The New Ambassador

On Monday, the Alfa Fellowship Group was invited to meet with the US ambassador to the Russian Federation.

The Embassy is a large compound in central Moscow, right on the Garden ring - a major thouroughfare. Its a collection of all sorts of types of buildings - an older, 1950's style monster, modern townhouses, and a very modern office complex that houses most of the administrative functions.

Security, of course, is pretty tight. First, a visitor has to present his documents to the Russian policeman on the street. Then, entering the security checkpoint, to a man behind bulletproof glass to be admitted into the screening area - where your visit must be pre-logged on the computer system. Leave your passport with the security desk in exchange for a visitors badge, then on through the metal detectors and camera confiscation point, and that includes camera phones, too.

It was all very efficient and polite, but nonetheless strange. All the staff wore baseball hats and short ski jackets emblazoned with US flags and State Department seals. But they were all Russian. In fact, our American escort at the door went over to the security desk and asked a question in russian assuming that everyone there was a local employee. The guy looked up, pressed the microphone button, and said "You're gonna have to speak English."

Once inside the checkpoint, we were technically on US soil. The sun shone a little more brightly, the air smelled just a bit sweeter. Sure, these things were only in my head; but I may very literally have been walking on US soil - a favorite story in the US expat community is how all the grass for the embassy compound was imported from back home.

In the administrative headquarters (where security is run, unobtrusively, by Marines), we met the ambassador in a winter garden porch at the end of a hallway lined with Warhols, at the top of a staircase surrounded by Tihany glass. In all, a nice environment for a chat.

Ambassador Burns is fluent in russian, having been posted here in the 1990s, and a career diplomat at the state department. He was, however, a bit more open and candid than I would have expected for someone with that background. He didn't say anything wildly inflammatory of course, but he was quite honest.

Naturally, the conversation was a little bit of preaching to the choir. He talked about his efforts to convince people in Washington that Russia is still a critically relevant country to the US. We, of course, by virtue of sitting in Moscow apparently already believe that.

I asked about the "country risk premium" that the capital markets attach to Russian securities and asked if he saw a linkage between that and political tensions between the governments. If so, I continued, is it fair to do so and how can it be counteracted? Ambassador Burns talked about being consistent in the application of rules. Investors don't have to agree with all the rules, but they're generally willing to put up with them if they're laid out and clearly detailed.

Good answer, and experience in various markets around the world probably proves him right. It seems to me, however, that there's just a little something more to it. American investors and corporations plow vast sums into unreformed communist regimes (China) where the rules change daily, and yet they freeze up when they hear the word "Russia". Sure, foreign direct investment is surging here, but its still somewhere around the central African nation level. And the American share of that total is pitifully small.

Most of our corporations see the light just shortly before dusk. The real glory of American business is that it has deep pockets and can barge its way into even developed markets by acquiring market share at nearly any cost. Three cheers for foresight.

Anyway, here's a photo of the Alfa Group (and a couple of Alfa administrators) with The Honorable William Burns, United States Ambassador to the Russian Federation.


Alfa Fellows with US Ambassador Burns

Church with Bouncers

We take no pleasure in permitted joys,
But what's forbidden is more keenly sought.
~Ovid

Over the course of my time in Moscow, I've made a systematic and determined effort to see everything of cultural and historical importance that I possibly could. It has entailed some early weekend mornings, getting lost on several occasions, and an unpleasant amount of wandering around in brutally cold weather. This weekend, I saw my only remaining monastery in Moscow. And, for all the culture, art, history and religion I’ve soaked up all over the map, this was one of my more interesting visits to such a place.

The Danilovsky Monastery is the headquarters of the Russian Orthodox Church. During Soviet times, the church leaders were exiled to the Trinity-Sergiev Monastery in Zagorsk. Certainly, that place is a very historically significant, holy, beautiful spot. But during the entire Soviet period Zagorsk was a closed city – thanks to its defense industries no one was allowed into it without proper permission. You still pass the roadblocks on the main highway into town.

So, being headquartered there wasn’t exactly a prime position for tending to one’s flock. But in 1988, Gorbachev allowed the Patriarchate to move back to Moscow in honor of the 1000th anniversary of the founding of the Russian church. The monastery they were given had been used as a prison, a factory, and a host of other not-so-spiritual things. The bell tower had been torn down and all the bells sold to Harvard University.

After quite a bit of effort, the place has been rehabilitated to a very tidy, pleasing appearance. The bells are back, and so are hordes of faithful and monks and nuns.

As I walked in through the imposing gates, two Cossacks were roughly ejecting a couple of drunks who were trying to wander into the monastery. I briefly glanced at the rules posted on the huge metal doors, noting that a state of “non-soberness” was the first of several prohibited activities. I figured that if sobriety was the first rule on the list, I would probably past muster on all the others.

While I stood in the sun-drenched courtyard surrounded by beautiful chapels and churches, I noticed the Cossacks coming toward me. I was the only person in the courtyard, and there was no doubt that they wanted to see me.

“Do you have permission to take photos here?” they asked politely.
Permission is usually granted by a small ticket that costs about 100 rubles in places like this.
“No, I don’t,” I answered. “Where can I buy one?”
They were a little taken aback. “You have to arrange permission with the excursion office, and I’m not sure they’re working today,” one of them said.
“Well, can I take your picture?” I asked. I’d never spoken to real Cossacks before. They loved that question – they started laughing and joking with me – but unfortunately answered that no pictures meant, well, no pictures.

Not a bad photo - for a scofflaw!

I walked back to the museum entrance with them and tried to find someone to give me permission to photograph the monastery. The museum consists of one little dark room full of small display cases. As I walked in, I flipped on the light switch. An old woman appeared out of nowhere and started screaming at me.

“I beg your pardon,” I pleaded. “The schedule on the door says that the museum is open on Sundays.”
“Well, its break time,” she shouted back at me.
“But the schedule says that break time was an hour ago.” This was, in retrospect, the absolutely wrong thing to say. As I turned and headed for the door, she shouted that the museum was closed and on break at the same time. Or something like that. Russia Rule Number 1: Don’t argue with the babushka.

So I headed back out and continued my tour of the grounds and churches. I didn’t take any more pictures, though. I saw how the Cossacks had handled the two drunk guys at the gate and didn’t want anything like that to happen to me. On holy ground, no less.

Little did the friendly, but tough, Cossack goons know – but I took their picture while they were approaching to tell me that I couldn’t take pictures. Here they are. Nice enough fellows as long as you follow all the rules posted on the gates.

Security - Russian Orthodox style.

The Far Side of the World

Work and my fellowship program will be wrapping up at the end of this month, so I’ve been thinking about the next step. No, not employment – but a massive amount of travel around this vast country.

Next week, I am popping down to Ukraine for a long weekend in Kiev. As a cradle of the original Russian civilization (Kievan Rus’) it’s always been an ambition of mine to go there. A day after returning to Moscow, I jet off to Novorossisk; a port town on the Black Sea. Those shorter jaunts are all arranged and ready to go.

Today, I took the first step on a much longer journey: I bought an Aeroflot ticket to Vladivostok. So on the 12th of April, I get on a plane in Moscow and fly overnight to the edge of the Pacific Ocean. Imagine – a nine hour flight and the plane lands inside the same country. Point that jet in a different direction and it would land at JFK in the same amount of time.

From there, I’ll hop trains, ferries, and buses all the way back to Moscow. I plan on seeing a number of Siberian soviet cities, some historical centers, some non-russian ethnic areas, Mongolia, Lake Baikal, etc. Vladivostok – Khabarovsk – Chita – Ulan Ude – Ulan Baataar (Mongolia) – Irkutsk – Krasnoyarsk – Omsk – Tyumen – Novosibirsk – Ekaterinburg – Nizhni Novgorod – Kazan.

The schedule is very fluid and designed for the maximum amount of flexibility.

I nearly had a traveling companion for the whole trip. Well, ‘companion’ may be overstating the situation. She’s a journalist, and when she heard about the trip from mutual friends, she was intrigued by the idea enough to invite herself along. “It’s such great material for a book,” she reckoned, “following around an idealistic, adventurous foreigner with minimal Russian language skills.”

Her plan was to remain a few steps behind me and see what sort of jams I could get myself into, and then out of, all on my own. From her perspective, I would make the trip possible, as well – it’s probably not a great idea for a woman to make such a solo journey.

In addition to adding a veneer of security, I told her that I would handle all arrangements for tickets and hotels and every conceivable logistical (not financial) element. In return, I would expect a healthy donation to my “Beer and Vodka” fund. She was a bit taken aback. “Hey, you want interesting stories at my expense,” I said, jabbing my finger in her face, “you’re gonna have to grease the wheels a little bit.”

Actually, I was joking. But we did have more serious discussions about editorial control over content and co-author status of the book.

Really, though, it broke down into much more simple elements when two near-strangers are considering traveling together over 9,000 km for weeks on end. “I have to decide whether you’re an axe murderer or not,” she summarized.

I never did hear back after that, so I guess she’s not coming along. That’s fine with me, too - more room for my axe.

Strictly Speaking (Foreigners Sound Funny)

The accent of one's birthplace remains in the mind and in the heart as in one's speech.
~Francois De La Rochefoucauld

Speaking another language is so much more complex than new words and grammar. Its about learning how people really communicate. And sometimes, learning to speak their language means changing the way you speak your own.

Russian has several strange sounds from the perspective of an English speaker. Letters that are unique to Russian, and a couple of letters that even have no sound of their own; their presence influences the sound of the preceding letter.

Of course, I speak with an American accent. People tell me (not just friends but strangers, even) that it isn’t too bad at all. I’ve been pegged for a Serbian, a Turk, a Ukrainian, and several other nationalities by folks who either don’t hear, or probably didn’t expect, an American accent. Memorably, one friend said “Oh, people think you’re Russian; they just think you’re retarded.”

But its how you use an English word that really causes problems. At Джонни Толстяк, an Italian restaurant charmingly named Fat Johnny’s, they serve a pretty good business lunch. There the forte is pizzas – individual, thin crust served on a wooden pizza board. Most are predictably named by their ingredients, but several are named by theme.

Now, New York is a word that is close enough in Russian to the English pronunciation to not cause problems. But others have enough differences to derail cross-cultural communication – such as it is in a pizza joint in Moscow.
At lunch, I ordered. “Девушка дайте, пожалуйста, пиццу “Chicago”. Which I pronounce the way I’ve always pronounced it; shi-KAH-go.
“Какую?”, she said, cluelessly.
Finally, she gets it.
“Ahhh,” she says. “Чикаго!” which she pronounces with a strong CH sound, hard E, and unvoiced O at the end. That is to say, more like “cheek-AH-ga.”

At my favorite blini stand they have one called the “E-mail”. I don’t know why a Russian blini with mushrooms and cheese is called the E-mail, but it is. Anyway, its written in English on the menu. So I pronounce it in English – which is all wrong. Their pronunciation of the English word is more like “E-mile”.

So in both cases, I’ve given myself away as a foreigner. Not through bad Russian; given away instead by my good English. Oh, the bitter, bitter irony of it.

I’ve come to learn, though, that this kind of restating is a two way street. At work, my colleagues all speak English wonderfully. Of course, they have accents. But not strong enough to be an impediment to understanding. Still, they’ve learned through experience that the proper pronunciation of their names will cause all sorts of problems with others in the English speaking world.

So Aleksandr, on the phone, breaks his name down slowly into Alexander. He’d probably never use his nickname of Sasha; first, its too informal, and secondly, its considered feminine in the west. Andrei becomes a carefully elocuted Andrew. Last names are offered even more slowly, and syllable by syllable. Usually a couple of times.

It reminds me of when I worked with an Australian guy in New York. He would say his name as he always had his whole life. But when he got on the phone, he would have to put on his American accent and over pronounce most of the letters that he habitually left out. "Maht’n" became "maRtin" for the benefit of his audience.

So speaking another language, it turns out, is a lot trickier than I had previously thought.

Oh, How They Laughed

A bear is walking through the woods when he sees a man fishing at the edge of a river. He decides to ask the fisherman how its going. “If he answers ‘Good’, I’ll eat him” the bear plans; “If he answers ‘Bad’, I’ll eat him all the same.”

The bear walks up to the fisherman and asks him how the fishing is. “Get lost,” the man answers rudely.

“That’s also an answer,” the bear says.

I heard this joke at a party. All the Russians in the room burst into laughter. The foreigners were sort of left standing around looking at each other. But no one who laughed could explain why the joke was funny – they’d start out with “well, you see…the bear…”. Invariably, though, the answer to the question was simply “it just is.”

In any event, it’s a very Russian-style anecdote with its loads of fatalism. For all the modernism sweeping the country, and the new style of working hard to get ahead, there are certain elements of the Russian character that aren’t changing all that fast. In this instance, the simple joke reveals the widespread belief that you are screwed no matter what. Force majeure (played here by the bear) will shift its tactics and responses according to whatever cleverly devised plan you have. And no matter what you do, the bear will get you.

Contrast this to the half-optimistic fatalism of the closest ursine American proverb – “Some days you get the bear, some days the bear gets you.”

A similar situation occurred once before with a joke about a man in a banya looking for a towel but finding a crocodile instead. Again, the Russians laughed heartily while I translated and re-translated the joke in my head. It still remains well beyond my ability to even begin to analyze that one.

Maybe i'm wrong about the bear joke. Until I actually hear why its funny, though, I'll just have to go with my analysis.

You Ess Ay! You Ess Ay! You Ess Ay!

…I have been a stranger in a strange land.
~Exodus 2:22

The Russians certainly mean no offense by it; in their language, the word is absolutely neutral and has no other connotations. But being repeatedly called “foreigner” begins to grate on one’s ability to empathize, to fit in, to weather the long, cold winter.

So sometimes we rebel. I received an e-mail that invited me to a friend’s house. “Bring beer and patriotism” it instructed. One strength, and weakness, of my character is that I’m rarely without either. I’ll let you decide which is the strength and which the weakness.

We gathered on Friday – 5 Americans, a Frenchman, and an Englishman – to privately stick it to the Russians the best way we knew how. Through the international language of sport.

We watched the first segment of the movie Miracle, and then a DVD transfer of the actual 1980 US-USSR hockey game from the Olympics in Lake Placid. We all knew the outcome of that legendary match when the upstart US squad beat the juggernaut Soviet team to advance to the gold medal round. But still we sat with baited breath as it all transpired once more.

We traded stories of where we were when we saw it. I recalled sitting on the floor close to the TV with my brothers, Dad perched on the edge of the corduroy ottoman, all of us leaping up at each of our goals – Mom on the couch at a safe distance. I remember it much more vividly than many other – arguably more important – moments of my life so far.

Of course, the Frenchman and the Englishman had no such personal connection to the moment, and were quite interested at the level of importance that we attached to it. So too, actually, was one of our American friends who had yet to be born when the game was played. But at least he could understand the mythos and the cultural background – that is to say, the nearly jingoistic nationalism of the “USA” chant.

It was wonderful to sit around and watch and reminisce. Of course, like all good reminiscences, we ascribed greater significance to the events than they actually deserved. Our consensus was that after that game in 1980, finally, everything started to go right again. Naturally, we knew that wasn’t true; but it felt good to gloss over the following 26 years and say that everything was alright, and maybe everything was going to be OK for a bit longer, too.

And if it took the Soviets losing to create all that goodwill– well, then, so be it.

None of us has dared tell our Russian friends how we spent last Friday evening. I just don’t think they’d understand. Perhaps the Russians are getting the last laugh. After all, we watched the glorious triumph of the US team while drinking Russian beer and snacking on Russian treats.

I suppose, when you think about it that way, everyone wins.

Stomping on Eggshells

Only today have the office staff gotten around to removing all the balloons from our holiday celebration last week. The normal sounds of the office are punctuated with the distant dull popping of half-deflated helium balloons being jabbed with scissors. Closer to the end of the day, once can expect to hear high-pitched squealing from someone who has inhaled the gas and changed his or her voice. In either case, though, neither sound is loud enough to cover my most recent enormous gaffe.

The investment team was chatting around the trading desk the other day. One portfolio manager was giving his opinion on the direction of the market for the rest of the year. He cited the synchronized tightening cycle in major economies around the world. Then, he listed them all as he read from a computer screen – US, Japan, European Central Bank, and Botswana. The inclusion of Botswana got a hearty laugh from everyone on the desk. “Is it standard practice in the US,” one manager jokingly asked me, “to closely monitor Botswana for evidence of major international financial trends?”

“Sure, it is”, I said, laughing. “After all, don’t they hold the chairmanship of the G8 this year?”

Silence.

Of course, Russia is the chair of the G8 this year. In the eyes of my shocked colleagues, the American guy had just equated their glorious homeland with a third-world country they no doubt think is full of cannibals and/or headhunters.

“Ahhh,” Alex said gravely, “I see your humor. But there’s a big difference - we have nuclear weapons.”

I protested strenuously that I was making a joke about Botswana, not a joke at the expense of Russia. Really – you’ve got to believe me, fellas! They all swore they wouldn’t take offense at my comments, but that effectively ended the coffee klatch for that day.

Russians are very proud of their history and culture. Rightly so, in my opinion; there are stunningly beautiful and ancient things here. But Russia is also a country that radically transformed itself and became a modern powerhouse in many ways – and its technological competence and achievements are still a source of pride for every citizen.

All these things searched for relevance in the 1990’s when the country couldn’t afford basic necessities let alone a space program, a nuclear arsenal and a huge military. During that time, every institution in the country had to prove its relevance and contribution to the essence of the nation. They kept the space program, and the nuclear arsenal, and the military, all in an effort to show that this country was still a serious power.

They’ve come a long way from the days of mourning the fallen empire. It was a humiliating experience to gain, maintain, and lose superpower status in only a couple of generations. That loss resulted in a sense of insecurity that’s only now beginning to fade as it is replaced by Russia’s re-emergence on the world scene. In my opinion, recent moves in Iran and the Middle East are really only efforts to bring that internal search for relevance to its broader role in the world.

Official Washington, of course, is in full apoplexy mode over the re-emergence of a power in the east that may well do unpopular things and think for itself. But looking at things from the inside out, I contend that its safer to have a New Russia looking for a new role in the world than a wounded post-Soviet Russia looking to recapture its past glories.

International Women's Day

I’ve smelled that cologne before; and each time I have, I’ve smelt a rat.
~ James Bond (Sean Connery) in Diamonds are Forever

Wednesday was Women’s Day in Russia, a huge holiday that’s a combination of Valentine’s Day, Mother’s Day, and a little bit of Christmas. I was prepared for the holiday in principle, but I wasn’t expecting the elements of Halloween that crept in.

We marked the occasion at work on Tuesday. I got to the office early and found it filled with balloons – some 800 according to the decorators – covering the ceilings and surrounding the arches of the entrance. Inside, all the men gathered in the lobby to congratulate and greet the women as they arrived. Each received a big bouquet of flowers in addition to our thanks and best wishes.

It was a holiday atmosphere during most of the work day, too. Ladies in the office exchanged gifts with one another, and the boss made the rounds handing out presents. Still, work for most went on, and the 5.7% drop in the main market index was largely ignored everywhere except the trading desk.

Last week, the men had a meeting to discuss our plans for celebrating the holiday. I had a hard time following the gist of the conversation. Normally, I can at least divine the sense of the topic. This time, though, I couldn’t. So just after I congratulated myself on having my Russian get worse while actually still living in Russia, I thought about it a little more. “Nah”, I said to myself as I mulled over some of the vocabulary, “that couldn’t possibly be what they were talking about”

As it turned out, I had understood the conversation all along. This became apparent to me on Tuesday at 6pm as I stood in our conference room with my pants off picking out a kilt. We had rented some 25 sets of Scottish dress and a bagpiper to surprise the ladies, so we had all crowded into the room to change surreptitiously. I was the only guy in boxer shorts. The horror. The horror.

Somehow, manliness and Scottishness were highly correlated in my colleagues’ eyes. So they decided to don kilts for both the humor and – well, mainly for the humor. A man wearing a skirt is a very funny idea to the Russians. Apparently much, much funnier than we give it credit for. It really was a big hit with the women in the office. I found that it got a lot funnier with each glass of Scotch.

Wednesday was a day off from work, and at a friend’s birthday party I had the opportunity to show the photos to a native Scot. She just blinked at the back of my camera, and shook her head. “I’m not quite sure what to say,” she said politely.


Party a la Russe


Neither am I, really.

Carnivale

This past week marked Maslenitsa, the Russian version of the traditional pre-Lenten bacchanal. Most cultures have something like this festival in principle, but watching how they proceed can tell us a lot about the locals.

All good pre-Lent festivals include a healthy dose of the things that are proscribed during the coming 40 days. Interestingly, the holiday here also retains elements of ancient pagan celebrations. The original celebration was a sun-worship festival, so the traditional food is blini, for their sun-like shape and color. At the end, an effigy of a female figure is burned on the last day to help the flax harvest.

Or something like that. I’m a bit shaky on the historical precedents for all the elements of the holiday. And to be honest, it probably doesn’t even matter to most of the locals either. It’s simply a great excuse to get out of the house and have some fun.

I headed out to Kolomenskoe for the festivities. The enormous park was crowded with people eating, drinking, dancing, attending concerts, sledding, skiing, playing games and just plain enjoying themselves. It’s hard not to get into the spirit of things when surrounded with so much revelry.

I stood on a long line at one of the many blini stands. By the time I reached the front, I had resolved to really indulge in the spirit of maslenitsa; so I ordered a blini stuffed with an entire can of red caviar. Washed down with a large cup of mead, it was a wonderful experience.

Later, we sat at picnic tables and ordered a couple of beers. Drinking beer in 15 degree weather has its advantages and disadvantages. An advantage is that the beer never warms up – it remains frosty down to the very last sip. The disadvantage, however, is that the beer never warms up – you’ve now ingested near freezing liquid into the core of your body.

This didn’t bother any of the Russians, of course, who carried on as though the deep snow and biting cold were simply not even there. This park in the summertime is an absolutely wonderful place for relaxation and celebrating. And it struck me, as I looked around, that it was the exact same scene in the winter. Change the clothing, and the sledding, and it would be indistinguishable.

All of which says something, it seems, about Russians and their culture and their attitude to adversity. Or more to the point: their attitude about having fun. Folks here work hard, and struggle and strain to make their way. But when its time to relax and enjoy time with friends and family, they attack the task with a special zeal. And they’ll ignore everything else – all their tribulations, and suffering, and difficulties – while they’re doing it.

It’s a huge part of what makes living in Russia a true pleasure. After all, our problems will still be there, waiting for us, tomorrow.

Wretched Excess

Many speak the truth when they say that they despise riches, but they mean the riches possessed by others.
~Charles Caleb Colton

Over the past 2 days, I attended a conference on IPO’s and listing on Russian and London exchanges. I learned a lot about international capital markets, the need for capital in Russia, what international investors are looking for, and other crucial elements for the development of a shareholder society in this rapidly growing economy. But a conversation at a cocktail party on the last day shed some light on an area that routinely blows my mind.

Victor is a Russian who lived for nearly a dozen years in the US. He now heads the communications and finance operations of the largest chain of mobile phone stores in the country. We talked at length about the amount of disposable income in Moscow.

I cited an article that I had read in the international press that examined the global market for ultra-luxury cars. Bentley, Rolls Royce, and Mercedes (Maybach) are creating a buzz with their waiting lists for quarter to half-million dollar cars. But the truth is a little different in a global perspective. The fact is that all those companies are allocating deliveries to Russia because they can get as much as a 50% premium on list price here. So, other consumers wait while wealthy Russians make cash payments for far more than the manufacturers ever could have hoped for.

Victor told me about the Vertu phones that his company retails (www.vertu.com). These are the global standard in luxury communications – a cell phone made entirely out of precious materials like platinum, titanium, gold, etc. The price points are between $5,000 and $50,000 per unit. The technology is somewhat advanced – the phones are programmable to any standard and are backwards compatible with any changes in network – but in essence a Vertu phone is really just a regular phone in nice clothes.

I see this kind of wealth on the streets everyday. But when asked to guess how many they sell in a month, I came up very short. According to Victor, they sell about 200 units a month in Moscow alone. And the split is 80% toward the highest end models. That is, they sell 160 units at $50,000 each every 30 days.

That’s a pretty mind boggling number, but it gets even better. They offered a “Russian Version” of the phone that has a keyboard with Cyrillic text for a premium price of $70,000 per phone. No other differences, mind you, simply a change in the keypad. The entire issue sold out before they had even announced its release.

So when you pull up to the pump in your gas-guzzling SUV, give a little thought to the emergence of capitalist society in Russia as you watch the numbers quickly scroll by. If he only had your number, an obscenely wealthy Russian would use his Vertu to call and say “Thank You”.