Russia's modernisation: pipe dream or reality?
* Investors sceptical of Kremlin rebranding drive
* Say Russia's corruption, red tape must be fixed
* Young Russian businessmen call for swift action, not talk
By Guy Faulconbridge and Dmitry Sergeyev
ST PETERSBURG, Russia, June 18 (Reuters) - If President Dmitry Medvedev's vision of modernising Russia is ever going to become reality, the Kremlin must stamp out corruption and stop greedy officials from crippling businesses, investors said.
Reacting to Medvedev's speech to the country's annual business forum promising a bright high-tech future for Russia, company bosses praised the president's high-flown rhetoric but expressed worry about the country's daily reality.
"I am going to tell the president: find success and shine lights on it," said Joe Schoendorf, a venture capitalist at Accel Partners, which has over $6 billion under management.
"Make sure that the Russian system does not slow it down, make sure that Russian corruption doesn't get involved with it and if it does, kill it," said Schoendorf, who was to attend an meeting with Medvedev during the St Petersburg Economic Forum.
The 44-year-old Kremlin chief wants Russia to diversify away from oil, gas and metals after the global crisis shattered a decade-long boom, leading to a severe recession last year.
But more than half way through his four-year presidential term, Medvedev's opponents say he has failed to significantly reform the political and economic system he inherited from his mentor Vladimir Putin, Russia's prime minister and paramount leader.
"I am not going to argue with you: corruption is a big problem for the Russian economy," Medvedev said, after he was quizzed by business leaders over the graft which has seeped into every walk of Russian life.
"We are certainly aware of the scale of the disaster and we believe that without cutting out corruption at all levels we will not have any kind of investment future," he said.
Critics say Medvedev cannot effectively tackle corruption because this would mean challenging the entrenched business interests and wealth of top government officials.
INNOVATION CITY?
Medvedev's ambitious plans to spur technological innovation in a country that has depended on selling natural resources for centuries took centre stage at the St Petersburg conference, Russia's answer to the Davos World Economic Forum.
At one breakfast session, officials asked CEOs and bankers to form groups to brainstorm on what Russia needed to do.
Deutsche Bank (DBKGn.DE) Chief Executive Josef Ackermann, summed up a discussion at one table, saying Russia needed "to have an institutional framework that allows people actually to develop their own initiatives and their own businesses."
"Two words have to be mentioned in this context, bureaucracy, on several levels... and of course corruption," said Ackermann.
But the strongest scepticism came not from foreigners but from a new generation of Russian businessmen.
During a discussion on innovation, Cisco Systems (CSCO.O) Chief Executive John Chambers and Russian oligarch Viktor Vekselberg were quizzed by a 22-year-old Russian businessman who said he was going to try his luck in Silicon Valley.
Alexander Debelov, who set up Massachusetts-based Crelligence Media, a company that sells video marketing products, said the business culture and large pools of capital in north America made it way more attractive than Russia.
"I don't think it is realistic to expect there to be an innovative economy created in Russia," said Arman Saakyan, a 24-year-old Russian founder of Alliance Investment Group.
"We can talk until the cows come home about innovation and modernisation, but without concrete action it is just a string of empty promises."
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Your aspiration to create a Silicon Valley in Russia seems to be a big joke…
And unfortunately it’s an old one. I’m from Silicon Valley and I’ve also lived in Russia for over 5 years. The world is littered with other countries that have attempted to build their own “Silicon Valley” and have failed.
Russia is by far in the worst position possible to even have a chance at accomplishing this.
Any “Hacker Mentality” is good at breaking things but in my experience it’s never been good at building. This analogy in itself is accurate in describing the overall mentality of the collapsed Soviet Union and for “Modern” Russia itself. Breaking things is what you guys like to do. Compounding this joke is the fact that you have appointed Vladislav Surkov to head this initiative. From what I understand Mr. Surkov is an old world ideological commissar who was responsible for creating Russia’s version of Hitler Youth called Nashi. He’s also great at creating oxymorons and trying to fool people into believing them like the now laughable term “sovereign democracy”.
Sovereign democracy? That’s just as idiotic as saying that Russia is an “Open Dictatorship”. Mr. Surkov is not even good at PR and he personally reminds me of Saddam Hussein’s old mouthpiece “Baghdad Bob”. Now you want to further insult the few remaining brilliant Russian engineers and scientists that haven’t left the country for Silicon Valley already and place this guy in charge of them?
Who in their right mind would want to work hard and dedicated their lives towards inventing something new so Mr. Surkov and the Russian state could take credit along with the money for it?
It must drive you guys crazy that a 10 year old kid named Sergei Brin could leave Moscow with his parents and in few short years create Google with his friend Larry Page in Silicon Valley.
Even if history were somehow reversed and Mr. Brinn stayed in Russia and came up with this idea on his own.. There is NO WAY his idea could have ever seen the light of day in Russia with it’s instinctive scorn of new ideas along with a complete lack of IT infrastructure and an even bigger lack of understanding on how the modern world actually works. Sadly it’s true what they say about Ignorance and Arrogance.. The 2 are always opposite sides of the same worthless coin. I write this not because I’m an American nationalist.
I write this because of my love for the Russian People and my frustration at seeing your government systematically crush any hopes your citizens have at making their lives better. Your habitual instincts towards implementing “Central Control” is an age old excuse for insecurity that will drive your country and it’s future into ruin. And for what reason? Unfortunately the answer is too simple. Ego.
If it is corrupt at the top with you two gentlemen (especially you Mr. Putin) then it is always going to be corrupt beneath you and that is painfully being reported at all levels of the international and business press. Russia is easily one of the most corrupt places on earth. So corrupt that in the last decade no significant construction of new roads has been completed even though many were planned simply because the allocated money never reached the right people. As I’ve mentioned earlier I’ve lived in Russia for over 5 years and your level of infrastructure is sadly anywhere between 50 to 100 years behind the West or any truly developed country that has embraced Western economic values. And to add insult to injury you want to fall back on the old Soviet mentality of burning up majority of your remaining GDP on the military?
Sadly Russia is like an obsolete and drunken old carpenter who only has a hammer to build himself a home before the Russian Winter sets in. Russia’s oil is the Vodka that this man is killing himself on.. While the military is the only tool that he has as he holds a single rusty hammer in his hand. Sorry but this old man doesn’t stand a chance and will perish in the streets next to his sober neighbors who have knowledge, experience and a whole host of power tools at their disposal. And on top of all of this..
You dream of building a Silicon Valley outside of Moscow? That would be like us trying to build a new Silicon Valley in Washington DC. Sorry but there’s a good reason Silicon Valley is on the opposite side of the country. Politics and Innovation are mutually excluding. They tend to annihilate each other. And you Gentlemen being the politicians that you are would never allow real innovation to threaten your power base. So therefore as usual.. this talk of Silicon Valley is just another “Potemkin Village” movie set attempting to “impress” people of your false ambition and desired status is in no ways different from the rappers on MTV making lots of noise and wearing layers of gold chains around their necks. If you want to take real steps towards helping your country.. let alone trying to build a Silicon Valley.. why don’t you try to learn from our own triumphs along with our mistakes and give your people REAL FREEDOM and self determination. For all the excesses of the 60’s in the US it did create a real paradigm shift in attitude that a bunch of establishment rejecting individuals could change the world. It was our modern renaissance and it serves as the foundation for our world of innovation and free competition.
You in Russia have never had this.. Because you never allowed it. And until you do. Your dream of building Silicon Valley will always be a mere fantasy. And you Mr. Medvedev will continue to have nice pieces of hardware on your desk that have glowing white apples on them.
GL
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