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  • Print publication year: 1999
  • Online publication date: September 2009

10 - Conclusion: halfway to the market Russia on the eve of the twenty-first century


Houston, Winter 1999:

Mikhail Khodorkovskii had shaved off his trademark black moustache. Still only thirty-six, he suddenly looked more like the elder statesman of business than the young entrepreneur who founded “Menatep” only a decade ago.

“Where will the next wave of entrepreneurs come from?” I asked him. “Most of my generation of entrepreneurs have now left Russia, “he replied,” some after their first ten million, some after their first hundred million. Their entrepreneurial skills were lost to the country, and they have not been replaced. Then we had a ‘dark decade’ in which young people did not complete their education, but went into private business instead, to make money fast. Consequently, they never got the right training, and when everything collapsed last August, they were unprepared and helpless.”

“But now there's a new crop of kids,” Khodorkovsky went on, “who have been educated in the West and are coming back to Russia. They have business training, but they're still lacking the toughening experience (zakalka) of actually working in Russia, plus the connections and networks. It will be another five years before they really get going. When they do they will be better than we were.”

Yuzhno-Sakhalinsk, July 1998:

At the far eastern end of Russia, on the former penal colony of Sakhalin Island, Western oil companies are working with the local government to turn this remote province into a showcase for foreign investment. Galina Pavlova, an energetic former biologist, directs a special department for offshore oil and gas development that reports straight to a supportive governor who is the island's most enthusiastic salesman. Sakhalin is racing ahead while other provinces stand still, looking at Sakhalin, as the Russian phrase goes, “with square eyes.” “They're all fighting among themselves,” says Pavlova. “Here we're all on the same team.”

The island is desperately poor and losing population. Outside Pavlova's office, on the main square where Karl Marx Street meets Communist Avenue, Lenin still points the way, just as he does in most other provincial capitals. But there are signs of change everywhere. As people here say, “there is diamond dust in the air.”