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By Frederick Andresen
Author of Walking on Ice, An American Businessman in Russia
“Their starting-point is different, and their courses are not the same; yet each of them seems to be marked out by the will of Heaven to sway the destinies of half the globe.” Alexis de Tocqueville had it right in 1831 about America and Russia. And his perspective is right today. How does the United States interact with its closest neighbor next to Canada and Mexico? Many Americans have worked hard at this. Some have failed and others have succeeded. Based on one of those successes, this nine-part series focuses on the issues and practices that make success happen in Russia today.
Part 8: Power of Human Capital
In Washington I took a course in negotiation from the very people who trained the American side in the nuclear arms treaty discussions. They stressed that if you can’t figuratively sit on the other side of the table and understand where your opponents are coming from, you will never be able to come to a mutual and sustainable agreement.
So let’s stand back, pull up a chair on a satellite maybe and look at America and Russia to get a better perspective. Look at America down there. We have rested, deluded in our privacy behind two big oceans and two weak neighbors and historically haven’t cared much for, or therefore haven’t studied much of what moves the rest of the world. But change is happening. Americans are growing up.
Now look at Russia on the other side of the earth. Russia suffers from an inconvenience of geography. A country twice the size of the United States with half the population (and decreasing) with some, perhaps even subconsciously, still living in the legend of a 19th century empire -– but with no warm water ports which defined an empire, no geographically definable borders to protect them, the country is not totally East nor West, but a mixture of both.
It is a flat land with a history of invasions and occupations; from the Mongols (who stayed 200 years) to Napoleon’s irresponsible invasion, to Hitler’s Germany (20 million Russians died) it is not difficult to see why the Russians tend to choose a more activist set of policies to protect themselves if it can get by with it.
For the most part they have not gotten by with it. The Afghan Wars of the 1860s were started by Russians to get a port on the Indian Ocean, but the British won that argument. Russians lost the Russo-Japanese War of 1905 with their wood-fired ships.
They instigated the Korean War to get reliable access to the Pacific and had to back out and make a deal with the Chinese when the Americans took over. And when the Russians invaded Afghanistan again in the 1970s for an oil pipeline to that water, the Americans again intervened.
And of course there was this thing called “The Cold War.” In that case they defeated themselves, failing internally.
Today their passion to control the Black Sea and the access to the Mediterranean and Atlantic is a historical compulsion of their leadership. Of course there is also money, which means oil in the modern economy.
Always follow the money.
What exactly are some Russian leaders straining to do now –- return to empire? It’s an uphill climb for them. Partly driven by nostalgia and nationalistic pride, it is also a perfectly logical and predictable expression of the Russian historical and geopolitical mindset.
Russia has always been a multiethnic empire, heavily stocked with non-Russian (and non-Orthodox) minorities. Their main weapon today is the pipeline.
Czar Nicholas I said that Russia must be ruled by three things: orthodoxy, autocracy, and nationality. Today it would appear that the church and national pride are being used to support a resurgent autocracy, but that is only one side of the coin.
Russia can no longer retreat into its vast Eurasian closet and claim exclusivity. Global change is upon them as it is on the rest of the world, including America.
So where does the globally minded businessman fit into Russia today? They are competitors and partners, but certainly not enemies.
Enemies are needed only by the few old Cold Warriors in Moscow and Washington who need a purpose. Russians and Americans make good partners.
In a 1998 conference there was an American man with a development project with six Russian scientists. He said, “The Russians can invent anything, but they don’t know what to do with it. The Americans can organize, make and sell anything, but they don’t know where to find it. Americans and Russians make the best team.”
There is a prophesy about this. “There are, at the present time, two great nations in the world which seem to tend towards the same end, although they started from different points: I allude to the Russians and the Americans.
“The Anglo-American relies upon personal interest to accomplish his ends, and gives free scope to the unguided exertions and common sense of the citizens; the Russian centres all the authority of society in a single arm: the principal instrument of the former is freedom; of the latter servitude.
Their starting-point is different, and their courses are not the same; yet each of them seems to be marked out by the will of Heaven to sway the destinies of half the globe.”
The prophecy comes from de Tocqueville’s “Democracy in America.” The words he wrote in 1831 still ring true. As businessmen we have a great opportunity to make a lasting contribution to growth, to well being, to peace. But it’s not easy.
“In Russia, everything is difficult, and everything is possible.” Therein lies the challenge and the fun of it all. If it were easy, everyone would do it. Russia, after Canada and Mexico, is America’s closest neighbor — 58 miles away.
It is imperative that we know what makes our Russian neighbor tick and how to make de Tocqueville’s joint “destiny” work for the betterment, not the threat, of humanity.
Russia is an incredibly rich country, and the real richness is in the minds of its people, not its mines. Russia’s greatest asset is its human capital. Any effort that accelerates the realization of the intellectual potential of Russia speeds its normalization and economic progress. A country of 141 million people with a 99.7 percent literacy rate is to be worked with, not against, if you can get around the politicians and nationalists.
The country has far to go to reach its vision of empire in this changed world. The GDP was growing at about 6 percent a year, one of the top rates in the world, but mainly based on oil. The academicians, the think tanks and the government bureaucrats hold conferences and give redundant advice, quoting each other, about what Russia must do.
At the personal level things happen regardless. To paraphrase a popular saying: “what official eyes fear will never happen, Russian hands are hard at work doing it.”
>> Read Part 1: Three Sides of the Coin
>> Read Part 2: Walking on Ice
>> Read Part 3: Quest for Global Status
>> Read Part 4: The Burden of ‘Yes’
>> Read Part 5: Tollgates, Not Roadblocks
>> Read Part 6: The Rule of Thumbs
>> Read Part 7: Deciphering the Culture
>> Read Part 9: Five P’s of Success
Title: Walking on Ice: An American Businessman in Russia
Author: Frederick R. Andresen, a 1958 graduate of Thunderbird School of Global Management, specializes in general business management, marketing, entrepreneurship and relationship building in Russia and other emerging markets.
Endorsement: This book “is mandatory reading for all who contemplate a tour of duty whether government or business in Russia or who have worked there … it brings back memories and reality. With insight, understanding, and a rare degree of humor, Fred Andresen tells us about working with the Russians,” Richard Weden, general director, American Express Russia, 1995 to 2004.
ISBN: 978-1432713522
Publisher: Outskirts Press (September 2007)
Information: www.fandresen.com
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