Riding the Russian bear

I’ve been living in Central and Eastern Europe for nearly three decades, so I’ve seen the region take three steps forwards, and then a step or two back, both politically and economically. Never more so than in Russia. I particularly remember the heady 1990s, when the Russian economy burst into chaos after the collapse of the Soviet Union. Freedom reigned in Moscow, too much of it for some. It was exuberant, expressive, socially liberating, unpopular, and on the whole disastrous.

We were well into the more sober Putin era when my company (LLP Group, based in Prague) was persuaded to dip its toe into the Russian market. We took over the customers of a firm for whom things had gone disastrously wrong. It was difficult at first because almost everything gets in the way in Russia (the form-over-substance financial regulations, the appalling cost of business services, the aggressive nature of customer-supplier relations, the prejudice against ‘Western’ software), but we made progress, and even some small profits in due course.

But these last few months have been more difficult. When the rouble fell in value some weeks ago we found that our bank simply couldn’t or wouldn’t convert our rouble balance into a safer currency and we saw our bank balances shrink in EUR value.

We resell software and consulting mainly to international companies investing in the Russian market. The accounting software we sell, Infor’s SunSystems, can meet both Russian and corporate requirements simultaneously. But, now, with many companies downsizing, or even leaving, it’s hard for us to know what to do. There are fewer companies who need what we sell.

Russian bear

Where is Russia going? Has the country set out on a path towards isolation, or has it been unjustly expelled?

Whatever the situation, we have no plans to leave. We have an excellent team of consultants in Moscow and St Petersburg, and we can break even at the moment, serving our current clients. It’s hard to know, though, if there will ever be new business for us in the future.

Granted, Western ideology informs much of Western reporting on Russian issues (Ukraine first and foremost), but I can’t help thinking that, for the moment, Russian pride has trumped pragmatism. Surely, things will only get worse for ordinary Russian citizens if Putin doesn’t seek a change of direction.

We don’t want to abandon our business. If only Russia were a little more like us, we wouldn’t have to.