Eurasian and American companies look for effective ways to collaborate in a tense investment climate — by Natalia Dagenhart
The Fourth Annual Eurasian Business Forum took place in Chicago on November 3, 2016.
From the beginning of time, people from different parts and regions of the world have been doing trade and exchange with each other in spite of ongoing conflicts and tensions. Our days, wise business owners use the same philosophy and collaborate with each other ignoring international difficulties and the tense investment climate. As the Bible says in Ecclesiastes 11:4, “If you wait until the wind and the weather are just right, you will never plant anything and never harvest anything.”
Many local Chicagoland businesses are either already successfully collaborating with the Eurasian Region, which mostly consists of former Soviet Union Republics, or are planning to start that collaboration. One of them is Russian Pointe Company that sells and distributes its beautiful hand-made ballet shoe brand from Russia to the United States as well as several other countries around the world. A graduate from Harvard Business School’s elite Executive Owner/Management Program, Founder of Russian Pointe Aleksandra Efimova started this business in 1998 with a thought of providing North American dancers with the finest pointe shoes created in Moscow in the grand tradition of Russian craftsmanship.
As an experienced business woman, entrepreneur and Chair of Moscow Committee of Chicago Sister Cities International, Ms. Efimova understands the importance of developing the US-Eurasian business relations. The importance of such relations is also essential for Piotr Galitzine, Co-Chair of the Moscow Committee of Chicago Sister Cities International. Being Chairman and CEO at TMK IPSCO, the world’s largest pipe producer, Mr. Galitzine, who a few years ago resided right in downtown Downers Grove, surprised the entire Chicagoland business community with a fact that he is a Russian Prince who is married to Archduchess Maria Anna, a granddaughter of Karl I, the last emperor of Austria. His heritage, expertise and international business experience help him to better understand and expand the US-Eurasian business and investment relations.
These two extremely knowledgeable and experienced professionals, who are Co-Chairs of Moscow Committee of Chicago Sister Cities International, hosted the Fourth Annual Eurasian Business Forum that took place in Chicago on November 3, 2016. This Forum is designed to not only develop and grow US-Eurasian business relations and promote cultures of the Eurasian Region in Chicago, but also to provide valuable benefits to both American and Eurasian businesses and to build extensive community support, loyalty and goodwill.
The event took place in collaboration with and at the grounds of Baker & McKenzie LLP, the world’s premier global law firm located in downtown Chicago. This reputable company has existed for more than sixty years and is a great example of how passion, hard work, enthusiasm and devotion can lead a small law firm, which started in 1949 with four lawyers and limited finances, to becoming one of the largest law firms by revenues, markets and headcount.
Today, Baker & McKenzie has seventy seven offices in forty seven countries including offices in Moscow that were opened back in 1989. This international law firm has developed productive and fast growing business relations with Russia and many other Eurasian countries viewing them as valuable and important partners. Michael S. Smith, Chicago Office Managing Partner at Baker & McKenzie LLP, welcomed the attendees of the Forum, expressed his satisfaction with productive relations between Baker & McKenzie, Russia and the entire Eurasian Region and pointed out major facts and factors of such collaboration.
The Fourth Annual Eurasian Business Forum brought together distinguished and valuable business and social figures such Alexis Rodzianko, President and CEO of American Chamber of Commerce in Russia, who was Keynote Speaker at the Forum. His speech attracted a lot of attention by addressing important financial, social, political and investing issues and by the speaker’s intelligible approach. Particularly, Mr. Rodzianko mentioned sanctions and their impact on the international trade and investment. He underlined the importance of cooperation between the American and the Eurasian companies and noticed that unfortunately the US State Department views the Eurasian Region as a creature of the Russian Federation, which makes the companies on both sides lose their opportunities.
Mr. Rodzianko also said a few words about Western European countries and their collaboration with the former Soviet Union region. Europeans participate in panels with Russian organizations and frequently feel that they are being forced by the US into sanctions against Russia. As a result, they lose their financial and investment opportunities. Besides that Mr. Rodzianko noticed that in spite of all the barriers and problems, US businesses are still very visible in Russia, and American companies keep cooperating and collaborating with Russian and Eurasian businesses. Recently, the Russian economy stopped falling and the post-Soviet Union region is a good area of investment for many international businesses and organizations.
Alexis Rodzianko, the President and CEO of the American Chamber of Commerce in Russia, and Piotr Galitzine, Chairman and CEO at TMK IPSCO, discuss the trends of the current investment climate in the world
Another notable speech was presented by Mr. J.P. Natkin, Partner at Macro-Advisory Ltd. He addressed the question of how the crisis is changing Russia and the entire Eurasian Region. He gave special attention to challenges and opportunities for investors in that region and demonstrated to the audience positive moments of collaboration with the former Soviet Union republics. Mr. Natkin mentioned key industries of Russia such as agriculture, food, pharmaceutics, auto parts, machinery and parts, defense industry equipment, and oil field services; explained how Russia protects its main industries and areas of business during crisis; spoke about perspectives of Russia collaborating with other countries, and noted that the choice of American people at the elections and the new American administration will affect American-Eurasian cooperation and determine it.
Discussion of the investment climate at the Forum brought forward some interesting information such as the fact that Russia adopted a government program to make itself more attractive for investors, which helped it rise in the World Bank Doing Business ratings from 120th place in 2011 to 40th place in 2017 (ahead of China, Brazil, India, South Africa, Italy and Israel). Russia welcomes foreign investors and provides them with equal legal treatment with local businesses. The eastern part of the country is developing rapidly now and brings more and more investment opportunities for businesses. Eurasian Economic Union that consists of the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic and the Russian Federation continues its profitable cooperation and is expected to strengthen it even more in the near future. This international organization provides free movement of goods, services, capital and labor, and pursues coordinated and single policy in the sectors determined by the Treaty and international agreements within the Union.
All this is creating a very positive picture for American businesses that are planning to collaborate with the Eurasian Region, although they should still remember risks such as the effects of sanctions and corruption. However, the experience of many American companies demonstrates that collaboration with the Eurasian Regions is not just possible, but is also noticeably profitable. Also, many Eurasian companies located in the USA successfully trade and invest in this country.
The Forum underlined the advantages of immersing into such geographic areas as southern former Soviet Union republics. Azamat Kuatbekov, Almaty Office Managing Partner at Baker & McKenzie LLP, described the advantages of investing in Kazakhstan, which is the 9th largest country in the world, such as its location, low tax rates, investment climate, levels of government control, labor force and employment rate. He mentioned major areas of investment and underlined Kazakhstan’s closeness to European and Asian countries.
Another region that American investors are not very familiar with is Azerbaijan. Nargiz Ibrahimova, Professional Fellow, U.S. Department of State, Azerbaijan Ministry of Economy also spoke about benefits of doing business in that country, particularly about a very convenient corridor that runs through Azerbaijan. This corridor is used to deliver goods to European and Asian countries and makes that delivery faster and easier, and, as a result, saves these countries a lot of time and money.
Sergei Voitishkin, CIS Managing Partner at Baker & McKenzie LLP, underlined that it is a good time now to invest in Russia. He touched legal issues and conditions in Russia such as for small, medium and large businesses, saying that larger companies have more resources to defend themselves in courts, if necessary, and smaller American businesses are still developing their presence and strengthen their positions on the territory of the Russian Federation. He noted that in the next five to ten years the level of international trade will increase the American businesses’ presence in Russia.
These are just a few major points that were discussed at the Forum that welcomed numerous valuable speakers and experts in different areas of expertise and from various reputable and successful companies. Also, some of the attendees of the Fourth Annual Eurasian Business Forum in Chicago shared with me their impressions of the Forum.
Anastasia Herasimovich, Associate at Baker & McKenzie and one of the organizers of the Forum: The Forum’s goal was to make attendees recognize opportunities and growth potential of the Eurasian Region. The attendees were able to raise awareness about Eurasian key trends and receive satisfactory answers to their questions relevant to the region’s competitiveness, investment climate, trade and dialogue between public and private partners. It was a wonderful opportunity for Baker & McKenzie to show once again that it is a true trailblazer of legal services providers worldwide, including in the Eurasian Region.
Tatiana Nagornova, Special Project Coordinator at Russian Pointe: I found this Forum very informative and well worth attending. I learned about doing business with countries such as Kazakhstan and Azerbaijan, which you usually don’t hear in the news. Also, I was impressed by the speech presented by Mr. Dobkin, who is Founder, CEO and President of EPAM Systems.
Ilya Zlatkin, Head of Business and Corporate Practice at Ziliak Law, LLC: What jumped out at me during the forum was Piotr Galitzine’s reminder about certain aspects of the sanctions. First, there are no limitations on amounts of US-Russia investments or trades. Second, there aren’t any sanctions against other CIS countries that would practically affect the vast majority of business. It was worrisome that small business can’t operate as smoothly as here, but I was encouraged to learn that that portion of the economy is improving throughout the region.
Iryna Iakusheva, Program Assistant, Metro Chicago Exports: It was helpful to get expertise and current knowledge from the speakers, forum guests, who work with this region day by day. There are certain industries, which struggle in Russian markets because of sanctions. At the same time, there are prospective opportunities in Azerbaijan and Kazakhstan markets in oil and gas fields. I believe Forum built up a new vision about the Eurasian Region and will expand borders for business and cultural collaboration. Despite difficulties in regulatory policies, there are still positive prospects for mutually beneficial cooperation in export and import operations.
Bahdan Yakavenka, Founder and CEO of Yakavenka Capital Management: One of the few reasons I attended the Fourth Annual Eurasian Business Forum last week was to network, to meet and build relationships with stalwarts of the Eurasian business world and, most importantly, learn about the developments of business and trade in SIC. I am planning to invest in the Eurasian Region and to educate investors from Eurasia about the opportunities of investing in the US. The Fourth Annual Eurasian Business Forum was very informative and interesting for me. I really liked the last panel with the managers from EPAM, EVRAZ North America and Rosnano USA. They gave a great overview of their businesses and current economic conditions and how they affect their operations.
The Forum is over, but the ongoing work between American and Eurasian companies is never ending. These wise managers, directors and investors keep in their mind the verse from the Bible that says to “Do your planting in the morning and in the evening, too. You never know whether it will all grow well or whether one planting will do better than the other,” (Ecclesiastes 11:6).
If you plan to develop your business options in the Eurasian Region, please consider attending the Eurasian Business Forum in the future. There are many opportunities and venues to become part of this important event and to learn about this extremely beneficial region. More information can be found at http://www.eurasian-forum.org/