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"Championing Russia’s young entrepreneurs"

11.10.2002

By CHRISTOPHER KENNETH / The Russia Journal

Political analysts say more than a decade after the collapse of communism in Russia, the creation of a full-fledged democracy with all its inherent features – civil society, equality before the law, an independent judiciary system and a bureaucracy-free public sector – remains a pipe dream.

Yet some private organizations have been working hard to assure those noble goals become realized sooner rather than later.

One such organization is the Center for Citizens’ Initiatives (CCI). Founded in the early ‘80s by Californian Sharon Ten-nison, it has gone farther than many official programs or other Western-funded agencies in helping entrepreneurs.

At the end of last month, Tennison, a self-described "people’s diplomat" and an advocate of civil society in Russia, led a two-day conference called "Entrepreneurs – Leaders of Change in Russia" in St. Petersburg.

Representatives of hundreds of small and medium-sized enterprises (SMEs) from across the Russian Federation attended the conference.

Delegates from Kaliningrad to Vladivostok, whom Tennision referred to as "future Fords of Russia," were divided into 31 focus groups according to business sectors in which they operate.

Issues on the agenda included administrative barriers, corruption in public service and development of small-scale entrepreneurs’ associations to protect the corporate interests of SMEs. Keynote speakers were Alyona Nikolayeva, a Kremlin adviser on businesses and public associations, and Pavel Kuznetsov, deputy director at the Center for Economic Reforms, which provides expert analysis to the federal government.

Sharon Tennison founded CCI in the 1980s with the aim of improving relations between U.S. and Soviet citizens.

At the opening ceremony, Tennison praised delegates. "You are the heroes and heroines; the hope for a new and economically strong Russia," she said. "You have endured so much – you found small niches to lodge in and made do with minuscule gains when the going was very rough, only to reinvent yourselves and take on new careers as Russia’s fledgling-market needs became better understood. Now, you are the real survivors."

Don Chapman, a CCI board member and volunteer for the past ten years, reinforced the inspirational tone saying: "I first met Tennison in 1987 when she addressed an audience on her experiences in the U.S.S.R. in 1983, and the story was unlike anything I had ever heard or read about Russia. She concluded her speech by saying: ‘Don’t believe in what I have said. Just go and see for yourself.’ So, I came to the U.S.S.R., and it completely changed my life."

Don Chapman, a board member of CCI, says the initiative’s programs have been successful because they do not work on a government-to-government basis.

Chapman said CCI programs have been successful because they are not executed on a government-to-government basis. "This enables us to choose program participants on merit alone. That’s a big surprise to some Russians who do not believe that in their country things can be done without having ‘good connections’ in high places."

Tennison said CCI had raised more than $60 million over the past 19 years to carry out its programs. The figure includes membership contributions and philanthropists’ donations, plus money from about 20 U.S. foundations and the U.S. government.

One of the CCI’s most successful initiatives is the Productivity Enhancement Program (PEP), currently funded by the U.S. State Department. The program started in the mid ‘90s, giving non-English-speaking Russian entrepreneurs an opportunity to go to the United States for industry-specific internships.

Although the St. Petersburg conference was not a U.S. government-sponsored project, four State Department officials were present to see what former interns are doing after their training.

"[PEP] gives Russian business owners the opportunity to study how businesses in their sphere develop and function, and how they are managed in the United States," Tennison said.

The program also offers training on legal issues, taxation, ethics, association development and civic organizations, she added.

The Charles Stewart Mott Foundation, a U.S. private organization working in Central and Eastern Europe, is another benefactor.

"The foundation’s activity in Russia is within the framework of civil-society development. We are supporting CCI – and particularly, this conference – because it deals with helping to create transparency in society," said Nick Deychakiwsky, the foundation’s program officer for Russia, Ukraine and Belarus.

REGIONAL NETWORKS

The foundation does not have specific programs to support entrepreneurship, but it has invested more than $300,000 in the CCI Transition to Transparency program, which helps SME operators find ways to combat corruption and increase government accountability.

For more effective coverage, the CCI has divided Russia into seven major zones with headquarters in Dubna, Rostov-on-Don, St. Petersburg, Vladivostok, Volgograd, Voronezh and Yekaterinburg, as well as 46 satellite offices.

"We recruit eligible candidates for the PEP U.S. internships – people who meet certain business and personal criteria," explained Nelli Shchukina, CCI director for Voronezh zone.

Lists of candidates are forwarded to CCI’s office in California for final approval.

FACTBOX

Sharon Tennison, a Californian with a passion for Russia, founded the Center for Citizens’ Initiatives (CCI) in 1983. The initiative is backed by the U.S. State Department, the Charles Stewart Mott Foundation and other charities in the United States.

Originally the CCI was a "people’s diplomacy project," aiming to establish better relations between Soviet and U.S. citizens.

Now, the organization administers programs to foster civil society and a functioning private-business sector in Russia, focusing on young and ambitious entrepreneurs.

"This [careful selection procedure] is very important as the internship is very expensive at about $13,000 per participant, but the chosen candidates only pay about $1,500. The rest comes from U.S. sponsors," said Shchukina who, until 1994 when she joined CCI, was dean of the foreign-languages faculty at Voronezh University.

Andrei Skorik, CCI director in Rostov-on-Don and general director of the Russian-American Business School, set up his own business in 1997 after returning from a PEP internship. "The program positively influenced my life, and experience with U.S. businesspeople gave me the knowledge I needed to run a private business," he said.

Yevgenia Terekhova, a Rotarian and CCI director in the Far East, said she came to know about the CCI through the Rotary Club. "I decided joining the CCI would be the best way to help my community in Vladivostok and the whole of the Far East," she explained.

More than 4,000 young Russian entrepreneurs from 290 cities have visited and trained in the United States thanks to PEP, and the ultimate goal is to train up to 10,000 specialists.

Shchukina said more than 5,000 people, including 600 PEP alumni, have benefited from CCI programs in the Voronezh area alone.

Terekhova put the number in the Far East – the most recently established regional office – at about 250.

Leonid Matusevich, president of Lemaks Holding and one of the first PEP interns in 1996, said the internship gave him the opportunity to see a developed free-market economy in action.

"I saw that my holding’s motto, ‘profits are great, but personal honor surpasses everything,’ could really work in a democratic environment," he said.

NEW SELF-CONFIDENCE

Meetings with owners of businesses – ranging from SMEs to huge corporations – bolstered his self-confidence, Matusevich added.

"We were greatly impressed by everything – from the people who received and hosted us to business owners who kindly provided their facilities for our internships," said Alexander Svetlichny, a PEP alumnus and owner of Kaskadr Advertising Co. in Rostov-on-Don.

"The United States, with centuries of free-market economy experience, offers a lot of opportunities for business internships.

"Personally, I noted several aspects of business management, technical innovations, and how advertising business – my specialty – is conducted. And these discoveries are being implemented in my firm at the moment," he added.

Andrei Davidovich, CEO of Market Research & Consulting Agency in Kolomna near Moscow, said his internship earlier this year had not given him any "totally different fundamental knowledge."

"But it gave me a great impetus, and since I came back I’ve had so many new ideas and so much to do to implement them in my business," he added.

Konstantin Mashonsky (left) says a CCI PEP internship in the United States expanded his knowledge of marketing techniques.

Konstantin Mashonsky, development director at Moscow-based Modern Printing Technologies (MPT), said he had visited more than 20 companies in the United States during his marketing internship earlier this year.

He undertook intensive courses in practical marketing, studying subjects such as market surveys, demand formation, development of marketing strategies, advertising and planning of competitive advantages for goods and services. "It was very interesting to see these marketing principles in action, after years of studying the theory," he said.

INFLUENCE IN RUSSIA

Over the past 19 years, the CCI has implemented several ventures including an Alcoholics Anonymous program in the Soviet Union in 1986 and "Angels for Angels," a program started in 2001 to provide workplace skills to Russian orphans.

"I believe volunteer-based technical assistance programs are the best things ever invented to carry out national and international goodwill, and the CCI – in my opinion – is a prime example of this," said Tennison.

Far East director Terekhova added: "I think the CCI programs have positively impacted on the lives of the alumni and their businesses [in the Far East region]. These people have developed business contacts which have started paying off with orders coming to Vladivostok from all over Russia."

Svetlichny, the advertising manager from Rostov, said the internship had given him an opportunity to see the future and how businesses similar to his are run in democratic environments.

"If all alumni, using their newly acquired knowledge, make resolutions to improve their business methods, form or join public business associations to help support civil society – which frankly speaking, is very weakly developed in the country at the moment – then Russia stands to gain tremendously from the CCI," he said.

"When we first started the programs, people were scared and doubtful of the American intent, and the fact that this was immediately after the Cold War with mentality still full of that era’s distrust did not help matters either," Shchukina said, adding that now people are no longer doubtful about the programs’ aims.

MPT’s Mashonsky said he had already implemented his newly acquired principles in his business, pushing up sales figures by more than 15 percent. "And, there are justifiable reasons to expect an increase of about 300 percent within the next couple of years."

Deychakiwsky said the Mott Foundation was committed to making fundamental changes in society and its financial allocations to Russia – between $2 million and $2.5 million a year – have mostly been aimed at strengthening non-profit organizations.

The foundation is also helping to promote citizens’ rights awareness, he added.

"However, we understand that these are long-term goals as it is not possible for a society to change its mentality and other traditional ways of doing things in just a few years. Therefore, I would say the progress made so far has been slow but steady."

PLANS FOR THE FUTURE

The future of the CCI’s programs to a large extent depends on the nature of political relations between Russia and the United States, said Shchukina.

"At the moment, we are expecting a grant for the next three years, as each grant is given for a three-year period. So far, we have received three such grants. I don’t know the exact value of the grant, but I know it’s huge," she added.

Board member Chapman said the State Department wanted CCI to double the number of interns, but this might be impossible.

"Currently, civic groups host these delegates, provide transport and arrange other activities on a voluntary basis. We simply don’t have enough people," he said.

Chapman added: "We still have a lot to do in Russia, especially in the areas of corruption and building civil society. On the corruption issue, I believe Russians will somehow fathom how to effectively deal with it. If only they arrive at the conclusion that corruption can be eliminated, that would really be a huge success as most of them don’t believe that is possible at the moment."

Meanwhile, Terekhova said she would like to see quantitative and qualitative changes in CCI’s programs.

"By quantitative changes, I mean an increase in the number of people who could go on these internships, learn and bring back technologies," she said. "By qualitative changes I mean a way of turning the CCI’s programs into a springboard for other things such as public organizations.

These organizations will be run by this new breed of Russians, some of whom will eventually get elected to high office and implement the changes needed to improve our lives."

[11 Oct 2002]

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