Offshore Islands
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Barter trading was one of the oldest forms of commercial exchange, practised in biblical times before money existed. It was still used in the twentieth century and would no doubt continue for as long as men had no other means of exchange in times of hardship or crisis.
Arrowsmith knew the mechanism well and by a curious coincidence had used it in Cuba for the construction of a paper mill at a town called Jatabonica early in his career, well before their economy fell into dire straits. However as Montero said times had changed. Cuba held little political interest once the Cold War had ended and their only tradable commodity, sugar, had to compete on the world markets at the going price.
Nevertheless, its ex-mentor Russia still needed cheap sugar, and in exchange Russia manufactured vast quantities of low price fertilisers, it was also a major exporter of oil. It was surprising that the Russians needed anything given their rich resources, but that was the fate of those who had embraced the disastrous economic system of communism.
He envisaged that the best arrangement would be to set up a deal in a neutral country, as the relations between Russia and Cuba had become worse than strained, they were little less than acrimonious. They mutually exchanged bitter accusations. Russia accused Cuba of being a nation of thieves who alone had consumed one half of Soviet foreign aid, whilst Cuba accused Russia of betrayal.
Tony Arrowsmith called an old business friend based in Moscow, Mika Koskinen, who could advise him. Koskinen, a Finn, had lived in Moscow during the time of the Soviet Union, leaving in 1987 and then returning after the fall of Gorbatchev. He was a highly respected specialist in Russian affairs, having graduated in Russian Political Science and Economics at Lenin University.
He was the president and owner of a Russo-Finnish company, which represented a number of large Finnish companies and groups trading in industrial machinery and chemicals.
The two friends agreed to meet to discuss the matter in London, where Mika had a conference scheduled on Russian trade development for British exporters.
London was less than three hours from Paris on the Eurostar, ideal for short visits, city centre to city centre, avoiding the endless hassle of the Paris and London airports.
As the train approached London Arrowsmith tried to catch the name of one of the stations that flashed by, the setting sun over the shabby brick houses and council flats dazzled him, he caught the sign Herne Hill, as far as he remembered that was not far from Clapham Junction, just a couple of miles from Victoria, the train would soon be arriving, then he saw the gasometer and Battersea power station, only a few more minutes to Waterloo, the train was on time. As soon as the train was in the station he planned on taking a taxi to his hotel where he could relax for a couple of hours.
Tony Arrowsmith always felt a little strange returning to the London he had left so many years ago to take up residence in Paris. Many things had changed, not only the skyline and such obvious details, but also the people and their attitudes, which in some instances had evolved, though in others had remained remarkably timeless. He was the first to admit that he himself had changed, for the better or for the worse that was for others to judge.
The Eurostar pulled into Waterloo Station, where he was affronted by what must have appeared to foreigners as rather frightening scene with an array of the severe looking representatives of the state, police dog handlers, customs and immigration officers, and security personnel, more suited to a police state than that of an ancient democracy. It was naturally for the benefit of the population at large. He thought wryly that it had never stopped bombers, drug traffickers or illegal immigration; it was obvious that the whole act was in the wrong place, on the other hand it probably provided a lot of jobs and perhaps a sense of security.
He looked ahead, experimenting at avoiding eye contact with the Orwellian faces of the law enforcers, and their air of restrained aggression. He was about to join the long queue waiting for taxis, when he abruptly changed his mind and took the Underground to Hyde Park Corner, a short walk to the Four Seasons Hotel. He liked that spot, a few minutes stroll from the hotel along Piccadilly and he was in the heart of London as he knew it, or, a slightly longer walk to the south and he was in Pimlico, the district where he had grown up.
He had often thought of buying an apartment in London, but for the little time he spent there he preferred to be pampered at the hotel. It was a stone’s throw from where he had started work as a young man, at an engineering consultant’s office in Berkeley Square House, in Mayfair.
He had taken the habit of reserving the comfortable suite he had discovered at the Four Seasons, it was quiet and the discrete ambience of the hotel was relaxing, a refuge from the crowds and traffic. Generally the only meal he took at the hotel was an English breakfast, but from time to time it was practical to invite one of his friends to lunch or dinner in the hotel’s fine restaurant.
Mika Koskinen was due to arrive late that evening from Moscow and Arrowsmith was looking forward to inviting him to the places he himself knew and did not know in London.
They dinned in a small restaurant in Mayfair before heading off to a nightclub opposite the Ritz Hotel, which more resembled the kind of establishment that was typical of Moscow than London, but where they could drink and dance.
Mika explained that the barter deal could be set up through a bank in Riga, the capital of Latvia. It was conveniently neutral and was perfectly suited for the import and export of commodities, as it had been when Latvia was part of the USSR.
Oil and fertilisers arrived from Russia in the terminal at the Port of Ventspils on the Baltic Sea. Sugar could be imported through Finn Sugar in nearby Finland where it could be processed and re-exported to Russia.
Mika’s old friend, Pieter Holmqvist, represented the Bottens Handelsbank office in Riga. He could support the deal with suitable credit lines put at their disposition by the European Bank for Reconstruction and Development, the EBRD, or Berd as Arrowsmith liked to call it using the French acronym, set-up to aid the countries of the ex-Soviet Bloc. It appeared a straightforward deal and perfectly transparent. The Cuban, Montero, would not be disappointed.
If the credit arrangements functioned as Holmqvist described, the only possible obstacle would be obtaining all the necessary papers from the Russians and Cubans. If all went well, Arrowsmith would have fulfilled his engagement to the satisfaction of both Montero and Castlemain.
Chapter 42
Partagas