World City Guide

Business

Business Profile
The economy so far appears to have benefited from the installation of Vladimir Putin in 2001, buoyed by an 8.9% rise in foreign trade turnover, largely due to the expansion of energy exports. The country even seems to have been relatively unaffected by the global economic slowdown. However, the September 11 2001 attacks on the World Trade Center in New York are likely to impact hard, as Western companies, particularly from the USA, have invested heavily in Russia since 1991. For example, the daily Dollar trade turnovers on the Moscow Interbank Currency Exchange declined sharply to US$140.5 million in September from US$166.1 million in August 2001.

A national GDP growth rate of 6.3% in 2000, a decline in unemployment from 12.2% to 10.2% and an increase in consumer spending of 8.1% in 2001, have all contributed to a rare period of economic stability and prosperity in the capital. Moscow is particularly prosperous, with unemployment standing at 2.4%. Meanwhile, 40% of people in the Russian Federation still live below the poverty line, while low birth rates and the increase of HIV infection have resulted in a 2% drop in the population since 1992.

Moscow is the largest industrial centre in Russia and more than half of the workforce is involved in heavy manufacturing, such as engineering and metal work, to produce cars, lorries and machine tools. The textile industry is the city’s second largest employer. The main business areas are along Tverskaya ulitsa and at central business centres in the area, such as the World Trade Centre (website: www.wtcmo.ru) and Riverside Towers.

Western manufacturing companies based in the capital, such as General Electric, Sun Microsystems, Rank Xerox, Siemens, Peugeot, IBM and Hewlett Packard continue to develop their brands in Russia but have reported massive decreases in sales since the 1998 crash. Despite the huge job losses in the West, following September 11, large corporations have shown no major signs of pulling out of Moscow. One of the reasons is that due to closer ties between Presidents Bush and Putin, Russia, with a quarter of the world’s oil reserves outside the Middle East, may bring more trade and industry to Moscow.

Business Etiquette
The business culture in Moscow has changed dramatically over the past decade. Investment from major Western corporations has brought wealth for a select few, as well as a more Western approach to business. English is far more prevalent than it used to be but it is always worth making sure that there is an interpreter on hand.

Offices are generally open Monday to Friday 0900-1800. Although Russians are not always punctual, it is important for business visitors to arrive on time. Business cards are readily handed out – they should have a Russian translation on the reverse. Business lunches are quite common but evening meetings tend to be more social and occasionally Russians will bring their spouses with them. If invited to a Russian’s home, guests should bring a gift (wine, chocolates or an uneven number of flowers) and something small for the children. Refusing to drink a toast is a major faux pas and once a bottle is opened it will be finished. Business suits should be worn for meetings, otherwise dress is slightly more casual than elsewhere in Europe. A fair amount of sexism still persists in Russian society and businesswomen are advised to dress conservatively.