conditions better for all of them.
What does that mean? It means lobbying, commenting on certain laws and legislative initiatives, and trying to work with the government on the regulations that put their own laws into practice. Individual companies have individual problems. Sometimes it is a lack of attention by a local government or something that is getting in the way, and we will try to undo those blockages. We also – especially over the last year – have served as advocates for US companies before the US government, because the US government, through sanctions, has become part of our lives. We have always had the door open to the US government. Before I came on board, there were major initiatives to help Russia enter the WTO. There was the famous Jackson-Vanik amendment that was designed to punish the Soviet Union for not allowing Jewish emigration. Then they allowed Jewish emigration, but the amendment was not withdrawn for decades. You can always find a reason to punish Russia.
These days we are mostly concerned with the sanctions. How to deal with them, how to understand them, how to get the message back what the impact is; and what unintended consequences there might be.
How effective is your lobbying?
Membership is holding up pretty well. The appreciation of companies ultimately is in whether or not they join, and they do join. That’s the ultimate litmus test.
Do you divide your members into sectors?
There are certain legislative initiatives that effect everybody, and there are some that are sector-specific. Basically, we don’t try to invent the solutions, because we represent people who know better.
I suppose that this is an interesting time for you? You provide a business format where people can come together in times of difficulty and share their problems and grievances?
If you think back to the origins of these associations, that’s how they formed, and ours is no different. It formed because a group of business people got together, because they needed to get together. After some time, it attained a formal structure, more members and a full time staff, and that is how it developed. Yes, in difficult times, people probably need it more. It is not an accident that baseball was more popular in the 1930’s than in the 1920’s.
Am I right in my observation that many American companies have downsized, but have not pulled the plug completely?
Yes, a company moving out completely is very rare. Maybe a little bit less rare amongst smaller companies, but among the major corporations this is almost non-existent. Some might reorganise, but that is a response to business conditions, a response to the business cycle, not so much a response to the political situation. Demand has dropped sharply, so people have to adjust. They understand that this is a cyclical economy.
Like any other economy?
Even more than other economies, because of the size of the energy sector in the total Russian economy. I get asked the question: “what is Russia’s potential?,” quite a lot. My answer is simple. The potential is what it was, it hasn’t changed. In fact, it’s greater because the price of oil is low and is likely to go back up. That means that the economy will grow. It is easier to diversify away from oil when the rouble is low. And it is easier to diversify away from oil when you have to.
In general, there are fewer people coming out here, is that correct?
Companies outside of Russia read the headlines, they don’t get past the surface, and even if they do get past the surface, they have to dig deep to get the real picture. If you read that Russia is radioactive, it’s toxic, don’t go there, you probably won’t. You can get past that when you are already here, but it’s more difficult to get past it if you are a smaller company, if you have less international experience, and if you are looking at Russia superficially. I think publicity is an important element, and geopolitics have a major impact on this. The last three years for me has been dominated by the sanctions, and sanctions are a symptom of the geopolitical situation.
We have noticed amongst the European expats, that there are fewer high level expatriates, and more middle-level managers. Is that the same with the American business community?
Yes, very much so. It’s a change driven by several factors. One of them is that it is super expensive to keep an expat here, and companies since 2008 and 2009 are much more conscious of every penny. Then you look around and ask what are the alternatives? The alternatives have grown up. There are Russians who have spent 20 years or more working in Western companies and are fully capable of doing a job that previously required an expat. In addition to that, the economy is not what it was. It is down, in some cases, twenty or thirty percent, maybe more. A company looking at itself globally from the US says OK, I have a business in England, it gives me 10% I expect it to give me 11% which is my bottom line. I have a business in Russia, that last year gave me 20% and this year will give me 10%. So all of a sudden the business in Russia drops out of the list of priorities. There is also the matter of negative publicity about Russia.
I would say an interesting thing about AmCham in comparison to the other chambers here in Moscow, is that amongst the AmCham board, when you look at the people around the table, probably the largest single group is Russians. The second largest group is probably Americans, then you have everybody else. So you can really see the effect of globalisation.
Do you organise cultural events at all?
We have a few major events that we organise every year, and these are coming up. The first is our annual golf tournament, which happens on June the 16th. It is popular and attracts a lot of interest. Then we celebrate July the 4th in a big way. That’s an interesting event because for some time it was considered the largest celebration of July 4th outside of the United States. I don’t know if we can claim that distinction any more, but we do continue. For the past three years, we have held the event in a closed venue, with pre-registration because of the geopolitical situation, but this year we are going back to a public space – to Izmailovo park. That will be a big family social event.
In December, we will have our Awards and Holiday party just before the end of the year. That will be one of the first Saturday’s of December. That will combine celebrating the year that was, looking ahead to the holidays, and we will give our corporate awards: Company of the Year, Business Person of the Year, Small Business of the Year, Committee Chairman of the Year, and each of those has a charity component.
Those are the formal events. In between, we do what we call Business After Hours, which are essentially cocktail parties, which might include a speaker. We recently organised such an event together with the Russo-British Chamber of Commerce (RBCC), which was great in terms of the mutual synergy that was generated.
Where are you from?
I am Russian/American. I was born in the States, my family emigrated from Russia in 1920, and emigrated first to Yugoslavia, which was then called the Kingdom of Serbia and Croatia. My parents lived there until the end of WWII and then moved west to the American zone in Munich where they lived until 1949, when they moved to America. My first language at home was Russian. Everybody around me spoke Russian, and I learnt English in school. I came here full time in 1998, and set up JP Morgan’s business in Russia. Before becoming President of AmCham, I was a banker for over 30 years.
What do you personally think of Russia and Russians now in 2017?
I think Russians are people like everybody else. They have the same interests, strengths and weaknesses. They tend to be able to deal with difficulties better than most; they are used to them. I would say that in the last 20 years that I have been here, Russia and Russians have changed. I think that Russians are much more comfortable, integrated in the world than they used to be. 20 or 30 years ago, when you saw Russians in the States or Europe, you would know it. Today you wouldn’t.
But don’t you think that Russians are still isolated culturally, ethnically?
To a certain extent yes. Russians are Europe’s largest ethnic group. You have this great nation concept of greatness, more than in any other European country. Russia is different. It isn’t part of the EU. There are these barriers; the visa system, the traditions, the habits, the customs, they are hard to deal with sometimes. But that’s what makes life interesting.