Spring 1992, Moscow:
A Russian friend of mine and I had decided to visit a special art exhibit at the Manezh, near Red Square. There was a line, as there still was in 1992 for anything worth waiting for. But the line got longer and longer, and it didn't move. My friend grew suspicious. “Something's wrong,” he said. “I'll go inquire.” A minute later, he was back. “We're in the wrong line,” he said. “This is a line for buyers of shares in some new private bank. Something called Menatep.”
So we walked away – missing our ticket to become Russian millionaires. Within three years Menatep had become one of the ten largest banks in Russia and the center of a powerful industrial and trading conglomerate. As an old Soviet saying went, “If you see a line, go stand in it.” But you have to know what to do when you get there. Yet as later events proved, we were luckier than we knew. By 1999, Menatep was out of business.
Russia's chances for economic recovery and growth depend on investment. In the Soviet system, the state was the investor. But in post-Soviet Russia the state is too weak to invest, and that is likely to remain true for the foreseeable future. “If you believe in the economic transformation of Russia,” says a Moscow-based financier, “then you have to believe that domestic savings will be channeled through intermediary institutions into fixed capital formation. If reform is to work, the government has simply got to get out of that business.”