HorasisReportGlobalRussiaBusinessMeeting2010-c

Global Russia Business Meeting16-18 May 2010, Ljubljana, Slovenia

a Horasis-leadership event

under the patronage of the Prime Minister of the Republic of Slovenia Borut Pahor

Report

Horasis is a global visions community committed to enact visions for a sustainable future(http:/www.horasis.org)

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Co-host:Government of the Republic of Slovenia

Co-organizers:Association of European BusinessesDelovaya RossiaMoscow International Business Association (MIBA)Moscow Investment and Export Promotion Agency (MIEPA)Russian Managers AssociationAssociation of Orthodox Business LeadersYoung Presidents’ Organization (YPO)

Co-chairs:Igor Agamirzyan Chief Executive Officer, Russian Venture Company, RussiaClaude Beglé Former Chairman, Swisspost, SwitzerlandVsevolod Chaplin Archpriest, Russian Orthodox Church, RussiaJeffrey Chen Chief Executive Officer, Neopac Lighting Group,TaiwanCarla Cico Chief Executive Officer, Rivoli S.P.A., ItalyTatjana Fink General Manager,Trimo, SloveniaDennis Gillings Chairman, Quintiles, USAJim Goodnight Chief Executive Officer, SAS, USA Alan Hassenfeld Chairman of the Executive Committee, Hasbro, USANatalya Kaspersky Chairman, Kaspersky Lab, RussiaAlexander Kiselev Director General, Russian Post, RussiaAnil Kumar Chief Executive Officer, Ransat Group, UK/IndiaWolfgang Lehmacher Chief Executive Officer, GeoPost Intercontinental, FranceDmitry Loschinin Chief Executive Officer, Luxoft, RussiaPetro Poroshenko Head of the Council, National Bank of Ukraine, UkraineCvetka Selsek Chief Executive Officer, SKB, SloveniaJanez Skrabec General Director, Riko, SloveniaMurad Sofizade Chief Executive Officer, IPnet, RussiaSergey Vasilyev Vice Chairman,VEB Bank, Russia

Knowledge Partners:A.T. KearneyBaker & McKenzieCNC CommunicationsErnst & YoungManpower

Upcoming Horasis events:Global India Business Meeting Madrid, 21-22 June 2010Global Arab Business Meeting Ras Al Khaimah, 26-27 September 2010Global China Business Meeting Luxembourg, 21-22 November 2010Horasis Annual Meeting Zurich, 25-26 January 2011

Media Partners:International Herald TribuneRussia Beyond the Headlines

Studying the programme

Taking notes

The inaugural Global Russia Business Meeting

Participants arriving for the opening of the meeting

The co-organizers welcoming participants

Participants listening to the political leaders during the welcome dinner

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Table of Contents

Foreword 6

Contacts Established in Slovenia Will Grow into Successful Business Relations 18

Emphasizing Innovation 20

Russia: Between Symbol and Brand 24

Wither Mother Russia? Cultivating Greatness as a Key to Success 26

Honouring the Russian Business Leaders of the Year 2010 32

The Brdo conference center - venue of the inaugural Global Russia Business Meeting The Opening Dinner was held at the Grand Hotel Union

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Foreword

The inaugural Horasis Global Russia BusinessMeeting convened in Ljubljana, Slovenia on16-18 May 2010. Following the turmoil ofthe global financial crisis and in the midst ofthe global economic downturn, the GlobalRussia Business Meeting provided a valuableand timely opportunity for leaders fromgovernment, business and academia to meetand exchange views and ideas on the wayahead for Russia and the world.

We would like to share with you this reportwhich encapsulates the key topics and ideasdiscussed as more then 200 participantsfrom 20 countries attended the GlobalRussia Business Meeting, including thefollowing co-chairs: Igor Agamirzyan,Chief Executive Officer, Russian VentureCompany, Russia; Claude Beglé, FormerChairman, Swisspost, Switzerland;Vsevolod Chaplin; Archpriest, RussianOrthodox Church, Russia; Jeffrey Chen;Chief Executive Officer, Neopac LightingGroup,Taiwan; Carla Cico, Chief ExecutiveOfficer, Rivoli S.P.A., Italy; Tatjana Fink,Chief Executive Officer,Trimo; DennisGillings, Chairman, Quintiles, USA;Jim Goodnight, Chief Executive Officer,

SAS, USA; Alan Hassenfeld, Chairman ofthe Executive Committee, Hasbro, USA;Natalya Kaspersky, Chairman, KasperskyLab, Russia; Alexander Kiselev, DirectorGeneral, Russian Post, Russia; Anil Kumar,Chief Executive Officer, Ransat Group,UK/India; Wolfgang Lehmacher,President, GeoPost Intercontinental, France;Dmitry Loschinin, Chief Executive Officer,Luxoft, Russia; Petro Poroshenko, Headof Council, National Bank of Ukraine,Ukraine; Cvetka Selsek, Chief ExecutiveOfficer, SKB, Slovenia; Janez Skrabec,General Director, Riko, Slovenia; MuradSofizade, Chief Executive Officer, IPnet,Russia; Sergey Vasilyev,Vice Chairman,VEB Bank, Russia.

The Global Russia Business Meeting wasorganized around what we believe to be themajor drivers of growth and forces that willshape the new order, impacting both thefinancial economy and the real economy, inRussia and the world at large.The assemblyof Russian and world leaders broughttogether under the auspices of the GlobalRussia Business Meeting sought to contri-bute to progress toward stability in both aconceptual and a practical way. As Slovenia’sMinister of Foreign Affairs Samuel Zbogarput it during his welcoming words:

Arrival of Dr Danilo Türk, President of Slovenia

Arrival of the Slovenian Prime Minister

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‘I am pleased to welcome to the GlobalRussia Business Meeting many companiesand individuals who have unveiled thesecrets of a successful cooperation betweenRussia and the world and are willing toshare those secrets with those who are justembarking on this journey.’

As Russian and world leaders flew intoLjubljana for this Horasis leadership event,Russia’s economic recovery was alreadyshowing signs of progress. Ironically, themore developed nations - especially somemember countries of the European Union -were at a less certain stage, with manyencountering deep structural problems.Nonetheless, at the time of the meeting,there was a cautious feeling of optimismrelated to Russia.‘Optimism should notobscure the challenges that lie ahead, norshould it be interpreted to mean it is timeto withdraw the special responses put intoeffect to moderate the impact of the crisis,’said Sergey Vasilyev,Vice Chairman,VEB

Bank, Russia. From the Opening Receptionto the Closing Dinner, participants expressedtheir commitment to cooperating toward astrong and fast recovery and a more stableglobal financial order.

At the Opening Dinner of the Global RussiaBusiness Meeting, Borut Pahor, PrimeMinister, Republic of Slovenia, noted that‘the economic and political relationshipbetween Russia and the world has extensivesynergies and large potential.’ ‘Russia willcontinue to be one of the most importantinvestment locations and trading partnersfor the Slovenian economy,’ he added.‘I seesigns of sustained economic growth asSlovenia will benefit from the continueddrive generated by Russia’s expandingeconomy. Looking ahead, Slovenia sees abroad field of unexploited potential, both indoing business with Russia and in Sloveniaas a regional hub for Russia and its partnersin globalising their operations.The GlobalRussia Business Meeting is an importantstep in making full use of this potential.’

At the same dinner, Doku Zavgaev,Ambassador of the Russian Federation toSlovenia, told participants:‘We are facing a

The Global Russia Business Meeting isthe next step in making full use of thispotential’Borut Pahor, Prime Minister, Republic of Slovenia

‘The negotiations on a new broad agree-ment between the European Union andthe Russian Federation are movingtowards a favourable conclusion’Danilo Türk, President of the Republic of Slovenia

Virtual Ribbon Cutting Ceremony, with the co-organizers

Doku Zavgaev,Ambassador of the Russian Federation to Slovenia

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very serious economic crisis, unprecedentedin the history of human mankind.Thisglobal crisis calls for global solutions andcloser cooperation between Russia and theworld.’The Ambassador expressed confi-dence that Russia’s recovery was underwayand on track. At the same time, he left nodoubt that he remains cautious, with manyimbalances remained to be resolved. Hepledged that the government of the RussianFederation would hold steady to the policiesit put place to address the crisis. On Russia’sprogress toward recovery, he noted thatdomestic consumption was showingencouraging growth, led by a focus onemployment opportunities. AmbassadorZavgaev spoke of accelerating the develop-ment of technology, science, and moderni-zation of industry, to make Russia an engineof innovation in the decades ahead. Headdressed environmental issues, includingthe commitment of Russia to promoteenergy conversation and environmentalremediation. On boosting domestic demand,he stressed education, healthcare, and socialsecurity as major investment areas for publicresources.The Ambassador also pledged

Russia’s effort in supporting successfuldevelopment of international trade andinvestment.

Supachai Panitchpakdi, Secretary-General, UNCTAD, Switzerland, addedthat ‘it is important to further reformRussia’s economy so that the country canuse trade to recover when the crisis eases.’The Secretary-General voiced his supportfor Russia’s bid to finalize its negotiationsfor accession to the WTO.‘Managed well, aRussian WTO membership would benefitboth Russia and its trading partners.Thetrade body’s rules would strengthen foreigndirect investment and trade bonds.’

The consensus of the delegates attendingthe Global Russia Business Meeting was thata new global financial and economic orderis inevitable - with Russia playing a key rolein this new global infrastructure. It was thecommon view that the crisis and the dramaticadjustments being made by economiesaround the world present a watershed

‘Managed well, a Russian WTOmembership would benefit both Russiaand its trading partners’Supachai Panitchpakdi, Secretary-General,UNCTAD, Switzerland

The Slovenian Minister of Foreign Affairs with participants

Supachai Panitchpakdi, Secretary-General, UNCTAD ‘A Russian WTO membership would benefit both Russia and its trading partners’.

Avtandil Gorgiladze,Vice Chairman,Russian Railways, Russia - on RussianTechnology Pioneers Global Awakening

Petro Poroshenko, Head of Council,National Bank of Ukraine - ‘Theglobal economic outlook for 2010remains uncertain‘

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series of events.‘Recovery from the crisiswill not lead to a restoration of the globalorder that existed prior to 2007, in termsof the practices and flows of investmentsand trade, market regulation, and manyother threads tying together national andglobal economic life,’ observed GligorTashkovich, Minister of ForeignInvestment (ret.) of Macedonia.

In his welcoming address, Danilo Türk,President of the Republic of Slovenia,assessed bilateral relations between Russiaand Slovenia as excellent.‘Despite the eco-nomic crisis, the level of trade between thetwo countries has been maintained andthere is a considerable further potentialwithin a wide range of fields.’ He added that‘the negotiations on a new broad agreementbetween the European Union and theRussian Federation are moving towards afavourable conclusion, an issue that Sloveniasuccessfully advocated during its EU Council

Presidency.’ President Türk also expressedhis satisfaction with the signing of an Agree-ment on Cooperation in constructing theSouth Stream gas pipeline.

‘Russia maintains an open and liberal foreigninvestment climate,’ said Suren O.Vardanian, Director General, MoscowInvestment and Export Promotion Agency,Russia.‘The ability of Western companiesto make investments in Russia is greaterthan in comparable developing countries.Many companies are fully controlled byforeign interests and there are norestrictions on taking money outside ofRussia.’ Alan Hassenfeld, Chairman ofthe Executive Committee, Hasbro, USA,stressed that ‘with a population reaching143 million people, there are tremendousopportunities for global investors in theRussian economy.’‘The traditional relianceon the oil and gas industry is changing.Human resources and infrastructure needs

‘With a population reaching 143 millionpeople, there are tremendous opportu-nities for global investors in the Russianeconomy’Alan Hassenfeld, Chairman of the Executive Committee, Hasbro, USA‘We are facing a very serious economic

crisis, unprecedented in the history ofhuman mankind.This global crisis callsfor global solutions and closer coopera-tion between Russia and the world’Doku Zavgaev,Ambassador of the RussianFederation to Slovenia

A discussion during the welcome dinner UNCTAD Secretary-General Supachai Panitchpakdi voicing hissupport for Russia’s bid to finalize its negotiations for accession tothe WTO

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Alan Hassenfeld, Chairman of theExecutive Committee, Hasbro, USA

Pavel Shashkin, Director ExternalRelations, Russia Orthodox Church,reasoning about the spiritualdimension of entrepreneurship

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are being addressed, resulting in tremendousinvestment opportunities in Russia despite theglobal economic crisis,’ added Carla Cico,Chief Executive Officer, Rivoli S.P.A., Italy.Avtandil Gorgiladze,Vice Chairman,Russian Railways, Russia, outlined thecurrent projects of his company, the largestemployer in the Russian Federation. Heemphasized the importance of railways to thecompetitiveness of Russia.‘Russian Railwayswill play a key role in the modernization ofRussia’s infrastructure.’

Addressing crisis issues in the mostcomprehensive terms, the Global RussiaBusiness Meeting featured a series ofpanels, boardroom dialogue sessions andspecial events to deep understanding of thecrisis and its aftermath from a Russian and aglobal perspective.‘I think that there is verymuch a cautionary view as to what the next12 to 18 months are going to look like,’ saidClaude Beglé, Former Chairman,Swisspost, Switzerland,‘and quite someconcern around a couple critical issues, suchas the falling Euro.’ Participants maintaineda clear focus on the future and on Russia

beyond the crisis. As Cvetka Selsek, ChiefExecutive Officer, SKB, Slovenia, put it:‘There are many developments unknownabout the new global order, but it seemscertain that Russia is already playing anincreasingly important role as a force forglobal recovery.’ And, as EdwardShenderovich, Managing Director, KiteVentures, Russia, pronounced it: ‘If theeconomic crisis has told us anything, it isthat we need a new framework forcollaboration, supervision and globalgovernance. Russia might assume a globalleadership role in this new framework.’Commenting on bilateral relations betweenRussia and the Ukriane, PetroPoroshenko, the Ukraine’s formerMinister of Foreign Affairs and currentHead of Council, National Bank of Ukraine,said:‘The Ukraine is interested in a strongand sustainable partnership with Russia.I am rather positive about the Ukraine’sfinancial and economic future.’

Russia is certainly at a crossroads. As one ofthe participants,Tatjana Fink, Chief Exe-

‘The Ukraine is interested in a strongand sustainable partnership withRussia’Petro Poroshenko, former Minister of Foreign Affairsand Chairman, Ukraine; Head of Council, NationalBank of Ukraine

‘Russian Railways will play a key rolein the modernization of Russia’sinfrastructure’Avtandil Gorgiladze,Vice Chairman,Russian Railways, Russia

Carla Cico, Chief Executive Officer, Rivoli, Italy,discussing global trade with her co-panelists

Danilo Türk, President of Slovenia, keynoting the meeting

Edward Shenderovich, ManagingDirector, Kite Ventures, Russia.

Cvetka Selsek, Chief ExecutiveOfficer, SKB, Slovenia, co-chair ofthe Global Russia Business Meeting

Peter Loukianoff, Managing Partner,Almaz Capital Partners, USA

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cutive Officer,Trimo, put it: ‘The financialcrisis only underscores the divergent pathsthe country can choose to walk.‘Will thegovernment’s vision of a confident RussianFederation boasting a diversifying economywin out? Or will Russia weaken from over-reliance on commodities and a shrinkingpopulation?’ asked James Fierro, Chair-man, Recipco Holdings, Canada. DennisGillings, Chairman, Quintiles, USA, feltthat ‘Russia’s declining population is crucialto understanding the country.The country’slow birth rates are alarming,’ he asserted,‘and the country faces difficult demographicrealities unless birth rates rise significantly.’

Proponents of contrasting visions ofRussia’s future debated over what kind ofeconomy will emerge. Igor Agamirzyan,Chief Executive Officer, Russian VentureCompany, Russia started the discussion byremarking that ‘Russia’s economy is poisedfor a big bounce this year as companiesrebuild stocks and domestic demand boostsoutput.’ Session participants split onpredicting whether Russia will successfully

diversify its economy. Participants alsobroadly disagreed on whether ‘Russia wouldsuffer if oil prices drop, or would use lowoil prices as a catalyst for economicreform’, as Maria Ordzhonikidze,Secretary-General, EU-Russia Center,Belgium, predicted.‘Most of Russia’seconomic growth has been drawn from itsresources sector. Roughly 20% of Russia’sGDP comes from the oil and gas industries,making the country the world’s largestproducer of gas and second largestproducer of oil’, said John Roberts,Global Energy Security Analyst, Platts,United Kingdom.

Panels at the Global Russia Business Meetingexplored a wide range of topics, covering thefuture role of public markets, private inves-tors and other aspects of financing growth.They dealt with key drivers of recovery inthe real economy, including aspects of innova-tion generally, and sectors with the potentialto nurture innovation into great economicvalue, for example IT, cleantech, and profes-sional services. Peter Loukianoff, ManagingPartner, Almaz Capital Partners, USAobserved that ‘the Russian government wants

‘China could be a model on how to steerup technology driven economic growth’Charles Tang, Chairman,Brazil-China Chamber of Commerce, Brazil

‘Russia’s economy is poised for a bigbounce this year as companies rebuildstocks and domestic demand boostsoutput’Igor Agamirzyan, Chief Executive Officer,Russian Venture Company, Russia

Panelists promoting a concerted strategy to invest in sectors other than oil and gas Claude Beglé, Former Chairman, Swisspost, Switzerland,synthesizing key conclusions of the days discussions

James Fierro, Chairman,Recipco Holdings, Canada

Maria Ordzhonikidze, Secretary-General, EU-Russia Center, Belgium- Russia’s rise to global eminencewill be a measure of how emergingmarkets can cope with the crisis

the corporate sector to create its ownintellectual property.’ Victor Zubarev,Deputy Leader, State Duma, Russia, said:‘We have to boost innovation capabilities.And we have to develop a world-class servicesector to reduce our dependency on thecountry’s natural resources.’ Russia needs tobuild a new high-tech economy to survive,’added Dmitry Lisenkov, ManagingDirector, RusNano, Russia.‘China could bea model on how to steer up technology driveneconomic growth’, opined Charles Tang,Chairman, Brazil-China Chamber ofCommerce, Brazil.

‘Increasing knowledge-based innovation hubsis one of the major challenges Russia willface in the next decade to spur economicgrowth,’ said Mikhail Treyvish, President,OmniGrade, Russia.‘The role of the privatesector is critical in raising educationstandards as a means of reducing poverty.Doing so puts more people in an economicposition to buy products and services,’ saidAndreas Schweitzer, Managing Director,Mistral, Switzerland.’ Unemployment mustbe addressed. Education is the key - it is thesolution to unemployment and all other chal-lenges in Russia’, said Mikael Hagström,President International, SAS, USA.‘Entrepreneurs are critical to jobs andgrowth in Russia, and the government canplay a productive role in supporting newbusinesses,’ argued Dmitry Loschinin,Chief Executive Officer, Luxoft, Russia.‘Apossible obstacle for Russian entrepreneursis access to capital. Public-private partner-ships could be the solution,’ concludedJanez Skrabec, General Director, Riko,Slovenia.

‘Education is the key - it is the solutionto unemployment and all otherchallenges in Russia’Mikael Hagström, President International, SAS, USA

‘The role of the private sector is criticalin raising education standards as ameans of reducing poverty. Doing soputs more people in an economic positionto buy products and services’Andreas Schweitzer, Managing Director,Mistral, Switzerland

Roberts Idelsons, President,Parex Asset Management, Latvia

Charles Tang, Chairman, Brazil-China Chamber of Commerce, Brazil- China could be a model on how tosteer up technology driven economicgrowth

John Fetter, President,FSI Energy, USA

Janez Skrabec, General Director, Riko, Slovenia - making a point on the global importance of the Russian economy

Andreas Schweitzer, Managing Director, Mistral, Switzerland,on technology leadership

Andrey A. Serebryakov, First Deputy Chairman, MFK Bank,Russia, making a point on Russia’s financial industry

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The panel on Russia’s Natural Resourcesemphasized the need to evaluate thehistorical role of resource-driven growthand understand transformations to neweconomic models for Russia. John Fetter,President, FSI Energy, USA explained that‘volatility in commodity pricing and balancepoints between regulation and markets is animportant driver for the long-term successof Russia’s energy sector.’‘Surely, Russiatook a very hart hit - the Russian economyin 2009 has contracted by about 8 percentof GDP,’ stated Valentin Romanov,Executive Director, SUN Group, Russia. Hefurther explained the reason why Russia washurt so badly:‘Russia borrowed heavily onthe international capital markets and, ofcourse, it is dependent on the price of oil.’Peter Kraljic, Member of the SupervisoryBoard, Severstal, Russia, added that ‘Russia’sfundamentals remain strong and stand outfrom the rest of emerging Europe. I amconfident that the Russian economy willbounce back - depending on what happensto oil prices.’

Garegin Tosunyan, President, Associationof Russian Banks, Russia launched thesession on financial services with an upbeatassessment.‘Banking is developing into aRussian success story’, he stressed,‘and isone of the most advanced users of infor-mation technology.‘During the impressivegrowth years of the 2000s, Russian banksincreasingly began to resemble the bankseverywhere in emerging economies,’ addedOltmann Siemens, Co-Chairman of theAdvisory Board, First Trust Portfolios, USA.‘Still, the Russian banking sector remainssmall relative to the size of economy’, heldRoberts Idelsons, President, Parex AssetManagement, Latvia. Marc-EmmanuelVives, First Deputy Chairman, Rosbank,Russia, emphasized the necessity of compe-tition in the Russian financial sector betweengovernment, private and foreign bankingoperations. Andrey A. Serebryakov,First Deputy Chairman, MFK Bank, Russia,said that the financial sector ‘is on the righttrack but there is lots of work to be done.Meanwhile, there is room for everyone butstate banks will still dominate.’

‘We have to boost innovation capa-bilities.And we have to develop aworld-class service sector to reduce our dependency on the country’snatural resources’Victor Zubarev, Deputy Leader, State Duma, Russia

‘The economic crisis might be a goodopportunity for soul-searching andspiritual reflection’Pavel Shashkin, Director External Relations,Russia Orthodox Church, Russia

Stefan Bogdan Salej, DirectorGeneral, International Center forPromotion of Enterprises, Slovenia

Oltmann Siemens,Co-Chairman,Advisory Board,First Trust Portfolios, USA

Valentin Romanov, ExecutiveDirector, SUN Group, Russia

Johan Staël von Holstein, Chief Executive Officer,Mycube, Singapore, at a boardroom dialogue

How might the world economy evolve in the next 6 to 12 months

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A major theme discussed at the meeting wasthe need to embrace socially responsible andenvironmentally friendly globalization stra-tegies. Pavel Shashkin, Director ExternalRelations, Russia Orthodox Church, Russiaargued that ‘the economic crisis might be agood opportunity for soul-searching andspiritual reflection.’ He voiced his wish thatthe global recession would help businessleaders to develop the right attitude towork and compensation, make them pullthemselves together and value their contri-butions to society. Along the same lines,Scott E. Rickert, Chief Executive Officer,Nanofilm, USA, urged participants to remem-ber that money imposes a huge responsibilityupon its owner. Artak Tovmasyan,Chairman, Sozvezdie, Ukraine envisionedthat the economic crisis would finally pickthe thin artificial coating called ‘virtualeconomy’ - speculation and short-termprofit taking.‘The Russian society might

emerge from the crisis strong ratherthan weakened,’ concluded LeonidKoshelev, Chairman, Jet 2000, Russia.

The co-chairs made the following proposalsat the closing of the meeting - a package ofmeasures they called the Ljubljanadeclaration:

First, keeping the carrying out of anti-crisismeasures for at least another six months,while connecting them more closely tostructurally reforming the Russian economy.The economic crisis has magnified the

‘Banking is developing into a Russian success story’Garegin Tosunyan, President,Association of Russian Banks, Russia

Listening to the remarks of Ambassador Doku Zavgaev

What is Russias impact on global growth?

Alexander I.Ageev, Director General,Association of Orthodox Business Leaders, Russia

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Philippov Yuri, Deputy DirectorGeneral, Snegiri, Russia

Marc-Emmanuel Vives,First Deputy Chairman, Rosbank,Russia - ‘What should domestic and foreign firms do to thrive inthis strategic environment’

importance of public private partnerships -partnerships between the private and publicsectors shall be promoted to translate fiscalstimulus into real economic growth.

Second, diversifying the economy, by im-plementing a concerted strategy to invest insectors other than oil and gas. In addition,small- and medium-sized businesses shouldbe shored up in the face of the crisis.Themodernization of the Russian economywould reduce the country’s dependence onnatural resource exports and lead to theemergence of knowledge-based industryclusters, as well as massive technologicalinnovation in industry and infrastructure.

And third, encouraging more and moresustainable Foreign Direct Investment as wellas trade. Foreign Direct Investment willincrease management skills and intellectualproperty - in addition to the mere provisionof money. Russia and the world would bene-fit if Russia joined the WTO.The benefitswill be even greater when coordinated withcoherent employment and social policies.

During the Closing Dinner, Patrick Vlacic,Minister of Transport, Republic of Slovenia;Alexander I. Ageev, Director General,Association of Orthodox Business Leaders,Russia; and Ivan Tselichtchev, Professor,Niigata University of Management, Japan,spoke of their views on Russia’s past, presentand future.These deliberations were closelylinked to discussions on a green and sustain-able Russia. Going sustainable, which is notonly an environmental and social imperativebut a significant opportunity for neweconomic growth. Promoting sustainableeconomic growth and reducing poverty arethe challenges Russia shares with the otherBRIC-economies.

The meeting ended with some cautiousoptimism: Russian exports have grownsteadily, rising oil prices are supporting the balance of payments, and industrialproduction is recovering. Still, domesticconsumption remains relatively weak.‘We might see a strong rebound by thethird quarter if everything goes right,’ asMurad Sofizade, Chief Executive Officer,IPnet, Russia, put it - fuelling hopes thatthe end of the crisis in Russia and aroundthe globe is in sight. In the same vein,Wolfgang Lehmacher, Chief ExecutiveOfficer, GeoPost Intercontinental, Franceunderlined that ‘despite the flow of globaltrade and technological advances locationand distance are still key considerations forpolitical and economic activity. In thiscontext, we as business leaders have aspecial role to play. A drive to innovate anda permanent search for new opportunitiesand markets makes the private sector apositive agent of social change and economicgrowth.’ And, as Alexey K. Pushkov,Director, Institute of Contemporary

‘Optimism should not obscure the chal-lenges that lie ahead, nor should it beinterpreted to mean it is time to withdrawthe special responses put into effect tomoderate the impact of the crisis’Sergey Vasilyev,Vice Chairman,VEB Bank, Russia

‘It is time to move Russia to the centreof the global economy’Alexey K. Pushkov, Director, Institute ofContemporary International Problems, Russia

David Arkless, President, Global Corporate & Government Affairs,Manpower, USA, moderating the session on human resources

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Rok Vodnik, Member of the Management Board, Petrol, Slovenia

Murad Sofizade, Chief ExecutiveOfficer, IPnet, Russia, one of themeeting co-chairs

International Problems, Russia, pinpointed:‘It is time to move Russia to the centre ofthe global economy.’

The Horasis Annual Meeting as well as theother Horasis meetings offer opportunitiesfor senior business leaders to channel theirideas and proposals for the global recovery.Horasis is using its unrivalled history ofpartnership with global corporations tocreate a powerful platform for cooperationbetween emerging and developed markets.From the first meeting in 2005, annualgatherings have been held around the globe.The flagship events are the Global ArabBusiness Meeting, the Global China Business

Meeting, the Global India Business Meetingand the Global Russia Business Meeting.Horasis has engaged business leaders fromall around the world to enact visions for asustainable future for the last six years.

On behalf of Horasis, I would like to perso-nally thank Borut Pahor, Prime Ministerof the Republic of Slovenia who generouslyagreed to act as patron of the 2010 GlobalRussia Business Meeting. My thanks go alsoto the co-chairs, knowledge partners and media partners as well as to the rapporteursof the meeting - Ivan Tselichtchev,Professor, Niigata University of Management,Japan; Julia Stonogina,Vice President,

Wolfgang Lehmacher, Chief Executive Officer, GeoPost Intercontinental,France - ‘We as business leaders have a special role to play’

Valeriy Zhelnov, Initiator andPresident, Financial Literacy, Russia

Sergey Vasilyev,Vice Chairman,VEB Bank, Russia, commenting on how Russia will achieve itsgrowth objectives

The Slovenian President with participants.

Continuing the discussions over the closing dinner

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International Association of Business Commu-nications, Russia; and Lou Marinoff,Professor of Philosophy,The City Collegeof New York, USA for their outstandingefforts in capturing the spirit of constructivedialogue in their contributions for this report.The Global Russia Business Meeting was aunique experience which would not havebeen possible without the dedication andenthusiasm of our partners, members andparticipants.

It is our hope that the Global Russia BusinessMeeting will serve as an important platformfor stimulating discussions and innovativesolutions in the years to come. Horasis looksforward to welcoming you back to nextyear’s edition of the Global Russia BusinessMeeting.When business leaders and govern-ment officials from Russia and from aroundthe world gather at the 2011 Global RussiaBusiness Meeting there will be much to reviewand an opportunity for delegates to form avaluable community to move the agendaforward.We hope to see you then again.

Dr. Frank-Jürgen RichterPresidentHorasis:The Global Visions Community Horasis President Frank-Jürgen Richter - on Russia’s engagement

with Europe

Timothy Beardson, Chairman,Albert Place Holdings, Hong Kong

Suren O.Vardanian, DirectorGeneral, Moscow Investment andExport Promotion Agency, Russia

The Slovenian Minister of Foreign Affairs Samuel Zbogar - celebrating Russia

Jörg Banzhaf, Managing Director, ECE Projektmanagement,Germany, on strategies for success in Russia

Natalya Kaspersky, Chairman, Kaspersky Lab, Russia President Türk in discussion with Peter Kraljic,Member of the Supervisory Board, Severstal

By Borut Pahor, Prime Minister of the Republic ofSlovenia

It was my great pleasure to accept thepatronage of the first in a series of Horasisevents, dedicated to one of the most impor-tant partners of Slovenia and the EU - theRussian Federation. Slovenia appreciatesthis opportunity also because at home, inthe EU and at international forums, as wellas in bilateral relations with other countries,most of the attention is paid to searchingfor the best way out of the current globaleconomic crisis. At the same time we wantto contribute to the discussion significantfor the future of our economic relationswith Russia and our joint economic partners.The Global Russia Business Meeting was anexceptional opportunity for all of thesethings, and it is our wish that it will representa successful foundation for an annual forum.

We believe that integration and joint actionare the keys to exiting the existing economiccrisis and to forming a joint global develop-ment. It was my pleasure to accept theinvitation of the Prime Minister of theRussian Federation, Mr.Vladimir Putin, toparticipate in this year’s InternationalEconomic Forum which will take place inSankt Petersburg. I’m convinced that thediscussions at the first Global Russia BusinessMeeting will be interesting and provide agood basis for the talks in Sankt Petersburg.

Slovenia was not chosen randomly as thehost of the Global Russia Business Meeting.Friendly relations based on a historicalcomponent and cultural similarities connectus and the Russian Federation. Politicaldialogue between the highest representatives

of Slovenia and Russia is regular and con-structive, too.We have contacts betweenthe line ministers, experts in various fields,and academic and civil spheres. I believe thatall of these things will deepen and expandeven further, due also to the joint Declarationon Friendly Relations and Cooperation.

In addition, Slovenia participates in shapingthe EU’s policy towards the RussianFederation.The efforts of the SlovenianPresidency of the EU led to the commence-ment of negotiations for concluding a newpartnership and cooperation agreementbetween the EU and the Russian Federation.

In addition to cooperation in the politicalfield, the Slovenian-Russian cooperation isparticularly successful in the field ofeconomic and cultural relations.The tradeof goods with the Russian Federation, atwhich Slovenia has recorded a surplus,exceeded one billion Euros annually in the

Borut Pahor, Prime Minister, Republic of Slovenia - Russia will continue to be one of the most important investment locations and trading partners for the Slovenian economy

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Contacts Established in Slovenia Will Grow into Successful BusinessRelations

years 2007 and 2008 (1.181 billion in 2007and 1.156 billion in 2008), while last year itdecreased by over a third compared to 2008due to the impact of the economic crisis.Meeting in Slovenia offered plenty of oppor-tunities for discussions and agreements onhow to stop and reverse this negative trend.

It should be pointed out that despite the crisisthe Russian Federation remains one ofSlovenia’s most important economic partners,and that despite the economic crisis mostSlovenian companies stayed in the Russianmarket, in which our investment activityhas been strengthening as well.

In the field of economic relations betweenthe two countries, I’d like to point out thesigning of the South Stream pipeline agree-ment, signed by Slovenia and the RussianFederation at the end of the previous year.It is expected that this agreement will bethe basis for concluding a number ofsuccessful joint Slovenian-Russian projects.

Allow me to point out what I consider to beof key significance in understanding theimportance of Slovenia for the Russianeconomy. Slovenia is a country whosepopulation has Slavic roots, geographicallyit is located at the heart of the Central Europeand borders the Western Balkans and,moreover, it has access to the Adriatic Sea.If an exceptionally qualified labour force isadded to the aforementioned geographicallocation, in particular the fact that Sloveniais a full member of the European Union,the Schengen area and the Eurozone, andthat it will become a full member of theOECD in a few days, the result is a marketwhich is regulated, safe and attractive forinvestors due to a number of unexploitedpotentials. At the same time, Slovenia is alsoa good starting position for investments inthe EU, in the Western Balkans and, last butnot least, in the Mediterranean countrieswith which we have friendly relations.

Economic contacts often provide the basisfor establishing contacts also in other fields,particularly in culture and science. Becausewe want to bring the rich culture of bothcountries closer to the citizens, the activityof the Forum of Slavic Cultures needs to bestrengthened and the mechanisms enablingcloser contact between their peoplesestablished.These mechanisms are providedby the bilateral establishment of a legal basisfor their more efficient cultural and scientificcooperation, as well as by the changes in thevisa regulation, which would facilitate themovement of people and ideas.

Slovenia is well aware of the importance ofcooperation in the political as well aseconomic and other fields in order tosuccessfully cope with the challenges of themodern world, which is why it was preparedto accept the challenge and host the firstglobal business meeting with Russia, hopingit will become an annual event.

We wish and expect that the contactsestablished by the participants during thesedays will grow into successful businessrelations and also include other areas ofcooperation, thus successfully buildingrelations at interpersonal and internationallevels.

‘Slovenia was not chosen randomly asthe host of the Global Russia BusinessMeeting. Friendly relations based on ahistorical component and culturalsimilarities connect us and theRussian Federation’Borut Pahor, Prime Minister of the Republic of Slovenia

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EmphasizingInnovationBy Ivan Tselichtchev, Professor,Niigata University of Management, Japan

Horasis and its President Frank-JürgenRichter have developed an innovative patternof international conferences - globalbusiness meetings focused on a particularcountry. The participants, who areprominent representatives of the globalbusiness community, government officials,academics and the media, discuss a widerange of topics, but primarily they focus onbusiness issues. A country is selected as thefocus of the meeting and its situation isdiscussed in the global context: importantlythe venue of the meeting is outside the focalcountry.This separation is needed to promotefreely moving in-depth discussions andnetworking.

Following successful Global China BusinessMeetings and Global India Business Meetingsthe first Global Russia Business Meetingwas organized by Horasis in Ljubljana,Slovenia over 16-18 May 2010, at the state-of-the art Brdo Conference Center.TheGovernment of the Republic of Sloveniawas the co-host, and the local organizers

were the Association of European Businesses,Delovaya Rossia, Moscow InternationalBusiness Association, Moscow Investmentand Export Promotion Agency, RussianManagers Association, Association ofOrthodox Business Leaders and the YoungPresidents Organization.

The President of the Republic of SloveniaDanilo Türk, Prime Minister BorutPahor, Foreign Minister Samuel Zbogar,Minister of Transport Patrick Vlacic, andRussian Ambassador Doku Zavgaev addres-sed the Meeting on different occasions.

One of the major messages of the meetingwas that the Russian economy is now goingthrough a major paradigm shift. This is ashift from an economy dominated by naturalresources to one with a more diversifiedstructure, climbing the value chain andultimately able to promote an innovation-led growth driven by high-tech industriescapitalizing on the country’s enormoushuman resource potential.The meetingheard the necessary political will to under-take such a shift is there and noticeabledevelopments have already taken place.Of note was the emergence of strongcompanies operating in the high-techsectors, such as RosNano and RussiaVenture Company. Although both aregovernment-owned they actively interactwith and co-support high-tech privatelyowned businesses. Both companies wererepresented at this Global Russia BusinessMeeting at the CEO-level, and naturallyfound themselves the focus of attention.

The major themes for plenary and board-room dialogue sessions were Innovation andHigh-Tech.The session on Innovating inRussia was chaired by United Russia Party’sDeputy Leader at the State Duma VictorZubarev - he led a discussion on ‘Creatinga New Economic Reality’. Herein he arti-culated the new contours of the innovationeconomy - Russian style - in which they

Ivan Tselichtchev, Professor,Niigata University of Management, Japan

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attempt to absorb successful innovation-ledeconomies, but not forgetting Russia’sspecifics.We heard that the Party is nowworking on this broad concept; and in thisregard, inputs provided by the participantslook more than helpful.

Along with creating a breakthrough conceptand clarifying a road map (see below), it isimportant to improve the basic conditionsfor innovative entrepreneurs in the shortterm. Some participants pointed out thatthat, paradoxically, a number of incentivesfor entrepreneurs have disappeared due torecent policy changes. Also, many new ideasseem to be generated without taking intoaccount real demand, possibly due to a lackof grounded research. It was noted thatRussian technology companies are not tryinghard enough to enter the markets of thedeveloped countries, but without marketresearch, the links between different stageswithin the value chain (starting fromfundamental research and ending with theentry into foreign markets) remain weak:many new ideas and research remains non-commercialized. It was stressed that creatingalliances between Russian researchers andinnovators on the one hand and foreigncompanies know-how to produce and sellinnovative products is a task of greatimportance. Of course the issue of Russiancorporate culture was questioned sharply:does Russia really value successful people?If yes, are they part of the central groupworking on the concept of the innovation-led economy? Are business and technologyinnovators treated the way they deserve?Are these innovators allowed to incubate thenext generation of innovators?

Other major themes included the creationand development of Russian brands; thestrategies of large Russian companies asoutward direct investors active in variousparts of the world; visions for a sustainablefuture; the way Russian companies see theircorporate social responsibility; and, of

course, the success strategies of foreignbusinesses operating in Russia itself.

The need for drastic steps to improve theregulatory framework and transparency wasemphasized: corruption it was noted is ahuge impediment. For instance, to start acivil construction project in Russia youneed around 700 permits, versus about 150in Europe and 40 in the US: it is temptingtherefore to initiate countervailingmechanisms, some of which may beunlawful. Russia’s legal environment seemsarbitrary, and taxes often seem to be used asa tool to pressure foreign companies tocomply with the local authorities. On theother hand, some participants mentionedthat it is not unusual that some foreigncompanies come to Russia somehowunprepared, lacking basic knowledge of theRussian law and not knowing enough abouthow to use the support systems for foreignbusinessmen which are already in place.Some participants pointed out that today itis possible to pursue well-proven entrystrategies in Russia, similar to those used inother countries.

Non-Russian participants strongly urgedRussia to do more to adopt internationallyaccepted standards and especially to speedup the process of joining the WTO. SomeRussian participants reacted by saying thatthere are more important things than the

‘One of the major messages of themeeting was that the Russian economyis now going through a major paradigmshift. This is a shift from an economydominated by natural resources to onewith a more diversified structure,climbing the value chain and ultimatelyable to promote an innovation-ledgrowth driven by high-tech industriescapitalizing on the country’s enormoushuman resource potential’Ivan Tselichtchev, Professor,Niigata University of Management, Japan

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WTO entry - Russia has to sort out itsinternal conflicts, and that resolving the WTOrelated issues may still take quite a long time.

Overall, it was emphasized that the Russianeconomy has overcome the global financialcrisis by avoiding heavy blows, and is nowaccelerating.The official 3.1 percent growthtarget is likely to be exceeded and so Russia’srole as one of the BRICs, and as a majoremerging market country will furtherincrease. Furthermore, it was expected thatEurope will need closer links with Russia inthe future given the rise of new Asianeconomic superpowers.

At the closing plenary, in a brain-stormingformat, participants articulated an unofficialLjubljana Declaration - a road-map,suggesting that Russia should do more toapply and adhere to international standards,‘think big , have a smaller government withless regulation, and promote entrepreneur-ship, freedom, creativity and innovation.

It was a productive and thought-provokingmeeting which contributed much tostrengthening the links between Russianand foreign business communities.Hopefully, further Global Russia BusinessMeetings will follow in due course.

Victor Zubarev, Deputy Leader, State Duma, Russia, moderatingthe panel ‘Innovating in Russia - Creating a New Economic Reality’

Community building - our vision at Horasis

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Zoran Jankovic, Mayor of Ljubljana, welcoming participants

Igor Kravchenko, President, International Academy of Innovation Social Technologies, Russia, asking a question

A boardroom dialogue panel

Dennis Gillings, Chairman, Quintiles, USA,on the US healthcare reform

Gligor Tashkovich, Minister of Foreign Investment (ret.) of Macedonia

‘Education is key‘ - Mikael Hagström,President International, SAS, USA

Guy Spier, Managing Partner,Aquamarine Capital, Switzerland -which strategies work best when trying to break into foreign markets

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Russia:Between Symboland BrandBy Julia Stonogina,Vice President, InternationalAssociation of Business Communications, Russia

A country’s image and branding is thepinnacle and a very exclusive product of thepublic relations’ fussy job. In the moderngeopolitical system, countries havedesperately competed at the image level,maintaining state PR programs in order topromote their advantages in the spheres oftrade, education or tourism. However imageis a fragile product too: the valiant effortsof sophisticated PR teams can be brokeninstantly by a politician’s careless remark.Russia is experiencing a period of uncertainimage - it is no longer a frighteningcommunist monster, but is not yet acountry fully integrated into the world’seconomic systems. On the one hand, Russiaattempts to take advantage of belonging tothe emerging markets, to the BRICs club -on the other hand, leaving oil prices aside,the country has not progressed in the sameimpressive way as China or India. Or, atleast, its progress is not that visible to therest of the world. For instance I’m sure itwas a revelation to the many participants of

this first Horasis Global Russia BusinessMeeting - to learn about Russia’s programfor innovation support, presented by IgorAgamirzyan, Chairman, Russian VentureCompany. Foreigners living and working inRussia admire its dynamism, its large varietyof opportunities, and its European style oflife: while the perception of the millionothers outside Russia is still based on theirprejudices of the Cold War period.Thereason might be that Russia is not, as thepanelist Tony Cowling, Chairman,TNS,United Kingdom, said,‘a strong marketingnation’. Here we understand marketing in abroader sense, as the country’ and particularplayers’ ability to speak and act in a marketingway, maintaining the image of an integratedeconomic and communication policy.

As a moderator of the session ‘CreatingRussian Brands,’ I had a chance to observehow Russia’s realities are perceived by itsEuropean and American counterparts. In asession reviewing the smaller nationalbrands we were able to see the reflection ofthe big ‘brand Russia’ and thus its strongand weak points.

First of all, it was an amazing discovery tofind that many of the Soviet Union’sdistinctive labels still have their place in thewesterners’ memory - and hearts.Talkingof Russia, they still name the symbols fromthe country’ Soviet past: Pravda and theBolshoy ballet, Sputnik and Kalashnikov,Fabergé and vodka. Indeed, those symbolswere of the two ‘usual’ kinds - of cultureand aggression.

Regretfully, there were few economic orbusiness efforts mentioned.This showedthat the West remains in ignorance of thenew economics and its branding processesin Russia. It would seem that Russiancompanies, even trying to penetratedeveloped markets do not possess theproper communication and promotionprograms which might smoothly promote

Julia Stonogina,Vice President,International Association of Business Communications, Russia

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their business. Being developed in basiceconomic sense the western markets arealso advanced ‘branded’ territories. one mustrespect that field.Without implementationof the proper promotion policy Russia stilloperates the old symbolic on the world stage,not the wished-for new branded presentation.

Even those companies like Aeroflot, Lukoil,Gazprom, with which the Europeans aremostly familiar through media introductions,are still considered as older symbols: of theRussian air transport with its poor service;of Russia’s abundance built on fuel wells; orRussia’s bullying smaller neighbours bycutting off the gas supplies. How about theother thousands of Russian companies withshorter or longer market life? Even beingwell known on the domestic market,Russian brands have no global impact whichmeans it’s still a long way from being fullyintegrated into the global economy.

The need to generate a positive image ofRussia’s symbols and a new awareness ofRussia’s brands is of prime importance.

This is the current situation that must begiven a proper and beneficial balance:similar to Lenovo not destroying the GreatWall but complementing it.Symbols and brands belong to differenteconomic systems and different humanconsciousness. For instance, we might thinkthe distance between symbols and brands isjust the same length as it is betweenpropaganda and marketing. Symbols talk tous about the politics, brands about economy.

Symbols do not need to compete for thepeople’s emotional appreciation but brandsdo. Russia’s symbols belong to the time ofthe industrial economy, controlled marketand totalitarian society. Russian brandsshould demonstrate the country’s economictransformation, post-industrial thinking anda new type of communication with the world.

Re-evaluating Russia is a mutual process forboth Russians and the Europeans alike. It isnot as if we are going to jump from zero tothe sky.What I’m trying to say is that thepresent economic processes in Russia areahead of the laggardly informational policy- whether conducted by private companiesor the State.

Horasis has voluntarily undertaken a difficultmission to consider Russia’s promotion toits potential world partners.The GlobalRussia Business Meeting was a great oppor-tunity for the public relations of the Russianbusiness elite to open up to the internationalcommunity. Hopefully they might bestimulated, and be propelled from thedomestic level to the higher levels of theworld’s economic processes.

‘The need to generate a positive image ofRussia’s symbols and a new awareness ofRussia’s brands is of prime importance’Julia Stonogina,Vice President, InternationalAssociation of Business Communications, Russia

Tony Cowling, Chairman,TNS, United Kingdom makes a point as Julia Stonogina and Janez Skrabec listen

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Wither MotherRussia? Cultivating Greatness as a Key to Success

By Lou Marinoff, Professor of Philosophy,The City College of New York, USA

‘I cannot forecast to you the action ofRussia. It is a riddle, wrapped in a mystery,inside an enigma; but perhaps there is a key.That key is Russian national interest.’– Winston Churchill, radio broadcast, 1939

I have been invited to write for this Reporton the inaugural Global Russia BusinessMeeting. Please bear in mind that I am aphilosopher, and with Russian roots, butdecidedly not an economist. So althoughthis article is grounded in political philosophy,it does indeed have direct implications foreconomics, and so too for business.

A mere sixty-five years ago, and still in livingmemory of many today, the three mostpowerful men in the world at the time met atYalta, to chart a course beyond the cataclysmof World War Two. In 1945, Churchill,Roosevelt and Stalin jointly wielded morepower than any man, or any triumvirate ofmen, in human history.The geopolitical fateof humankind was being decided in London,Moscow, and Washington. But not for long.The swift disintegration of the British Empirein the late 1940s left only two great powersstanding: the USA, and the USSR.Worldhistory for the next four decades was largelydetermined in two cities:Washington andMoscow.

The past twenty years have wroughtmomentous global changes.Thanks toperestroika, the Soviet empire evaporatedmore swiftly and pacifically than did

Britain’s, while the American empire’songoing denouement unfortunatelyresembles ancient Rome’s. Paralyzed bypolitical gridlock, fractured by socialconflict, debilitated by culturally-induceddysfunctions, and showing signs ofprecipitating a new Dark Age in its wake,America’s decline and fall is as tortuous andagonized as that of Rome’s former Westernempire.

Post-perestroika, Russia survived a ‘WildWest’ transition from which has emerged apowerful oligarchy, wielding considerablepotential for economic growth. Russia hasre-invented herself as a developing nation,an element of the BRIC, early in a century inwhich the balance of global power appearsto be shifting from West to East.This articledoes not aim to predict the future of Russia;however, it does suggest that some coursesconduce to greater peace and prosperity -and thus to better business - than others.

The natural and human worlds alike aregoverned by laws. In the case of nature, weare not free to flout the laws of physics,

Lou Marinoff, Professor of Philosophy,The City College of New York, USA.

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chemistry and biology - we are free only todiscover them, and to find ways of makingthem serve (rather than hinder) ourpurposes. In the case of the human world,the laws are far from crystal-clear.The so-called ‘social sciences’ - psychology, sociology,economics, politics - do not admit of thesame exactitude as the natural ones. On thecontrary: In some cases, their tenets are soimprecise or arbitrary that they appear barelyscientific at all; they often resemble articlesof religious faith rather than reasoned inquiry.

Even so, some general tendencies can bereliably observed. For example, economicarrangements - like social ones - areconditioned by the sphere of politics. A givenpopulation, with a given pool of naturalresources, physical infrastructures andhuman competencies, will become more(or less) prosperous depending on thepolitical system that governs its economictransactions.The USA, for example, evolvedfrom a constellation of British colonies tothe world’s leading economy partly becausethe Jeffersonian ideal of laissez-faireeconomics was incorporated in itsfoundations. By contrast, once-viableeconomies of many smaller nations have beenseverely compromised, if not destroyed, byregnant tyrants. I am not claiming thatauthoritarianism guarantees impoverishment;far from it. China’s economic prosperity isunfolding under the aegis of an authoritariangovernment; while the recent meltdown ofthe US economy was caused partly byavaricious abuses of liberty, and partly byinsufficient regulation.

What about Russia? First, I can make nopretence to objectivity. My four grand-parents all emigrated from Russia and theBaltic states. Russian was spoken (along withEnglish, French and Yiddish) in the homesof my grandparents and uncles, butregrettably was not passed on to mygeneration. In the 1960s, we had a visit

from a Muscovite uncle, a professor at theUniversity of Moscow, with whom we playedchess and debated politics. He defeated ussoundly at chess, but we won the politicalarguments, since the Brezhnev regime hadforbidden his wife and child to accompanyhim while he toured what used to be knownas the ‘free West.’

Second, I am a child of the Cold War, andthus acquired early fluency in the dialecticof deterrence.The Cuban missile crisis wasespecially memorable, as for several tensehours the world tottered on the brink ofArmageddon.We must pay retrospectivetribute to American and Soviet leadersalike, who managed for decades to avertnuclear warfare, if only by the paradoxicalthreat of Mutual Assured Destruction.Nonetheless, in so doing they taught theworld a valuable lesson, writing ‘the book’on deterrence, which hopefully is still beingstudied by all current members of the‘Nuclear Club’, and especially by aspiringones.

One of the most profound collaborations toemerge from the Cold War was betweentwo outstanding astronomers: Carl Sagan(USA) and Iosif Samuilovich Shklovsky(USSR).Together they wrote a delightfulbook, Intelligent Life in the Universe, inwhich they transported readers to theleading edges of the galaxy, the cosmos, andstate-of-the-art astronomy of the day.Although its title ostensibly refers to extra-terrestrial intelligence, I thought it aptlysatirized the condition of the times.That is,if we humans were truly intelligent, we’dfind a way to transform geopolitical conflictinto global collaboration.We are still atwork on that problem, but have madedemonstrably large strides. I emphasize thatour progress to date owes much to thegreatness of Russia, and her people.

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Any person of scientific or artisticsensibility cannot fail to be indeliblyimpressed by the achievements of Russianscience, and the genius of Russian artistry.Sputnik changed the world forever, and YuriGagarin owns the eternal distinction ofbeing the first man in space. Notwithstandingconventional US cynicism over the ensuingspace race to the moon, when punditsobserved that ‘Our German scientists beattheir German scientists,’ it is nonethelessremarkable that the USSR managed to rivalthe USA for so many decades, given theglaring disparities between their politicaleconomies. Marxist command-economiesare doomed to fail, for their attemptedleveling of inequalities leads to near-universalpoverty, and intolerance of wealth; whereasJeffersonian capitalist economies are doomedto succeed, for their attempted perpetuationof inequalities leads to near-universalaspirations to wealth, and tolerance ofpoverty.The greatness of the Russian peoplewas manifest in their ability to be competitivewith the USA in spite of Marx, not becauseof him.

The influence of Russian (and Russian-inspired) arts and sports on the West -literature, music, chess, ice-hockey - ismonumental. During the 1960s, whileRussian youth were savoring rock musicand blue jeans smuggled through the IronCurtain,Western youth were digestingclassics by Dostoyevsky, Pasternak, andTolstoy with deep and lasting appreciation.Immortal compositions by Tchaikovsky,Prokofiev, Rachmaninoff, and Stravinskycontinue to grace concert stages world-wide.Russian émigrés such as Koussevitzky andHorowitz made lasting impressions onconducting and performance, while thetowering novels of Ayn Rand (neé AlisaZinov’yevna Rosenbaum) became mainstaysof libertarianism in the once-free West.Another émigré, eminent Oxford scholarIsaiah Berlin, described the extraordinary

political and social revolutionary ferment of19th-century Russian minds - Herzen,Bakunin, Belinsky,Turgenev - as ‘the largestsingle Russian contribution to social changein the world.’ Beyond the revolutionariesably catalogued by Berlin, in the 20th centurythere emerged the sober sociology ofSorokin, the passionate anti SocialDarwinism of Kropotkin, and thecivilizational taxonomy of Kardashev,among other luminaries of Russian socialscientific thought.

The brilliant legacy of Russian chesschampions is simply unequalled in thegame, and the greatest chess encounters inhistory have featured Russian players -Spassky versus Fischer in Reykjavik,Kasparov versus Deep Blue in New York.The game’s ‘bible’, Chess Openings:Theoryand Practice, brims with brilliancies byRussian and Soviet legends - including thelikes of Alekhine, Botvinnik, Bronstein,Karpov, Keres, Korchnoi, Petrosian,Smyslov,Tal.

Ice hockey is played around the world, butin only two nations does it transcend sportand approach the stature of a religion:Canada, and Russia.These days, theNational Hockey League (NHL) aboundswith Russian stars, but Canadians willalways remember the 1972 Canada-Sovietseries, the ‘summit on ice,’ in which adisciplined Soviet team more than held itsown against the NHL’s most vauntedsuperstars, proving that Russian hockeyplayers could vie with Canada’s best. And inthe fiercely competitive, derivative sport oftable-hockey, a young Russian player hasrecently dethroned the long-reigningSwedish Stiga champions. It remains forRussians to discover, and to master,Canada’s definitive Coleco table-hockeyboard. (If you are up to this challenge, I ama former 3-time Canadian champion, andhave a ‘five-year plan’ to get you started.)

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Among the books that have had the greatestimpact on Western intelligentsia, as well ason popular culture in the 20th century, andwhich continue to be widely read today, aretwo by Britain’s George Orwell: AnimalFarm (his satire on the Bolshevik revolution),and Nineteen Eighty-Four (his satire onStalinism). Nineteen Eighty-Four has soldmore than 50 million copies worldwide,which is astronomical for any book, andthat much more amazing for a politicalallegory with a tragic ending.Written in theUK, it owes its substance and soul to Russia.

Following World War One, a good manyidealistic Western intellectuals embracedvarieties of socialism or communism asputative remedies against excesses ofimperialism and capitalism. But after WorldWar Two, and the emergence of full-blowntotalitarianism from the political Left, themost disenchanted and prescient of theseintellectuals - including Orwell andHungarian émigré Arthur Koestler (inDarkness at Noon) - repudiated in nouncertain terms what Gorbachev wouldlater call ‘the ideology of the Iron Hand.’Their influential novels coincided with theappearance of Alexander Solzhenitsyn’sworks, which altogether reinforced Westernwill to resist doctrines and dictators -whether real or imaginary - that appearedinimical to hard-won individual liberty.

In the USA, McCarthy’s rabid witch-huntsagainst imaginary communism ruined manyinnocent lives.The mortal threats to libertywould emerge post-McCarthy, during thelate 1960s, when student radicals andagitators of assorted far-left persuasions -from Trotskyites to Maoists - tutored bytransplanted European totalitarians (e.g. theFrankfurt school, Herbert Marcuse, Paul deMan), and egged on by indigenous rabble-rousers (e.g. Noam Chomsky) and saboteursof high culture (e.g. Stanley Fish), trans-formed the universities from bastions ofliberal arts to hothouses of politicalindoctrination.The edifices of Westernhigher education have become People’sDemocratic Universities, from which theseradicals and their political commissars havegraduated cadres of apparatchiks, rank-and-file ideocrats who have waged the so-called‘culture wars’ and ‘gender wars’ that havesapped the foundations of Westerncivilization, impaired the mental fitness ofits citizenry, and rendered its cultureincreasingly ‘brain-dead.’

This did not happen by accident. ItalianMarxist Antonio Gramsci theorized thatone can bring down a civilization withoutfiring a shot, if one can commandeer itscultural institutions.The USA has become aproving-ground for Gramsci’s terminalhypothesis.

Iurii Senyuk, Chief Executive Officer,Industrial Park International, Ukraine - what does it take to boost innovation capabilities

How to develop a world-class service sector -Dmitry Lisenkov, Managing Director,RusNano, Russia

Carol Patterson, CIS Managing Partner,Baker & McKenzie, Russia, moderating the panel‘Riding the Next Wave of Financial Services in Russia’

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The Russian people are particularly if notuniquely well-placed to appreciate linguisticironies of America’s decline - from the so-called Czars who oversee special policybureaus in Washington, to the neo-conservative nickname for The New YorkTimes, namely Pravda.The Russian peopleare also uniquely well-positioned toappreciate much deeper ironies, includingthe farrago of politically correct neo-Marxistmyths that masquerade as unchallengeabledogmas in the contemporary Americanmindscape, accelerating its cultural collapse.Our Czars provide no immunization againstPravda’s untruths; and Hollywood, nocounterpoint to comrade Michael Moore’sinsipid agitprop.

I happen to possess a remedy, and wouldhappily share it, by directing a documentaryfilm for the entertainment and edificationof the Russian people.The film is calledAmerican Gulag. It stands no greater chanceof being produced in contemporaryHollywood than The First Circle stood tobe produced by the KGB. Whenever I givemy Russian or Eastern European friends atour of the American Gulag, theyimmediately react with a mixture of horrorand humor. For they recognize thattotalitarianism is alive and well, thriving inthe USA. Like a cultural retrovirus, it has(true to Gramsci) commandeered themind-politic, and thence metastasizedthroughout the body-politic. Only the most

hardened conservatives and stoic libertarians,along with fundamentalist Christians, areimmune to it. Having become all butinoperable, the sublime ideologies ofAmerica’s radical Left provide sardonicentertainment.

My Russian roots reverberate with theconviction that Russians would appreciatethis irony.We in the formerly-free Westhave for so many decades been entrancedand enthralled, horrified yet deeply moved,by masterful literary and film portrayals oflife in Russia, that never fail to evoke thepoetry of the Russian soul. Russia hasexported brilliant cultural artifacts, and hasinspired insightful and impactful politicalart. Now the time has come to reverse thistrade deficit, to expose and export Americanpolitical horror to the audience best-qualifiedto appreciate it.

How times have changed! I know quite afew Western intellectuals who have fled (orwould like to escape) the American Gulag,seeking new-found freedom andopportunity in Eastern Europe and Asia.America kept the torch of liberty alight formuch of the 20th century, andunderstandably pontificated its brand ofmorality in the process of ‘policing’ muchof the world.These days, the ‘police force’has been largely privatized (as it was in theLate Roman empire).Today, more than 78%of young American males of military age are

‘So my philosophical prescription tothe oligarchs of Russia is this: Utilizewealth to create opportunity, to growyour middle classes, to enhance yourintelligentsia, and to cultivate thegreatness of your people.This is surelyin your private interest, in Russia’snational interest, and in the interestsof the entire global village’Lou Marinoff, Professor of Philosophy,The City College of New York, USA

Announcing the next panels

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chronically unfit for service, owing to acongeries of physical and psychologicaldysfunctions, all of them culturally-induced(did I mention Gramsci?). So who iscurrently teaching moral lessons to theworld? Who else but Eastern Europeans andAsians: for example, Mikhail Gorbachevand Japanese Buddhist leader DaisakuIkeda.Their dialogue, Moral Lessons of theTwentieth Century, not only brims withwords worth heeding, but also shows wherethe moral compass is pointing in the 21stcentury: East, not West.

America’s development was historicallypredicated on oligarchs - colloquiallyknown as ‘robber barons’ - who alsounderstood the importance of political,economic and social stability to the long-term stewardship of wealth.Thus far-sightedAmerican oligarchs took to heart the adviceof Aristotle, who knew full-well in 325 BCEthat the most stable and pleasant states togovern, and to inhabit, harbor a thrivingmiddle class. So they funded education,established think-tanks, encouraged sciencesand arts, and undertook philanthropy. Fastforward to the BRIC, and this is what wesee: Middle classes burgeoning in China andIndia, and emerging to different rhythms inBrazil and Russia. Again, and by contrast,the American middle class is becoming anendangered species.

The promising potential of globalization, interms of the transcendence of globaleconomics over national politics - and thesubsequent flow of capital and information,goods and services, across permeablenational borders - cannot be attained if themiddle classes are bled white by predatorycapitalists operating in concert withcorrupt governments. Systemic predationon the middle classes, and the resultingpolarization of the populace, is nothing buta breeding-ground for suffering andagitation, instability and revolution.TheFrench, the Russian, the Chinese, and theCuban revolutions number among history’scautionary tales of what can happen wheneconomic polarization and politicalcorruption reach dangerous extremes.

America’s emergent plutocracy is drivingexactly the same phenomenon in the US,and Russian oligarchs would be wise tochart a different course.The long-sufferingRussian people have endured Czars andBolsheviks alike, have survived mercilessinvaders from without and ruthless purgesfrom within. So my philosophicalprescription to the oligarchs of Russia isthis: Utilize wealth to create opportunity,to grow your middle classes, to enhanceyour intelligentsia, and to cultivate thegreatness of your people.This is surely inyour private interest, in Russia’s nationalinterest, and in the interests of the entireglobal village.

Christian Wiest, Executive Vice President,Schneider Electric, France

Dmitry Bazhenov, General Director,General DataComm, Russia

Frank Schauff, Chief Executive Officer,Association of European Business, Russia

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By Sergey Litovchenko, Executive Director,Russian Managers Association, Russia

The Minister of Finance of the RussianFederation Aleksei Kudrin rightly summari-zed the first decade of the new millenniumas one of economic growth for Russia,pointing out that between 2000 and 2010the real income of the average Russianincreased by 160% while salaries rose 230%,GDP shot up by 68%, industrial output sawan upturn of 47%.

These are welcome signals but further rapiddevelopment seems impossible withoutchanging the fundamental economicpolicies.The infrastructure of the wholeRussian economy strives for modernization.By modernization, read innovation in theeconomy and in the economic activitiesunderpinning it.This means research anddevelopment, investment and changing themanagement environment for innovationand modernization to take place.

An international jury led by RussianManagers Association and Horasis took theopportunity at the first Global RussiaBusiness Meeting to recognize and honorthree Russian business leaders that excel ininnovation and leadership and whose impacton the economic development and globalintegration of Russia was obvious wellbeyond the borders of the country.

The award ceremony took place at a specialplenary during the Global Russia BusinessMeeting in Ljubljana, 17 May 2010. I hadthe privilege to name Russian BusinessLeader of the Year award winners and had ashort but substantial panel with them:

• Igor Agamirzyan, Chief ExecutiveOfficer of Russian Venture Company forsupport of innovation economy in Russia

• Dmitry Loschinin, President of Luxoftfor establishing a successful internationalhi-tech enterprise

• Alexander Kiselev, Director General ofRussian Post for modernization initiativesin the government economic sector inRussia

The first award is logical for the innovationtrend that the Russian leaders have set.Igor Agamirzian, Ph.D., is a highly successfulCEO & Chairman of the Executive Board ofthe Russian Venture Company since May 2009.His previous positions included GeneralManager of the Software DevelopmentCenter of EMC Corporation and NationalTechnology Officer and member of theCabinet of the Chairman of Microsoft inRussia and CIS countries.Russian Venture Company is a fund of fundsand development institution which wasestablished by the Russian government to

‘The infrastructure of the whole Russianeconomy strives for modernization’Sergey Litovchenko, Executive Director,Russian Managers Association, Russia

Honoring the Russian BusinessLeaders of the Year 2010

Sergey Litovchenko, Executive Director, Russian Managers Associationawards Dmitry Loschinin, Chief Executive Officer, Luxoft

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foster development of venture capitalindustry and national innovation system inRussia.The company was trusted by Russiangovernment 1 billion USD to invest through7 venture funds into priority technologyareas.These areas include informationtechnology, telecommunications, biotechno-logy, medicine, nanotechnology, alternativeenergy, and power generation sectors.

Under the leadership of Mr. AgamirzianRussian Venture Company undertook anumber of important initiatives in develop-ment of innovation economy in Russia. Oneof them is setting up the first Seed Fund inRussia in the end of 2009 which invests inhigh growth potential startups at early stageof development.This effort was regarded asa Breakthrough idea in Venture Financing byFinance magazine, a Russian leading businessmedia.

Just to name other projects the Russian Ven-ture Company is involved in today, they arelegislative initiatives to create an innovation-friendly business environment in Russia,partner and consulting networks supportinginnovations all the way for investments,global outreach programs helping Russianstartups to succeed in global markets.To sumup, Russian Venture Company is today inthe forefront of developments which willbuild a Knowledge Economy in Russiatomorrow.

Luxoft, a global IT company, is Russia’sleading software developer and IT servicesexporter.The company was founded in2000 and is a member of the IBS Group.Dmitry Loschinin has led Luxoft from itsinception in April 2000.With over 20 yearsof IT experience Dmitry has built a superiorteam of professionals and has brought Luxoftto the vanguard of global IT outsourcing.

Dmitry started his professional career as asoftware engineer in the late 1980s. In a shortperiod of time he achieved management

roles within leading multinationals such asKED GmbH, MCP GmbH and IBM. In 1998Dmitry joined the IBS Group where he suc-cessfully established SAP R/3 implementationpractice before taking charge of the IBSinitiative to offer offshore software services.This initiative eventually became Luxoft.

Under Loschinin’s leadership, Luxoft hasenjoyed exponential growth, became theworld’s only company to achieve bothCMM and CMMI Level 5 certificationsimultaneously, and has climbed to the topof the Russian software services industry bybuilding a loyal client base of world’s mostsuccessful companies.The company nowemploys more than 1,200 people at fivedevelopment centers.

Leveraging a unique, proven offshoreengagement model, Luxoft provides a fullrange of custom software developmentservices for IT solutions on variousplatforms and technologies. Luxoft runsresearch and offshore development centersin Moscow, St. Petersburg, Dubna, Omskand Kiev. Under Dmitry’s stewardshipLuxoft has enjoyed exponential growth andhas become a global IT outsourcing leaderwith a loyal client base that includes someof the world’s most successful companies.

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Igor Agamirzyan, Chief Executive Officer, Russian Venture Company- awarded as Russian Business Leader-of-the-Year by SergeyLitovchenko, Executive Director, Russian Managers Association

The last but not the least award went to theleader of one of the Russia’s largest enter-prise, owned by government, AlexanderKiselev, Director General of the RussianPost. Mr. Kiselev is known as the author ofthe Russian Post reformation concept andwas appointed to be the leader of the RussianPost in 2009 after being an assistant to theMinister of Telecommunication andInformatization of the Russian FederationLeonid Reiman and having an experience inseveral companies including Svyazinvest.

The recession of the 2008-2009 had affecteda number of strategic facilities in the RussianFederation, the Russian Post being one ofthem. Mr. Kiselev states that the Russian Postshould make use of the current situation toboost the investments and modernization inthose areas where the development potentialwas previously underestimated.The RussianPost has elaborated the Program of theRussian Postal Service InfrastructureModernization, which suggests investmentof 101 billion Rubles under its parityfinancing by the Government (47%) andthe Russian Post itself (53%) by 2011.

The number and scope of tasks and functionsfulfilled by the Russian Post have significantlyincreased lately. Mr. Kiselev notes that thepost having the ramified branch network

and enjoying the population’s credit is ableand must expand its presence on the marketof financial services and increase their salesvolumes.The planned increase will primarilyinvolve the delivery of pensions andallowances, transfer of postal money orders,acceptance of various payment orders,credit redemption and, in the long term,opening of accounts and effecting bankingtransactions with them, servicing the bankcards and carrying out operations withsecurities. By the year of 2011 the RussianPost plans to increase its share on thepayments market up to 33% (by 6%).

Russian Post is a sleeping giant, which hasonly recently begun to stir with theemergence of a new consumer economy inRussia. Russian Post is in many ways a relicof the vast, inefficient state bureaucracies ofthe Soviet area. However, with vigorousnew management, infusions of investmentcapital, and the rapid introduction ofelectronic communications, the system isshowing signs of new life.

The achievements, excellence and integrityof Mr. Agamirzian, Mr. Loschinin and Mr.Kiselev are indisputable and they trulydeserve to be honored as Russian BusinessLeaders of the Year 2010.

Alexander Kiselev, DirectorGeneral, Russian Post, Russia

Dmitry Loschinin in discussion with the two award winners

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Alexander Borisov, General Director,Moscow International BusinessAssociation, Russia,on Russia’s FDI-climate

Tatjana Fink, Chief ExecutiveOfficer,Trimo - the financial crisisonly underscores the divergent pathsthe country can choose to walk.

Galina Malakhova, Partner, Ernst & Young, Russia,moderating the panel on Russian firms investing overseas

Alexey K. Pushkov, Director, Institute of Contemporary International Problems, Russia

Aljosa Ivancic,Vice President, Comita, Slovenia

Samuel Zbogar, Minister of Foreign Affairs, Republic of Slovenia andFrank-Jurgen Richter, President, Horasis, during the welcome reception

Cvetka Selsek, Chief Executive Officer, SKB, Slovenia, with Petro Poroshenko, Head of Council,National Bank of Ukraine, and Alexey K. Pushkov

Christoph Walther, Chief Executive Officer, CNC Communications;Danica Purg, President, IEDC-Bled School of Management; Leonid Koshelev, Chairman, Jet 2000

Igor Agamirzyan, Chief Executive Officer, Russian Venture Company,talking about the global economic outlook as Dennis Gillings,Chairman, Quintiles, USA looks on

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