How to be a success in Russia
By Dmitry Verkhoturov and Ilya Kirillovsky

Indians have not been very happy recently about their partnerships with Russia. The Times of India highlights major problems, such as belated equipment supplies to the Kudankulam nuclear plant, the modernisation of the aircraft-carrier Vikramaditya put off to 2010, spare parts for military technology delivered behind schedule and, last but not least, an insufficient trade turnover. The Indian prime minister’s visit to Russia in November 2007 added to the problems with tensions on protocol intricacies.

Despite all that, India is fully aware of the promising prospects for bilateral partnership. The clash between radiant hopes and emerging problems makes India’s situation rather awkward in contacts with Russia.

We do not think that the problems are rooted in Russia’s shifting foreign political priorities that take a lesser interest in India than before. On the contrary, Moscow regards India as a promising partner, especially in military technologies, where Russia is losing its prominence in the world.

The main reason for all the failures lies in the gradual enfeeblement of the Russian government. Orders from the top often never reach those they concern at lower levels. If they do, they are occasionally shelved because official Russian agencies at various levels are too slow with feedback and decision making.

The trend arose many years ago. In fact, the disintegration of the USSR in 1991 came as an official acknowledgement that no one was actually ruling the country. Not that contemporary Russia has reached the extent of mismanagement the Soviet Union had at the start of the 1990s, but many Russians are acutely aware of an impending danger.

President Vladimir Putin is also under the influence of this disastrous trend, though he is making staunch efforts to reverse or at least stop it. The division of the country into federal districts, each of which brings several regions together, and the appointment of presidential envoys to rule those districts took the edge off managerial problems, but they still persist.

These problems not merely impede Indian projects in Russia but come as an obstacle to bilateral relations in general.

What is to be done to guarantee success for the Indian initiatives in Russia even with the current state of the government?

Many Indians think an agreement will certainly be implemented once it has been signed at the highest level. They are wrong. An official agreement does not mean the target is hit. In Russia, it is only the start of a long and tortuous road. To talk it over at the top and obtain its consent implies only the legality of Indian representatives’ presence in Russia—and even this only to an extent. Regional authorities, for instance, are sure to pay attention to such representatives, but they are far less sure to implement agreements.

There is only one way to make oneself heard: arrange the affair at every level in Russia from the Kremlin down to municipal and corporate authorities, and closely monitor the agreement and contract implementation. One cannot accomplish anything in Russia without establishing an ad hoc managerial system, though local bosses may rise up in arms against it. Notorious corruption is not the worst thing to clash with amongst the Russian officialdom; still worse is the prospect of wasting years fruitlessly walking from one office to another.

Especially hard put are the Indians launching regional projects in Russia. They do not realise that Russian regional and local authorities have a certain extent of autonomy since the Constitution qualifies them as independent agencies. Even after a contract is made at the federal level, it may be stopped at a lower one.

The Russian provincial routine clearly shows that understandings have to be made with everyone. To get established in a region, one has to contact a local spokesman who is on friendly terms with all the relevant people. He must know every unofficial information channel and have friends in the local ruling bodies. This arrangement makes talks smoother and the job quicker.

In Russia, you deal with persons, not agencies. Decision making depends on individuals. It is often helpful to contact agencies that have no link to your project. Some of such agencies have functions extremely vague to Russians and Indians alike. Still, they have the say in the local government and economy. Local ruling bodies are also influential due to their control and supervision duties.

Russian business has many social missions with lean regional and municipal budgets. This situation emerged even at the start of Soviet industrialisation. Private entrepreneurs assume a great part of local social expenditures. Help with urban development and engage in charity, and you will have assistance from the local authorities.

It is tiresome and expensive to do business in Russia. You need extreme patience to implement a project here, but it is not impossible. Many Russian regional companies engage in high technologies and are successful exporters. Russia offers chances for lucrative investment in high-tech and other fields, promising industrial and infrastructural projects, and a good sales market for Indian commodities.