For years, consistent with its political and military policies, the American government has been feeding corporate America a line of malarkey about investing in Russia. To the extent convenient for its interests corporate America has been willing to listen, as long as the government GAVE them the money to make the investments with. Rare exceptions exist in oil and a few major industries. A few companies have sufficient money to 'buy" a foothold for the long term. It is not really an investment. It is an "ante' at the poker table, to have a seat. Russian bankers have realized this is not investment and that Russia cannot reconstruct its industrial output on the strength of these few billions. At the 1992 Yeltsin-Clinton Summit in Vancouver, during a discussion as to the amount that might be required, I suggested the figure $3 trillion dollars. president Yeltsin's response was. 'just about right".
The global corporate private business world knows well from market economy experience what it needs to conduct business in Russia and so do Russian bankers. Russian bankers have taken upon themselves the responsibility to act as catalysts in accomplishing this economic reconstruction. To do this Russian banks are undertaking the tasks of creating viable, reliable, dependable financial institutions to manage the currency of commerce which is the fertilizer of Russian economic life.
Both the Russian and U.S. government depend upon their populations for the financial support of the costs of government. The Russian banking industry understands that it is the people who support the government and not the governments that support the people. particularly in the United States it is the people who have the wealth upon which government is dependent for its survival. It is the banking industry's understanding that the essence of economic growth is to enable people to create and produce, that offers Russia its place in the the future global economy.
Russian banking is 'inventing' a new Russian social process for individual and small group entrepreneurial pioneering and providing people with new pathways for economic growth. Every decisive step in the history of economic development ha been the result of deliberate decisions to open up space and enable people to pioneer. This deliberate incubation of the free enterprise of ordinary people has always worked to produce great results. This is not nostalgic, not romantic, not greed. It is the simple principle of applying "opportunity" to the great driving hunger of millions of people to transcend their inadequate past
Many dwell on the negatives of this past which did exist. To proceed into the future, the Russian banking industry is finding and supporting the positive source of the strength of Russia: respect and enablement of the individual the "entrepreneurial' every-person, who collectively constitute "the unseen hand' of "the wealth of Russia", whose collective drive to transcend the past is the irreplaceable motive force of history.
Many in this generation have also written that the growth opportunity is gone forever. They would consign the Russian people to eternal political misery in grubbing over a perennially inadequate economic pie, which is constantly shrinking. far too "fashionable" are arguments that Russian resources are too limited, that Russian environment cannot handle rapid growth, and that most Russian must look forward to a diminishing quality of life in increasingly servile jobs. To these, the Russian banking industry says Humbug. These "reasoned arguments" are but the illusion of ignorance. Alignment with these arguments betrays the terrible struggle of Russian forebears to bequeath to Russia a world made more dignified for each and every individual.
The Russian banking industry believes that Russian resources are essentially unlimited and that for every obstacle there is a solution. It believes Russia has the capacity to re-entrepreneurialize all goods and services which have ever been made. In short it believes there are no arbitrary technical limits to Russian capacity for economic growth. Russian bankers believe it is true that they cannot grow the same way as in the past and that new ways must be found through which the limits of today can be transcended. Russian bankers believe that finding these ways is, in essence, the "job" of the Russian entrepreneur or, in its highest expression, the "profession" of the entrepreneur.
The task of Russian banking is to to design a coherent, integrated policy, a marketplace, if you will, for removing the barriers, all the barriers, to new venture formation, the principle one of which is trust.
Less than 30% of the population of Russia can presently make full use of its productive capabilities. The great entrepreneurial dilemma is reaching the point what sufficient tangible results have been created to interest formulae-oriented investment or loan capital. This in itself requires the Russian banking industry to act as spokesman for the Russian people in obtaining greater freedom, flexibility and logic in regulatory policies. As the Russian banking industry approaches the second decade of its participation in the development of a market economy it offers this description of its own pioneering efforts of the past decade. It is a blueprint motivated by hope and expectations which it dedicates to its customers, the Russian entrepreneur. Together they face the challenges of rebuilding Russia's economy.
Dr. van de Waal-Palms, a delegate to the Yeltsin-Clinton Summit and participant in the New York Stock Exchange board-room meetings with CEO's of America's leading industries and Russia's Prime Minister, began teaching market economics at the Moscow Business School and Leningrad management School in 1989, later teaching at the Russian Academy of Science. He is President of the international investment banking firm Palms & Company, Inc. (1934-1997) which was the first American corporation licensed by the USSR government to operate in the USSR.
