CRISIS 2015

 

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We are now well into (another) crisis. Many of us have been here before but the current situation is very different. Complex, with a multitude of factors each playing a role in the continuously developing scenario, the likes of which we have not experienced before.

Moscow is host to an estimated 170,000 expats and their families. For many it is their home and the place where a great number of expat businesses have been established with considerable investments. To some it is just a 4-year stint on an ever-revolving cycle of postings abroad. However we are all caught in the middle and whilst each has his/her own agenda for survival (or departure), we wanted to attempt to gauge the mood of our multi-cultural readers with a series of short interviews to enable a cross section to express their views and offer hope/advice/commiserations to our readers.

Our primary aim is to portray the real feelings and emotions of expats actually living and working here in Moscow in contrast to the emotionally written articles by our International colleagues that mostly portray a completely different view on our lives!

Those interviewed are a comprehensive of expats living and working in Moscow, who combined bring decades of experience dating back to the very early days of modern Moscow.

We asked 4 main questions and in this issue the cross section is mainly business orientated. We will continue in the next issue of Moscow expat Life, so if you have some comments or would like to be interviewed please contact me at Moscow expat Life publisher@moscowexpatlife.ru

Chris Helmbrecht, Partner at KOLLEKTIV, 11 years in Moscow.

Chris Helmbrecht

Chris Helmbrecht

 

We are now well into another crisis and the playing field seems to change on a daily basis. How is this affecting your industry/company and what immediate policies are you making?

We are cutting costs, keeping expenses down, looking for foreign business. Every crisis offers opportunities. We are trying to use the current situation to our advantage, offering Russian creative services for a low cost to our European and US clients and partners. It’s a win-win situation for everybody. Our creativity earns business and Euros, we make money and our partners get good quality work for much less than in their home markets!

Many of us have ‘survived’ previous crises, what is your prognosis for the future? Will business return to normal?

According to my business/finance contacts, the worst is still to come. They forecast a never-seen-before-economic-crash along with running inflation for the first-second quarter of 2015. Hopefully they are wrong. In any case, the recovery will take a few years. As soon as we are through the bottom and recovery begins, I want to start two new businesses with the help of investors. I have planned these businesses already to start this year, but in the current environment, it would be stupid to start something new. I am sure, both businesses will benefit from the recovery/growth period, after the bottom is hit.

Do you feel that the way Russia is now perceived by the non-Russian press accurately portrays the real situation in Russia?

In most cases not. But in my opinion, it’s NOT some sort of propaganda, but laziness on behalf of the journalists, combined with the general opinion within their target groups. The publishers’ editors want to feed to the readers/viewers, what they want to see, since it will generate more advertising revenue/profits. The general opinion about Russia just started to change to a positive one over the past few years, from the Alcoholic-Mafia-Rude-Russian image, but all positive image gains have evaporated in the last year. Nevertheless, from my frequent visits to Germany I know that there is an overall understanding of the Russian side (and it’s actions) within the German middle and upper classes, which is surprising.

How is this crisis affecting your personally? Are you experiencing price increases or other challenges?

An increase of blood pressure maybe. So far, the crisis hasn’t affected me that much, but I think it’s still the quiet before the storm. I am uncertain and afraid of what lays ahead. But, this is not my first crisis and I am positive that I will be able to stay in Russia and get through this. We may even benefit from the crisis in one way or another. I have decided to stay in Russia (as long as I can) and sit this one out. I will only leave if I can’t make enough money anymore to provide my family with its daily needs or (worse case), if the streets get violent (due to political social unrest or criminals). I’m also afraid, that (some) Russians will develop a hate rage against foreigners and there will be threats against us, because we are foreigners. Particularly from a country, which imposes sanctions on Russia. Hopefully none of that will happen and we can continue our businesses and do our part to support the Russian economy.

Bastien Blanc

Bastien Blanc

 

Bastien Blanc, VP Sales, Marketing & Business Development – Russia CIS, Interstate Europe Hotels & Resorts. 6 years in Moscow.

We are now well into another crisis and the playing field seems to change on a daily basis. How is this affecting your industry/company and what immediate policies are you making?

Indeed the playing field is constantly changing, particularly within the Hotel & Tourism business, as we are getting hit from all angles. We are getting less business travellers, international conferences are now nearly non-existent, tourism has dwindled, and costs have risen dramatically. Though as I repeat always to the team, crises mean opportunities, hence we are developing new partnerships in different markets, with different industries, to try to offset the drops. In such times it can be challenging to do better than the previous year but you have to perform better than the competition.

Do you feel that the way Russia is now perceived by the non-Russian press accurately portrays the real situation in Russia?

To work in Russia is to accept the ups and downs of this market. It is a long-term investment and not for short-term players. Business will return as this market, and the whole CIS, still represents many opportunities for development in a variety of different fields. It might be the right time to invest locally in logistic infrastructure, which remains a main braking force to industrial regional development. Investment in hotels is still necessary, so that the country can prepare for the World Cup. Focus should be on how to rebound best beyond the removal of sanctions in July, hopefully.

Do you feel that the way Russia is now perceived by the non-Russian press accurately portrays the real situation in Russia?

I have lived in many countries, and as a general statement, the press often only shows a biased picture, and this is even more so when talking about the western view of Russia unfortunately. Many people talk or write about Russia without having been here even once, or without interviewing people who are living here. I personally listen to different sources and try to get a real feeling about what is going on, always keeping in mind that face-to-face communication with team and partners is crucial.

How is this crisis affecting your personally? Are you experiencing price increases or other challenges?

Like all Muscovites I am experiencing price increases, from Aeroexpress tickets which are up by over 15% to my coffee, which is up by over 6%. Some products have totally disappeared after a couple of months of sanctions. Only my local market babushka has kept her prices pretty stable so far. But here again, when I see some programs on European TV, it looks like shelves are empty, which is absolutely not the case. Many items from different origins have appeared. I do experience the lack of cheese! Luckily there is Belarus!

Robert Knights, COO Work Service, 22 years in Moscow.

Robert Knights

Robert Knights

We are now well into another crisis and the playing field seems to change on a daily basis. How is this affecting your industry/company and what immediate policies are you making?

Our clients are behaving cautiously and calmly, they are not making any snap decisions, but business is slowing down. We have more client requests than ever before, because businesses are considering all options when it comes to the provision of services including labour, but the translation into business and contracts is slower.

Many of us have ‘survived’ previous crises, what is your prognosis for the future? Will business return to normal?

We have recently moved into new offices, and are investing in the future. We have opened a new business unit for the supply of outsourced IT Solutions, and signed co-operation agreements with several new service partners. We remain 100% committed to this market, to our clients and to our team. We are taking a long-term view.

This is my fourth crisis here in Russia and each has had its own unique DNA. Russia has emerged from each one of these crises a stronger nation and economy. This crisis has the added dimension of sanctions. I believe that this crisis will take longer to emerge from than the previous events. I do not think that business will return to normal as it was pre-crisis. Future direct foreign investment will be limited and investors are likely to be very cautious, especially those from Europe and the USA. Investment may come from China, India, Brazil and other developing nations who are seeking a healthy and robust relationship with Russia.

Do you feel that the way Russia is now perceived by the non-Russian press accurately portrays the real situation in Russia?

For a number of years now Russia has been receiving a disproportionate amount of negative press and that has intensified. Currently I do not believe that there is an attempt by the Western media to even understand the current situation in Ukraine from a Russian perspective. The reporting is not balanced and it’s quite often misleading.

How is this crisis affecting your personally? Are you experiencing price increases or other challenges?

Well it’s now becoming very obvious that prices are rising rapidly for basic foodstuff, particularly dairy, meat, poultry, fish and fresh fruit and vegetables. I am consciously shopping at outlets which are giving reasonable quality and value. I have changed my shopping habits and I can imagine people that are on a limited and fixed rouble budget are really struggling. I am also conscious and wary as to where I travel. I have spent 22 wonderful years in Russia and I hope that I can spend another wonderful 22 years here with my family.

Luc Jones

Luc Jones

Luc Jones Partner & Commercial Director – Russia & Kazakhstan, Antal Russia.  20 years in Russia.

We are now well into another crisis and the playing field seems to change on a daily basis. How is this affecting your industry/company and what immediate policies are you making?

Recruitment is always a good barometer for business in general, with companies hiring more people when times are good and doing the opposite during downturns – it’s basically feast & famine! Business certainly hasn’t stopped since clients realise that there is still a shortage of good people available, and even if a few firms are letting some staff go, they hardly get rid of the best ones first! As a rule of thumb, those companies already active & well established in Russia will stay put but we are unlikely to see many new entrants in the nearest future!

Many of us have ‘survived’ previous crises, what is your prognosis for the future? Will business return to normal?

Define ‘normal’? Many would say that putting ‘Russia’ and ‘normal’ in the same sentence is an oxymoron, as least as far as foreigners are concerned – Russia is never likely to be normal in the Western sense. However, if you mean economically stable & having strong relationships with the western world, then this is unlikely to happen in the foreseeable future, unfortunately. My feeling is that both sides have bitten off more than they can chew here (The West didn’t realize what Russia would do to prevent Ukraine from joining NATO, and Russia underestimated the reaction to annexing the Crimea) and neither sees much benefit in achieving a quick compromise.

Do you feel that the way Russia is now perceived by the non-Russian press accurately portrays the real situation in Russia?

Russia has always been an easy target for lazy, foreign journalists – and in any case, who wants to read about the trains running on time; far more exciting to write a story about the Russian mafia trying to sell plutonium to Kim il Sung! Granted, the Russian government certainly doesn’t do itself any favours; I get the distinct impression that they like the ‘cold, tough, hard man’ image, assuming that if outsiders aren’t frightened of us, then they won’t respect us! Recently the western press is particularly one-sided – when you live in Russia for a considerable length of time as an expat, you at least begin to see things from the Russians’ point of view (even if you don’t necessarily agree with it) and why they act the way they do! Just imagine if the boot was on the other foot and that Russia had supported the Scottish independence movement, or was funding UKIP? This is Russia’s ‘Cuban Missile Crisis’!

How is this crisis affecting your personally? Are you experiencing price increases or other challenges?

As I have a mortgage in the UK, yes! My salary (paid entirely in RUR) is essentially worth half of what it was only a few months ago. However, when you work in emerging markets, you have to be prepared to take the rough with the smooth – I did well during the boom of 2004-2008, and sent sufficient cash abroad to tide me over for the coming months, but not indefinitely! If you live locally, you won’t experience a huge difference, apart from airfares, so unlike in 1999 when bars & restaurants were empty, this isn’t the case now, as Russia is more self-sufficient than it was 15 years ago.

Anonymous (Banking Sector).

We are now well into another crisis and the playing field seems to change on a daily basis. How is this affecting your industry/company and what immediate policies are you making?

The crisis triggered by sanctions is strongly affecting the financial sector. Before the US and EU sanctions, Russia was a growth market for European banks. Current sanctions and anticipation of new ones adversely affect business.

Many of us have ‘survived’ previous crises, what is your prognosis for the future? Will business return to normal?

In my view this crisis is different. Crises in the past reflected mostly an economic weakness. This crisis has a political background. I expect business to return to normal only after politicians start to talk to each other again.

Do you feel that the way Russia is now perceived by the non-Russian press accurately portrays the real situation in Russia?

The way that Russia is portrayed in EU press is disturbing. The western press in general does not accurately reflect political developments. This is sad.

A senior expat with 20 years experience

We are now well into another crisis and the playing field seems to change on a daily basis. How is this affecting your industry/company and what immediate policies are you making?

As pressure mounts on cash flows so companies review their expenses. This is bound to put all financial advisory firms revenues under review.

Many of us have ‘survived’ previous crises, what is your prognosis for the future? Will business return to normal?

This is unlike other crises as it is being driven by a political agenda. As such we cannot rely on the normal cycles that are created by economic events. This has the potential to be long and drawn out.

Do you feel that the way Russia is now perceived by the non-Russian press accurately portrays the real situation in Russia?

The Russian bad guys sell newspapers, books and films. Sadly what we are seeing now is that both Russia and the west have reverted to their characters of the other.

How is this crisis affecting your personally? Are you experiencing price increases or other challenges?

Immersed in a sea of bad news it is ever more important to protect our personal motivation. I have taken to ensuring I attend the ballet or concerts at least once a week.

John Kopiski, Dairy Farmer/Agro-tourism 23 years in Russia

John Kopiski

John Kopiski

We are now well into another crisis and the playing field seems to change on a daily basis. How is this affecting your industry/company and what immediate policies are you making?

Is the crisis a result of sanctions? I think not! What is the cause of the current sanctions – the answer is oil and shale oil and the politics that surround this!

The current exchange rate is a direct result of oil, and not the sanctions, not even Crimea or Ukraine. Hence one just has to sit out and wait for the oil-politics to end! Who, where and why the oil politics are the way they are, is beyond the reach of us, the normal voter! If the war in Ukraine was solved tomorrow, would the price of oil fall? The current global crisis is beyond the control of normal people business people.

For domestic producers, using domestic resources, the exchange rate should not affect costs. However, as a dairy farmer I face problems like many, concerning the cost of spare parts that I have to import. Hence there will be a direct effect on costs.

On my dairy farm, I wait to see what policy the [milk] processors make, as they control the price of milk which I am paid. Hence I am not really in control of my long term policies, other than to reduce costs, reduce labour and hope not to be forced to sell assets to provide cash flow.

Many of us have ‘survived’ previous crises, what is your prognosis for the future? Will business return to normal?

My business will return to normal when exchange rates return to normal, or sales prices react pro-rata to my cost increases. In the meantime I am studying how to process more of my Russian milk, with Russian equipment to produce Russian products and hence not rely on imports. The term to use is long-term. Make higher profits when one can and bite the bullet when hard times come! Do what we preach! Do as we tell the Greeks.

What does normal mean? If normal means working as in Europe, then this means lower profit margins; higher salaries and less dividends! If one means ‘normal’ as ten years ago the answer surely must be ‘no’ because as the market matures the approach to business becomes more long term, without such large profits. The Russian market will grow. With current politics now imposed on Russia, there is a chance the new ‘normal’ will mean more rouble deals; more BRIC deals.

Politically or commercially? Commercially – business is business. Exchange rates are exchange rates. I see no difference about investing here today, than two years ago. It is a place to invest. Western politicians provide the wrong portrait to serve their purposes! The purpose today… seems to be to make the public think that Russia is expansionist and risky. There is a lack of bank finance, or at exorbitant rates and terms and conditions. There are price increases on anything imported but marginal price increases on local production. Disposable income is being reduced.

Do you feel that the way Russia is now perceived by the non-Russian press accurately portrays the real situation in Russia?

The western press these days does not just report on a situation! It opines on a situation and hence follows policies.

Anonymous, Real Estate

We are now well into another crisis and the playing field seems to change on a daily basis. How is this affecting your industry/company and what immediate policies are you making?

For the moment, there are no currency controls, and therefore, we expect potential clients to continue buying but with reduced budgets.

Many of us have ‘survived’ previous crises, what is your prognosis for the future? Will business return to normal?

We expect Russia to become more self-sufficient and less dependent on imports due to sanctions and absence of foreign credit. Providing there are no currency restrictions and the currency—whatever its value remains convertible—we expect business to continue. Pundits from Kudrin to Chris Weafer predict the crisis should lift within 3 years. There are very good opportunities at the moment for manufacturers of agricultural and food processing/packaging equipment with a link-up for leasing with a Russian bank or foreign bank working in Russia. There are no restrictions by the West in this sector at the moment.

Do you feel that the way Russia is now perceived by the non-Russian press accurately portrays the real situation in Russia?

No, the West has turned Russia into a Pariah state; it will take many years, if ever, to restore the friendly relations created as a result of the dissolution of the Soviet Union.

How is this crisis affecting your personally? Are you experiencing price increases or other challenges?

Challenging! We shall find new products adapted to the new situation.

Adrian Cooper, CFO Region EEMEA for a global food processing company

We are now well into another crisis and the playing field seems to change on a daily basis. How is this affecting your industry/company and what immediate policies are you making?

We see locally supplied prices for materials and services rising in-line with inflation, plus a trend for payments in other currencies [EUR or USD]. With currency and borrowing rate changing frequently, we need to update pricing mechanisms far more frequently, and look to hedge any exposure we may have.

Many of us have ‘survived’ previous crises, what is your prognosis for the future? Will business return to normal?

No, not in the next 18 months, I think this is a new ‘reality’. This is only the start of a slowing-down of the economy. GDP grew by only 0.6% in 2014, and will fall by between 3 to 4% during 2015. Capital flight continues, and the oil price seems to have stabilized at a lower level than Russia needs to cover its spending. This is leading to cuts in Government spending and jobs, that will further exacerbate a slowdown.

Do you feel that the way Russia is now perceived by the non-Russian press accurately portrays the real situation in Russia?

What I read in Reuters, the FT or The Economist [as examples of foreign press] seems to indeed mirror a close representation of what is actually happening to the economy, in terms of data and facts. When Russia emerged from their last recession in 2009/2010, it seemed to me that the Government was content to rely on a buoyant oil price to ‘balance the books’ / increase reserves… without maybe investing more, faster, in local manufacturing, with still a high reliance on imports. Of course in the local press, it’s all the fault of the US..!

How is this crisis affecting your personally? Are you experiencing price increases or other challenges?

One very real challenge was telling employees that they had to settle for only a 50% of Inflation pay-rise in December. This will impact them directly in 2015, as real prices in shops rise, but I was surprised by their level of acceptance to this. It was though they were hardened to this reality, having seen it many times before.

Anonymous, IT Sector, 8 years in Moscow + 7 years in Kazakhstan.

We are now well into another crisis and the playing field seems to change on a daily basis. How is this affecting your industry/company and what immediate policies are you making?

It was evident already towards the end of 2013 that Russia was still suffering from big underlying structural problems and that we were heading for a slowdown. Crimea, Ukraine, sanctions have all merely exacerbated that weak situation. For our business we have already lost four employees (out of 11), downsized to a new office three times smaller and switched pricing of our products from roubles to Euros to protect us against exchange rate swings. We have a contingency to further downsize or even close the office if necessary and work through a local dealer.

Many of us have ‘survived’ previous crises, what is your prognosis for the future? Will business return to normal?

We really have no optimism at all regarding the future. This current crisis differs from the previous one in that it is almost completely stand-alone and self-manufactured. Politics, saving face and not backing down seem to play a large role, so based on current activities do not expect things to change for the better. Indeed, like in most other countries there is always constant debate, particularly in harder times. I have not seen that here.

Do you feel that the way Russia is now perceived by the non-Russian press accurately portrays the real situation in Russia?

Yes, it’s fairly accurate, although the real situation is even, at times, worse.

How is this crisis affecting your personally? Are you experiencing price increases or other challenges?

On a personal level, real income has dropped substantially. We are paid in roubles but have at least 50% expenses in GBP and EUR. Add double-digit inflation to that and we are all suffering.

Russia was generally a fairly lucrative place to work in the past – now the situation has changed. If you include the fairly dire quality of life in Moscow, particularly in the winter months then outside of friends, family and tradition, it’s difficult to find a reason to stay.

Don Scott OBE

Don Scott OBE

Don Scott OBE, President of the British Business Club 26 years in Moscow.

We are now well into another crisis and the playing field seems to change on a daily basis. How is this affecting your industry/company and what immediate policies are you making?

Yet again we find Russia in a very difficult and challenging situation, however we should remember that this is not the first time Russia has been in this situation over the past 25 years of independence. I think the most important thing to keep in mind here is that through every period of difficulty Russia has gone through, it has come back, bigger better and stronger. Russia is not dead but going through enormous growth pains and still finding itself in the global geo-political landscape. I have heard many people say that this ‘crisis’ is worst that all the rest. I seem to feel that much of that statement is used by less experienced and younger expats in Russia, in fact it is no worse than other crisis periods, but it is different.

In 1998, peoples material expectations were much lower than today. Nobody could dream of having a mortgage back then. Today it is fairly commonplace and so the cultural mass learning of debt is now being felt. Back in 1998, oil was less per barrel than it is today, but as Russia grew over the last decade and invested with increased margins, it is now feeling the pinch, something that it is not used to! All in all, the current climate is not pleasant, however, life goes on, business will continue and things will get better again. It is not for the faint hearted, but then again Russia never was. Russia will still be here in 20, 30, 100 years, it is a long-term investment in time, life and money, but for those that stay and persevere, the rewards will come.

Andrew Quayle, CFO Heineken Russia, 3 years in Moscow

Andrew Quayle

Andrew Quayle

We are now well into another crisis and the playing field seems to change on a daily basis. How is this affecting your industry/company and what immediate policies are you making?

Our industry (alcohol) has been under siege for several years already by the government, with additional legislation and increased taxes on an annual basis. So in some ways it is just more of the same and we know how to deal with it. The difference is, of course, that this time around the whole economy is struggling and a recession seems imminent, if not here already! Our strategy remains sound and we will keep planning ahead for the ‘good times’, when they return, and on a daily basis to focus on the things we can control and not worry too much about the things we cannot.

Many of us have ‘survived’ previous crises, what is your prognosis for the future? Will business return to normal?

We see two years of recession and realignment of the economy… then all will be back to ‘normal’… whatever that is! (ever the optimist!).

Do you feel that the way Russia is now perceived by the non-Russian press accurately portrays the real situation in Russia?

No, most if not all of the western media seems to have a negative, biased view of Russia. What I see on the street and hear in the office is not what I read in the press.

How is this crisis affecting your personally? Are you experiencing price increases or other challenges?

There are some food challenges as western-sourced products are not available. This is an inconvenience but hardly more than that. Prices are beginning to react, but surprisingly slowly.

Oliver Eller

Oliver Eller

Oliver Eller, General Manager Hotel Baltschug Kempinski Moscow.

We are now well into another crisis and the playing field seems to change on a daily basis. How is this affecting your industry/company and what immediate policies are you making?

The economic situation is not very favourable in Russia at the moment, but I am sure we will manage this challenge. I am an optimist by nature and I am looking forward to the future with confidence, otherwise I would have never come to Moscow. Crises always open up to new opportunities. The most important thing is that our guests are loyal to us, which means they trust us and are ready to stick with us through any crisis. Many people ask me about sanctions and I respond that the sanctions are actually not my business. My task is to satisfy the guests no matter if sanctions are applied or not. Of course, we needed to adjust to the current conditions and have changed suppliers to local ones, but we did not decrease the quality, which is most important to our clients.

Many of us have ‘survived’ previous crises, what is your prognosis for the future? Will business return to normal?

The first time I came to Moscow in 2007, it was also in a crisis two years’ later. I was a part of the opening team of a deluxe Moscow hotel, which was a true success story, so I think you become stronger and more creative, gaining experience through challenges. But I would also like to point out that at the moment, there are many negative insinuations around the booking situation in hotels. In reality, the figures are not so bad. Over the last couple of months we managed to increase our occupancy in comparison with last year by 25%.

Do you feel that the way Russia is now perceived by the non-Russian press accurately portrays the real situation in Russia?

The Baltschug is famous for being a media-friendly hotel. We invite all journalists to stay in our hotel and experience true Russian hospitality. More media players should come to Russia and give an objective portrait of the Russian reality. I am sure the general image of Russia will then be changed.

How is this crisis affecting your personally? Are you experiencing price increases or other challenges?

I know that economic situations influence all the aspects of our lives. As an executive leader, I do everything possible to keep my boat (otherwise known as my hotel) stable, to avoid the storm and huge waves. I make sure that my team rows the boat in the right direction. But frankly speaking, I forget about the crisis when I come home. I recently returned to Moscow with my wife, who is Russian by the way, and my nine-month-old son. I am a happy man and I think that a lack of money or a decrease in the exchange rate or the price of oil can never destroy the true peace in your heart.

Mark Smith, Managing Director Sunbury Heights 27 years in Moscow.

Mark Smith

Mark Smith

We are now well into another crisis and the playing field seems to change on a daily basis. How is this affecting your industry/company and what immediate policies are you making?

The construction industry is always prone to downturns caused by economic crises. While the clock speed of our industry may be a little slower than some, a downturn in the general economy will hit developers looking for investment immediately, architects within 3 months and project managers and general contractors within 6 months. The present crisis in Russia has been long in the making and before the onset of the most recent downturn our industry was already suffering. Even before the intervention in the Ukraine, Moscow office vacancy rates were higher than any other European city, outside of Greece. The appetite for new office developments therefore was low at the outset. Now the crisis has deepened, that trend has become considerably more pronounced, with very low demand for most commercial design and construction services. I see that paucity of demand as being likely to continue for at least another 2-3 years.

Many of us have ‘survived’ previous crises, what is your prognosis for the future? Will business return to normal?

I think the current crisis is of quite a different order to the others we’ve all lived through in the 1990s and in 2008. Those crises were largely financial crises and while they affected Russia badly, Russia could turn to two pillars of support that are simply not available now. Firstly, Russia was an established and accepted member of the global financial community, allowing it to operate on global financial markets without let or hindrance. Now, Russia has been expelled from that community of nations and is actively ostracised by a very large part of the global community – this is not simply a U.S.-Russia conflict for instance.

Secondly, during those previous crises, the world oil price maintained a degree of buoyancy. This is the bedrock upon which the Russian economy is built – Russia having no other significant source of income excepting the sale of weaponry. The oil price is now at a significant low, with most analysts accepting that changes to oil exploration, including the availability of shale reserves, means that the price will stay low for a considerable period ahead.

Do you feel that the way Russia is now perceived by the non-Russian press accurately portrays the real situation in Russia?

This is rather a leading question and invites one to take sides in a way that I don’t think I’d like to do. I would say however that the question would be more telling if we were comparing state controlled publications in the various countries – then we could conclude something meaningful. The media in Russia is almost universally state controlled, so comparing that with independent sources of opinion will always lead to differences in approach.

How is this crisis affecting your personally? Are you experiencing price increases or other challenges?

Personally, as a result of recent events we’re focussing more on expansion overseas. I think the present crisis will not go away anytime soon and the prudent decision for any business leader is to protect overall revenue streams, rather than being patriotic or overly sentimental about one or other location. That is the business of a politician or apparatchik, not a businessman. From a personal standpoint, the environment has led me, after 27 years residency in Moscow, to relocate to Berlin with my family. It’s a decision that saddens me, but one, which I fear, is weighing on the minds of many expats in Moscow.

Anton Greiler

Anton Greiler

Anton Greiler, General Director Julius Meinl Russia Involved in the Russian market since 2001.

We are now well into another crisis and the playing field seems to change on a daily basis. How is this affecting your industry/company and what immediate policies are you making?

As we are selling mainly imported goods, the RUR/EUR exchange rate affects us and our selling prices directly. The first price increase was by 10% at the end of October last year and that continued at a very fast rate during the weeks which followed. Our ideal solution is to switch clients with RUR-prices/pricelists to EUR-pricelists, invoicing in RUR on the day of delivery based on the official central bank exchange-rate. Not all clients accept this, but we monitor our profitability constantly and we are not delivering, if we make losses.

Last year we had our absolute record in sales in Russia and we are in the meantime the biggest importer of roasted coffee to the Russian Federation. We continue with a strong sales-momentum and we try to compensate margin-losses with additional volume and market-share, which will set up a great base for the time after the crisis!

Many of us have ‘survived’ previous crises, what is your prognosis for the future? Will business return to normal?

The economy is not a one-way street. There are always upswings and downswings. After every crisis there was and will be a boom and we have to prepare now to get stronger for the huge opportunities which are ahead of us!

Luckily, I am paid in EUR, so the effect is limited, but I definitely saw the value of my RUR-accounts here decrease and imported goods are becoming more expensive (in RUR). On the other hand, I just noticed that going out eating in ‘expensive’ restaurants is currently much cheaper (counting in EUR), as most of them have not increased prices (yet). Russians are travelling less abroad, as it has become basically twice as expensive as only one year ago.

Do you feel that the way Russia is now perceived by the non-Russian press accurately portrays the real situation in Russia?

I see and feel a real ‘propaganda-war’ between the view from the west and from the east. The media are telling stories, which are fitting to their ‘view of the world’ and not showing ‘reality’ (whatever this might be).

David Gilmartin, General Manager, Troika Relocations 19 years in Moscow.

We are now well into another crisis and the playing field seems to change on a daily basis. How is this affecting your industry/company and what immediate policies are you making?

As our main business is working with international companies and their incoming expatriate assignees, our industry has been affected quite seriously. Since the last round of US sanctions, and the Russian ban on imports of European foods, many expatriates have left the country. Many of these would have been employees who simply found that their jobs no longer existed.

Since the December crisis, we have witnessed a more worrying trend. Many long-term expats have left, or are planning to leave, as they feel it is no longer i nteresting, both personally and financially, to stay here. For those who are earning in RUR but still have outgoings in Euros, for instance school and college fees, it may no longer be viable to stay here.

Many of us have ‘survived’ previous crises, what is your prognosis for the future? Will business return to normal?

I have been here long enough to have witnessed the 1998 crisis. At the time, that was a challenging experience, and I don’t think anyone predicted that the country would recover as quickly as it did.

This time around, I am afraid to make a prediction, as there are so many factors involved in the equation. The economy will of course recover, and some companies will be in a position to take advantage of that, but it will take longer for other international companies to commit once again, as they see the recent events as being self-inflicted and avoidable. In the long term, they will all return as Russia is simply too big to ignore.

Do you feel that the way Russia is now perceived by the non-Russian press accurately portrays the real situation in Russia?

No!

Anonymous. Restaurant business, 23 years in Moscow.



We are now well into another crisis and the playing field seems to change on a daily basis. How is this affecting your industry/company and what immediate policies are you making?

Sales are down 15%. We are having to watch all aspects of the business daily and adapt immediately. We are in the process of reducing staff and monitoring CGS. We are also looking closely at the effectiveness of all our marketing.

Many of us have ‘survived’ previous crises, what is your prognosis for the future? Will business return to normal?

Unfortunately this is not going to be a short-term crisis. The economy has serious systemic problems! Even if oil goes up, sanctions go away and Ukraine stabilizes it will not result in a strong economy. The Government appears to have the wrong priorities which they will not change and it will take years for capital investment to return as they will be discouraged by the risk and corruption.

Do you feel that the way Russia is now perceived by the non-Russian press accurately portrays the real situation in Russia?

No it is a lot worse than they can imagine. Drive 100km from any major city and you will see the real Russia. It is sad!

How is this crisis affecting your personally? Are you experiencing price increases or other challenges?

My personal income has been seriously reduced. Inflation is growing – quality food is seriously increasing in cost. Why? Because here is no competition with quality imports. The sanctions imposed by Russia are only really hurting the Russian people!