by Val M Karren
“Do you speak German?” I asked expecting him to answer in the negative.
“Yes, I had to study it in school and my father lived in East Germany for many years and we would speak German at home when nobody was listening of course. Nobody here likes Germans. He was an engineer so he helped me understand the difficult words and I sounded like I knew what I was talking about with those gypsies from Germany,” he said insulting the Turks in Germany.
“Sounds very clever!” I was starting to feel uneasy and tried to hide it by being agreeable.
“We even bought broken cars from Western Germany for parts. We would import broken cars and take them apart in our garage and make inventories. So, we started being specialists in German cars for all over Russia, not just in Nizhniy. Eventually, we were able to get our parts back from GAZ as they couldn’t get our customers to order from them and so we did both,” he added.
“Was it difficult to import in 1990 and 1991 before the Soviet Union was dissolved?” I was doing my best to sound academic and harmless by not asking deep questions about his operations.
“No, not really. If we came from Germany through Finland with our trucks with cars on them, we didn’t have much trouble. In the Soviet years, we had to pay the borders guard with cigarettes and the Colonel with a BMW so they wouldn’t make problems for us. You see, they were in the wrong positions to make profits, and so they had to do what they had to do to get by and we had to look after them. Remember that the stores were empty then. Even though the military had their own special stores for purchasing meat and vodka, the distribution system was terrible and they too would go many days without anything but cigarettes and tea at the border stations. The more cigarettes they could smoke the less they felt the hunger. We were importing with the right permissions, but they still had the guns. We had to do something to help the guards follow the law,” he said without any apology.
“How is that today? Is it easier to import or more difficult? I asked the best I could without prejudice.
“Relationships make all the difference. Like I already said, we looked after the border guards. A Colonel only changes every three years. So even when the Union dissolved the same Russian Colonel was watching the Finland border crossing for two more years. So, the changes have really been very little for importing for us. We even have Volvos now from Sweden,” he boasted.
“Do you import form other places than Europe?” I asked already knowing about his Korean connections.
“Yes, from Asia. We import electronics, mostly radios, and televisions and video tape players. Russian electronics are so poorly made that Russians won’t buy those anymore. Usually, the drunks are employed at the radio and television factories. They can’t build anything right!” he sneered.
“Did you start with radios in the same way you started with car parts?” I lead him on.
“Nyet, I had a license to import and I knew that radios and televisions from our factories were no good, so I made some connections through a taxi company I know in Vladivostok and they sent me a container filled with Korean radios and televisions. I wanted Japanese, SONY, but they were too expensive. So, we opened a shop in town and the people came and bought them so fast that we had to close the store after three days because we had nothing more to sell! Imagine that. We asked for more. And it just kept going like that for many months,” he recalled.
“How did you start importing cars from Asia? It sounds like a different dynamic than in your early days.” I asked.
“My contacts in Vladivostok were already importing Korean cars and the relationship moved from only electronics to include cars too and also spare parts. We are only importing second-hand cars. The new ones were still too expensive for the Russian taxi drivers. We are now the largest distributor of Hyundai parts on this side of the Ural mountains. The Korean and Japanese cars are all you see in Vladivostok now. They’re crazy out there,” he said holding his finger to his temple.
“From your history, I understand you are more an entrepreneur than a typical director of a factory or a farm or another organization that had experience with the new privatization process, so perhaps any questions I have about that maybe need to be for somebody else,” I said bating the hook for him.
“Da nyet, I am also involved in privatization here in Nizhniy Novgorod. In fact, I have bought and run a restaurant now that was a state-owned enterprise, several shops that sell electronics that we import from Asia and I am now investing in a number of grocery stores,” he remarked.
“OK, that’s an interesting step. Can you tell me about your experience with this process? Are you continuing the old operations with the same staff and suppliers or do you have your own network of suppliers and staff? Obviously, the imports from Korea are an additional supply chain, but do you continue to support the domestic producers?” I asked professionally.
“Understand that domestic production is so poor that nobody wants to buy it. Did you know that several people were killed in the late 1980s by exploding televisions? The circuits were so badly built that the tubes actually exploded with an overload and killed several old women. I am not joking. The people would only purchase the radios built in the second week of a month. Do you know why? Because it was the second week of the month that the managers were actually doing something to control quality. In the first week, they were still drunk or hungover from drinking their quota rewards for the month before. In the last week, they were too busy just pushing half built radios through the assembly line in order to reach quota by the end of the month. So, the women would demand the shop clerks to open the back of the radio to see the date of production, check the calendar, and then it had to be plugged in and the volume on as loud as it could go for a few minutes go before they would agree to buy it. So, do I support Russian factories? Not when gypsies, Tatars, and Kavkazi are building them in Russian factories,” he said with disgust.
“So your sales of electronics are one hundred percent imported?” I confirmed.
“Yes, nobody wants Russian made goods,” he stated with fervor.
“When you purchased the shops from the government, did you keep the staff?” I tried to keep my questions sounding as if they were pre-planned, unswayed by his revelations.
“Anybody who has worked in a government shop does not know how to sell or how to treat customers. There were a few, some younger girls who understood that you need to treat a customer correctly, but mostly it was older women working as shop clerks as the men were in the factories, so usually I replaced the staff with younger students who finished university and wanted to get involved with international businesses,” he answered like a good business owner should.
“And in the restaurant?” I asked innocently.
“In the restaurant? The cooks are all Russian women because people do want Russian made food. So, we kept the grandmothers cooking. It is good food! Do you know my restaurant on Bolshaya Pokrovka?” he asked with a flinch of pride.
“Yes, I ate there once in February. The food was good, but too expensive for a student to go again,” I conceded.
“Well yes, I must make a profit. The next time you want a special night out, you tell me, and I will make sure you get a good meal for a student’s budget. Agreed?” he was being sincerely generous.
“That’s very kind of you, thank you. Can you tell me about the grocery stores you are investing in? What is your business plan for these?” I continued to push through the details.
“These shops are to be made by Russians for Russians. Nothing imported. People want Russian food for their kitchens. I am busy now putting together the suppliers who can produce and package correctly so that these stores become convenient like shopping in Germany. We will hire mostly young women to work in the shop who understand customer service. I do not plan to make much money with these shops. I am doing this to help the local food producers in the Volga region and to provide the people with a modern shopping choice. I consider these stores to be my gift to the city and my people of t
he Volga,” he said like a Tsar gifting his people with their very lives.
“What is your opinion about the government’s initiatives to privatize these enterprises? Do you find it to be worthwhile? It sounds to me that you prefer to buy the property and not the enterprise. You replace staff, suppliers, etcetera. So, in fact, you aren’t buying the enterprise at all.” My question seemed accusatory and I braced myself for his reaction.
“It is true. I purchase the property and the license. After it is a private company and no longer a shop that belongs to one factory or another then I am free to run that business as I choose. So, yes you are correct that I am not like the workers who buy a shop for themselves. I don’t know how they think they can survive doing the same things, but then for themselves. These people don’t know other suppliers, other producers. They know how to unload trucks, stock shelves and take people’s money. They are not business managers. I have no faith in the workers’ buyouts in Russia. I think the government makes a big mistake to think that a group of workers will know how to make their business successful. They pay lots of money to the government and then the bank and I expect that they will lose everything. We need entrepreneurs to run the businesses, not workers,” he proclaimed.
“And the factories?” I didn’t even know what I was asking with that remark but it was out there.
“That’s different of course. There you have technical people who can make, fix, design new things so they aren’t helpless. What they lack is a commercial vision, a target market for their products, but I believe that the managers of most of the factories understand this. They have higher educations in economics, even if it was for a planned economy. But they are smart guys. If they can find some foreign investors and some foreign markets for the good Russian technology, after some time I believe they will do well.” he said with some confidence in his compatriots.
“What about the privatization of natural resources and strategic infrastructure projects,” I asked, poking the bear.
“Russia is being robbed!” he shouted.
“Excuse me?” I bumbled.
“Russia is being robbed by the communist apparatchiki and ministers in the Yeltsin government, and those men are making themselves rich and somehow they are doing this and getting away with it. They have not brought any new knowledge or efforts to improve the product. They are not improving Russia! They are just taking the money and putting it in Switzerland and Cyprus in their own accounts after they took the shares of their newly privatized ministries. It’s the biggest crime being committed in Russia and somebody needs to stop it!” he was instantly angry.
“I agree completely!” I replied, truly in agreement.
“My private enterprises are giving things back to Russia and Russians. I make jobs, I sell products that people want and need, we provide parts and service to keep trucks and taxis moving and people can earn their bread and salt. To just take the country’s resources and sell them abroad to make a few men in the government rich is insulting to our homeland. Those men should be shot!” he demanded.
“Are you involved in the local politics or are you only interested in business and trade?” I asked knowing the answer already.
“In Russia, business is politics. The economy is politics. The mayor consults with me on a regular basis about how to help private business thrive so they can get the votes and tax money of course. It’s all mixed up. You can’t keep it separate!” he waved his left hand in the air to signify confusion.
“Do you feel it should be kept separate like in the United States and Germany?” I asked with some superiority.
“Young man, don’t be naive. American businesses run your government too and your CIA. How many times has your country overthrown a government in central America to make sure you kept access to cheap labor and have export markets. Remember that Marx and Lenin were not wrong about everything! You forget that Russia is still very good friends with Cuba,” he said condescendingly.
“Good point,” I conceded.
“Russia needs a real God-fearing Russian in power. No more Ukrainians and Georgians and Siberians as President. It is time for the people of the Volga to lead Russia and care for the motherland. Russia was built on the Volga and by the Volga. The people of the Volga truly love the land and the history and suffered through the worst of our history. If we neglect the heart of our country, our country will die!” He was getting very worked up now.
“Do you have somebody in mind that could fill the role? Do you support a candidate?” I asked pushing him to talk about himself.
“Right now, there is nobody who loves Russia more than their own bank account. We need to start a new party of those who truly love Russia, a Volga Party that will stop the rape of this country by our own countrymen!” he declared.
“Sorry, I’ve gotten off track with my questions. Even though I agree with you one hundred percent, and I am glad to find somebody else who thinks like I do about it, can I ask you again about what kind of policies can help private businesses help Russia and Russians?” I interjected.
“The biggest problem are the government ministers, customs officers and tax collectors who make it difficult to do anything without them all getting their kickbacks. They are lazy and have no imagination about how to work, and they suck the people dry after they work hard. We need to throw all those gypsies out of the government and let the people just work. The Russian knows how to work if he is left alone!” he said pounding his fist into his own hand.
“It’s government corruption then that holds your business back?” I asked for clarification.
“Yes, corrupt, self-serving bureaucrats that are robbing the people blind, laming private businesses like mine by giving rights and licenses to their friends and family and not allowing competition. They take every day and give nothing back of any value to Mother Russia,” he restated more calmly this time.
“You also have a very popular night club in a unique setting. Can you tell me about that business and what plans you have for that in the future?” I asked going out on a limb a bit.
“Did you like The Monastery?” he asked with obvious pride in his voice.
“To be honest, it didn’t feel good to me to be dancing like that in an old church. It lacks respect. But this is just my opinion,” I said apologetically.
“OK, you can have your opinion. No problem,” he said brushing me off and protecting his pride.
“Can I ask how you purchased a church to make into a nightclub?” I queried, truly wanting to know the answer.
“It was easy. No more monks. Russian girls are too pretty. They were chasing girls when I bought it!” he laughed at his own joke.
“Yes, I agree. It would be difficult to be a monk in Russia,” I truly agreed with that sentiment. “Do you have further plans to expand the night club operations, or are you satisfied with it?”
“It is a fun little club, but it does not make much money. It does not attract the people with the money. It is more for students to dance. It is not open every day, just weekends. So I am planning to build a new one very close to it,” he said with a bit a disappointment.
“How will the new one be different?” I was sincerely curious.
“Do you know Las Vegas?” he looked at me and winked his left eye, letting me in on a secret plan.
“Yes, of course…,” I stammered not understanding what he was telling me.
“To get people with money you must have more than dancing. You need shows, a casino, buffets and someplace for them to sleep,” he paused waiting for my acknowledgment, “Nizhniy has no good hotels. My friends, when they come from Moscow to The Monastery, they always complain to me that they need someplace to sleep that makes them comfortable. Nizhniy is a great town, a great Volga town, but it is not a modern city.”
“So, you plan to make Nizhniy Novgorod the Las Vegas of Russia?” I asked with a pinch of repulsion.
“If God won’t stop me, yes!” he replied convinced of his crusade. “It will bring new
construction, new hotels, new jobs, money from gambling, restaurants, airport. Just look at Macau! It’s a great model for a city-state.”
“Is this just a dream you have or are you working on plans already?” I swallowed my personal indifference to his plans to keep him talking.
“We are working on the plans already. Would you like to see the drawings? Maybe you can give some good tips about how to make it better, more American?” he said with enthusiasm.
Mr. P. retrieved some plastic tubes from behind his desk and rolled the technical drawings of a master plan on the glass coffee table and secured the corners of the thin paper with heavy granite chess pieces and began to explain the specifics of the plan.
The drawings were impressive. The artist’s sketches looked to give the hotel and the other buildings a unique modern style but unmistakably with a rich Russian influence. It seemed almost to be a complimentary sort of architecture to the local kremlin and incorporated the architectural aspects of The Monastery as it now was. I studied it for some time as Mr. P. explained his favorite elements of the design and the layout and the architecture. There would indeed be a casino, fine dining, a hotel with three hundred and fifty rooms. The hotel though would not be a sky scraper like the monstrosities in Las Vegas, but a three-floor stone structure that encircled the entertainment facilities, much like a fortress with a church and a village in the middle. The hotel rooms would all have a great view of the Volga, perched on and built into the the panorama slope of the bluff. Somehow, the design of the hotel held true to Mr. P.’s belief and quasi-worship of the Volga river and the Russian aesthetic. It was ingenious, even to my eyes.
“And you see, here is The Monastery, so we will make sure that we keep the church and its buildings preserved. This was our agreement with the church and the city when they let us buy it. We will not keep it as a club forever. I promised if I could build my hotel on the land next to it that we would restore and preserve it for our history,” he said with a bit of reverence and respect, which surprised me.